Document:

FRM - EX10.3 - 2014.06.30 - Q2

EXHIBIT 10.3

CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into by and between Furmanite Corporation, a Delaware corporation (the “Company”), and Robert S. Muff (the “Executive”) effective as of May 27, 2014.
WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continued employment of key management personnel; and
WHEREAS, the Company recognizes that, as is the case with many publicly-held corporations, the possibility of a change in control exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Company has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company’s management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a change in control;
WHEREAS, the Company and the Executive desire to enter into the Change in Control Agreement to comply with section 409A of the Internal Revenue Code of 1986, as amended;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Executive hereby agree as follows:
1.Definitions and Interpretation Rules.
1.1    Defined Terms.  For purposes of this Agreement, the following terms shall have the meanings indicated below:
“Accrued Obligations” means the sum of (i) the Executive’s Base Compensation through the Executive’s Employment Termination Date for periods through but not following his Separation From Service, and (ii) any accrued vacation pay, in each case to the extent not theretofore paid by the Company and not theretofore deferred by the Executive.
“Additional Obligations” means the Executive’s Base Compensation for periods following his Separation From Service to the extent not theretofore paid by the Company and not theretofore deferred by the Executive.
“Affiliate” means any entity which is a member of (i) the same controlled group of corporations within the meaning of section 414(b) of the Code with the Company, (ii) a trade or business (whether or not incorporated) which is under common control (within the meaning of section 414(c) of the Code) with the Company or (iii) an affiliated service group (within the meaning of section 414(m) of the Code) with the Company.
“Assets” means assets of any kind owned by the Company, including but not limited to securities of the Company’ direct and indirect subsidiaries and Affiliates.

“the Company” means Furmanite Corporation, a Delaware corporation, and any successor by merger or otherwise.
“Base Compensation” means the Executive’s base salary or wages (as defined in section 3401(a) of the Code for purposes of federal income tax withholding) from the Company, modified by including any portion thereof that such Executive could have received in cash in lieu of any elective deferrals made by the Executive (other than deferrals of bonuses) pursuant to a qualified cash or deferred arrangement described in section 401(k) of the Code and any elective contributions under a cafeteria plan described in section 125 of the Code, and modified further by excluding any bonus, incentive compensation (including but not limited to equity-based compensation), commissions, expense reimbursements or other expense allowances, fringe benefits (cash and noncash), moving expenses, deferred compensation (other than elective deferrals by the Executive under a qualified cash or deferred arrangement described in section 401(k) of the Code that are expressly included in “Base Compensation” under the foregoing provisions of this definition), welfare benefits as defined in ERISA, overtime pay, special performance compensation amounts and severance compensation.
“Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to those terms in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. 
“Board” means the Board of Directors of the Company or other governing body of the Company or its direct or indirect parent.
“Cause” means (i) the willful and continued failure by the Executive to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Executive by the Board (or by a delegate appointed by the Board), which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive’s duties, (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the Company or any of its Affiliates, monetarily or otherwise, (iii) the conviction of the Executive for a felony, (iv) the entering by the Executive of a plea of guilty or nolo contendre to a felony charge or crime involving moral turpitude, or (v) the material breach by the Executive of any code of conduct established by the Company.  For purposes of Sections (i) and (ii) of this definition, (A) no act, or failure to act, on the Executive’s part shall be deemed “willful” if done, or omitted to be done, by the Executive in good faith and with reasonable belief that the act, or failure to act, was in the best interest of the Company and (B) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Company establishes to the Board by clear and convincing evidence that Cause exists.
“Change in Control” means the occurrence of any of the following events:
(a)    the individuals who are Incumbent Directors cease for any reason to constitute a majority of the members of the Board; 
(b)    the consummation of a Merger of the Company or an Affiliate of the Company with 

