SPECIAL CHANGE IN CONTROL BONUS AGREEMENT
Exhibit
10.1
POMEROY
IT SOLUTIONS, INC.
This
SPECIAL CHANGE IN CONTROL BONUS AGREEMENT (this “Agreement”) is made and entered
into as of this 11th day of December, 2007, by and between ▇▇▇▇▇▇▇ IT Solutions,
Inc., a Delaware corporation (the “Company”), and ▇▇▇▇▇ ▇▇▇▇▇▇▇ – SVP, Chief
Financial Officer, (the “Employee”).
WHEREAS,
the Company and the Employee have agreed that it is in their respective best
interests that (i) the ongoing services of the Employee be secured at this
time;
and (ii) the Employee fully devote his/her attention to maximizing the value
of
the Company and to managing the Company’s participation in any potential “Change
in Control” relating to the Company.
NOW,
THEREFORE, for and in consideration of the premises and the mutual covenants
and
agreements herein contained, the Company and Employee hereby agree as
follows:
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1.
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Definitions.
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(a)
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For
purposes of this Agreement, “Change In Control”
shall mean the first to occur of any of the following
events:
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(i)
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any
“person” (as defined in Section 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”),
excluding for this purpose, (A) the Company or any subsidiary
of
the Company, or (B) any employee benefit plan of the Company or
any
subsidiary of the Company, or any person or entity organized, appointed
or
established by the Company for or pursuant to the terms of any
such plan,
which acquires beneficial ownership of voting securities of the
Company,
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly of securities of the Company
representing more than fifty percent (50%) of the combined voting
power of
the Company’s then outstanding securities; provided, however, that no
Change In Control will be deemed to have occurred as a result of
a change
in ownership percentage resulting solely from an acquisition of
securities
by the Company; or
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(ii)
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persons
who, as of the Effective Date constitute the Board (the “Incumbent
Directors”) cease for any reason, including
without limitation, as a result of a tender offer, proxy contest,
merger
or similar transaction, to constitute at least a majority thereof,
provided that any person becoming a director of the Company subsequent
to
the Effective Date shall be considered an Incumbent Director if
such
person’s election or nomination for election was approved by a vote of
at
least fifty percent (50%) of the Incumbent Directors; but provided
further, that any such person whose initial assumption of office
is in
connection with an actual or threatened election contest relating
to the
election of members of the Board or other actual or threatened
solicitation of proxies or consents by or on behalf of a “person” (as
defined in Section 13(d) and 14(d) of the Exchange Act) other than
the
Board, including by reason of agreement intended to avoid or settle
any
such actual or threatened contest or solicitation, shall not be
considered
an Incumbent Director; or
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(iii)
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consummation
of a reorganization, merger or consolidation or sale or other disposition
of at least eighty percent (80%) of the assets of the Company (a
“Business Combination”), unless, in each case, following
such Business Combination, all or substantially all of the individuals
and
entities who were the beneficial owners of outstanding voting securities
of the Company immediately prior to such Business Combination beneficially
own, directly or indirectly, more than fifty percent (50%) of the
combined
voting power of the then outstanding voting securities entitled
to vote
generally in the election of directors of the Company resulting
from such
Business Combination (including, without limitation, a company
which, as a
result of such transaction, owns the Company or all or substantially
all
of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the outstanding
voting
securities of the Company; or
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(iv)
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approval
by the stockholders of the Company of a complete liquidation or
dissolution of the Company.
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(b)
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“Board”
shall mean the Board of Directors of the
Company.
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(c)
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“Disability”
shall have the meaning as set forth in the Employment Agreement
by and
between Employee and Company dated November 17, 2005, or subsequent
replacement there of.
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(d)
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“Special
Change in Control Bonus Payment” shall mean
$310,000.00.
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(e)
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“Term”
shall have the meaning set forth in Section 2
below.
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2.
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Term
of Agreement; Duties.
