AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is
entered into by and between Furmanite Corporation, a Delaware
corporation (the “ Company ”), and Michael L.
Rose (the “ Executive ”) effective as of
January 1, 2009.
WHEREAS, the
Company considers it essential to the best interests of its
stockholders to foster the continued employment of key management
personnel; and
WHEREAS, the
Company recognizes that, as is the case with many publicly-held
corporations, the possibility of a change in control exists and
that such possibility, and the uncertainty and questions which it
may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company
and its stockholders; and
WHEREAS, the
Company has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of
members of the Company’s management, including the Executive,
to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility
of a change in control;
WHEREAS, effective
August 31, 2006 (the “ Effective Date ”)
the Company and the Executive previously entered into a Change in
Control Agreement; and
WHEREAS, the
Company and the Executive desire to amend the Change in Control
Agreement to comply with section 409A of the Internal Revenue Code
of 1986, as amended;
NOW, THEREFORE, in
consideration of the premises and the mutual covenants herein
contained, the Company and the Executive hereby agree as
follows:
1.
Definitions and Interpretation Rules .
1.1 Defined
Terms . For purposes of this Agreement, the following terms
shall have the meanings indicated below:
“Accrued
Obligations” means the sum of (i) the
Executive’s Base Compensation through the Executive’s
Employment Termination Date for periods through but not following
his Separation From Service, and (ii) any accrued vacation
pay, in each case to the extent not theretofore paid by the Company
and not theretofore deferred by the Executive.
“Additional Obligations” means the
Executive’s Base Compensation for periods following his
Separation From Service to the extent not theretofore paid by the
Company and not theretofore deferred by the Executive.
“ Affiliate ” means any
entity which is a member of (i) the same controlled group of
corporations within the meaning of section 414(b) of the Code with
the Company, (ii) a trade or business (whether or not
incorporated) which is under common control (within the meaning of
section 414(c) of the Code) with the Company or (iii) an
affiliated service group (within the meaning of section 414(m) of
the Code) with the Company.
“ Assets ” means assets of
any kind owned by the Company, including but not limited to
securities of the Company’ direct and indirect subsidiaries
and Affiliates.
“ the Company ” means
Furmanite Corporation, a Delaware corporation, and any successor by
merger or otherwise.
“ Base Compensation ” means
the Executive’s base salary or wages (as defined in section
3401(a) of the Code for purposes of federal income tax withholding)
from the Company, modified by including any portion thereof
that such Executive could have received in cash in lieu of any
elective deferrals made by the Executive (other than deferrals of
bonuses) pursuant to a qualified cash or deferred arrangement
described in section 401(k) of the Code and any elective
contributions under a cafeteria plan described in section 125 of
the Code, and modified further by excluding any bonus,
incentive compensation (including but not limited to equity-based
compensation), commissions, expense reimbursements or other expense
allowances, fringe benefits (cash and noncash), moving expenses,
deferred compensation (other than elective deferrals by the
Executive under a qualified cash or deferred arrangement described
in section 401(k) of the Code that are expressly included in
“ Base Compensation ” under the foregoing
provisions of this definition), welfare benefits as defined in
ERISA, overtime pay, special performance compensation amounts and
severance compensation.
“ Beneficial Owner ” or
“ Beneficial Ownership ” shall have the meaning
ascribed to those terms in Rule 13d-3 of the General Rules and
Regulations under the Exchange Act.
“ Board ” means the Board
of Directors of the Company or other governing body of the Company
or its direct or indirect parent.
“ Cause ” means
(i) the willful and continued failure by the Executive to
substantially perform the Executive’s duties with the Company
(other than any such failure resulting from the Executive’s
incapacity due to physical or mental illness) after a written
demand for substantial performance is delivered to the Executive by
the Board (or by a delegate appointed by the Board), which demand
specifically identifies the manner in which the Board believes that
the Executive has not substantially performed the Executive’s
duties, (ii) the willful engaging by the Executive in conduct
which is demonstrably and materially injurious to the Company or
any of its Affiliates, monetarily or otherwise, (iii) the
conviction of the Executive for a felony, (iv) the entering by
the Executive of a plea of guilty or nolo contendre to a felony
charge or crime involving moral turpitude, or (v) the material
breach by the Executive of any code of conduct established by the
Company. For purposes of Sections (i) and (ii) of this
definition, (A) no act, or failure to act, on the
Executive’s part shall be deemed “willful” if
done, or omitted to be done, by the Executive in good faith and
with reasonable belief that the act, or failure to act, was in the
best interest of the Company and (B) in the event of a dispute
concerning the application of this provision, no claim by the
Company that Cause exists shall be given effect unless the Company
establishes to the Board by clear and convincing evidence that
Cause exists.