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another Entity, unless the individuals and Entities who were the Beneficial Owners of the Voting Securities of the Company outstanding immediately prior to such Merger own, directly or indirectly, at least 50 percent of the combined voting power of the Voting Securities of any of the Company, the surviving Entity or the parent of the surviving Entity outstanding immediately after such Merger; 
(c)    any Person, other than a Specified Owner, becomes a Beneficial Owner, directly or indirectly, of securities of the Company representing 30 percent or more of the combined voting power of the Company’s then outstanding Voting Securities; 
(d)    a sale, transfer, lease or other disposition of all or substantially all of the Company’s Assets is consummated (an “Asset Sale”), unless:
(1)    the individuals and Entities who were the Beneficial Owners of the Voting Securities of the Company immediately prior to such Asset Sale own, directly or indirectly, 50 percent or more of the combined voting power of the Voting Securities of the Entity that acquires such Assets in such Asset Sale or its parent immediately after such Asset Sale in substantially the same proportions as their ownership of the Company’s Voting Securities immediately prior to such Asset Sale; or
(2)    the individuals who comprise the Board immediately prior to such Asset Sale constitute a majority of the board of directors or other governing body of either the Entity that acquired such Assets in such Asset Sale or its parent (or a majority plus one member where such board or other governing body is comprised of an odd number of directors); or
(e)    The stockholders of the Company approve a plan of complete liquidation or dissolution of the Company.
“Code” means the Internal Revenue Code of 1986, as amended, or any successor act.
“Committee” means, prior to a Change in Control or a Potential Change in Control, the Compensation Committee of the Board.  After a Change in Control or a Potential Change in Control, “Committee” means (i) the individuals (not fewer than three (3) in number) who, on the date six months prior to the Change in Control or Potential Change in Control constitute the Compensation Committee of the Board, plus, (ii) in the event that fewer than three (3) individuals are available from the group specified in clause (i) above for any reason, such individuals as may be appointed by the individual or individuals so available (including for this purpose any individual or individuals previously so appointed under this clause (ii)); provided, however, that the maximum number of individuals constituting the Committee after a Change in Control or Potential Change in Control shall not exceed five (5).
“Company” means the Company.  In the event that the Executive’s employer is a subsidiary of the Company, the term “Company” shall include the Executive’s employer where appropriate and the Company will cause the Executive’s employer to take any actions necessary to satisfy the obligations of the Company under this Agreement.

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“Disability” means the Executive’s incapacity due to physical or mental illness that has caused the Executive to be absent from full-time performance of his duties with the Company for a period of six (6) consecutive months.
“Effective Date” means the date identified in the introduction of this Agreement.
“Employee” means an individual who is employed in the services of the Company on the Company’s active payroll.
“Employment Termination Date” means the date as of which the Executive incurs a Termination of Employment determined in accordance with the provisions of Section 5.2.
“Entity” means any corporation, partnership, association, joint-stock company, limited liability company, trust, unincorporated organization or other business entity.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, or any successor act.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any successor act.
“Excise Tax” means the excise tax imposed by section 4999 of the Code or any similar tax payable under any United States federal, state, or local statute.
“Executive” means the Employee identified in the introduction of this Agreement.
“Expiration Date” shall have the meaning specified in Section 2.
“Good Reason” for termination by the Executive of his employment means the occurrence (without the Executive’s express written consent) after any Change in Control, or prior to a Change in Control under the circumstances described in clauses (b) and (c) of the second paragraph of the definition of Termination of Employment (treating all references to “Change in Control” in paragraphs (a) through (f) below as references to a “Potential Change in Control”), of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (a), (e), (f) or (g) below, such act or failure to act is corrected prior to the effective date of the Executive’s termination for Good Reason:
(a)    the assignment to the Executive of any duties or responsibilities which are substantially diminished as compared to the Executive’s duties and responsibilities immediately prior to a Change in Control or a material change in the Executive’s reporting responsibilities, titles or offices as an Employee and as in effect immediately prior to the Change in Control;
(b)    a reduction by the Company in the Executive’s annual Base Compensation as in effect on the date hereof or as the same may be increased from time to time;
(c)    the relocation of the Executive’s principal place of employment to a location outside of a 50-mile radius from the Executive’s principal place of employment immediately prior to the 

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Change in Control or the Company’s requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Executive’s business travel obligations immediately prior to a Change in Control;
(d)    the failure by the Company to pay to the Executive any portion of the Executive’s current compensation or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due;
(e)    the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately prior to the Change in Control which is material to the Executive’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive’s participation relative to other the Company executives, as existed immediately prior to the Change in Control;
(f)    the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the Executive under any of the Company’s pension, savings, life insurance, medical, health and accident, or disability plans in which the Executive was participating immediately prior to the Change in Control, the taking of any other action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit or Perquisite enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of paid vacation days to which the Executive is entitled on the basis of years of service with the Company in accordance with the Company’s normal vacation policy in effect immediately prior to the time of the Change in Control; or
(g)    any purported termination of the Executive’s employment which is not effected pursuant to a notice of termination satisfying the requirements of Section 5.1.
The Executive shall have the right to terminate his employment for Good Reason even if he becomes incapacitated due to physical or mental illness.  The Executive’s continued employment shall not constitute consent to, or a waiver of any rights with respect to, any act or failure to act constituting Good Reason hereunder.
For purposes of any determination regarding the existence of Good Reason, any claim by the Executive that Good Reason exists shall be presumed to be correct unless the Company establishes to the Committee by clear and convincing evidence that Good Reason does not exist.  The Committee’s determination regarding the existence of Good Reason shall be conclusive and binding upon all parties unless the Committee’s determination is arbitrary and capricious.
“Gross-Up Payment” means the additional amount paid to the Executive pursuant to Section 3.3.

