Change of Control Agreement - Berlitz International Inc. and Manuel Fernandez
February 6, 1992
Mr. Manuel Fernandez
Executive Vice President, Europe
BERLITZ LANGUAGE CENTERS
Gran Via 80-4
28013 Madrid, SPAIN
Dear Mr. Fernandez:
In view of the unique circumstances facing Berlitz International, Inc.,
a New York corporation (the "Company"), the Company is writing
to set forth certain terms of your employment in the event of an
acquisition of the Company. The Company recognizes and
appreciates your prior service and believes that the provisions
regarding a change in control set forth herein will better enable you
to focus on the needs and direction of the company at this critical
time.
Accordingly, in the event that (i) a Change of Control (as defined
below) occurs at any time within two years from the date hereof, and
(ii) you are involuntarily terminated without Cause (as defined below)
at any time within 18 months after such Change of Control, the
Company agrees to pay you the severance benefits described below.
First, the Company agrees to pay you in monthly installments over a
period of one year a severance amount equal to your then base salary.
Second, to the extent such continued participation is permissible under
the Company's plans and programs, you may continue to participate
in all health insurance, life insurance, pension, 401(k), and disability
plans or programs of the Company, for the earlier of one year from
the date of your termination or the date on which you obtain new
employment. Third, all stock awards, including, without limitation,
restricted stock and stock options awarded to you by the Company
pursuant to the 1989 Stock Option and Incentive Plan, shall to the
extent not already vested become fully vested. If permissible under
applicable law, your stock options shall be exercisable for one year
following your termination. Fourth, you will be entitled at such time
as the amount becomes determinable to receive a pro-rated amount of
the financial performance portion (60%) of your Short-Term
Executive Incentive Compensation Plan bonus. Finally, you shall also
be entitled to select executive outplacement services as is customary
for senior executives, the reasonable cost of such services to be paid
by the Company. The Company specifically acknowledges that the
severance benefits payable to you hereunder shall not be reduced by
virtue of any obligation to seek other employment.
<PAGE>
MR. MANUEL FERNANDEZ
February 6, 1992
Page Two
In the event that there is a material change in either your duties or
compensation at any time within the 18 month period following a
Change of Control, you may resign from employment on sixty days
written notice to the Company and receive the above-described
severance benefits. In such case, your severance compensation shall
be based on your base salary at its pre-adjusted rate.
As used in this letter, "Cause" shall mean (i) serious and repeated
willful misconduct in respect of your duties which has resulted in
material, economic damages to the Company, and, to the extent such
misconduct is susceptible to being cured, such misconduct continues
for thirty days following written notice to you by the Company
detailing such misconduct, (ii) the final, unappealable conviction in a
court of law of any crime or offense (A) for which you are
imprisoned for a term of six months or more of (B) that involves the
commission of fraud or theft against, or embezzlement from, the
Company, or (iii) chronic alcoholism or abuse of controlled
substances.
A "Change of Control" shall mean from the date hereof, (i) when any
person or group of persons files a Form 13D or Form 13G with the
Securities Exchange Commission asserting beneficial ownership to at
least 35% of the Company's outstanding shares of Common Stock,
par value $.10 per share (the "Common Stock"), or (ii) when any
person or group of persons has the ability to elect a majority of the
Board. For purposes of the definition of "Change of Control", the
term "person" shall include Macmillan Inc. or any successor or
transferee of Macmillan Inc.
Following termination of employment, you shall keep secret and
retain in strictest confidence, and shall not use for the benefit of
yourself or other except in connection with the business and affairs of
the Company, all confidential matters of the Company.
The Company agrees to pay your reasonable legal fees and expenses
incurred in enforcing or defending any of your rights under this letter;
provided you prevail in such enforcement or defense.
The agreement in this letter shall be governed by and construed and
enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely
<PAGE>
MR. MANUEL FERNANDEZ
February 6, 1992
Page Three
in New York. This letter may be executed in counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
Sincerely,
BERLITZ INTERNATIONAL, INC.
By: /s/ ELIO BOCCITTO
Name: Elio Boccitto
Title: President
Accepted and Agreed to:
By: /s/ MANUEL FERNANDEZ