“ Change in Control ” means
the occurrence of any of the following events:
(a) the
individuals who are Incumbent Directors cease for any reason to
constitute a majority of the members of the Board;
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(b) the
consummation of a Merger of the Company or an Affiliate of the
Company with another Entity, unless the individuals and Entities
who were the Beneficial Owners of the Voting Securities of the
Company outstanding immediately prior to such Merger own, directly
or indirectly, at least 50 percent of the combined voting
power of the Voting Securities of any of the Company, the surviving
Entity or the parent of the surviving Entity outstanding
immediately after such Merger;
(c) any
Person, other than a Specified Owner, becomes a Beneficial Owner,
directly or indirectly, of securities of the Company representing
30 percent or more of the combined voting power of the
Company’s then outstanding Voting Securities;
(d) a sale,
transfer, lease or other disposition of all or substantially all of
the Company’s Assets is consummated (an “ Asset
Sale ”), unless :
(1) the
individuals and Entities who were the Beneficial Owners of the
Voting Securities of the Company immediately prior to such Asset
Sale own, directly or indirectly, 50 percent or more of the
combined voting power of the Voting Securities of the Entity that
acquires such Assets in such Asset Sale or its parent immediately
after such Asset Sale in substantially the same proportions as
their ownership of the Company’s Voting Securities
immediately prior to such Asset Sale; or
(2) the
individuals who comprise the Board immediately prior to such Asset
Sale constitute a majority of the board of directors or other
governing body of either the Entity that acquired such Assets in
such Asset Sale or its parent (or a majority plus one member where
such board or other governing body is comprised of an odd number of
directors); or
(e) The
stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company.
“ Code ” means the Internal
Revenue Code of 1986, as amended, or any successor act.
“ Committee ” means, prior
to a Change in Control or a Potential Change in Control, the
Compensation Committee of the Board. After a Change in Control or a
Potential Change in Control, “ Committee ” means
(i) the individuals (not fewer than three (3) in number)
who, on the date six months prior to the Change in Control or
Potential Change in Control constitute the Compensation Committee
of the Board, plus, (ii) in the event that fewer than three
(3) individuals are available from the group specified in
clause (i) above for any reason, such individuals as may be
appointed by the individual or individuals so available (including
for this purpose any individual or individuals previously so
appointed under this clause (ii)); provided , however
, that the maximum number of individuals constituting the Committee
after a Change in Control or Potential Change in Control shall not
exceed five (5).
“ Company ” means the
Company. In the event that the Executive’s employer is a
subsidiary of the Company, the term “Company” shall
include the Executive’s employer where appropriate and the
Company will cause the Executive’s employer to take any
actions necessary to satisfy the obligations of the Company under
this Agreement.
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“ Disability ” means the
Executive’s incapacity due to physical or mental illness that
has caused the Executive to be absent from full-time performance of
his duties with the Company for a period of six
(6) consecutive months.
“ Effective Date ” means
the date identified in the introduction of this
Agreement.
“ Employee ” means an
individual who is employed in the services of the Company on the
Company’s active payroll.
“ Employment Termination Date
” means the date as of which the Executive incurs
a Termination of Employment determined in accordance with the
provisions of Section 5.2.
“ Entity ” means any
corporation, partnership, association, joint-stock company, limited
liability company, trust, unincorporated organization or other
business entity.
“ ERISA ” means the
Employee Retirement Income Security Act of 1974, as amended, or any
successor act.
“ Exchange Act ” means the
Securities Exchange Act of 1934, as amended, or any successor
act.
“ Excise Tax ” means the
excise tax imposed by section 4999 of the Code or any similar tax
payable under any United States federal, state, or local
statute.
“ Executive ” means the
Employee identified in the introduction of this
Agreement.
“Expiration Date” shall have the meaning
specified in Section 2.