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“Highest Base Compensation” means the Executive’s annualized Base Compensation in effect immediately prior to (a) a Change in Control, (b) the first event or circumstance constituting Good Reason, or (c) the Executive’s Termination of Employment, whichever is greatest.
“Incumbent Director” means –
(a)    a member of the Board on the Effective Date; or
(b)    an individual- 
(1)    who becomes a member of the Board after the Effective Date;
(2)    whose appointment or election by the Board or nomination for election by the Company’ stockholders is approved or recommended by a vote of at least two-thirds of the then serving Incumbent Directors (as defined herein); and 
(3)    whose initial assumption of service on the Board is not in connection with an actual or threatened election contest.
“IRS” means the Internal Revenue Service.
“Merger” means a merger, consolidation or similar transaction.
“Pension Plan” means the Company’s 401(k) plan, as amended from time to time.
“Perquisites” means benefits such as any supplemental life insurance; financial consulting; and office equipment for use in the home (e.g., cellular telephones, personal digital assistance, home computers and office accessories similar to the office accessories available to the Executive in his employment office and monthly Internet connection fees) that may be provided by the Company from time to time.
“Person” shall have the meaning ascribed to the term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof, except that the term shall not include (a) the Company or any of its Affiliates, (b) a trustee or other fiduciary holding Company securities under an employee benefit plan of the Company or any of its Affiliates, (c) an underwriter temporarily holding securities pursuant to an offering of those securities or (d) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.
“Potential Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:
(a)    the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; 
(b)    the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; 

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(c)    any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15 percent or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company’s then outstanding securities (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates); or
(d)    the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred.  
“Section 409A” means section 409A of the Code and the final regulations issued thereunder by the IRS and the Department of Treasury.
“Section 409A Disability” shall mean the inability of the Executive to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months.  The Executive shall also be treated as having a “Section 409A Disability” if he is, by reason of a medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company.
“Separation From Service” shall have the meaning ascribed to that term under Section 409A.
“Specified Employee” shall have the meaning ascribed to that term under Section 409A.
“Specified Owner” means any of the following:
(a)    the Company; 
(b)    an Affiliate of the Company;
(c)    an employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate of the Company; 
(d)    a  Person that becomes a Beneficial Owner of the Company’s outstanding Voting Securities representing 30 percent or more of the combined voting power of the Company’s then outstanding Voting Securities as a result of the acquisition of securities directly from the Company and/or its Affiliates; or
(e)    a  Person that becomes a Beneficial Owner of the Company’s outstanding Voting Securities representing 30 percent or more of the combined voting power of the Company’s then outstanding Voting Securities as a result of a Merger if the individuals and Entities who were the Beneficial Owners of the Voting Securities of the Company outstanding immediately prior to such Merger own, directly or indirectly, at least 50 percent of the combined voting power of the Voting Securities of any of the Company, the surviving Entity or the parent of the surviving Entity outstanding immediately after such Merger in substantially the same proportions as their ownership of the Voting Securities of the Company outstanding immediately prior to such Merger.

