EXHIBIT 10 (n)
CHANGE IN CONTROL
AGREEMENT
As Amended and Restated Effective
January 1, 2009
THIS AGREEMENT, effective as of
July 16, 2001 (the “Effective Date”), is between
Computer Task Group, Incorporated, a New York corporation with its
executive offices at 800 Delaware Avenue, Buffalo, New York 14209
(the “Corporation”), and James R. Boldt, an individual
residing at 142 Audubon Drive, Amherst, New York 14226 (the
“Executive”). The Agreement is amended and restated
effective January 1, 2009.
RECITALS:
WHEREAS, the Executive is employed
as the President and Chief Executive Officer of the Corporation;
and
WHEREAS, it is in the best interests
of the Corporation to reinforce and encourage the Executive’s
continued disinterested full attention and undistracted dedication
to the duties of the Executive currently and in the potentially
disturbing circumstances of a possible change in control of the
Corporation by providing some degree of personal financial security
to the Executive; and
WHEREAS, it is in the best interests
of the Corporation to enable the Executive, without being
influenced by the uncertainties of the Executive’s own
situation, to assess and advise the Corporation whether proposals
concerning any potential change in control are in the best
interests of the Corporation and its shareholders and to take other
action regarding these proposals as the Corporation might determine
to be appropriate; and
WHEREAS, to induce the Executive to
remain in the employ of the Corporation, the Board of Directors has
determined it is desirable to pay the Executive the compensation
set forth below if the Executive’s employment with the
Corporation terminates in one of the circumstances described below
in connection with a change in control of the Corporation;
and
WHEREAS, this Agreement has been
amended and restated effective January 1, 2009 to coordinate
with a certain Employment Agreement and to include provisions
intended to comply with final regulations promulgated under
Internal Revenue Code (“Code”) Section 409A and
shall be construed to the extent practicable so as to avoid causing
any amounts payable to the Executive hereunder to be includable in
his gross income under Code Section 409A
(a) (1).
NOW, THEREFORE, in consideration of
the promises and of the covenants contained in this Agreement, the
Corporation and the Executive agree as follows:
1. DEFINITIONS. The following
definitions apply for purposes of this Agreement.
(a) “Aggregate Exercise
Price” means:
(i) in the case of options to
acquire common stock of the Corporation owned by the Executive, the
total amount of cash or immediately available funds the Executive
would be required to pay to the Corporation to purchase all of the
common stock of the Corporation that, on the date as of which the
Aggregate Exercise Price is to be determined, the Executive is
entitled to purchase under the terms of all issued, outstanding and
unexercised options to purchase common stock of the Corporation
that are outstanding and exercisable on the date as of which the
Aggregate Exercise Price of those options is to be determined;
and
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(ii) in the case of options to
acquire Successor Equity, the total amount of cash or immediately
available funds the Executive would be required to pay to the
Successor to purchase all the Successor Equity that, on the date as
of which the Aggregate Exercise Price is to be determined, the
Executive is entitled to purchase under the terms of all issued,
outstanding and unexercised options to purchase Successor Equity
that are outstanding and exercisable on the date as of which the
Aggregate Exercise Price of those options is to be
determined.
(b) “Built in Gain”
means an amount equal to:
(i) the Highest Sale Price as of the
date of a Change in Control multiplied by the total number of
shares of common stock of the Corporation that the Executive could
acquire by exercising all of the options to acquire common stock of
the Corporation that, as of the date of the Change in Control, were
issued to the Executive, outstanding and unexercised,
minus
(ii) the Aggregate Exercise Price of
those options.
(c) “Board of Directors”
or “Board” means the Board of Directors of the
Corporation.
(d) “Cause” means a
finding by the Board of Directors, with notice in writing to the
Executive setting forth in reasonable detail its reasons, that any
of the following conditions exist:
(i) The Executive’s willful
and continued failure to substantially perform his duties as
President and Chief Executive Officer (other than as a result of
the Executive’s Disability).
