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EXHIBIT 10.1
TRANSITION AGREEMENT
This TRANSITION AGREEMENT (“
Agreement ”) is
entered into as of November 13, 2007, by and
between Acxiom Corporation, a Delaware corporation (the
“ Company ”), and Charles Morgan (“ Mr. Morgan ”), an individual
residing in the State of Texas.
WHEREAS , Mr. Morgan is
Company Leader, has served as an officer of the Company since 1972
and has served as Chairman of the Company’s Board of
Directors (the “ Board
”) since 1975;
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WHEREAS , Mr. Morgan
previously announced his intention to retire as Company
Leader;
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WHEREAS , Mr. Morgan
has submitted a letter of retirement to the Board, which the Board
has determined to accept;
WHEREAS , the Board
desires to provide for a smooth and orderly transition of the
Company Leader position and, to that end, has requested that Mr.
Morgan serve as Interim Company Leader until the Board selects his
successor;
WHEREAS , the parties
desire to set forth all matters regarding Mr. Morgan’s
retirement, his service as Interim Company Leader, and his service
as a consultant to the Company; and
WHEREAS , the Board
believes it is in the best interests of the Company and its
stockholders to enter into this Agreement with Mr.
Morgan.
NOW, THEREFORE , in
consideration of the promises and covenants herein, the sufficiency
of which is hereby acknowledged, Mr. Morgan and the Company agree
as follows:
1.
Retirement and Transition . Mr. Morgan’s retirement as Company Leader and as a
Board member, as well as from all other officer and director
positions he holds with the Company, the Company’s
subsidiaries and its affiliates, is effective immediately. Also
effective immediately, Mr. Morgan is appointed to the office of
Interim Company Leader, to serve at the pleasure of the Board in
such capacity until the effective date on which his successor
becomes Company Leader but in no event later than June 30, 2008
(the “ Transition Date
”).
2.
Compensation Until the Transition Date
. Mr. Morgan will continue to receive his current
salary of $815,000 per year, and all other compensation to which he
is entitled in his current position as Company Leader, for his
services as Interim Company Leader until the Transition Date,
payable in accordance with Company policy; provided, however , that Mr. Morgan
hereby waives any right he may have to compensation under any
Company bonus plan, cash incentive plan or other such arrangement,
including under the Acxiom Leadership Cash Incentive Plan. On the
Transition Date, Mr. Morgan will also be compensated for all earned
but unused vacation consistent with the Company’s vacation
policies, and will be paid any other compensation then due upon the
effectiveness of his retirement under the Company’s
retirement plans. On the Transition Date, all compensation related
to Mr. Morgan’s employment with the Company under all
agreements and arrangements, including all perquisite, retirement,
bonus and equity incentive programs, will cease, and no further
compensation will be due from or paid by the Company to Mr. Morgan,
except as expressly provided in this Agreement. For avoidance of
doubt, except as expressly provided in this Agreement, Mr. Morgan
agrees that he will not be entitled to receive any other payment,
compensation or benefit from the Company or any of its affiliates
in connection with his employment or service, the termination of
such employment or service or
otherwise, notwithstanding anything to the contrary
in any Company equity incentive plan, bonus plan, benefit plan or
other compensatory plan or policy. Mr. Morgan further agrees that
he is not entitled to any severance, change-in control-related or
similar payments or benefits under any agreement, guidelines, plan,
program, policy or arrangement, whether formal or informal, written
or unwritten, of the Company or any of its affiliates.
3.
