UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 4, 2013

 

 

EDGEWATER TECHNOLOGY, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   000-20971   71-0788538

(State or other jurisdiction

of incorporation)

 

(Commission

File No.)

 

(IRS Employer

Identification No.)

200 Harvard Mill Square, Suite 210

Wakefield, Massachusetts 01880

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (781) 246-3343

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2-(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS

On December 4, 2013, Edgewater Technology, Inc. (the “Company”) entered into a Second Amendment to Employment Agreement (each, a “Second Amendment” and collectively, the “Second Amendments”) with each of Shirley Singleton, the Company’s President and Chief Executive Officer, and David Clancey, the Company’s Executive Vice President, Chief Strategy Officer and Chief Technology Officer (each, an “Employee”). The Amendments amend term, salary and severance provisions in each Employee’s respective Employment Agreement with the Company, dated as of June 12, 2007, which was subsequently amended on December 17, 2010 (each, as amended, an “Employment Agreement” and collectively, the “Employment Agreements”).

Additionally, on December 4, 2013, the Company entered into a Restated Change in Control Agreement (each, a “Restated Agreement” and collectively, the “Restated Agreements”) with each of Timothy R. Oakes, the Company’s Chief Financial Officer, and Robin Ranzal Knowles, the President of Edgewater Technology-Ranzal, Inc., a wholly-owned subsidiary of the Company. The Restated Agreements amend severance payment provisions in each employee’s respective Change in Control Agreement.

Second Amendments

Each Second Amendment extends the term of the respective Employment Agreement for an additional term commencing on January 1, 2014 and continuing until December 31, 2016, unless terminated sooner in accordance with the termination provisions of the applicable Employment Agreement. Prior to the Second Amendments, the terms of the Employment Agreements would have expired as of December 31, 2013.

The Second Amendments also establish the following minimum annual base salary levels, subject to potential future increases based upon the review and determination of the Company’s Compensation Committee: Ms. Singleton, $425,000 and Mr. Clancey, $375,000. Prior to the Second Amendments, the Employment Agreements provided for minimum base salaries of $350,000 and $300,000 for Ms. Singleton and Mr. Clancey, respectively.

Each Second Amendment also provides that, if the Employee is terminated without cause or terminates his or her employment for good reason (in each case, absent a change of control of the Company), then the Company is required to pay to the Employee a lump sum payment equal to two (2) times the Employee’s annual base salary in effect at the time of such termination plus an amount equal to the Employee’s bonus target for the calendar year immediately preceding the calendar year in which termination of employment occurs. In no event will the bonus paid exceed one (1) year’s annual base salary for the employee. The total amounts due will be payable in two installments: (a) thirty (30) days after the date of such termination, a first payment equal to the greater of (i) $510,000 or (ii) two (2) times the Employee’s annual base salary in effect at the time of such termination; and (b) six months after the date of such termination, a second payment equal to the excess of (i) the amount of

 

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the severance payment, over (ii) the amount paid under section (a) above (the “Severance Payment Provisions”). Prior to the Second Amendments, each Employment Agreement provided that, under such circumstances of termination, the Company would pay a lump sum amount equal to two (2) times the Employee’s annual base salary in effect at the time of such termination plus an amount equal to the Employee’s cash bonus paid for the year immediately preceding the year in which termination of employment occurs.

Each Second Amendment also provides that, if the Employee’s employment with the Company is terminated following a change in control, either by the Company, which is not for cause, or by the employee for good reason, then the Company is required to pay to the Employee a lump sum payment equal to two (2) times the Employee’s annual base salary in effect at the time of such termination plus an amount equal to the Employee’s bonus target for the calendar year immediately preceding the calendar year in which termination of employment occurs. In no event will the bonus paid exceed one (1) year’s annual base salary for the employee. The total amounts due will be paid in accordance with the Severance Payment Provisions. Prior to the Second Amendments, each Employment Agreement provided that, under such circumstances of termination following a change in control or by the employee for good reason, then the Company would be required to pay the Employee a lump sum amount equal to two (2) times the Employee’s annual base salary in effect at the time of such termination plus an amount equal to the Employee’s cash bonus paid for the year immediately preceding the year in which termination of employment occurs. Prior to the Second Amendments, each Employment Agreement provided that, under such circumstances of termination following a change of control, the Company was required to pay a lump sum amount equal to the greater of: (1) the annual base salary of the Employee then in effect for the remaining period of the term of the Employment Agreement plus the amount of cash bonus paid to the Employee for the immediately preceding year; or (2) 1.5 times the annual base salary then in effect plus the amount of the cash bonus paid to the Employee in the year immediately preceding the year of termination.

