|
Exhibit
10.2
DANKA BUSINESS SYSTEMS
PLC
Amended Change of Control
Agreement for A.D. Frazier
DANKA BUSINESS SYSTEMS
PLC
Change of Control Agreement
for A. D. Frazier
|
|
|
|
|
| |
|
|
|
Page |
|
1.
|
|
Definitions. |
|
2 |
|
|
|
|
2.
|
|
Term of
Agreement. |
|
4 |
|
|
|
|
3.
|
|
Reimbursement of Business Expenses. |
|
5 |
|
|
|
|
4.
|
|
Entitlement to Severance Benefit. |
|
5 |
|
|
|
|
5.
|
|
Entitlement to Retention Bonus. |
|
7 |
|
|
|
|
6.
|
|
Confidentiality and Related Covenants. |
|
7 |
|
|
|
|
7.
|
|
Amendment
or Termination. |
|
8 |
|
|
|
|
8.
|
|
Resolution of Disputes. |
|
8 |
|
|
|
|
9.
|
|
Miscellaneous Provisions. |
|
8 |
AMENDED CHANGE OF CONTROL
AGREEMENT
AGREEMENT, made and entered into as of
the 15th day of February, 2008 (the “Effective Date”)
by and among Danka Business Systems PLC (“Danka Business
Systems”), Danka Office Imaging Company (“Danka”)
(Danka Business Systems and Danka sometimes referred to herein
together with their respective successors and assigns as the
“Company”) and A.D. Frazier, an individual (the
“Executive”).
W I T N E S S E T
H:
WHEREAS, Executive is an employee of the
Company serving in an executive capacity;
WHEREAS, the Board of Directors of each
corporation included in the Company (the “Board”)
believes it is necessary and desirable that the Company be able to
rely upon Executive to continue serving in his position in the
event of a pending or actual Change of Control (as defined) of the
Company;
WHEREAS, the Company and Executive
entered into a Change of Control Agreement, effective as of
April 3, 2006 (the “Original Change in Control
Agreement”); and
WHEREAS, the Company and Executive
desire to amend and restate the Original Change in Control
Agreement, in the manner set forth herein.
NOW, THEREFORE, in consideration of the
premises and mutual covenants contained herein and for other good
and valuable consideration, the receipt and sufficiency of which is
mutually acknowledged, the Company and Executive (individually a
“Party” and together the “Parties”) agree
as follows:
1. Definitions .
(a) “Base Salary” shall mean
Executive’s annual base salary in effect at the time of
termination of employment or, if applicable, at the time of the
Change of Control, if greater than Executive’s annual base
salary in effect at the time of termination of
employment.
(b) “Cause” shall mean and
be limited to:
| |
(i) |
Executive’s commission of any crime that
(i) constitutes a felony in the jurisdiction involved or
(ii) involves loss or damage to or destruction of property of
the Company or (iii) results in the incarceration of Executive
following his conviction for such crime; or |
| |
(ii) |
Executive’s willful and material violation of any lawful
directions of the Company’s Chief Executive or Board after
the Company has provided written notice to Executive and said
violation continues after Executive shall have reasonable
opportunity to cure said violation. |
For purposes of this Agreement, an act
or failure to act on Executive’s part shall be considered
“willful” if it was done or omitted to be done by
Executive not in good faith, and shall not include any act or
failure to act resulting from any incapacity of
Executive.
(c) A “Change of Control”
shall be deemed to have occurred when:
| |
(i) |
securities of Danka Business Systems representing more than 30
percent of the combined voting power of the then outstanding voting
securities of Danka Business Systems are acquired pursuant to a
general offer for the issued share capital of the Company which is
an offer regulated under the U.K. Take-Over Code or any other
tender offer or an exchange offer by any person or group of persons
acting in concert (within the meaning of Section 14(d) of the
Securities Exchange Act of 1934) other than the Company, a direct
or indirect subsidiary or parent of the Company, an employee
benefit plan or similar trust established by the
Company; |
| |
(ii) |
any “person” or “group” (as such terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934) is or becomes the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act
of 1934, except that a “person” or “group”
shall be deemed to have beneficial ownership of all shares that
such “person” or “group” has the right to
acquire, whether such right is exercisable immediately or only
after the passage of time), directly or indirectly, of 50% or more
of the total outstanding Voting Stock of Danka Business
Systems; |
| |
(iii) |
Danka Business Systems consolidates with or merges with or into
any entity, or any entity consolidates with or merges with or into
Danka Business Systems, in any such event pursuant to a transaction
in which the outstanding Voting Stock of Danka Business Systems is
converted into or exchanged for cash, securities or other property,
other than any such transaction where the outstanding Voting Stock
of Danka Business Systems is converted into or exchanged for Voting
Stock of the surviving entity representing a majority of the voting
power of all Voting Stock of such surviving entity immediately
after giving effect to such issuance; |
| |
(iv) |
a sale is consummated by the Company of substantially all of
the Company’s assets (or substantially all of the assets of
Danka) to a person or entity which is not a wholly-owned subsidiary
of Danka Business Systems or a holder of all of the Voting Stock of
Danka or Danka Business Systems; or |
| |
(v) |
during any period of two consecutive years, individuals who, at
the beginning of such period, constituted the Board of Directors of
Danka Business Systems (the “Board”) cease, for any
reason, to constitute at least a majority thereof, unless the
election or nomination for election for each new director was
approved by the vote of at least two-thirds of the directors then
still in office who were directors at the beginning of such
two-year period. |
For purposes of this Agreement, no
Change of Control shall be deemed to have occurred with respect to
Executive if the Change of Control results from actions or events
in which Executive is a participant in a capacity other than solely
as an officer, employee or director of the Company.