(ii) A willful act or omission by
the Executive constituting fraud or other malfeasance, including
without limitation acts of dishonesty constituting a felony offense
under the laws of the United States or any state thereof, and any
act or omission by the Executive constituting immoral conduct,
which in any such case is injurious to the financial condition or
business reputation of the Corporation.
(iii) A material breach by the
Executive of the Employment Agreement.
For purposes of this definition, an
act or failure to act will be deemed “willful” only if
it is effected by the Executive not in good faith and without a
reasonable belief that his action or failure to act was in or not
opposed to the Corporation’s best interests.
(e) “Change in Control”
means any one of the following occurrences:
(i) Approval by the stockholders of
the Corporation of the dissolution or liquidation of the
Corporation;
(ii) Approval by the stockholders of
the Corporation of an agreement to merge or consolidate, or
otherwise reorganize, with or into one or more entities that are
not Subsidiaries or other affiliates, as a result of which less
than 50% of the outstanding voting securities of the surviving or
resulting entity immediately after the reorganization are, or will
be, owned, directly or indirectly, by stockholders of the
Corporation immediately before such reorganization (assuming for
purposes of such determination that there is no change in the
record ownership of the Corporation’s securities from the
record date for such approval until such reorganization and that
such record owners hold no securities of the other parties to such
reorganization, but including in such determination any securities
of the other parties to such reorganization held by affiliates of
the Corporation);
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(iii) Approval by the stockholders
of the Corporation of the sale of substantially all of the
Corporation’s business and/or assets to a person or entity
that is not a Subsidiary or other affiliate; or
(iv) Any “Person” (as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended from time to time, but excluding
any person described in and satisfying the conditions of Rule
13d-1(b)(1) thereunder), other than the Corporation, any Subsidiary
of the Corporation, any employee benefit plan of the Corporation or
of any of its Subsidiaries or any Person holding common shares of
the Corporation for or pursuant to the terms of any such employee
benefit plan, becomes the beneficial owner (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of
securities of the Corporation representing more than 20% of the
combined voting power of the Corporation’s then outstanding
securities entitled to then vote generally in the election of
directors of the Corporation; or
(v) During any period not longer
than two consecutive years, individuals who at the beginning of
such period constituted the Board cease to constitute at least a
majority thereof, unless the election, or the nomination for
election by the Corporation’s stockholders, of each new Board
member was approved by a vote of at least three-quarters of the
Board members then still in office who were Board members at the
beginning of such period (including for these purposes, new members
whose election or nomination was so approved).
(f) “Code” means the
Internal Revenue Code of 1986, as amended.
(g) “Conversion Options”
means an option or options to purchase Successor Equity, which
option or options may be granted by the Successor to the Executive
and are exercisable in full immediately following the Change in
Control for an Aggregate Exercise Price that does not exceed the
Aggregate Exercise Price of the options to purchase common stock of
the Corporation owned by the Executive on the date of the Change in
Control and which options, if exercised by the Executive in full
immediately following that Change in Control, would provide for the
ownership by the Executive of Successor Equity that, immediately
following the acquisition of that Successor Equity by the
Executive, may be sold by the Executive, free of any restrictions
imposed on the sale of securities by the Securities Act of 1933,
and which satisfy the requirements of Regulation
§1.409A-1(b)(5)(v)(D) so that the exchange of options to
purchase stock of the Corporation for Conversion Options will not
be treated as the grant of a new stock right or change in the form
of payment for purposes of said Regulation. Under no circumstances
is the Executive required to accept a grant of Conversion Options
from the Successor.
(h) “Corporation” means
Computer Task Group, Incorporated.
(i) “Disability” means a
disability that exists for a period of at least 12 months and
because of which the Executive is physically or mentally unable to
substantially perform his regular duties as President or Chief
Executive Officer of the Corporation, as the case may
be.
(j) “Employment
Agreement” means a certain employment agreement between the
Corporation and the Executive which is effective as of
July 16, 2001, as such agreement may be amended or
superseded.
