Change of Control Letter Agreement [Date]
Exhibit 10.1
Change of
Control Letter Agreement
[Date]
[Name of
Executive]
[Address
of Executive]
[Address
of Executive]
Dear
[Name of Executive]:
It is
essential that RBC and the Board be able to rely upon you to continue in your
position if RBC becomes subject to a proposed or threatened Change in Control
(defined on Schedule 1). It is also critical that RBC and the Board be able to
receive and rely upon your advice concerning the best interests of RBC and its
stockholders without concern that you might be distracted by the personal
uncertainties and risks created by this type of proposal or threat. To assure
RBC that it will have your continued dedication and commitment and the
availability of your advice and counsel when facing the possibility, threat or
occurrence of an effort to take over control of RBC, and to induce you to remain
in the employ of RBC or its subsidiary, RBC agrees with you as
follows:
1. (a) If
a Change in Control occurs and if within 24 months after a Change in Control,
your employment is either terminated by RBC without Cause (defined on Schedule
1) or by you for Good Reason (defined on Schedule 1), RBC will pay you on your
date of termination a single lump sum cash payment equal to the sum
of:
The base
salary, unused vacation and any annual bonus applicable to a completed fiscal
year, which have not yet been paid to you through the date of
termination;
A bonus
equal to your annual base salary applicable to you on your termination date,
multiplied by your maximum target bonus percentage then in effect and prorated
to account for the number of days you were employed by RBC during the Fiscal
Year in which you were terminated.
A
severance payment equal to the sum of (i) 150% of your annual base salary, and
(ii) 150% of your Target Bonus in effect on such date. “Target Bonus”
shall mean the amount payable under all annual incentive compensation plans of
RBC in which you participate, waiving any condition precedent to the payment to
you and assuming that the performance goals for the period were achieved at the
100% level.
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reimbursement for all documented expenses, up to $15,000, actually incurred by
you for professional outplacement services within 3 months after your
termination.
(b) For
the 18 month period following the termination of the your employment, RBC (or
the subsidiary that employed you) will continue to provide coverage and
participation to you at the same participation, coverage and benefit levels (or
will provide their equivalent) and pay the full cost of coverage and
participation under the employee health and other welfare plans maintained by
RBC and applicable to you on your termination date.
(c) Immediately
prior to a Change in Control, you will completely vest in all restricted stock
and stock options that have been granted to you. Approval of this Letter
Agreement by the RBC Board Compensation Committee shall be deemed approval of
the vesting of restricted stock and stock options as provided in the immediately
preceding sentence for all purposes under the RBC 2005 Long-Term Equity
Incentive Plan as amended. All stock options that have been granted to you will
additionally be exercisable by you for a period of 18 months following the
termination of the your employment.
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(d) All
amounts paid under this Letter Agreement shall be subject to applicable tax
withholding.
(e) In
the event that the vesting of restricted stock and stock options, together with
all other payments and the value of any benefit received or to be received by
you would result in all or a portion of such amount being subject to excise tax
under Section 4999 of the Internal Revenue Code of 1986, as amended, (the
“Code”) then you shall only be entitled to an amount that would result in no
portion of the amount being subject to excise tax under Section 4999 of the
Code (the “Excise Tax”). In the event of any reduction in the amount under this
Section 1(e), the amount in Section 1(a) shall be reduced.
(f)
In exchange for and prior to receipt of these benefits you
agree to execute and deliver to RBC its general release agreement applicable to
severed employees.
2. You
agree that following a Change in Control and in the event your employment is
terminated by RBC without Cause or by you with Good Reason you will not for a
period of 12 months after your termination (i) engage in or carry on,
directly or indirectly, any competing business in any territory in which such
competing business is then engaged in by RBC, (ii) allow your name to be
used by any person engaged in any competing business, (iii) invest in,
directly or indirectly, any person engaged in any competing business, or
(iv) serve as an officer or director, employee, agent, associate or
consultant of any person engaged in a competing business (other than RBC or any
RBC subsidiary). Nothing herein shall prohibit you from investing in a
publicly-held entity if such investment (individually or as part of a group) is
limited to not more than five percent (5%) of the outstanding equity issue of
such entity.
3. You
agree that in the event a third party (a) begins a tender or exchange
offer; (b) circulates a proxy to stockholders; or (c)
takes other steps to effect a Change in Control, you will not voluntarily
terminate employment with RBC (or the subsidiary that employs you) unless you
provide at least 3 months prior written notice to the Chief Executive Officer of
RBC, and you will continue to render the services expected of your position, and
you will represent the best interests of the stockholders of RBC until the third
party has abandoned or terminated the efforts to effect a Change in Control or
until a Change in Control has occurred and your employment has been
terminated.