(d) “Code” means the
Internal Revenue Code of 1986, as amended.
(e) “Disability” shall mean
a physical or mental illness which, in the judgment of the Company
after consultation with the licensed physician attending Executive,
impairs Executive’s ability to substantially perform his
duties as an employee and as a result of which Executive shall have
been unable to perform his duties for the Company on a full-time
basis for a period of 180 consecutive days.
(f) “Effective Date” shall
mean the date of this Agreement, as set forth above.
(g) “Excise Taxes” shall
have the meaning set forth in Section 4 below.
(h) “Good Reason” shall mean
the occurrence of one or more of the following events without
Executive’s prior written consent (except as a result of a
prior termination):
| |
(i) |
any material change in Executive’s status, title,
authorities or responsibilities (including reporting
responsibilities) which represents a demotion from
Executive’s status, title, position or responsibilities
(including reporting responsibilities) prior to the Change of
Control; the assignment to Executive of any duties or work
responsibilities which are materially inconsistent with
Executive’s status, title, position or work responsibilities
prior to the Change of Control, or which are materially
inconsistent with the status, title, position or work
responsibilities of a similarly situated senior officer; or any
removal of Executive from, or failure to appoint, elect, reappoint
or reelect Executive to, any of such positions, except in the event
of Executive’s death or Disability; |
| |
(ii) |
any decrease in Executive’s annual Base Salary or target
annual incentive award opportunity; |
| |
(iii) |
the reassignment of Executive to a location more than thirty
(30) miles from Executive’s then-current work
location; |
| |
(iv) |
the failure by the Company to continue in effect any incentive,
bonus or other compensation plan in which Executive participates,
unless an equitable arrangement (embodied in an ongoing substitute
or alternative plan) has been made with respect to the failure to
continue such plan, or the failure by the Company to continue
Executive’s participation therein, or any action by the
Company which would directly or indirectly materially reduce his
participation therein or reward opportunities thereunder; provided,
however, that Executive continues to meet substantially all
eligibility requirements thereof; |
| |
(v) |
the failure by the Company to continue in effect any employee
benefit plan (including any medical, hospitalization, life
insurance, disability or other group benefit plan in which
Executive participates), or any material fringe benefit or
perquisite enjoyed by Executive unless an equitable arrangement
(embodied in an ongoing substitute or alternative plan) has been
made with respect to the failure to continue such plan, or the
failure by the Company to continue Executive’s participation
therein, or any action by the Company which would directly or
indirectly materially reduce Executive’s participation
therein or reward opportunities thereunder, or the failure by the
Company to provide Executive with the benefits to which Executive
is entitled as an employee of the Company; provided, however, that
Executive continues to meet substantially all eligibility
requirements thereof, |
| |
(vi) |
any purported termination of Executive’s employment for
Cause which is not effected which does not follow the notice
requirements herein.; or |
| |
(vii) |
the failure of the Company to obtain a satisfactory agreement
from any successor or assignee of the Company to fully assume and
agree to perform this Agreement. |
(i) “Retention Bonus” shall
have the meaning set forth in Section 5 below.
(j) “Retirement” shall mean
Executive’s termination of employment with the Company at or
after attaining age 65.
(k) “Severance Payments”
shall have the meaning set forth in Section 4
below.
(l) “Term” shall have the
meaning set forth in Section 2 below.
(m) “Voting Stock” of an
entity means capital stock of such entity of the class or classes
pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of such entity
(irrespective of whether or not at the time capital stock of any
other class or classes shall have or might have voting power by
reason of the happening of any contingency).