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“Termination of Employment” means the termination of the Executive’s employment relationship with the Company (a) by the Company without Cause after a Change in Control occurs, or (b) by the Executive for Good Reason after a Change in Control occurs, or (c) resignation by the Executive within 30 days of a Change in Control.  
For purposes of this definition, the Executive’s employment shall be deemed to have been terminated after a Change in Control, if (a) the Executive’s employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control ever occurs) and such termination was at the request or direction of a Person who has entered into an agreement with the Company, the consummation of which would constitute a Change in Control; (b) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control ever occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of a Person who has entered into an agreement with the Company, the consummation of which would constitute a Change in Control; (c) the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason and such termination or the circumstance or event which constitutes Good Reason is otherwise in connection with a Change in Control; (d) resignation by the Executive within 30 days of a Change in Control; or (e) in accordance with section 2.2.  For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Executive shall be presumed to be correct unless the Company establishes to the Committee by clear and convincing evidence that such position is not correct.
“Termination of Employment” does not include (a) a termination of employment due to the Executive’s death or Disability, or (b) a termination of employment by the Company with Cause.
“Voting Securities” means the outstanding securities entitled to vote generally in the election of directors or other governing body.
1.2    Number and Gender.  As used in this Agreement, unless the context otherwise expressly requires to the contrary, references to the singular include the plural, and vice versa; references to the masculine include the feminine and neuter; references to “including” mean “including (without limitation)”; and references to Sections and clauses mean the sections and clauses of this Agreement.
2.    Term of Agreement.
2.1    The “Term” of this Agreement shall commence on the Effective Date and end on the earlier of (a) the Executive’s Termination of Employment or (b) the date the Executive is no longer an Employee of the Company or (c) six (6) months following the date of a Change in Control (such last day being the “Expiration Date”).
2.2    Notwithstanding 2.1 above, should a Change in Control occur within ninety (90) days following cessation of the Executive’s employment relationship with the Company for any reason, except for Cause, then Executive shall be entitled to the benefits and compensation contained herein as if Executive had been employed at the time of the Change in Control and had tendered his resignation within thirty (30) days of a Change in Control in accordance with the definition of 

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Termination of Employment.  In such event, for all items in Compensation listed below, including the Executive’s Highest Base Compensation, shall be calculated as of the date of Executive’s cessation of employment. 
3.    Compensation.
3.1    Equity Based Compensation.  Upon the occurrence of a Change in Control, all options to acquire shares of the Company stock, all shares of restricted Company stock, all other equity or phantom equity incentives and any awards the value of which is determined by reference to or based upon the value of the Company stock, held by the Executive under any plan of the Company shall become immediately vested, exercisable and nonforfeitable and all conditions thereof (including, but not limited to, any required holding periods) shall be deemed to have been satisfied, subject to the terms and conditions of such plans or agreements.
3.2    Benefits Following Termination of Employment.  If the Executive incurs a Termination of Employment during the Term of this Agreement, the Company shall provide the Executive the benefits described below.  
(a)    Severance Payment Based Upon Base Compensation.  The Company will pay the Executive a cash severance benefit equal to 2.99 times the Executive’s Highest Base Compensation.  The Executive’s severance payment under this paragraph (a) will be paid in accordance with the provisions of Section 4.
(b)    Pension Plan.  In addition to the retirement benefits to which the Executive is entitled under the Pension Plan, the Company shall pay the Executive a single sum cash payment in an amount equal to the undiscounted value of the employer contributions the Company would have made to the Pension Plan (including but not limited to matching and base contributions) on behalf of the Executive had the Executive continued in the employ of the Company for a period of three years after the Employment Termination Date, assuming for this purpose that (i) the Executive’s earned compensation per year during that three year period of time is the Executive’s Highest Base Compensation; and (ii) contribution, deferral, credit and accrual percentages made under the Pension Plan, by and on behalf of the Executive during the three year period, are the same percentages in effect on the date of the Change in Control or the Executive’s Employment Termination Date, whichever is more favorable for the Executive.  The payment required under this paragraph (b) will be made in accordance with the provisions of Section 4.  
(c)    Accident and Health Insurance Benefits.  For three years following the Executive’s Employment Termination Date (the “Continuation Period”), the Company shall arrange to provide the Executive and his dependents accident and health insurance benefits, in each case, substantially similar to those provided to the Executive and his dependents immediately prior to the Employment Termination Date or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to the Executive immediately prior to such date or occurrence; provided, however, that with respect to any of such plans, programs, practices or policies requiring employee contributions, the Executive shall continue to pay the employee contributions for same.  If the dental, accident, health insurance or other benefits 