Further, the Second Amendments also provide that the Company shall give an employee at least a ten (10) day written notice period of its intention to terminate employment in the event the employee becomes unable to engage in any substantial gainful activity because of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months (the “Disability Period”). Prior to the Second Amendments, the Disability Period was defined as being a period of one hundred and eighty (180) days in the aggregate in any twelve (12) month period.

Additionally, the Second Amendments require the employee to provide written notification within ninety (90) days of the initial existence of a circumstance in which the employee may elect to terminate employment for good reason. Prior to the Second Amendments, no specific notification period upon the initial existence of such circumstances was included in the Employment Agreements.

 

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Restated Agreements

Each Restated Agreement provides that if, at the time of termination, the employee is a “specified employee”, as defined in Treasury Regulations, Sec 1.409A-1(i), then severance payments shall be delayed for a period of six months after the date of termination. There were no other changes to the terms and conditions of the Restated Agreements.

The descriptions of the Second Amendments and the Restated Agreements are qualified in their entirety by reference to the complete agreements, copies of which are filed herewith as Exhibits 10.1, 10.2, 10.3 and 10.4 and are incorporated herein by reference.

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

 

Exhibit
Number

  

Description of Exhibit

10.1    Second Amendment to Employment Agreement by and among Edgewater Technology, Inc. and Shirley Singleton, dated as of December 4, 2013.
10.2    Second Amendment to Employment Agreement by and among Edgewater Technology, Inc. and David Clancey, dated as of December 4, 2013.
10.3    Restated Change in Control Agreement by and among the Company and Timothy R. Oakes, dated as of December 4, 2013.
10.4    Restated Change in Control Agreement by and among the Company and Robin Ranzal Knowles, dated as of December 4, 2013.

* * *

 

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SIGNATURES:

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: December 6, 2013

 

EDGEWATER TECHNOLOGY, INC.
By:  

/s/ Timothy R. Oakes

Name:   Timothy R. Oakes
Title:   Chief Financial Officer
  (Principal Financial and Accounting Officer)

 

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Exhibit 10.1

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT (the “Amendment”) is made and entered into as of December 4, 2013, by and among EDGEWATER TECHNOLOGY, INC., a Delaware corporation (the “Company”) and Shirley Singleton (“Employee”).

RECITALS

WHEREAS , Company and Employee entered into that certain Employment Agreement dated June 12, 2007 (the “Employment Agreement”) for a term commencing on June 12, 2007 and continuing through December 31, 2010; and

WHEREAS, Company and Employee by their First Amendment to Employment Agreement agreed to extend the term of the Employment Agreement through December 31, 2013; and

WHEREAS , Company and Employee now desire again to extend the term of the Employment Agreement; and

WHEREAS , Company and Employee also desire to amend certain of the terms and conditions of the Employment Agreement as set forth herein, principally in order to ensure compliance of the Agreement with Section 409A of the Code; and

WHEREAS , all capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Employment Agreement;

AGREEMENT

NOW, THEREFORE , in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the parties hereto agree as follows:

1. The term of the Employment Agreement is extended for an additional term commencing on January 1, 2014 and continuing until December 31, 2016, unless terminated sooner in accordance with Sections 5 or 6 of the Employment Agreement.

2. Section 3.1 of the Employment Agreement is amended and restated as follows:

Base Salary . The Company shall pay to Employee a Base Salary at the rate of $425,000.00 per annum through the expiration of the term, payable bi-weekly as per normal pay practices of the Company. Such Base Salary shall be subject to increase based upon review by the Compensation Committee of the Company (the “Committee”) from time to time.