4. If
you die prior to the time all payments due to you under this Letter Agreement
have been made, then as soon as practicable after your death (but in no event
later than one month after), RBC shall pay in a lump sum all sums not paid to
you prior to your death. Payment shall be made to your designated beneficiary or
beneficiaries named under the 401(k) plan maintained by RBC on the date of your
death. If no such beneficiary is named, such sums shall be paid to your
estate.
5. This
Letter Agreement constitutes our entire agreement and supersedes all prior
discussions, understandings and agreements with respect to the severance
benefits which RBC has agreed to provide to you. This Letter Agreement shall be
governed by and construed in accordance with the laws of the State of
Connecticut applicable to contracts made and to be performed therein, without
regard to conflicts of laws principles.
6. This
Letter Agreement shall not be assignable, in whole or in part, by you. This
Letter Agreement shall be binding upon and inure to the benefit of RBC and its
successors and assigns and upon any person acquiring all or substantially all of
the assets and business of RBC by merger, consolidation, purchase of assets or
otherwise, and the successor shall be substituted for RBC with respect to all
RBC rights and obligations under this Letter Agreement.
7. This
Letter Agreement is intended to be exempt from Code §409A as separation pay to
the greatest extent possible. Accordingly, all provisions herein shall be
construed and interpreted consistent with that intent, but that, to the extent
necessary RBC shall amend any such provision pertaining to such
payment to comply with Code §409A and the regulations thereunder, in the least
restrictive manner necessary without any diminution in the value of the payments
to you.
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8. This
Letter Agreement is effective on the Effective Date and shall terminate three
years thereafter. This Agreement shall automatically renew for successive
one-year terms unless RBC notifies Executive in writing at least 90 days prior
to the expiration date of the original or a successive term that it does not
wish to renew the Agreement for an additional term. This Letter Agreement is not
an employment contract between you and RBC or any of its subsidiaries. Your
employment is “at will” and may be terminated by you or RBC at any time for any
reason.
If this
Letter Agreement accurately sets forth our agreement and understanding please
sign it where indicated below and return the executed letter to me. A separate
copy is enclosed for your records.
Please
contact ▇▇▇ ▇▇▇▇ or ▇▇▇ ▇▇▇▇▇▇▇▇ with any specific questions.
Thank
your for your loyalty, commitment and efforts!
Sincerely,
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
President
& CEO
Read and
agreed:
|
(Name)
|
Dated as
of _______________, ____ (“Effective Date”)
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SCHEDULE
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“Cause” means (i) the failure
by you to use your best efforts to perform the material duties and
responsibilities of your position or to comply with any material policy or
directive RBC has in effect from time to time, provided you shall have received
notice of such failure and have failed to cure the same within thirty days of
such notice (ii) any act on your part which is harmful to the reputation,
financial condition, business or business relationships of RBC (iii) a material
breach of your fiduciary responsibilities to RBC , such as embezzlement or
misappropriation of RBC funds, business opportunities or properties,
or to any customer, vendor, agent or employee of RBC; and (iv) your conviction
of, or guilty plea or nolo contendere plea to a felony or any crime involving
moral turpitude, fraud or misrepresentation.
“Change in Control” is
as defined in the RBC 2005 Long-Term Equity Incentive Plan as
amended.
“Good Reason” - for the
24 month period following a Change in Control shall mean, without your express
written consent, any of the following:
A.
Demotion. The assignment of any of your duties or responsibilities that are a
reduction of, or are inconsistent with, your position, duties, responsibilities
or status immediately preceding the Change in Control;
B.
Reporting. A change in your reporting responsibilities or titles in effect
immediately preceding the Change in Control resulting in a reduction of your
responsibilities or position;
C.
Reduction. The reduction of your annual salary, projected or target annual bonus
(including any deferred portions), level of benefits (except for a reduction of
benefits uniformly applicable to all similarly situated executives), target
long-term incentives, stock options, restricted stock awards, projected
Supplemental Executive Retirement Plan benefits, or supplemental compensation in
effect immediately preceding the Change in Control; or
D.
Location. The transfer of your office or designated place of work to a location
at least thirty-five (35) miles from your location at the Change in Control or
requiring a change in residence or a material increase in the amount of travel
normally required of you in connection with your employment.
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