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specified in this Section 3.2(c) are taxable to the Executive, the following provisions shall apply to the reimbursement or provision of such benefits.  The Executive shall be eligible for reimbursement for covered welfare expenses, or for the provision of such benefits on an in-kind basis, during the period commencing on the Executive’s Employment Termination Date and ending on the third anniversary of such date.  The amount of such welfare benefit expenses eligible for reimbursement or the in-kind benefits provided under this Section 3.2(c), during the Executive’s taxable year will not affect the expenses eligible for reimbursement, or the in-kind benefits to be provided, in any other taxable year (with the exception of applicable lifetime maximums applicable to medical expenses or medical benefits described in Section 105(b) of the Code).  The Executive’s right to reimbursement or direct provision of benefits under this Section 3.2(c) is not subject to liquidation or exchange for another benefit.  To the extent that the benefits provided to the Executive pursuant to this Section 3.2(c) are taxable to the Executive and not otherwise exempt from Section 409A, any amounts to which the Executive would otherwise be entitled under this Section 3.2(c) during the first six months following the date of the Executive’s Separation From Service shall be accumulated and paid to the Executive on the date that is six months following the date of his Separation From Service.   
(d)    Perquisites.  The Executive shall be entitled to a single sum cash payment which shall be an amount equal to the sum of (1) the cost of the Executive’s Perquisites in effect prior to his Termination of Employment for the remainder of the calendar year in which the Employment Termination Date occurs; plus (2) the cost of the Executive’s Perquisites in effect prior to his Termination of Employment for an additional three years.  The payment required under this paragraph (d) will be made in accordance with the provisions of Section 4.    
(e)    Retiree Medical.  If the Executive would have become entitled to benefits under the Company’s post-retirement health care insurance plans, as in effect immediately prior to the Employment Termination Date or, if more favorable to the Executive as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, had the Executive’s employment terminated at any time during the period of thirty-six (36) months after the Employment Termination Date, the Company shall provide such post-retirement health care insurance benefits to the Executive and the Executive’s dependents commencing on the later of (i)  the date on which such coverage would have first become available and (ii) the date on which the applicable benefits described in Section 3.2(c) terminate.  Except for any reimbursements under the applicable group health plan that are subject to a limitation on reimbursements during a specified period, the amount of expenses eligible for reimbursement under this Section 3.2(e), or in-kind benefits provided, during the Executive’s taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year of the Executive.  The Executive’s right to reimbursement or in-kind benefits pursuant to this Section 3.2(e) shall not be subject to liquidation or exchange for another benefit.  To the extent that the benefits provided to the Executive pursuant to this Section 3.2(e) are taxable to the Executive and are not otherwise exempt from Section 409A, any amounts to which the Executive would otherwise be entitled under this Section 3.2(e) during the first six months following the date of the Executive’s Separation From Service shall be accumulated and paid to the Executive on the date that is six months following the date of his Separation From Service.  

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(f)    Interest Amount.  If the Executive is a Specified Employee, the Company shall pay to the Executive, on the date that is six (6) months following the Executive’s Separation From Service, an amount equal to the amount of interest that would be earned on the amounts specified in Sections 3.2(a), 3.2(b), and 3.2(d) and, to the extent subject to a mandatory six-month delay in payment, the amounts specified in Sections 3.2(c), 3.2(e), 3.3 and 3.4, for the period commencing on the date of the Executive’s Separation From Service until the date of payment of such amounts, calculated using an interest rate equal to the six month London Interbank Offered Rate in effect on the date of the Executive’s Separation From Service plus two percentage points (the “Interest Amount”).  
3.3    Gross-Up Payments.  The Executive will reasonably cooperate with the Company in good faith to achieve a mutually acceptable methodology for minimizing the Excise Tax.  
 
Should the Executive and the Company fail to agree on a mutually acceptable methodology for minimizing the Excise Tax, the following provisions of this Section 3.3 will apply.  If any payments or benefits received or to be received by the Executive (whether pursuant to the terms of this Agreement, or any other plan or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) (such payments or benefits, excluding the Gross-Up Payment, being hereinafter referred to as the “Total Payments”) will be subject to the Excise Tax, the Company shall pay the Executive an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Executive after the deduction of any Excise Tax on the Total Payments and any federal, state and local income and employment taxes and Excise Tax upon the Gross-Up Payment shall be equal to the Total Payments.  The purpose of this Section is to place the Executive in the same economic position such Executive would have been in had no Excise Tax been imposed with respect to the Total Payments.  
(a)    For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax,  (i) all of the Total Payments shall be treated as “parachute payments” (within the meaning of section 280G(b)(2) of the Code) unless, in the opinion of tax counsel (the “Tax Counsel”) reasonably acceptable to the Executive and selected by the accounting firm which was, immediately prior to the Change in Control, the Company’s independent auditor (the “Auditor”), such payments or benefits (in whole or in part) do not constitute parachute payments, including by reason of section 280G(b)(4)(A) of the Code, (ii)  all “excess parachute payments” within the meaning of section 280G(b)(l) of the Code shall be treated as subject to the Excise Tax unless, in the opinion of the Tax Counsel, such excess parachute payments (in whole or in part) represent reasonable compensation for services actually rendered (within the meaning of section 280G(b)(4)(B) of the Code) in excess of the “base amount” (within the meaning of section 280G(b)(3) of the Code) allocable to such reasonable compensation, or are otherwise not subject to the Excise Tax, and (iii)  the value of any noncash benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code.  
(b)    For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal income tax at the highest marginal rate of federal income taxation in the calendar year in which the Gross-Up Payment is to be made and state and local 