3. The first sentence and second sentence of Section 5(c)(ii) are deleted and replaced with the following:

(ii) at any time prior to the expiration of the Term, by the Company pursuant to Section 5(a)(iv) above, or by Employee for Good Reason (as defined below), then in such event Employee shall receive from the Company a sum (the “Severance Payment”) equal to (i) two (2) times the Employee’s annual base salary in effect at the time of such termination plus (ii) an amount equal to the Employee’s bonus target established for the calendar year immediately preceding the calendar year in which such termination occurs, such bonus amount to in no event exceed one (1) year’s base annual base salary for the Employee, payable in two installments as follows:

(a) thirty (30) days after the date of such termination, a first payment equal to the greater of (i) $510,000 or (ii) two (2) times the Employee’s annual base salary in effect at the time of such termination; and

(b) six months after the date of such termination, a second payment equal to the excess of (i) the amount of the Severance Payment, over (ii) the amount paid under subsection (a) immediately above.

4. Section 6(a) of the Employment Agreement is changed to read as follows:

(a) If Employee’s employment with the Company is terminated during the Term following a Change in Control, either by the Company which is not for Cause or by the Employee for Good Reason only:

(i) the Company shall pay Employee a lump sum amount equal to (i) two (2) times the Employee’s annual base salary in effect at the time of such termination plus (ii) an amount equal to the Employee’s bonus target established for the calendar year immediately preceding the calendar year in which such termination occurs, such bonus amount to in no event exceed one (1) year’s base annual base salary for the Employee, payable in two installments as designated in amended Section 5(a)(iv) above,

(ii) the provisions of Section 5(c)(ii) relating to exercisability of options, restricted stock awards and Continued Health Care Coverage shall apply; and

(iii) the non-competition, non-solicitation and confidentiality provisions of Section 7 shall apply for a period of only six (6) months from the effective date of termination.

In such event, Employee shall have no further obligations under this Agreement, other than continued compliance with Section 7 hereof during the aforementioned period in the preceding sentence.

5. Section 5(a)(ii) of the Employment Agreement is changed to read as follows:

(ii) if, during the Term, Employee becomes unable to engage in any substantial gainful activity because of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months (“Disability”); provided, however, that the Company shall give Employee at least ten (10) days prior written notice of


its intention to terminate this Agreement on account of such Disability, as of the date set forth in the notice. In case of termination for Disability, Employee shall be entitled to receive salary, benefits, and reimbursable expenses owing Employee through the date of termination;

6. The definition of “Good Reason” shall include the circumstances listed in Section 5(c)(ii) of the Employment Agreement only if, within ninety (90) days of the initial existence of such circumstances, Employee gives written notification thereof to the Company and Company fails to cure or correct such circumstances within thirty (30) days of receipt of such notice.

7. Section 6(b) of the Employment Agreement is changed to read as follows:

(b) A “Change in Control” shall be deemed to have occurred on the date that: (i) any person, or more than one person acting as a group (other than the Company or an employee benefit plan of the Company), acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or group), directly or indirectly, the beneficial ownership of any voting stock of the Company and immediately after such acquisition such person or group is, directly or indirectly, the beneficial owner of voting stock of the Company which represents 50% or more of the total voting power of the then-outstanding voting stock of the Company; (ii) the majority of the members of the Board is replaced during any twelve month period by directors whose appointment to the Board was not approved by a vote of at least two-thirds (2/3) of the directors still in office immediately prior to such replacement; (iii) the stockholders of the Company approve a merger, consolidation, recapitalization, or reorganization of the Company, a reverse stock split of outstanding voting securities, or consummation of any such transaction if stockholder approval is not sought or obtained, other than any such transaction which would result in at least 75% of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by at least 75% of the holders of outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction; or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of more than 50% (by fair market value) of the Company’s assets (other than cash).

8. Section 6(c)(i) of the Employment Agreement is changed to read as follows:

(c) (i) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that any payment or distribution by the Company to or for the benefit of Employee (whether paid or distributed pursuant to this Agreement or otherwise) would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, then amounts payable or distributable pursuant to this Agreement shall be reduced to the minimum extent required so that such “excess parachute payment” is reduced to zero.