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(a)
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Subject
to Section 4 below, this Agreement shall be effective on the date
hereof
and shall continue in effect through the first to occur of (i)
the occurrence of a Change in Control or (ii) December 31, 2009
(the “Term”), unless extended by the President and Chief Executive Officer
and the Compensation Committee of the Board. Upon expiration of
the Term,
all obligations of the parties under this Agreement (except obligations
to
pay money that exist as of the end of the Term and any obligation
that by
its terms survives the expiration of the Term) shall terminate
and this
Agreement shall have no further
effect.
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(b)
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The
Employee shall have such duties and obligations as are set forth
in the
Employment Agreement by and between Employee and
Company.
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3.
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Payment
of Special Change in Control Bonus Payment. Subject to Section
4 and Section 14 below, the Company shall pay the Employee the
Special
Change in Control Bonus Payment within four (4) business days following
the occurrence of a Change in
Control.
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4.
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Termination
of Employment and Compensation upon
Termination.
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(a)
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In
the event of termination of the Employee’s employment during the Term due
to death, Disability or by the Company without cause , as
defined in the Employment Agreement, Company shall pay to the Employee,
or
to his or her beneficiary in the event of death or disability,
the Special
Change in Control Bonus Payment if:
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(i)
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a
Change in Control occurs within 90 days of the date of such death,
Disability or termination of employment without cause;
or
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(ii)
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a
definitive agreement relating to a Change in Control has been executed
at
the effective date of such termination, and such agreement is subsequently
consummated by the parties; or
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(iii)
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a
definitive agreement relating to a Change in Control is subsequently
executed with a party with whom the Company has had substantive
negotiations regarding a Change in Control prior to the effective
date of
such termination, or with an affiliate of such party, and such
negotiations have not been interrupted for a material period of
time (90
days or more) prior to the date of a Change in Control, and such
agreement
is subsequently consummated by the parties. For
purposes of this Section 4(a), the effective date of termination
of the
Employee’s employment with the Company shall be determined under his/her
Employment Agreement..
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(b)
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In
the event of a termination of the Employee’s employment during the Term
for any other reason, the Company shall have no obligation to pay
the
Employee any Special Change in Control Bonus
Payment.
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(c)
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If
the Employee’s employment by the Company is not terminated prior to the
expiration of the Term, then if a definitive agreement relating
to a
Change in Control has been executed prior to the expiration of
the Term or
if a definitive agreement relating to a Change in Control is subsequently
executed with a party with whom the Company has had substantive
negotiations regarding a Change in Control prior to the expiration
of the
Term, or with an affiliate of such party, and such negotiations
have not
been interrupted for a material period of time (90 days or more)
prior to
the date of execution of such definitive agreement, the Employee
shall be
entitled to the Special Change in Control Bonus Payment if the
transaction
contemplated by that definitive agreement is consummated after
the
expiration of the Term and Employee is employed by the Company
at such
time.
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5.
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Withholding
Taxes. The Company shall withhold from any payment due to the
Employee hereunder (or his/her beneficiary or estate) all taxes
which, by applicable federal, state, local or other law, the Company
is
required to withhold therefrom.
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6.
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Confidentiality. The
Employee agrees that the terms of the Agreement, and all discussions
relating to this Agreement, are and shall remain confidential as
between
the parties, unless and to the extent, disclosure as required by
law or to
secure advice from a legal or tax
advisor.
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7.
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Successors
and Assigns: No Third-Party Beneficiaries. This Agreement shall
inure to the benefit of and shall be binding upon the Company and
its
successors, assigns and legal representatives and the Employee,
his/her
heirs and legal representatives. The Employee may not assign,
transfer, or otherwise dispose of the Agreement, or any of his/her
rights
or obligations hereunder other than his/her rights to payments
hereunder,
which may be transferred only by will or by the laws of descent
and
distribution), without the prior written consent of the Company,
and any
such attempted assignment, transfer or other disposition without
such
consent shall be null and void. The Company shall be entitled
to assign this Agreement, without the prior written consent of
the
Employee, (i) in connection with the merger or consolidation of
the
Company with another unaffiliated corporation, or (ii) in connection
with
the sale of all or substantially all of the assets or business
operations
of the Company to another person or entity; provided, however,
that such
assignee expressly assumes all of the rights and obligations of
the
Company hereunder, and provided further that solely with respect
to any
obligations of the Company to make a Special Change in Control
Bonus
Payment, the Company shall remain liable with respect to such obligation
in the event of a default by such assignee. After any such
assignment, the Agreement shall continue in full force and
effect.