“ Good Reason ” for
termination by the Executive of his employment means the occurrence
(without the Executive’s express written consent) after any
Change in Control, or prior to a Change in Control under the
circumstances described in clauses (b) and (c) of the
second paragraph of the definition of Termination of Employment
(treating all references to “ Change in Control
” in paragraphs (a) through (f) below as references
to a “ Potential Change in Control ”), of any
one of the following acts by the Company, or failures by the
Company to act, unless, in the case of any act or failure to act
described in paragraph (a), (e), (f) or (g) below, such
act or failure to act is corrected prior to the effective date of
the Executive’s termination for Good Reason:
(a) the
assignment to the Executive of any duties or responsibilities which
are substantially diminished as compared to the Executive’s
duties and responsibilities immediately prior to a Change in
Control or a material change in the Executive’s reporting
responsibilities, titles or offices as an Employee and as in effect
immediately prior to the Change in Control;
(b) a
reduction by the Company in the Executive’s annual Base
Compensation as in effect on the date hereof or as the same may be
increased from time to time;
(c) the
relocation of the Executive’s principal place of employment
to a location outside of a 50-mile radius from the
Executive’s principal place of employment immediately prior
to the Change in Control or the Company’s requiring the
Executive to be based anywhere
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other than such
principal place of employment (or permitted relocation thereof)
except for required travel on the Company’s business to an
extent substantially consistent with the Executive’s business
travel obligations immediately prior to a Change in
Control;
(d) the
failure by the Company to pay to the Executive any portion of the
Executive’s current compensation or to pay to the Executive
any portion of an installment of deferred compensation under any
deferred compensation program of the Company, within seven
(7) days of the date such compensation is due;
(e) the
failure by the Company to continue in effect any compensation plan
in which the Executive participates immediately prior to the Change
in Control which is material to the Executive’s total
compensation, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect
to such plan, or the failure by the Company to continue the
Executive’s participation therein (or in such substitute or
alternative plan) on a basis not materially less favorable, both in
terms of the amount or timing of payment of benefits provided and
the level of the Executive’s participation relative to other
the Company executives, as existed immediately prior to the Change
in Control;
(f) the
failure by the Company to continue to provide the Executive with
benefits substantially similar to those enjoyed by the Executive
under any of the Company’s pension, savings, life insurance,
medical, health and accident, or disability plans in which the
Executive was participating immediately prior to the Change in
Control, the taking of any other action by the Company which would
directly or indirectly materially reduce any of such benefits or
deprive the Executive of any material fringe benefit or Perquisite
enjoyed by the Executive at the time of the Change in Control, or
the failure by the Company to provide the Executive with the number
of paid vacation days to which the Executive is entitled on the
basis of years of service with the Company in accordance with the
Company’s normal vacation policy in effect immediately prior
to the time of the Change in Control; or
(g) any
purported termination of the Executive’s employment which is
not effected pursuant to a notice of termination satisfying the
requirements of Section 5.1.
The Executive
shall have the right to terminate his employment for Good Reason
even if he becomes incapacitated due to physical or mental illness.
The Executive’s continued employment shall not constitute
consent to, or a waiver of any rights with respect to, any act or
failure to act constituting Good Reason hereunder.
For purposes of
any determination regarding the existence of Good Reason, any claim
by the Executive that Good Reason exists shall be presumed to be
correct unless the Company establishes to the Committee by clear
and convincing evidence that Good Reason does not exist. The
Committee’s determination regarding the existence of Good
Reason shall be conclusive and binding upon all parties unless the
Committee’s determination is arbitrary and
capricious.
“ Gross-Up Payment ” means
the additional amount paid to the Executive pursuant to
Section 3.3.
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“ Highest Base Compensation
” means the Executive’s annualized Base
Compensation in effect immediately prior to (a) a Change in
Control, (b) the first event or circumstance constituting Good
Reason, or (c) the Executive’s Termination of
Employment, whichever is greatest.
“Incumbent Director ” means
—
(a) a member
of the Board on the Effective Date; or
(1) who becomes a
member of the Board after the Effective Date;
(2) whose
appointment or election by the Board or nomination for election by
the Company’ stockholders is approved or recommended by a
vote of at least two-thirds of the then serving Incumbent
Directors (as defined herein); and
(3) whose initial
assumption of service on the Board is not in connection with an
actual or threatened election contest.
“ IRS ” means the Internal
Revenue Service.
“ Merger ” means a merger,
consolidation or similar transaction.
“ Pension Plan ” means the
Company’s 401(k) plan, as amended from time to
time.
“ Perquisites ” means
benefits such as any supplemental life insurance; financial
consulting; and office equipment for use in the home (e.g.,
cellular telephones, personal digital assistance, home computers
and office accessories similar to the office accessories available
to the Executive in his employment office and monthly Internet
connection fees) that may be provided by the Company from time to
time.
