Exhibit 10.12

 

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February 2, 2004

 

Mr. Russell P. Fradin

 

Dear Russ:

 

This letter will confirm the authorization and your acceptance of the specific
terms and conditions of the “Key Executive” Separation Agreement that the
Compensation Committee of The BISYS Group, Inc. Board of Directors has approved
for you (the “Executive”).

 

1.

Termination for Just Cause

 

In the event that the Company terminates the Executive’s employment for Just
Cause, the Executive shall not be entitled to any additional salary, annual
incentive and/or benefit continuation payments beyond the Executive’s employment
termination date.

 

For the purposes of the Separation Agreement, Termination for Just Cause shall
be defined as follows: (i) any act of willful dishonesty by the Executive; (ii)
the Executive’s material failure to perform the duties ordinarily performed by a
person holding your executive office; (iii) activities by the Executive which
are materially harmful to the reputation of the Company and/or conviction of a
felony.

 

2.

Termination Due to Mental and/or Physical Disability

 

In the event that the Executive’s employment is terminated due to the
Executive’s inability to perform his job responsibilities due to physical and/or
mental disability, the Executive shall be entitled to receive the following
benefits:

 

(a)

ninety (90) days of full income replacement benefits under the BISYS Exempt
Employee Short Term Disability policy; and

 

(b)

in addition to any amount payable under the Company’s long-term disability plan,
an additional lump sum payment equal to nine (9) months of base salary pay.

 

Payment of the lump sum described in 2(b) above will be made at the end of the
Executive’s one year of medical leave of absence and/or the termination of the
Executive’s actual BISYS employment status.

 

3.

Termination Other Than for Cause or Change of Control

 

In the event that the Executive’s employment is terminated by the Company (other
than for Just Cause or Disability as described above in sections 1. and 2., the
Executive shall be entitled to receive a lump sum payment equal to one and
one-half (1 1/2) times the sum of the (i) Executive’s present base salary and
(ii) the greater of the Executive’s present fiscal year’s annual “At Plan”
incentive target amount or prior fiscal year’s annual incentive settlement
amount.

 

4.

Termination After A Change of Control

 

 

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(a)

In the event the Executive’s employment terminates after a Change of Control of
The BISYS Group, Inc., the Executive shall be entitled to receive a lump sum
payment as outlined in paragraph 4(c) below.

 

(b)

For purposes of this Separation Agreement, a Change in Control is defined as
follows:

 

Change of Control shall mean either (i) approval by the stockholders of The
BISYS Group, Inc. of a merger, consolidation, liquidation or dissolution of The
BISYS Group, Inc., or the sale of all or substantially all of the assets of The
BISYS Group, Inc. in which the stockholders of The BISYS Group, Inc. immediately
before the consummation of the transaction do not own at least 51% of the voting
shares of the surviving successor, acquiring, or assuming corporation in such
transaction, or (ii) the acquisition by any person (including a group, within
the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934) of
beneficial ownership of 51% or more of The BISYS Group, Inc.’s then outstanding
voting securities.

 

(c)

Effective only after a Change of Control of The BISYS Group, Inc., the Executive
may unilaterally terminate his employment hereunder within twelve (12) months
after the Change of Control date and he shall receive a lump sum payment equal
to three (3) times the sum of (i) the Executive’s present base salary and (ii)
the greater of the Executive’s present fiscal year’s “At Plan” annual incentive
target amount or prior fiscal year’s annual incentive settlement amount.

 

(d)

After the first twelve (12) month period, and for the following twenty-four (24)
month period, the Executive may terminate his employment hereunder for “Good
Reason” and receive the same lump sum payment described in paragraph (c) above

 

For purposes of this Agreement, “Good Reason” shall mean any of the following:

 

(i)

The assignment of the Executive by the Company of reduced scope of duties as
compared with the Executive’s then positions, duties, responsibilities, titles
or offices of any reduction in his duties or responsibilities or any removal of
the Executive from or any failure to re-elect the Executive to any of such
positions except in connection with the termination of the Executive’s
employment For Cause, Disability, or as a result of the Executives’ death or by
the Executive other than for Good Reason;

 

(ii)

A reduction by the Company of the Executive’s base salary as then in effect
prior to the Change in Control;

 

(iii)

A reduction by the Company in any of the Executive’s annual incentive plan,
minimum, “At Plan” or maximum incentive amounts.