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income taxes at the highest marginal rate of taxation in the state and locality of the Executive’s residence on the Employment Termination Date (or if there is no Employment Termination Date, then the date on which the Gross-Up Payment is calculated for purposes of this Section), net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes.
(c)     In the event that the Excise Tax is determined to exceed the amount taken into account hereunder in calculating the Gross-Up Payment (including by reason of any payment the existence or amount of which cannot be determined at the time of the payment of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest, penalties or additions payable by the Executive with respect to such excess) within five (5) business days following the time that the amount of such excess is finally determined and in any event no later than the payment deadline specified below in this Section 3.3.  The Executive and the Company shall each reasonably cooperate with the other relative to any administrative or judicial proceedings concerning the existence or amount of liability for the Excise Tax.
(d)    The parties intend and agree that the five (5) business day deadline specified above in this Section 3.3 is not to be extended as a result of the following sentence which is included solely for the purpose of complying with Section 409A.  The Company shall make a payment to reimburse the Executive in an amount equal to all federal, state and local taxes imposed upon the Executive that are described in this Section 3.3, including the amount of additional taxes imposed upon the Executive due to the Company’s payment of the initial taxes on such amounts, by the end of the Executive’s taxable year next following the Executive’s taxable year in which the Executive remits the related taxes to the taxing authority.  Notwithstanding any provision of this Agreement to the contrary, any amounts to which the Executive would otherwise be entitled under this Section 3.3 during the first six months following the date of the Executive’s Separation From Service shall be accumulated and paid to the Executive on the date that is six months following the date of his Separation From Service.
3.4    Legal Fees.  the Company shall pay, on a fully grossed up, after tax basis, all legal fees and expenses incurred by the Executive (i) in disputing in good faith any issue relating to the Executive’s termination of employment, (ii) in seeking in good faith to obtain or enforce any benefit or right provided under this Agreement in accordance with Section 9.5, or (iii) in connection with any tax audit or proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit under this Agreement.  Such payments under this Section 3.4 shall be made within ten (10) business days after the delivery of the Executive’s written request for the payment accompanied by such evidence of fees and expenses incurred as the Company may reasonably require.  The parties intend and agree that the foregoing ten (10) business day deadline is not to be extended as a result of the following sentence which is included solely for the purpose of complying with Section 409A.  The Company shall make a payment to reimburse the Executive in an amount equal to all legal fees and expenses incurred due to a tax audit or litigation relating to the application of section 4999 of the Code to any payment or benefit under this Agreement by the end of the Executive’s taxable year following the Executive’s taxable year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no taxes are remitted, by the end of the Executive’s taxable year following the Executive’s taxable year in which the audit is completed or there is a final and nonappealable 

- 12 -

settlement or other resolution of the litigation.  The legal fees or expenses that are subject to reimbursement pursuant to this Section 3.4 shall not be limited as a result of when the fees or expenses are incurred.  The amount of legal fees or expenses that is eligible for reimbursement pursuant to this Section 3.4 during a given taxable year of the Executive shall not affect the amount of expenses eligible for reimbursement in any other taxable year of the Executive.  The right to reimbursement pursuant to this Section 3.4 is not subject to liquidation or exchange for another benefit.  Notwithstanding any provision of this Agreement to the contrary, any amount to which the Executive would otherwise be entitled under this Section 3.4 during the first six months following the date of the Executive’s Separation From Service shall be accumulated and paid to the Executive on the date that is six months following the date of his Separation From Service.
4.    Time of Benefits Payments.  The Company shall pay the Executive any cash benefits described in paragraphs (a), (b), (d) and (f) of Section 3.2 in a single sum cash payment in good funds immediately available by wire transfer to the Executive on the date of the Executive’s Separation From Service if he is not a Specified Employee or on the date that is six months following the date of his Separation From Service if he is a Specified Employee, or in the case of 2.2 above, within fifteen (15) days of the Change in Control. 
5.    Termination Procedures And Compensation During Dispute.
5.1    Notice of Termination.  After a Change in Control and during the Term of this Agreement, any purported termination of the Executive’s employment by the Company shall be communicated by the Company by a written Notice of Termination to the Executive in accordance with Section 9.8.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.  Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail.  No purported termination of the Executive’s employment by the Company after a Change in Control and during the Term of this Agreement shall be effective unless the Company complies with the procedures set forth in this Section.
5.2    Employment Termination Date.  “Employment Termination Date,” with respect to any purported termination of the Executive’s employment after a Change in Control and during the Term of this Agreement, shall mean (i) if the Executive’s employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during such thirty (30) day period), and (ii) if the Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor more than sixty (60) days, respectively, 