Consulting . Subject to
the oversight and review by, and at the request of, the Board and
the successor Company Leader, Mr. Morgan hereby agrees to provide
the Company with the following consulting services (the
“ Consulting Services
”) beginning on the Transition Date and
continuing for a continuous period ending on the earliest of (i)
the third anniversary of the Transition Date, (ii) at the election
of Mr. Morgan, the first anniversary of a change in control event
within the meaning of Section 409A of the Internal Revenue Code
(“ Section 409A
”) (a “ Change
in Control Event ”), and (iii)
December 31, 2010 (the “ Consulting
Term ,” and the final date of such
Consulting Term the “ Final
Date ”):
(a) assisting
the new Company Leader, as reasonably requested by such new Company
Leader, in maintaining and developing positive business
relationships with customers, including facilitating client
introductions, leading up to four large customer events per year
and visiting existing or potential customers;
(b) advising the
Company with respect to technological and technology strategy
matters, including meeting as reasonably requested with the Company
Leader, Chief Technology Officer and other company officers to
discuss such matters;
(c) advising the
Company with respect to pending or future acquisitions and
dispositions;
(d) assisting in
maintaining and developing relationships with the Company’s
strategic partners; and
(e) providing
and assisting in such other services as may be reasonably requested
by the Company, including with respect to business strategy and
Company culture.
Mr. Morgan hereby covenants with the Company to
(i) perform his functions, responsibilities and duties
hereunder in a professional, competent manner consistent with
industry standards, (ii) carry out his duties hereunder in
good faith and in all respects consistent with the Company’s
written policies and procedures, and (iii) exercise the degree
of care, diligence and skill that a reasonably prudent professional
would exercise in comparable circumstances. Unless otherwise
agreed, Mr. Morgan will not be required to render Consulting
Services for more than 12 full business days during any calendar
month. The Company will provide reasonable advance notice of any
request for Consulting Services. The Company will provide Mr.
Morgan with copies of any written policies and procedures adopted
after the date hereof.
4.
Compensation . In
addition to the payments set forth in Section 2, the Company, in
consideration for the services to be provided by Mr. Morgan
hereunder and the other agreements and covenants of Mr. Morgan
contained herein (including those contained in Sections 8 and 9 and
the Release attached as Exhibit
A (the “ Release ”) will make the
following payments to, and for the benefit of, Mr.
Morgan:
(a)
Initial Payment . On
the date hereof, the Company will pay to Mr. Morgan
$3,000,000.
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(b)
Consulting Payments .
Subject to the terms of this Agreement, during the Consulting Term,
the Company will pay Mr. Morgan at the rate of $500,000 per annum
for the Consulting Services. Such payments (each a “
Consulting Payment ”) will be due at the end of each calendar quarter,
starting with the calendar quarter in which the Transition Date
occurs. If Mr. Morgan dies or becomes totally and permanently
disabled during the Consulting Term, no Consulting Payments due
after the date of such death or disability will be made.
(c)
Office Space and Support . Beginning on the Transition Date and continuing until the
Final Date, the Company will provide Mr. Morgan with an office,
assistant and technology support commensurate with his position as
a senior consultant of the Company and as the Company deems
reasonably necessary for Mr. Morgan to provide the Consulting
Services as contemplated herein. The office will be at a location
that the Company determines to be suitable for Mr. Morgan’s
performance of the Consulting Services required under this
Agreement.
(d)
Expenses . The Company
will promptly reimburse Mr. Morgan for all reasonable out-of-pocket
expenses incurred by him in connection with the performance of the
Consulting Services following his delivery of an accounting of
those expenses to the Company in accordance with the
Company’s then-current travel and business expense
policy.
(e)
Independent Contractor Status
. During the Consulting Term, Mr. Morgan will be an
independent contactor of the Company. Nothing herein will be deemed
to create any form of partnership, principal-agent relationship,
employer-employee relationship or joint venture between the Company
and Mr. Morgan. It is expressly understood that Mr. Morgan will not
have the authority to bind the Company during the Consulting
Term.
(a) Until the
Transition Date, Mr. Morgan will be eligible for such medical,
disability, life insurance coverage, vacation, sick leave, holiday
benefits and any other benefits, in each case as are customarily
made available to the Company’s executive officers, all in
accordance with the Company’s benefits program in effect from
time to time.
