RETENTION AND CHANGE OF
CONTROL AGREEMENT
This CHANGE OF
CONTROL AGREEMENT (“ Agreement ”) between and
among TechTeam Global, Inc., a Delaware corporation (the “
Company ”), TechTeam Government Solutions, Inc., a
Virginia corporation (“ TTGSI ”) and David A.
Kriegman (the “ Executive ”) is entered into on
February 12 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)
The sale of 51% or more of the then outstanding shares of common
stock entitled to vote generally in the election of the directors
(“ Voting Securities ”) of TTGSI or the Company;
or
(ii)
The consummation of the sale or other disposition of all or
substantially all of the assets or operations of TTGSI or the
Company (whichever occurs first, the “ Acquired
Company ”).
(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 Acquired 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
Acquired 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 Acquired Company; or
(iii) any material breach of any employee handbook of the
Acquired 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 Date, or any other action
by the Company or the Acquired 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
1
relocation
costs incurred by the Executive; (iii) any failure by the
Acquired 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 Acquired 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 Acquired 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
Acquired Company other than for Cause or Disability, the
Termination Date shall be the date on which the Acquired 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) “
Separation from Service ” shall having the meaning
given in Code Section 409A, applying the default rules
thereof.
(k) “
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.
(l) “
Participation Incentive ” shall mean a cash payment
equal to twenty-five percent (25%) of the Closing Pool.
(m) “
Closing Pool ” shall mean an amount of money set aside
from the cash or other proceeds payable to the Company at the
consummation of a Change of Control (the “ Purchase
Price ”), determined as follows:
(i)
.75% of any Purchase Price under Eighty Million Dollars
($80,000,000); plus
(ii)
.9% of any Purchase Price between Eighty Million Dollars
($80,000,000) and One Hundred Million Dollars ($100,000,000);
plus
(iii)
1.2% of any Purchase Price between One Hundred Million Dollars
($100,000,000) and One Hundred Twenty Million Dollars
($120,000,000); plus
(iv)
a discretionary amount to be determined by the CEO of the Company,
of any Purchase Price over One Hundred Twenty Million Dollars
($120,000,000).
(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 Acquired 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 Acquired Company
in
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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 Acquired
Company;
(iii)
be entitled to participate in all savings and retirement plans,
practices, policies and programs applicable generally to other peer
executives of the Acquired 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 Acquired Company (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee
life, group life, accidental death and travel accident insurance
plans and programs).
(c)
Payment of Participation Incentive . If Executive remains
employed by TTGSI at the consummation of a Change of Control of
TTGSI, then the Executive shall be entitled to receive the
Participation Incentive.
(d)
Rights of the Company . The Executive hereby acknowledges
and agrees to the following as it relates to the rights of the
Company with respect to this Agreement:
(i) that the
Company may accept or reject any proposal for, or terminate any
discussions or neg
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