9. For purposes of the Notice provision under Section 9 of the Employment Agreement, Aaron Gilman’s address is changed to the following:

Aaron Gilman, Esq.

Hinckley, Allen & Snyder LLP

28 State Street

Boston, MA 02109

10. Except as expressly amended as set forth herein, all other terms and conditions of the Employment Agreement and the First Amendment to the Employment Agreement shall remain in full force and effect, unaltered and unaffected hereby, and the parties hereby ratify and confirm their rights and obligations as set forth in said Employment Agreement, as amended herein.

11. This Second Amendment shall be construed and interpreted in accordance with the laws of the State of Delaware.

12. This Second Amendment may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or PDF shall be effective as delivery of a manually-executed counterpart of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the date first set forth above, intending this document to take effect as a sealed instrument.

 

COMPANY:
EDGEWATER TECHNOLOGY, INC.
By:  

/s/ Timothy R. Oakes

Name:  

Timothy R. Oakes

Title:  

Chief Financial Officer

EMPLOYEE:

/s/ Shirley Singleton

Shirley Singleton

Exhibit 10.2

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT (the “Amendment”) is made and entered into as of December, 2013, by and among EDGEWATER TECHNOLOGY, INC., a Delaware corporation (the “Company”) and David Clancey (“Employee”).

RECITALS

WHEREAS , Company and Employee entered into that certain Employment Agreement dated June 12, 2007 (the “Employment Agreement”) for a term commencing on June 12, 2007 and continuing through December 31, 2010; and

WHEREAS, Company and Employee by their First Amendment to Employment Agreement agreed to extend the term of the Employment Agreement through December 31, 2013; and

WHEREAS , Company and Employee now desire again to extend the term of the Employment Agreement; and

WHEREAS , Company and Employee also desire to amend certain of the terms and conditions of the Employment Agreement as set forth herein, principally in order to ensure compliance of the Agreement with Section 409A of the Code; and

WHEREAS , all capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Employment Agreement;

AGREEMENT

NOW, THEREFORE , in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the parties hereto agree as follows:

1. The term of the Employment Agreement is extended for an additional term commencing on January 1, 2014 and continuing until December 31, 2016, unless terminated sooner in accordance with Sections 5 or 6 of the Employment Agreement.

2. Section 3.1 of the Employment Agreement is amended and restated as follows:

Base Salary . The Company shall pay to Employee a Base Salary at the rate of $375,000.00 per annum through the expiration of the term, payable bi-weekly as per normal pay practices of the Company. Such Base Salary shall be subject to increase based upon review by the Compensation Committee of the Company (the “Committee”) from time to time.


3. The first sentence and second sentence of Section 5(c)(ii) are deleted and replaced with the following:

(ii) at any time prior to the expiration of the Term, by the Company pursuant to Section 5(a)(iv) above, or by Employee for Good Reason (as defined below), then in such event Employee shall receive from the Company a sum (the “Severance Payment”) equal to (i) two (2) times the Employee’s annual base salary in effect at the time of such termination plus (ii) an amount equal to the Employee’s bonus target established for the calendar year immediately preceding the calendar year in which such termination occurs, such bonus amount to in no event exceed one (1) year’s base annual base salary for the Employee, payable in two installments as follows:

(a) thirty (30) days after the date of such termination, a first payment equal to the greater of (i) $510,000 or (ii) two (2) times the Employee’s annual base salary in effect at the time of such termination; and

(b) six months after the date of such termination, a second payment equal to the excess of (i) the amount of the Severance Payment, over (ii) the amount paid under subsection (a) immediately above.