(b) During
the Consulting Term, Mr. Morgan will receive continued benefits
(the “ Health Benefits
”) under the health plan in which he
participated on the Transition Date (or comparable substitute plan
offered by the Company), upon the terms applicable on
such date or as such terms may be amended or
modified following the Transition Date. Any premium payments or
other amounts owing in respect of such coverage will be paid by the
Company during the Consulting Term. Nothing in this Agreement
will preclude the Company from amending or terminating any of the
health plans or programs applicable to salaried employees or senior
executives as long as such amendment or termination is applicable
to all salaried employees or senior executives. Mr.
Morgan acknowledges that he has the right to elect
continuation of his Health Benefits under “COBRA”
as of the Transition Date and that he has instead elected to
receive Health Benefits under this Section 5(b), which
are provided as an alternative to COBRA continuation
coverage. As a result of such election, Mr.
Morgan acknowledges that he will not be entitled to any
additional continuation of Health Benefits pursuant
to COBRA following the Consulting Term.
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6.
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Treatment of Equity Awards
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(a) Attached
as Schedule A is
a listing of all stock options (the “ Options ”) held by Mr. Morgan
or any of his affiliates as of the date hereof, all of which are
vested and exercisable. Mr. Morgan agrees that
Schedule A accurately
reflects all equity awards and their respective terms held by him
as of the date hereof. All such awards were granted pursuant to the
terms of the Company’s Key Employee Stock Option Plan (1983),
the Acxiom Corporation U.K. Option Scheme, or the 2005 Equity
Compensation Plan of Acxiom Corporation (collectively, the
“ Plans ”). The Company hereby confirms that with respect to the
Options, the underlying award agreements and the Plans that Mr.
Morgan’s termination of employment hereunder on the
Transition Date will constitute a termination of employment with
the Company by reason of “Retirement in Best Standing”
(as defined in the Company’s administration guidelines), and
as such, subject to the terms and conditions of this Agreement, and
the applicable plan and award agreements, the Options will remain
exercisable until the Expiration Date set forth on Exhibit
A.
(b) Mr.
Morgan hereby confirms and agrees to the following with respect to
any of the Options for which the underlying Plans or award
agreements specify certain prohibited activities and contain
related forfeiture provisions: (i) a breach of this Agreement
(including the covenants contained in Sections 8, 9, and 10) by Mr.
Morgan at any time before the Final Date will be deemed a
prohibited activity for purposes of such award agreements,
regardless of whether such agreements or Plans specify a time
period in which prohibited activity must occur for penalties to be
applicable; and (ii) all remedies hereunder and under such
agreements or Plans will be available to the Company in the event
of such breach, including any right of the Company to require Mr.
Morgan to disgorge profits on option gains. In the event of any
such breach, notwithstanding anything to the contrary in any
underlying award agreement or Plan, all Options will be immediately
forfeited and canceled. Mr. Morgan represents, warrants and agrees,
with respect to all Options listed on Schedule A held by an
affiliate of his (including Vantage Point Properties, LLP), that:
(i) Mr. Morgan is the authorized signatory of such affiliate; and
(ii) his signature hereto also constitutes such affiliate's
signature hereto for the purpose of consenting to and agreeing with
this Section 6.
7.
Release . In
consideration of the promises, covenants and other valuable
consideration provided by the Company in this Agreement including,
without limitation, the Company’s agreement to provide the
compensation set forth herein, Mr. Morgan agrees that for him to be
entitled to receive the payments and other benefits described in
this Agreement, he will execute and deliver the Release on the date
hereof.
8.
Non-Disclosure, Non-Solicitation, and
Non-Competition Covenants . As an
inducement to the Company to enter into this Agreement, Mr. Morgan
agrees as follows:
(a)
Non-Disclosure . Mr.