 

(iv)

A relocation of the Executive’s office which requires the Executive to either
relocate his residence or substantially change his commute to work requirements;

 

(v)

Failure by the Company to continue in effect any substantial benefit or base
salary and/or annual incentive plan in which the Executive is then participating
or plans providing the Executive with substantially similar benefits or the
taking of any action by the Company which would adversely affect the Executive’s
participation in or substantially reduce the Executive’s benefits under any of
such plans without offsetting compensation of approximately equal value.

 

 

 

5.

Post Employment Termination Health Insurance Continuation Benefits

 

 

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(a)

In the event that the Executive’s employment is terminated by the Company (other
than For Just Cause) including termination of active employment due to the
expiration of one year medical leave due to physical and/or medical disability,
or that the Executive terminates his employment for Good Reason, the Executive
and his spouse, Judith Fradin, will be eligible to continue their participation
in The BISYS Group, Inc. Health Insurance Plan available to other BISYS
employees for the period ending the earlier of (i) five (5) years from the date
of termination of employment, or (ii) the date the Executive is eligible to
participate in an alternative employer-provided group health insurance plan.

 

(b)

In the case of the Executive’s death prior to his termination of employment, his
spouse, Judith Fradin, may continue her participation in the BISYS health plan
for up to five (5) years from the date of the Executive’s death.

 

(c)

In the case of the Executive’s death after the date of termination of his
employment with BISYS, his spouse, Judith Fradin, may elect to continue her
participation in the BISYS health plan for the remainder of the five-year period
following the Executive’s employment termination date.

 

6.

Accelerated Vesting of Unvested Stock Options and Restricted Shares Granted
Under All BISYS Group, Inc. Stock Option and Restricted Stock Purchase Plans

 

(a)

All Stock Options and Restricted Shares granted to the Executive under all BISYS
Group, Inc. Stock Option and Restricted Stock Purchase Plans prior to the Change
of Control, will undergo full and complete accelerated vesting, effective with a
Change of Control, as described in this Agreement.

 

(b)

All Stock Options granted to the Executive under all BISYS Group, Inc. Stock
Option and Restricted Stock Purchase Plans prior to his death and outstanding as
of the date of death, will undergo full and complete accelerated vesting,
effective the date of Executive’s death.

 

7.

Accelerated Vesting of Unvested Employer Match Funds within BISYS’ Executive
Deferred Compensation Program

 

All unvested employer match funds within BISYS’ Executive Deferred Compensation
Program will undergo full and complete accelerated vesting, effective with a
Change of Control, as described in this Agreement.

 

8.

Financial Planning Services

 

(a)

In the event that the Executive’s employment is terminated (other than For Just
Cause), the Executive shall be entitled to receive financial planning services
from AYCO, or such other provider made available to executives by the Company,
for up to two years following date of termination.

 

(b)

In the event of the Executive’s death while employed with BISYS, Executive’s
spouse, Judith Fradin, shall be entitled to receive financial planning services
from AYCO, or such other provider made available to executives by the Company,
for up to two years following his death.

 

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9.

Legal Fees

 

All reasonable legal fees paid or incurred by the Executive pursuant to any
dispute or questions of interpretation relating to this Agreement shall be paid
or reimbursed by the Company if the Executive prevails in such dispute in whole
or in part.

 

10.

“Triggering” Amount Option

 

Should the value of aggregate payments and benefits to be made to the Executive
which are deemed to be parachute payments as defined in Section 280G of the
Internal Revenue Code of 1986 (the “Code”), as amended or any successor thereof,
be deemed to include an “excess parachute payment” under Section 280G of the
Code, the Executive will receive whichever of the following two (2) described
alternatives provide the Executive with the greater total payments and benefit
after the payment of any applicable excise tax, as defined by Section 499S of
the Code.

 

(a)

The entire aggregate payments and benefits as defined by this Agreement. The
Executive will be responsible for any excise tax, as defined by Section 499S of
the Code, associated with any payments which are beyond the Triggering Amount.
(Triggering amount is equal to three (3) times the Executive’s “base amount” as
determined in accordance with said Section 280G of the Code.)

 

(b)

Reduced aggregate payments and benefits equal to one dollar ($1.00) less than
the Triggering Amount described in 10(a) above. The Executive will determine the
allocation of any termination payment or benefit reduction.

 

 

Approved on behalf of the Compensation Committee of the Board of Directors

as of February 2, 2004

 

 

By: /s/ Robert J. Casale                                    

 

 

Robert J. Casale

 

 

Acknowledged and Agreed as of February 2, 2004

 

 

By: /s/ Russell Fradin                                       

 

 

Russell P. Fradin

 

 

Key Executive Separation Agreement - CEO

 

 

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