4. Section 6(a) of the Employment Agreement is changed to read as follows:

(a) If Employee’s employment with the Company is terminated during the Term following a Change in Control, either by the Company which is not for Cause or by the Employee for Good Reason only:

(i) the Company shall pay Employee a lump sum amount equal to (i) two (2) times the Employee’s annual base salary in effect at the time of such termination plus (ii) an amount equal to the Employee’s bonus target established for the calendar year immediately preceding the calendar year in which such termination occurs, such bonus amount to in no event exceed one (1) year’s base annual base salary for the Employee, payable in two installments as designated in amended Section 5(a)(iv) above,

(ii) the provisions of Section 5(c)(ii) relating to exercisability of options, restricted stock awards and Continued Health Care Coverage shall apply; and

(iii) the non-competition, non-solicitation and confidentiality provisions of Section 7 shall apply for a period of only six (6) months from the effective date of termination.

In such event, Employee shall have no further obligations under this Agreement, other than continued compliance with Section 7 hereof during the aforementioned period in the preceding sentence.

5. Section 5(a)(ii) of the Employment Agreement is changed to read as follows:

(ii) if, during the Term, Employee becomes unable to engage in any substantial gainful activity because of any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than 12 months (“Disability”); provided, however, that the Company shall give Employee at least ten (10) days prior written notice of


its intention to terminate this Agreement on account of such Disability, as of the date set forth in the notice. In case of termination for Disability, Employee shall be entitled to receive salary, benefits, and reimbursable expenses owing Employee through the date of termination;

6. The definition of “Good Reason” shall include the circumstances listed in Section 5(c)(ii) of the Employment Agreement only if, within ninety (90) days of the initial existence of such circumstances, Employee gives written notification thereof to the Company and Company fails to cure or correct such circumstances within thirty (30) days of receipt of such notice.

7. Section 6(b) of the Employment Agreement is changed to read as follows:

(b) A “Change in Control” shall be deemed to have occurred on the date that: (i) any person, or more than one person acting as a group (other than the Company or an employee benefit plan of the Company), acquires (or has acquired during the twelve month period ending on the date of the most recent acquisition by such person or group), directly or indirectly, the beneficial ownership of any voting stock of the Company and immediately after such acquisition such person or group is, directly or indirectly, the beneficial owner of voting stock of the Company which represents 50% or more of the total voting power of the then-outstanding voting stock of the Company; (ii) the majority of the members of the Board is replaced during any twelve month period by directors whose appointment to the Board was not approved by a vote of at least two-thirds (2/3) of the directors still in office immediately prior to such replacement; (iii) the stockholders of the Company approve a merger, consolidation, recapitalization, or reorganization of the Company, a reverse stock split of outstanding voting securities, or consummation of any such transaction if stockholder approval is not sought or obtained, other than any such transaction which would result in at least 75% of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by at least 75% of the holders of outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction; or (iv) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of more than 50% (by fair market value) of the Company’s assets (other than cash).

8. Section 6(c)(i) of the Employment Agreement is changed to read as follows:

(c) (i) Anything in this Agreement to the contrary notwithstanding, in the event that it shall be determined that any payment or distribution by the Company to or for the benefit of Employee (whether paid or distributed pursuant to this Agreement or otherwise) would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, then amounts payable or distributable pursuant to this Agreement shall be reduced to the minimum extent required so that such “excess parachute payment” is reduced to zero.


9. For purposes of the Notice provision under Section 9 of the Employment Agreement, Aaron Gilman’s address is changed to the following:

Aaron Gilman, Esq.

Hinckley, Allen & Snyder LLP

28 State Street

Boston, MA 02109

10. Except as expressly amended as set forth herein, all other terms and conditions of the Employment Agreement and the First Amendment to the Employment Agreement shall remain in full force and effect, unaltered and unaffected hereby, and the parties hereby ratify and confirm their rights and obligations as set forth in said Employment Agreement, as amended herein.

11. This Second Amendment shall be construed and interpreted in accordance with the laws of the State of Delaware.

12. This Second Amendment may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Amendment by facsimile or PDF shall be effective as delivery of a manually-executed counterpart of this Agreement.

IN WITNESS WHEREOF, the parties have executed this Second Amendment as of the date first set forth above, intending this document to take effect as a sealed instrument.