- 13 -

from the date such Notice of Termination is given).  “Employment Termination Date,” with respect to the resignation by the Executive concurrent with a Change in Control, shall mean the date of the Change in Control.
5.3    Dispute Concerning Termination.  If within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Employment Termination Date (as determined without regard to this Section), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Employment Termination Date shall be extended until the earlier of (i) the date on which the Term of this Agreement ends or (ii) the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of an arbitrator or a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that the Employment Termination Date shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence.
5.4    Compensation During Dispute.  If a purported termination of employment occurs following a Change in Control and during the Term of this Agreement and the Employment Termination Date is extended in accordance with Section 5.3, the Company shall pay the Executive the full Base Compensation in effect when the notice giving rise to the dispute was given.  The Company shall pay any such compensation to the Executive at the applicable times specified in Section 9.7.  To the extent legally permissible, the  Company shall also continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given or those plans in which the Executive was participating immediately prior to the first occurrence of an event or circumstance giving rise to the Notice of Termination, if more favorable to the Executive, until the Employment Termination Date, as determined in accordance with Section 5.3.  Amounts paid under this Section are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement.
6.    Withholding.  Subject to the provisions of Section 3.3, the Company may withhold from any benefits paid under this Agreement all income, employment, and other taxes required to be withheld under applicable law.
7.    Death of the Executive.  If the Executive dies after his Employment Termination Date but before the Executive receives full payment of the benefits to which he is entitled, any unpaid benefits will be paid to the Executive’s surviving spouse, or if the Executive does not have a surviving spouse, to the Executive’s estate. 
8.    Amendment.  This Agreement may not be amended except pursuant to a written instrument that is authorized by the Committee and agreed to in writing and signed by the Executive.
9.    Miscellaneous.
9.1    Agreement Not an Employment Contract.  This Agreement is not an employment contract between the Company and Executive and gives Executive no right to retain his employment.  

- 14 -

This Agreement is not intended to interfere with the rights of the Company to terminate the Executive’s employment at any time with or without notice and with or without cause or to interfere with the Executive’s right to terminate his employment at any time.
In the event that a third party begins a tender or exchange offer, initiates a proxy contest or takes other steps to effect a Change in Control of the Company, the Executive agrees that the Executive will not voluntarily leave the employ of the Company and will perform the services of the Executive’s office until the third party has abandoned or terminated efforts to effect a Change in Control or until a Change in Control has occurred.  In the event such Change in Control is supported and endorsed by the Board, the Executive agrees to assist, for a period of ninety (90) days from the date of Change in Control, in the orderly transition of management of the Company, provided the Company shall pay any reasonable expenses the Executive incurs in connection with such assistance.  
If the Executive’s employment with the Company should terminate for any reason prior to the occurrence of the Change in Control events described herein, this Agreement shall terminate and the Company will have no further obligation to the Executive hereunder.
9.2    Alienation Prohibited.  No benefits hereunder shall be subject to anticipation or assignment by the Executive, to attachment by, interference with, or control of any creditor of the Executive, or to being taken or reached by any legal or equitable process in satisfaction of any debt or liability of the Executive prior to its actual receipt by the Executive.  Any attempted conveyance, transfer, assignment, mortgage, pledge, or encumbrance of the benefits hereunder prior to payment thereof shall be void.
9.3    Severability.  Each provision of this Agreement may be severed.  If any provision is determined to be invalid or unenforceable, that determination shall not affect the validity or enforceability of any other provision.
9.4    Binding Effect.  This Agreement shall be binding upon any successor of the Company.  Further, the Board shall not authorize a Change in Control that is a Merger or an Asset Sale transaction unless the purchaser or the Company’s successor agrees to take such actions as are necessary to cause the Executive to be paid or provided all benefits due under the terms of this Agreement as in effect immediately prior to the Change in Control.
9.5    Settlement of Disputes Concerning Benefits Under this Agreement; Arbitration.  All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Committee and shall be in writing.  Any denial by the Committee of a claim for benefits under this Agreement shall be delivered to the Executive in writing within thirty (30) days after written notice of the claim is provided to the Company in accordance with Section 9.8 and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon.  The Committee shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Committee a decision of the Committee within sixty (60) days after notification by the Committee that the Executive’s claim has been denied.  Any further dispute or controversy arising out of or relating to this Agreement, including without limitation, any and all disputes, claims (whether in tort, contract, statutory or 

