CHANGE OF CONTROL
AGREEMENT
This CHANGE OF
CONTROL AGREEMENT (“ Agreement ”) between and
among TechTeam Global, Inc., a Delaware corporation (the “
Company ”), and Christopher E. Donohue (the “
Executive ”) is entered into on
February 11 th ,
2009.
The Board of
Directors of the Company (the “ Board ”) has
determined that it is in the best interests of the Company and its
shareholders to diminish the inevitable distraction to the
Executive from the personal uncertainties and risks created by a
pending or potential Change of Control, and to encourage the
Executive’s full attention and dedication to the Company
currently and in the event of any pending or potential Change of
Control, and to provide the Executive with a severance package if
the Executive is terminated as a result of a Change of Control.
Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.
NOW, THEREFORE, IT
IS HEREBY AGREED AS FOLLOWS:
(a)
“ Effective Date ” shall mean the date on which
a Change of Control occurs. Notwithstanding anything in this
Agreement to the contrary, if a Change of Control occurs and if the
Executive’s employment with the Company is terminated prior
to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of
employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect the Change of Control
or (ii) otherwise arose in connection with or in anticipation
of the Change of Control, then for all purposes of this Agreement,
the “ Effective Date ” shall mean the date
immediately prior to the date of such termination of
employment.
(b)
“ Change of Control ” shall mean the first to
occur of the following:
(i)
any merger, consolidation, recapitalization of the Company or the
sale or other transfer of greater than 50% of all then outstanding
voting shares of the Company entitled to vote generally in the
election of the directors (“ Voting Securities
”);
(ii)
the consummation of the sale, lease, dissolution or other transfer
(in one transaction or a series of transactions contemplated or
arranged by any part as a single plan) or other disposition of all
or a majority of the assets or operations of the Company;
or
(iii)
a change in composition of the Board of Directors involving a
majority of the then current incumbent directors as a result of
either an actual or threatened election contest.
(c)
“ Change Period ” shall mean the period
commencing upon the Effective Date and ending on the first
anniversary of such date.
(d)
“ Disability ” shall mean the absence of the
Executive from the Executive’s duties with the Company on a
full-time basis for 180 consecutive business days as a result of
incapacity due to mental or physical illness, which is determined
to be total and/or permanent by a physician selected by the Company
or its insurers.
(e)
“ Cause ” shall mean any of the following:
(i) Executive’s conviction of or a plea of no contest to
a felony, fraud or a crime involving moral turpitude under any
state or federal statute; (ii) Executive’s continued
failure to substantially perform the Executive’s duties
unrelated to a Disability, or any other intentional action or
omission by Executive that is injurious to the Company; or
(iii) any material breach of any employee handbook of the
Company by the Executive, which breach is not remedied within
fourteen (14) days after written notice thereof.
(f)
“ Good Reason ” shall mean any of the following:
(i) the assignment to the Executive of any duties inconsistent
with the Executive’s position, authority, duties or
responsibilities prior to the Effective
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Date, or any
other action by the Company or the Company (or any of their
successors) which results in a diminution in such position,
authority, duties or responsibilities, and the continuance of such
assignment of duties or other such action for a period of sixty
(60) days; (ii) the requirement of the Executive to be based
at any office or location other than the location to which
Executive was assigned prior to the Effective Date, except for
short-term assignments (under three (3) months) where the
Company pays all travel or temporary relocation costs incurred by
the Executive; (iii) any failure by the Company to comply with
and satisfy Section 9(c) of this Agreement, or any failure by any
successor to assume and offer to perform this Agreement in
accordance with Section 9(c), provided that such successor has
received at least ten days prior written notice from the Company or
the Executive of the requirements of Section 9(c).
(g)
“ Notice of Termination ” shall mean a written
notice which (i) indicates the specific termination provision
in this Agreement relied upon by the terminating party, and
(ii) to the extent practicable, sets forth in reasonable
detail the facts and circumstances relied upon to form such
party’s basis for termination of employment under the
operative provisions.
(h)
“ Termination Date ” shall mean (i) if the
Executive’s employment is terminated by the Company for
Cause, the date of receipt of the Notice of Termination or any
later date specified therein, as the case may be; (ii) if the
Executive’s employment is terminated by the Executive for
Good Reason, the end of the thirty-day cure period described in
subsection (d) above or any later date specified therein
(which later date must in all cases be within two years of the
initial existence of the condition constituting Good Reason);
(iii) if the Executive’s employment is terminated by the
Company other than for Cause or Disability, the Termination Date
shall be the date on which the Company notifies the Executive of
such termination; and (iv) if the Executive’s employment
is terminated by reason of death or Disability, the Termination
Date shall be the date of death of the Executive or the date of
Disability, as the case may be.
(i)
“ Specified Employee ” shall have the meaning
given in Code Section 409A as determined in accordance with
the methodology established by the Company as in effect on the date
of Executive’s Separation from Service.
(j)
“ Code ” shall mean the Internal Revenue Code of
1986, as amended. Any reference to a specific provision of the Code
shall include any successor provision and/or regulations
promulgated under that provision of the Code.
(a)
Position and Duties . During the Change Period, Executive
agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to
the extent necessary to discharge the responsibilities assigned to
the Executive hereunder, to use the Executive’s reasonable
best efforts to perform faithfully and efficiently such
responsibilities.
(b)
Compensation . During the Change Period, the Executive
shall:
(i)
receive an annual base salary (“ Annual Base Salary
”) at least equal to twelve times the highest monthly base
salary paid or payable to the Executive by the Company in the
twelve-month period immediately preceding the month in which the
Effective Date occurs;
(ii)
be eligible to participate in any bonus program in force on the
Effective Date, or otherwise adopted by the Company;
(iii)
be entitled to participate in all savings and retirement plans,
practices, policies and programs applicable generally to other peer
executives of the Company;
(iv)
be eligible (and the Executive’s family members shall be
eligible) for participation in and to receive all benefits under
welfare benefit plans, practices, policies and programs provided by
the Company (including, without limitation, medical, prescription,
dental, disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and
programs).
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3.
Termination of Employment .
(a)
Death or Disability . The Executive’s employment shall
terminate automatically upon the Executive’s death or
Disability that continues for 30 days after the Company
provides Executive of notice of its determination of
Disability.
(b)
Cause . The Company may terminate the Executive’s
employment during the Change Period for Cause.
(c) The
Executive’s employment may be terminated during the Change
Period by the Executive for Good Reason.
(d) In
the case of any termination of employment under this Agreement, the
provisions of Section 4 of this Agreement shall
apply.
(e)
Notice of Termination . Any termination by the Company for
Cause, or by the Executive for Good Reason, shall be communicated
by written Notice of Termination to the other party in accordance
with this Agreement. In addition, if the Executive is resigning for
Good Reason, the Notice o
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