Exhibit 10.4
Execution Copy
SEVERANCE
AGREEMENT
SEVERANCE AGREEMENT (the
“Agreement”) dated October 5, 2009 by and between
Information Services Group, Inc. (the “Company”)
and David Berger (the “Executive”).
The Executive is employed as the
Company’s Chief Financial Officer.
The Company desires to induce the
Executive to remain in its employment by providing the Executive
protection in the event of a termination of the Executive’s
employment in certain circumstances, and the Executive desires to
continue to be employed by the Company and to accept such
protection.
In consideration of the promises and
mutual covenants contained herein and for other good and valuable
consideration, the parties agree as follows:
1.
Term . This Agreement shall
be effective for a period commencing on the date of this Agreement
and ending on December 31, 2010 (the “Term”);
provided , however , that commencing with
January 1, 2011 and on each anniversary thereof (each an
“Extension Date”), the Term shall automatically be
extended for an additional twelve (12) month period, unless the
Company or Executive provides the other party hereto sixty (60)
day’s prior written notice before the next Extension Date
that the Term shall not be so extended.
2.
Termination of
Employment .
a.
By the Company
without Cause or by Executive for Good Reason
. If,
during the Term, Executive’s employment with the Company and
its affiliates is terminated by the Company without Cause or by
Executive for Good Reason (as each such term is defined in
Section 3 below), subject to the Executive’s execution
without revocation of a general waiver and release of claims
agreement substantially in the form attached hereto as
Exhibit A , Executive shall be entitled to
receive:
(i) a cash
severance payment equal to one (1) times the Executive’s
annual rate of base salary plus the Executive’s target annual
incentive bonus opportunity under the Company’s Annual
Incentive Plan, both as in effect immediately prior to such
termination, payable in equal installments, on the normal payroll
dates of the Company over the twelve (12) month period following
the date of termination (the “Severance Period”);
and
(ii) so
long as Executive’s termination occurs after the first 180
days of the Company’s fiscal year, the annual cash bonus that
the Executive would have received under the Company’s Annual
Incentive Plan, if the Executive had remained employed by the
Company through the end of the fiscal year of the Company in which
such termination occurs (with the determination of the amount, if
any, of such bonus based on the Company’s performance in
relation to the applicable performance targets previously
established by the Company for such fiscal year, as determined in
good faith by the compensation committee of the board of directors
of the Company), multiplied by the Pro-Rate Factor (as
defined in Section 3 below) and paid at such time as the
annual cash bonus would otherwise have been paid to the Executive
under the Company’s Annual Incentive Plan;
(iii)
coverage during the applicable COBRA health care continuation
coverage period under Section 4980B of the Internal Revenue
Code of 1986, as amended (the
“
Code ”), or any replacement or successor provision of
United States tax law to the extent the Executive so
elects;
(iv) all
earned and unpaid and/or vested, nonforfeitable amounts owing or
accrued at the date of Executive’s termination of employment
(including any earned but unpaid base salary and vacation) under
any compensation and benefit plans, programs, and arrangements of
the Company and its affiliates in which Executive theretofore
participated, payable in accordance with the terms and conditions
of the plans, programs, and arrangements (and agreements and
documents thereunder) pursuant to which such compensation and
benefits were granted or accrued; and
(v)
reimbursement for any unreimbursed business expenses properly
incurred by Executive in accordance with Company policy prior to
the date of termination, to be reimbursed in accordance with such
policy.
b.
By the Company
for any Reason other than Without Cause or by Executive for any
Reason other than for Good Reason . If, during the Term,
Executive’s employment with the Company and its affiliates is
terminated by the Company for any reason (other than a termination
without Cause) or by Executive’s resignation without Good
Reason, Executive shall be entitled to receive only those benefits
described in Section 2(a)(iii), (iv) and
(v) above.
c.
Following
Executive’s termination or resignation (as the case may be),
except as set forth in this Section 2 and Section 5
below, Executive shall have no further rights to any other
compensation or benefits under this Agreement or any other
severance plan or arrangement maintained by the Company or any of
its affiliates, except as otherwise provided under any Company
stock incentive plan or award agreement entered into by and between
Executive and the Company or any of its affiliates.
3.
Definitions
. For purposes of
this Agreement:
a.
“
Cause ” shall mean with respect to the Executive:
(a) Executive’s willful misconduct with regard to the
Company; (b) any act involving fraud or material dishonesty in
connection with the business of the Company or its affiliates;
(c) a material violation of the Company’s code of
conduct or other policy; or (d) conviction of, or a plea of
nolo contendere to, any felony whatsoever.
b.
“ Good
Reason ” shall mean without Executive’s express
written consent, the occurrence of any of the following
circumstances: (i) a reduction in Executive’s annual
base salary and/or target annual incentive opportunity under the
Company’s Annual Incentive Plan (“target AIP”)
(excluding any reduction in Executive’s base salary and/or
target AIP that is part of a plan to reduce compensation of
comparably situated employees of the Company generally; (ii) a
material diminution in the nature or scope of Executive’s
responsibilities, duties or authority; (iii) the relocation by
the Company of Executive’s primary place of employment with
the Company to a location more than fifty (50) miles outside of
Executive’s current principal place of employment (which
shall not be deemed to occur due to a requirement that Executive
travel in connection with the performance of his or her duties); or
(iv) the Company gives notice of non-extension of the Term
(which the parties agree constitutes a material breach of the
Agreement). Resignation for Good Reason shall not occur unless the
Executive provides the Company with written notice of the existence
of the conditions supporting any of the foregoing events described
in this definition within the period not to exceed 90 days of the
initial existence
2
of the
conditions and the Company fails to remedy such conditions within
ten (10) days of receiving such written notice.
c.
“ Pro-Rate Factor
” shall mean a fraction, (i) the numerator of which is
equal to the number of days that the Executive is employed by the
Company during the fiscal year in which the Executive’s
employment terminates, and (ii) the denominator of which is
the number of days in such fiscal year.
4.
Notice of
Termination . Any purported
termination of employment by the Company or by Executive (other
than due to Executive’s death) shall be communicated by
written Notice of Termination to the other party hereto in
accordance with Section 6(e) hereof. For purposes
of this Agreement, a “Notice of Termination” shall mean
a notice which shall indicate the specific termination provision in
this Agreement relied upon and the date of termination, and shall
set forth in reasonable detail the facts and circumstances claimed
to provide a basis for termination of employment under the
provision so indicated. Unless terminating for Good Reason,
Executive shall provide a Notice of Termination to the Company at
least (30) days or prior to the effective date of the
Executive’s termination of employment other than due to his
death; provided , however , that the Company may
waive all or any portion of such required 30-day notice
period.
5.
Section 409A
.
Notwithstanding anything herein to the contrary, if any payment of
money or other benef
|