2. Term of Agreement .
The term of this Agreement shall
commence on the Effective Date and, subject to any amendment or
termination of the Agreement by the Parties permitted by
Section 7 below, shall remain in effect until such time as
Executive’s employment may be terminated under circumstances
which do not entitle Executive to Severance Payments or the
Retention Bonus under this Agreement (the “ Term”). If
a Change of Control shall have occurred during the Term, including
during the one-year notice period provided for in Section 7
following the delivery by the Company of notice of its intent to
terminate this Agreement, notwithstanding any other provision of
this Section 2, the Term shall not expire earlier than two
years after the effective date of such Change of Control. If, prior
to the first anniversary of the Effective Date, a Change of Control
has not occurred and Executive’s employment is terminated
under circumstances that entitle him to the Retention Bonus but not
the Severance Payments, then this Agreement shall not expire
earlier than at such time as the Retention Bonus has been
paid.
3. Reimbursement of Business
Expenses .
Executive is authorized to incur
reasonable expenses in carrying out Executive’s duties and
responsibilities on the Company’s behalf, and the Company
shall promptly reimburse Executive for all business expenses
incurred in connection therewith, subject to documentation in
accordance with the Company’s policy.
4. Entitlement to Severance
Benefit .
(a) Severance Benefit . In the
event Executive’s employment with the Company is terminated
without Cause, other than due to death, Disability or Retirement,
or in the event Executive terminates his employment for Good
Reason, in either case within two years following a Change of
Control, or in the event that prior to the consummation of a
pending Change of Control Executive’s employment is
involuntarily terminated without Cause (other than due to death or
Disability) as a condition to the consummation of the proposed
transaction, whether at the request of the acquiring firm or
otherwise, Executive shall be entitled to receive, subject to
Section 4(d) below:
| |
(i) |
Base Salary through the date of termination of
Executive’s employment, which shall be paid in a cash lump
sum not later than 30 days following Executive’s termination
of employment; |
| |
(ii) |
an amount equal to two and one-half times the sum of
(A) Executive’s Base Salary and
(B) Executive’s annual bonus determined, for the
purposes of this Section 4(a)(ii), to be equal to
Executive’s Base Salary, payable in a cash lump sum not later
than 30 days following Executive’s termination of
employment; |
| |
(iii) |
immediate vesting of all outstanding stock options and the
right to exercise such stock options at any time during an extended
exercise period of not less than 36 months following
Executive’s termination of employment, or the remainder of
the exercise period, if less, in each case, to the extent permitted
by the terms of the Company’s stock option
schemes; |
| |
(iv) |
settlement of all deferred compensation arrangements in
accordance with any then applicable deferred compensation plan or
election form; |
| |
(v) |
continued medical, hospitalization, life and other insurance
benefits being provided to Executive and Executive’s family
at the date of termination, for a period of up to twelve
(12) months after the date of termination; provided that such
benefits shall be provided through an arrangement that satisfies
the requirements of Sections 105 or 106 of the Code; and provided,
further, that the Company shall have no obligation to continue to
provide Executive with these benefits for any periods after the
date Executive obtains comparable benefits (with no significant
pre-existing condition exclusions) as a result of Executive’s
employment in a new position; and |
| |
(vi) |
other or additional benefits then due or earned in accordance
with applicable plans and programs of the Company. |
(b) Reduction in Compensation to
Avoid Excise Tax . In the event Executive would become entitled
to any amounts payable in connection with a Change of Control
(whether or not such amounts are payable pursuant to this
Agreement) (the “Severance Payments”), if any of such
Severance Payments would otherwise be subject to the excise tax on
excess golden parachute payments imposed by Section 4999 of
the Code (or any similar federal, state or local tax that may
hereafter be imposed) (the “Excise Tax”), as determined
in accordance with this Section 4(b), but prior to giving
effect to any adjustment under this Section 4(b), the
following provisions shall apply:
| |
(i) |
For purposes of determining whether any of the Severance
Payments would be subject to the Excise Tax and the amount of such
Excise Tax: |
| |
(A) |
Severance
Payments, the Retention Bonus (the Severance Payments and the
Retention Bonus together, the “Severance and Retention
Payments”) and any other payments or benefits other than
those under this Section 4 and Section 5 received or to
be received by Executive in connection with a Change in Control or
Executive’s termination of employment (whether pursuant to
the terms of this Agreement or any
|
| |
other plan, arrangement or
agreement with the Company, any person whose actions result in a
Change of Control or any person affiliated with the Company or such
person) (which, together with the Severance Payments, constitute
the “Total Payments”), shall be treated as
“parachute payments” within the meaning of
Section 280G(b)(2) of the Code, and all “excess
parachute payments” within the meaning of
Section 280G(b)(1) of the Code shall be treated as subject to
the Excise Tax, unless in the opini
|
|