“ Person ” shall have the
meaning ascribed to the term in Section 3(a)(9) of the
Exchange Act and used in Sections 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d)
thereof, except that the term shall not include (a) the
Company or any of its Affiliates, (b) a trustee or other
fiduciary holding Company securities under an employee benefit plan
of the Company or any of its Affiliates, (c) an underwriter
temporarily holding securities pursuant to an offering of those
securities or (d) a corporation owned, directly or indirectly,
by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.
“Potential Change in Control ” shall be
deemed to have occurred if the event set forth in any one of the
following paragraphs shall have occurred:
(a) the
Company enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control;
(b) the
Company or any Person publicly announces an intention to take or to
consider taking actions which, if consummated, would constitute a
Change in Control;
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(c) any
Person becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 15 percent or more of
either the then outstanding shares of common stock of the Company
or the combined voting power of the Company’s then
outstanding securities (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Company or its Affiliates); or
(d) the Board
adopts a resolution to the effect that, for purposes of this
Agreement, a Potential Change in Control has occurred.
“ Section 409A ” means
section 409A of the Code and the final regulations issued
thereunder by the IRS and the Department of Treasury.
“ Section 409A Disability
” shall mean the inability of the Executive to
engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months. The Executive
shall also be treated as having a “
Section 409A Disability ” if he is, by
reason of a medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving
income replacement benefits for a period of not less than three
months under an accident and health plan covering employees of the
Company.
“ Separation From Service ”
shall have the meaning ascribed to that term under
Section 409A.
“ Specified Employee ”
shall have the meaning ascribed to that term under
Section 409A.
“ Specified Owner ” means
any of the following:
(b) an
Affiliate of the Company;
(c) an
employee benefit plan (or related trust) sponsored or maintained by
the Company or any Affiliate of the Company;
(d) a Person
that becomes a Beneficial Owner of the Company’s outstanding
Voting Securities representing 30 percent or more of the
combined voting power of the Company’s then outstanding
Voting Securities as a result of the acquisition of securities
directly from the Company and/or its Affiliates; or
(e) a Person
that becomes a Beneficial Owner of the Company’s outstanding
Voting Securities representing 30 percent or more of the
combined voting power of the Company’s then outstanding
Voting Securities as a result of a Merger if the individuals and
Entities who were the Beneficial Owners of the Voting Securities of
the Company outstanding immediately prior to such Merger own,
directly or indirectly, at least 50 percent of the combined
voting power of the Voting Securities of any of the Company, the
surviving Entity or the parent of the surviving Entity outstanding
immediately after such Merger in substantially the same proportions
as their
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ownership of
the Voting Securities of the Company outstanding immediately prior
to such Merger.
“ Termination of Employment
” means the termination of the Executive’s
employment relationship with the Company (a) by the Company
without Cause after a Change in Control occurs, or (b) by the
Executive for Good Reason after a Change in Control occurs, or
(c) resignation by the Executive concurrent with a Change in
Control.
For purposes of
this definition, the Executive’s employment shall be deemed
to have been terminated after a Change in Control, if (a) the
Executive’s employment is terminated by the Company without
Cause prior to a Change in Control (whether or not a Change in
Control ever occurs) and such termination was at the request or
direction of a Person who has entered into an agreement with the
Company, the consummation of which would constitute a Change in
Control; (b) the Executive terminates his employment for Good
Reason prior to a Change in Control (whether or not a Change in
Control ever occurs) and the circumstance or event which
constitutes Good Reason occurs at the request or direction of a
Person who has entered into an agreement with the Company, the
consummation of which would constitute a Change in Control; or
(c) the Executive’s employment is terminated by the
Company without Cause or by the Executive for Good Reason and such
termination or the circumstance or event which constitutes Good
Reason is otherwise in connection with a Change in Control For
purposes of any determination regarding the applicability of the
immediately preceding sentence, any position taken by the Executive
shall be presumed to be correct unless the Company establishes to
the Committee by clear and convincing evidence that such position
is not correct.
“
Termination of Employment ” does not include
(a) a termination of employment due to the Executive’s
death or Disability, or (b) a termination of employment by the
Company with Cause.
“ Voting Securities ” means
the outstanding securities entitled to vote generally in the
election of directors or other governing body.
1.2 Number and
Gender . As used in this Agreement, unless the context
otherwise expressly requires to the contrary, references to the
singular include the plural, and vice versa; references to the
masculine include the feminine and neuter; referenc
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