Exhibit 10.2
SEVERANCE
AGREEMENT
THIS SEVERANCE AGREEMENT (this
“Agreement”) is made and effective this 2 nd day of
February 2005 by and between AFFILIATED COMPUTER SERVICES,
INC. (the “Company”) and John Rexford, Executive Vice
President – Corporate Development, of the Company (the
“Executive”).
The Company has determined that both
the Executive’s performance and the Company’s ability
to retain the Executive as an employee will be significantly
enhanced if the Executive is provided with fair and reasonable
protection from a Change of Control of the Company. Accordingly,
the Company and the Executive agree as follows:
1. Defined Terms .
Unless otherwise indicated, capitalized terms used in this
Agreement shall have the meanings set forth herein or in
Schedule A .
2. Effective Date; Term
. This Agreement shall be effective on the date hereof and shall
remain in effect until (a) the Company terminates this
Agreement by giving the Executive at least one (1) year
advance written notice of termination or (b) the effective
date of any termination of the Executive’s employment with
the Company, whether voluntary, involuntary, or for Cause, and
regardless of the reason for such termination. Notwithstanding the
foregoing, this Agreement shall, if in effect on the date of a
Change of Control, remain in effect for such time following a
Change of Control as may be necessary to give effect to the terms
of the Agreement.
3. Change of Control
Benefits . Upon a Change of Control, the Executive shall be
entitled to the benefits provided herein.
(a) Severance Payments .
Within two (2) business days after a Change of Control, the
Company shall pay the Executive a lump sum amount, in cash, equal
to:
(i) three (3) times the sum
of:
(A) the Executive’s per annum
base salary in effect on the date of the Change of Control
(“Base Salary”), and
(B) the Executive’s Average
Commission Payment; and
(ii) the Executive’s Average
Commission Payment multiplied by a fraction, the numerator of which
shall be the number of days the Executive was employed by the
Company in the fiscal year in which the Change of Control occurs
and the denominator of which shall be 365.
(b) Continued Benefits . Until
the earlier of the third anniversary of the termination of the
Executive’s employment with the Company after a Change of
Control or the date on which the Executive becomes employed by a
new
employer,
the Company shall, at its expense, provide the Executive with
medical, dental, life insurance, disability and accidental death
and dismemberment benefits (“Insurance Benefits”) at
the highest level provided to the Executive immediately prior to
the Change of Control, provided , however , that if
the Executive becomes employed by a new employer which maintains
Insurance Benefits that either (i) do not cover the Executive
with respect to a pre-existing condition which was covered under
the Company’s Insurance Benefits, or (ii) do not cover
the Executive for a designated waiting period, the
Executive’s coverage under the Company’s Insurance
Benefits shall continue, without limitation, until the earlier of
the end of the applicable period of noncoverage under the new
employer’s Insurance Benefits or the third anniversary of the
Change of Control.
(c) Payment of Accrued But Unpaid
Amounts . Within two (2) business days after a Change of
Control or such other timeframe as required by applicable law, rule
or regulation, the Company shall pay the Executive (i) any
unpaid portion of compensation previously earned by the Executive;
and (ii) all compensation previously deferred by the Executive
but not yet paid.
(d) Post-Retirement Welfare
Benefits . For purposes of determining the Executive’s
eligibility for post-retirement benefits under any welfare benefit
plan (as defined in Section 3(1) of the Employee Retirement
Income Security Act of 1974, as amended) maintained by the Company
immediately prior to the Change of Control and in which the
Executive then participated, the Executive shall be credited with
the excess of three (3) years of participation in the applicable
plan and three (3) years of age over the actual years of
participation and age credited to the Executive on the date of the
Change of Control. If, after taking into account the credited
participation and age, the Executive would have been eligible for
post-retirement benefits, the Executive shall receive, commencing
on the date of the Change of Control, post-retirement benefits
based on the terms and conditions of the applicable plans in effect
immediately prior to the Change of Control.
(e) Effect on Existing Plans .
All Change of Control provisions applicable to the Executive and
contained in any plan, program, agreement or arrangement maintained
on or after the date hereof by the Company (including, but not
limited to, any stock option, restricted stock or pension plan)
shall remain in effect for such period after the date of a Change
of Control as is necessary to carry out such provisions and provide
the benefits payable thereunder, and may not be altered in a manner
which adversely affects the Executive without the Executive’s
prior written approval.
(f) Outplacement Counseling .
The Company shall reimburse all reasonable expenses incurred by the
Executive for professional outplacement services by qualified
consultants selected by the Executive for a period of
12 months following a Change of Control.
4. Mitigation . The
Executive shall not be required to seek other employment after a
Change of Control and any compensation earned from other employment
shall not reduce the amounts otherwise payable under this
Agreement.
5. Gross-up .
(a) In the event it shall be
determined that any payment, benefit or distribution (or
combination thereof) by the Company, or any trust established by
the Company for the benefit of its employees, to or for the benefit
of the Executive (whether payable pursuant to the terms of this
Agreement (a “Payment”)) would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code and
any interest or penalties are incurred by the Executive with
respect to such excise tax (the excise tax, together with interest
and penalties thereon, hereinafter collectively referred to as the
“Excise Tax”), the Executive shall be entitled to
receive an additional payment (a “Gross-up Payment”) in
an amount such that after payment by the Executive of all taxes,
including, without limitation, any income taxes and the Excise Tax
imposed upon the Gross-up Payment, the Executive retains an amount
of the Gross-up Payment equal to the Excise Tax imposed upon the
Payments.
(b) Subject to the provisions of
Section 5(c) , all determinations required to be made
under this Section 5 , including whether and when a
Gross-up Payment is required and the amount of such Gross-up
Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized certified
public accounting firm as may be designated by the Executive (the
“Accounting Firm”). All fees and expenses of the
Accounting Firm shall be borne solely by the Company. Any Gross-up
Payment, as determined pursuant to this Section 5 ,
shall be paid by the Company to the Executive within five
(5) days after the receipt of the Accounting Firm’s
determination. If the Accounting Firm determines that no Excise Tax
is payable by the Executive, it shall so indicate to the Executive
in writing. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive.
(c) The Executive shall notify the
Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of a
Gross-up Payment. Such notification shall be given no later than
ten (10) business days after the Executive is informed in
writing of such claim and shall apprise the Company of the nature
of the claim and the date of requested payment. The Executive shall
not pay the claim prior to the expiration of the thirty
(30) day period following the date on which it gives notice to
the Company. If the Company notifies the Executive in writing prior
to the expiration of the period that it desires to contest such
claim, the Executive shall:
(i) give the Company any information
reasonably requested by the Company relating to such claim;
(ii) take such action in connection
with contesting such claim as the Company shall reasonably request
in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an
attorney reasonably selected by the Company;
(iii) cooperate with the Company in
good faith in order to effectively contest such claim; and
(iv) permit the company to
participate in any proceedings relating to such claim.
Without limitation on the foregoing
provisions of this Section 5(c ), the Company shall
control all proceedings taken in connection with s
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