Morgan acknowledges that he has received and will continue to
receive access to confidential and proprietary business information
or trade secrets (“ Confidential
Information ”) about the Company,
that this information was obtained by the Company at great expense
and is reasonably protected by the Company from unauthorized
disclosure, and that Mr. Morgan’s possession of this special
knowledge is due solely to his employment with the Company. In
recognition of the foregoing, except for disclosure necessary in
the course of Mr. Morgan’s duties hereunder, Mr. Morgan will
not, at any time, disclose, use or otherwise make available to any
third party any Confidential Information relating to the
Company’s business, including its products, services, and
development methods and techniques; trade secrets, data,
specifications, inventions, and research activity; marketing and
sales
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strategies, information and techniques; long- and
short-term plans; current and prospective, customer or vendor,
supplier lists, contacts and information; financial, personnel and
information system information; and any other information
concerning the business of the Company which is not disclosed to,
or known by, the general public or generally known in the
industry.
(i) Mr. Morgan
specifically acknowledges that the Confidential Information
described in this Section 8 includes confidential data pertaining
to current and prospective customers of the Company, that such data
is a valuable and unique asset of the Company’s business and
that the success or failure of the Company’s specialized
business is dependent in large part upon the Company’s
ability to establish and maintain close and continuing personal
contacts and working relationships with such customers, and to
develop proposals which are specifically designed to meet the
requirements of such customers. Therefore, until the Final Date,
Mr. Morgan agrees that he will not, except on behalf of the Company
or with the Company’s express written consent, solicit,
either directly or indirectly, on his own behalf or on behalf of
any other person or entity, any customers with whom Mr. Morgan had
contact (and any customers with whom Mr. Morgan has contact in the
course of providing the Consulting Services) before the Final Date
to take any action which could reasonably be expected to adversely
affect the Company.
(ii) Mr.
Morgan specifically acknowledges that the Confidential Information
described in this Section 8 also includes confidential data
pertaining to current and prospective employees and agents of the
Company, and Mr. Morgan further agrees that until the Final Date,
Mr. Mr. Morgan will not directly or indirectly solicit, on his own
behalf or on behalf of any other person or entity, the services of
any person who is an employee or agent of the Company or solicit
any of the Company’s employees or agents to terminate their
employment or agency with the Company, except with the
Company’s express written consent. This Section 8(b)(ii) will
not preclude Mr. Morgan from soliciting the employment of Sharon
Tackett or Julie Passman (whether or not either individual is then
in the employment of the Company) and will not preclude Mr. Morgan
from soliciting the employment of any person whose employment with
the Company previously ended for any reason other than a
solicitation from Mr. Morgan.
(iii) Mr. Morgan
specifically acknowledges that the Confidential Information
described in this Section 8 also includes confidential data
pertaining to current and prospective vendors and suppliers of the
Company, and Mr. Morgan agrees that until the Final Date, Mr.
Morgan will not directly or indirectly solicit, on his own behalf
or on behalf of any other person or entity, any vendor or supplier
of the Company for the purpose of either providing products or
services to do a business competitive with that of the Company, as
described in Section 8(c)(i), or terminating or changing such
vendor’s or supplier’s relationship or agency with the
Company.
(i) Mr. Morgan
covenants and agrees that until the Final Date, he will not engage
in or carry on, directly or indirectly, as an owner, employee,
agent, associate, consultant, or in any other capacity, a business
competitive with that conducted by the Company. A “business
competitive with that conducted by the Company” will mean
any
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business or activity involved in information
management products, marketing solutions and other services related
to customer acquisition, growth and retention, including data
collection, data integration technology and services, database
services, information technology outsourcing, consulting and
analytics services and consumer privacy products and services, or
any other significant business in which the Company is engaged in
before or as of the date hereof, in each case where such products
or services are competitive with those offered by the Company. To
“engage in or carry on” will mean to have ownership in
such business (excluding ownership of up to 1% of the outstanding
shares of a publicly-traded company) or to consult, work in, direct
or have responsibility for any area of such business,
includi
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