(k) “Good Reason” means
the occurrence of one or more of the following events, provided
that the Executive shall give the Corporation a written notice,
within 90 days following the initial occurrence of the event,
describing the event that the Executive claims to be Good Reason
and stating the Executive’s intention to terminate employment
unless the Corporation takes appropriate corrective
action:
(i) A material diminution in the
Executive’s responsibilities, duties, title, reporting
responsibilities within the business organization, status, role or
authority.
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(ii) A material reduction by the
Corporation in the Executive’s annual base salary as in
effect on the date of a Change in Control or as in effect
thereafter if that base salary has been increased.
(iii) A material reduction by the
Corporation in the aggregate value of benefits provided to the
Executive, as in effect on the date of a Change in Control or as in
effect after that date if those benefits have been increased.
“Benefits” includes all profit sharing, 401(k),
retirement, pension, health, medical, dental, disability,
insurance, automobile, severance, vacation, leave, reimbursement,
and similar benefits.
(iv) A material breach by the
Corporation of any provision of this Agreement or of any other
agreement requiring the payment of compensation to the
Executive.
(v) Removal from, or failure to
re-elect, the Executive to the position of President or Chief
Executive Officer.
(vi) A requirement, in the
Executive’s reasonable judgment, that the services required
to be performed by the Executive would necessitate the Executive
moving his residence at least 50 miles from the Buffalo, New York
area.
The Corporation shall have 30 days
following the date of receipt of the written notice from the
Executive stating his claim of Good Reason in which to take
appropriate corrective action. If the Corporation does not correct
the Good Reason condition, the Executive’s Good Reason
termination will be deemed to have occurred on the day following
the 30-day period.
(l) “Highest Sale Price”
means:
(i) with respect to the common stock
of the Corporation, the highest closing sale price at which common
stock of the Corporation has been sold, in an established
securities market, during the 12 consecutive month period ending on
the date as of which the Highest Sale Price of the common stock of
the Corporation is to be determined; and
(ii) with respect to Successor
Equity, the highest closing sale price at which Successor Equity
has been sold, in an established securities market, during the 12
consecutive month period ending on the date of which the Highest
Sale Price of the Successor Equity is to be determined.
(m) “Regulation” means
Treasury Regulations promulgated under Code Section 409A as
amended.
(n) “Subsidiary” means
any corporation or other entity a majority of whose outstanding
voting stock or voting power is beneficially owned directly or
indirectly by the Corporation.
(o) “Successor” means,
the person, firm, corporation or other entity that, as a result of
a Change in Control, has succeeded, directly or indirectly, to all
or substantially all the assets, rights, properties, liabilities
and obligations of the Corporation.
(p) “Successor Equity”
means capital stock or any other equity interest in the
Successor.
(q) “Termination of
Employment” has the meaning provided in Regulation
§1.409A-1(h) (1) (ii). If the Executive provides services
as an independent contractor, the Executive will not be considered
to have a Termination of Employment until the Executive has ceased
providing services both as an employee and as an independent
contractor. The preceding sentence shall not apply with respect to
nonqualified deferred compensation plan in which the Executive
participates as an employee to the extent that the
Executive’s sole activity as an independent contractor with
respect to the Corporation is to serve on the Corporation’s
Board of Directors.
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2. BENEFITS UPON CHANGE IN CONTROL. The
Corporation will provide the benefits listed below in Sections 2(a)
and 2(b) on a Change in Control. All amounts payable on a Change in
Control under all subsections of this Section will be made by bank
check or wire transfer at the Change in Control, or, if that is not
within the control of the Corporation, not later than the tenth
business day following the Change in Control except as otherwise
provided in Section 2(a) or 2(b). For purposes of this
Section, references to payments by the Corporation include payments
from any entity related to the Corporation, such as the
Corporation’s Stock Employee Compensation Trusts.
(a) STOCK RIGHTS. As of the date of
the Change in Control, the Executive will become fully vested in,
and entitled to exercise immediately all stock-related awards he
has been granted under any plans or agreements of the Corporation,
including without limitation, awards under the 1991 Stock Option
Plan and the 2000 Equity Award Plan, other than any stock-related
award that constitutes a “deferral of compensation”
within the meaning of Code Section 40