 

COMPANY:
EDGEWATER TECHNOLOGY, INC.
By:  

/s/ Timothy R. Oakes

Name:  

Timothy R. Oakes

Title:  

Chief Financial Officer

EMPLOYEE:

/s/ David Clancey

David Clancey

Exhibit 10.3

December 4, 2013

Timothy Oakes

200 Harvard Mill Square, Suite 210

Wakefield, MA 01880

 

  Re: Severance Agreement

Dear Tim:

In order to ensure your continued service to the Edgewater Technology, Inc. (the “Company”), the Company wishes to offer you the following severance package which supersedes and replaces your prior severance package letter dated July 21, 2008:

1. Severance . If at any time after the date hereof, you are terminated by the Company (or its successor) without Cause, as defined below, and such termination occurs within one (1) year after the effective date of a Change in Control, as defined below, you shall be entitled to receive severance pay for a period of six (6) months at the rate of your annual base salary then in effect, payable in the same manner as your regular salary, together with six (6) months continued coverage under the Company’s medical and dental plans at the rate applicable to active employees. Such severance pay shall be in lieu of any other severance benefits to which you may be entitled under any other applicable policy or program. Notwithstanding the foregoing, if at the time of termination you are a “specified employee” as defined in the Treasury Regulations, Sec 1.409A-1(i), then the severance payments described above shall be delayed until six months after the date of your termination, in the manner required by Treasury Regulations, Section 1.409A-3(i)(2). In that event, any payments that would otherwise be due prior to the date which is six months after your termination shall instead be due to you on the date which is six months after your termination, or, if earlier, on the date of your death.

2. Change in Control . A “Change in Control” shall be deemed to have occurred if: (i) any person, other than the Company or an employee benefit plan of the Company, acquires, directly or indirectly, the beneficial ownership of any voting security of the Company and immediately after such acquisition such person is, directly or indirectly, the beneficial owner of voting securities representing 50% or more of the total voting power of the then-outstanding voting securities of the Company; (ii) the individuals (A) who, as of the date of this Agreement, constitute the Board (the “Original Directors”) or (B) who thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of at least two-thirds (2/3) of the Original Directors then still in office (such directors becoming “Additional Original Directors” immediately following their election) or (C) who are elected to the Board and whose election, or nomination for election to the Board was approved by a vote of at least two-thirds (2/3) of the Original Directors and Additional Original Directors then still in office (such directors also becoming “Additional Original Directors” immediately following their election), cease for any reason to constitute a majority of the members of the Board; (iii) the stockholders of the Company shall approve a merger, consolidation, recapitalization, or reorganization of the Company, a reverse stock split of outstanding voting securities, or consummation of any such transaction


if stockholder approval is not sought or obtained, other than any such transaction which would result in at least 75% of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by at least 75% of the holders of outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction; or (iv) the stockholders of the Company shall approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or a substantial portion of the Company’s assets (i.e., 50% or more of the total assets of the Company).

3. Cause . For purposes of this Agreement, “Cause” shall mean any of the following: (A) Employee’s material breach of any provision of the Employee’s Confidentiality and Non-Disclosure Agreement; (B) after providing 30 days prior notice to the Employee and providing the opportunity for Employee to be heard by the Board of Directors during such time, the Board of Directors issues a final written determination that Employee has willfully failed and refused to comply with the material and reasonable directives of the Company; (C) Employee’s failure to meet written performance standards established by the President and Chief Executive Officer of the Company from time to time which Employee has failed to cure within ninety (90) days after receipt of written notice of nonperformance from the Company ; (D) Employee’s gross negligence or willful or intentional misconduct; (E) after providing 30 days prior notice to the Employee and providing the opportunity for Employee to be heard by the Board of Directors during such time, the Board of Directors issues a final written determination that Employee has breached his fiduciary duties to the Company; or (F) the conviction of, or the entering of a guilty plea or plea of no contest with respect to, a felony with respect to Employee, or any other criminal activity which materially affects Employee’s ability to perform his duties or materially harms the reputation of the Company;

4. Assignment . You may not assign your rights or obligations hereunder. The rights and obligations of the Company hereunder shall inure to the benefit of and shall be binding upon its respective successors and assigns.

