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 such
contest and, at its sole o