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8.
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Entire
Agreement. This Agreement sets forth the entire agreement
between the parties hereto with respect to the subject matter hereof,
and
supersedes all other agreements and understandings, written or
oral,
between the parties hereto with respect to the subject matter hereof;
provided, however, nothing in the Agreement is intended to affect
the
Employee’s rights to payments or benefits provided to the Employee under
his/her Employment Agreement and the Company’s equity based compensation
and/or welfare benefit plans.
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9.
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Waiver
and Amendments. Any waiver, alteration, amendment or
modification of any of the terms of this Agreement shall be valid
only if
made in writing and signed by the parties hereto; provided however,
that
any such waiver, alteration, amendment or modification is consented
to on
the Company’s behalf by the President and Chief Executive Officer or the
Board. No waiver by either of the parties hereto of their
rights hereunder shall be deemed to constitute a waiver with respect
to
any subsequent occurrences or transactions hereunder unless such
waiver
specifically states that it is to be construed as a continuing
waiver.
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10.
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Severability.
If any provision of this Agreement or the application of any provision
is
held invalid, unenforceable or otherwise illegal, the remainder
of this
Agreement and the application of such provision will not be affected,
and
the provision so held to be invalid, unenforceable or otherwise
illegal
will be reformed to the extent (and only to the extent) necessary
to make
it enforceable, valid or legal. To the extent any provisions held
to be
invalid, unenforceable or otherwise illegal cannot be reformed,
such
provisions are to be stricken herefrom and the remainder of this
Agreement
will be binding on the parties and their successors and assigns
as if such
invalid or illegal provisions were never included in this Agreement
from
the first instance.
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11.
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Governing
Law. This Agreement will be construed and enforced according to
the laws
of the Commonwealth of Kentucky, without giving effect to the conflict
of
laws principles thereof.
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12.
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Section
Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall be deemed
to
constitute a part hereof, affect the meaning or interpretation
hereof or
of any term or provision hereof.
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13.
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Obligations
Contingent on Performance. The obligations of the Company
hereunder, including its obligation to make the payments provided
for
herein, are contingent upon the Employee’s performance of the Employee’s
obligations under his/her Employment
Agreement.
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14.
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Waiver
and Release. The Employee acknowledges and agrees that any
payment made under this Agreement is contingent upon Employee delivering
to the Company at the time of such Change In Control a release
in the form
attached hereto as Exhibit A, and the expiration of all revocation
periods
related thereto.
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15.
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Counterparts. This
Agreement may be executed in two or more counterparts, each of
which shall
be deemed to be an original but all of which together shall constitute
one
and the same instrument. The execution of this Agreement may be
by actual or facsimile signature.
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16.
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Notices. All
notices and other communications hereunder shall be in writing
and shall
be given by hand delivery to the other party or by registered or
certified
mail, return receipt requested, postage prepaid, addressed as
follows:
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If
to the Employee:
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▇▇▇▇▇
▇▇▇▇▇▇▇
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▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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If
to the Company:
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Pomeroy
IT Solutions, Inc.
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▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
and Chief Executive Officer
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With
copy to:
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Pomeroy
IT Solutions, Inc.
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▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General
Counsel
IN
WITNESS WHEREOF, the undersigned have executed this Agreement of the date
first
written above.
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Pomeroy
IT Solutions, Inc.
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Employee
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By:
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▇▇▇▇▇
▇. ▇▇▇▇▇▇
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By:
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▇▇▇▇▇
▇▇▇▇▇▇▇
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Title:
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President/Chief
Executive Officer
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Title:
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SVP,
Chief Financial Officer
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