5. General Release and Cooperation Agreement . Notwithstanding anything to the contrary in this Agreement, the aforementioned severance benefits set forth above are subject to and conditioned upon, and will be paid only in the event of your execution and delivery to the Company and/or its successor of a release of all claims and cooperation agreement in such form as may be required by the Company or its successor. No severance benefits will be paid by the Company or its successor unless the such release and cooperation agreement has been executed and delivered by you to the Company or its successor and any revocation period thereunder has expired.

6. General Provisions .

a. This Agreement shall in no manner be considered a contract for employment with the Company nor any guaranty of employment for any specified period of time, and your employment with the Company will remain at-will and may be terminated by either the Company or you, at any time, with or without cause and with or without notice.

b. You agree to maintain this Agreement as confidential and shall not disclose the terms hereof to any other employee of the Company or to any other person, firm,


or entity other than (i) the members of your immediate family or (ii) your legal counsel and tax advisers, provided all of such individuals are informed of the confidential nature of this Agreement and agree to maintain it as confidential

c. This Agreement shall be subject to and governed by the laws of the Commonwealth of Massachusetts without regard to its choice of law principles.

d. The Company’s obligations to pay amounts hereunder are subject to all withholding obligations under applicable federal, state, and local laws.

If the foregoing is acceptable to you, please execute this correspondence in the space provided for below indicating your acceptance of and agreement with the foregoing.

 

Very truly yours,
EDGEWATER TECHNOLOGY, INC.
By:  

/s/ Shirley Singleton

  Shirley Singleton, President and Chief Executive Officer

 

Accepted and agreed to as of the date written above:

/s/ Timothy Oakes

Timothy Oakes

Exhibit 10.4

December 4, 2013

Robin Ranzal Knowles

200 Harvard Mill Square, Suite 210

Wakefield, MA 01880

 

  Re: Severance Agreement

Dear Robin:

In order to ensure your continued service to the Edgewater Technology, Inc. and its subsidiaries and affiliates (collectively the “Company”), and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by the parties, the Company wishes to offer you the following severance package which supersedes and replaces your prior severance package letter dated September 20, 2010:

1. Severance . If at any time after the date hereof, you are terminated by the Company (or its successor) without Cause, as defined below, and such termination occurs within one (1) year after the effective date of a Change in Control, as defined below, you shall be entitled to receive (i) severance pay for a period of six (6) months at the rate of your annual base salary then in effect, payable in the same manner as your regular salary, together with six (6) months continued coverage under the Company’s medical and dental plans at the rate applicable to active employees, (ii) a lump sum payment in an amount equal to one-half (  1 2 ) of the annual performance bonus paid by the Company to you during the preceding fiscal year and (iii) full vesting of all stock option grants received by you from the Company which shall be immediately exercisable by you for the period specified in each such grant. Such severance pay and other benefits provided for herein shall be in lieu of any other severance benefits to which you may be entitled under any other applicable policy or program. The Company shall reduce payments made to you pursuant to this Agreement by those deductions and withholdings required for tax purposes, and shall make such tax-related reporting that it reasonably determines to be required with respect to payments or other benefits provided pursuant to this Agreement. Notwithstanding the foregoing, if at the time of termination you are a “specified employee” as defined in the Treasury Regulations, Sec 1.409A-1(i), then the severance payments described above shall be delayed until six months after the date of your termination, in the manner required by Treasury Regulations, Section 1.409A-3(i)(2). In that event, any payments that would otherwise be due prior to the date which is six months after your termination shall instead be due to you on the date which is six months after your termination, or, if earlier, on the date of your death.

2. Change in Control . A “Change in Control” shall be deemed to have occurred if: (i) any person, other than the Company or an employee benefit plan of the Company, acquires, directly or indirectly, the beneficial ownership of any voting security of the Company and immediately after such acquisition such person is, directly or indirectly, the beneficial owner of voting securities representing 50% or more of the total voting power of the then-outstanding voting securities of the Company; (ii) the individuals (A) who, as of the date of this Agreement, constitute the Board (the “Original Directors”) or (B) who


thereafter are elected to the Board and whose election, or nomination for election, to the Board was approved by a vote of at least two-thirds (2/3) of the Original Directors then still in office (such directors becoming “Additional Original Directors” immediately following their election) or (C) who are elected to the Board and whose election, or nomination for election to the Board was approved by a vote of at least two-thirds (2/3) of the Original Directors and Additional Original Directors then still in office (such directors also becoming “Additional Original Directors” immediately following their election), cease for any reason to constitute a majority of the members of the Board; (iii) the stockholders of the Company shall approve a merger, consolidation, recapitalization, or reorganization of the Company, a reverse stock split of outstanding voting securities, or consummation of any such transaction if stockholder approval is not sought or obtained, other than any such transaction which would result in at least 75% of the total voting power represented by the voting securities of the surviving entity outstanding immediately after such transaction being beneficially owned by at least 75% of the holders of outstanding voting securities of the Company immediately prior to the transaction, with the voting power of each such continuing holder relative to other such continuing holders not substantially altered in the transaction; or (iv) the stockholders of the Company shall approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or a substantial portion of the Company’s assets (i.e., 50% or more of the total assets of the Company).

3. Cause . For purposes of this Agreement, “Cause” shall mean any of the following: (A) Employee’s material breach of any provision of the Employee’s Confidentiality and Non-Disclosure Agreement; (B) after providing 30 days prior notice to the Employee and providing the opportunity for Employee to be heard by the Board of Directors during such time, the Board of Directors issues a final written determination that Employee has willfully failed and refused to comply with the material and reasonable directives of the Company; (C) Employee’s failure to meet written performance standards established by the President and Chief Executive Officer of the Company from time to time which Employee has failed to cure within ninety (90) days after receipt of written notice of nonperformance from the Company ; (D) Employee’s gross negligence or willful or intentional misconduct; (E) after providing 30 days prior notice to the Employee and providing the opportunity for Employee to be heard by the Board of Directors during such time, the Board of Directors issues a final written determination that Employee has breached his fiduciary duties to the Company; or (F) the conviction of, or the entering of a guilty plea or plea of no contest with respect to, a felony with respect to Employee, or any other criminal activity which materially affects Employee’s ability to perform his duties or materially harms the reputation of the Company;

4. Assignment . You may not assign your rights or obligations hereunder. The rights and obligations of the Company hereunder shall inure to the benefit of and shall be binding upon its respective successors and assigns.

5. General Release and Cooperation Agreement . Notwithstanding anything to the contrary in this Agreement, the aforementioned severance benefits set forth above are subject to and conditioned upon, and will be paid or provided only in the event of your execution and delivery to the Company and/or its successor of a release of all claims and cooperation agreement in such form as may be required by the Company or its successor. No severance or other benefits will be paid or provided by the Company or its successor unless such release and cooperation agreement has been executed and delivered by you to the Company or its successor and any revocation period thereunder has expired.


6. General Provisions .

a. This Agreement shall in no manner be considered a contract for employment with the Company nor any guaranty of employment for any specified period of time, and your employment with the Company will remain at-will and may be terminated by either the Company or you, at any time, with or without cause and with or without notice.

b. You agree to maintain this Agreement as confidential and shall not disclose the terms hereof to any other employee of the Company or to any other person, firm, or entity other than (i) the members of your immediate family or (ii) your legal counsel and tax advisers, provided all of such individuals are informed of the confidential nature of this Agreement and agree to maintain it as confidential

c. This Agreement shall be subject to and governed by the laws of the Commonwealth of Massachusetts without regard to its choice of law principles.

d. The Company’s obligations to pay amounts hereunder are subject to all withholding obligations under applicable federal, state, and local laws.

If the foregoing is acceptable to you, please execute this correspondence in the space provided for below indicating your acceptance of and agreement with the foregoing.

 

Very truly yours,
EDGEWATER TECHNOLOGY, INC.
By:  

/s/ Shirley Singleton

  Shirley Singleton, President and Chief Executive Officer

 

Accepted and agreed to as of the date written above:

/s/ Robin Ranzal Knowles

Robin Ranzal Knowles