- 15 -

otherwise) or disagreements concerning the interpretation or application of the provisions of this Agreement shall be resolved by arbitration in accordance with the rules of the American Arbitration Association (the “AAA”) then in effect.  No arbitration proceeding relating to this Agreement may be initiated by either the Company or the Executive unless the claims review and appeals procedures specified in this Section 9.5 have been exhausted.  Within ten (10) business days of the initiation of arbitration hereunder, the Company and the Executive will each separately designate an arbitrator, and within twenty (20) business days of selection, the appointed arbitrators will appoint a neutral arbitrator from the AAA Panel of Commercial Arbitrators. The arbitrators shall issue their written decision (including a statement of finding of facts) within thirty (30) days from the date of the close of the arbitration hearing.  The decision of the arbitrators selected hereunder will be final and binding on both parties.  This arbitration provision is expressly made pursuant to and shall be governed by the Federal Arbitration Act, 9 U.S.C. Sections 1-16 (or replacement or successor statute).  Pursuant to Section 9 of the Federal Arbitration Act, the Company and the Executive agree that a judgment of the United States District Court for the District in which the headquarters of the Company is located at the time of initiation of arbitration hereunder may be entered upon the award made pursuant to the arbitration.
9.6    No Mitigation.  The Company agrees that if the Executive’s employment with the Company terminates during the Term of this Agreement, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to this Agreement.  Further, except as expressly provided otherwise herein, the amount of any payment or benefit provided for in this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise.
9.7    Other Amounts Due.  Except as expressly provided otherwise herein, the payments and benefits provided for in this Agreement are in addition to and not in lieu of amounts and benefits that are earned by the Executive prior to his Termination of Employment.  The Company shall pay to the Executive the Accrued Obligations on the Executive’s Employment Termination Date.  If the Executive’s Separation From Service is not due to his death or his incurring a Section 409A Disability, the Company shall pay to the Executive the Additional Obligations on the date of his Separation From Service if he is not a Specified Employee or on the date that is six months following the date of his Separation From Service if he is a Specified Employee.  If the Executive’s termination of employment with the Company occurs by reason of the death of the Executive, the Company shall pay to the person or estate specified in Section 7 the Additional Obligations on the date that is 30 days following the date of the death of the Executive.  If the Executive’s termination of employment with the Company occurs by reason of the Executive incurring a Section 409A Disability, the Company shall pay to the Executive the Additional Obligations on the date that is 30 days following the date of the Executive’s incurring a Section 409A Disability.  Further the Executive shall be entitled to any other amounts or benefits due the Executive in accordance with any contract, plan, program or policy of the Company or any of its Affiliates, other than any severance benefit program or policy.  Amounts that the Executive is entitled to receive under any plan, program, contract or policy of the Company or any of its Affiliates at or subsequent to the Executive’s Termination of Employment, other than any severance benefit program or policy, shall be payable 

- 16 -

or otherwise provided in accordance with such plan, program, contract or policy, except as expressly modified herein.
9.8    Notices.  For the purpose of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be given in person or by United States registered mail, return receipt requested (with evidence of receipt by the party to whom the notice is given), postage prepaid, addressed, if to the Executive, to the address listed on the signature page of this Agreement and, if to the Company, to 10370 Richmond Ave. Suite 600 Houston, Texas 77042; Attention:  Legal, or to such other address as either party may have furnished to the other in writing in accordance herewith.  For purposes of this agreement notice to a party shall be effective only upon actual receipt of the notice by the party with written evidence of receipt by the party to whom the notice is given.
9.9    Disputed Payments and Refusals to Pay.  If the Company fails to make a payment under this Agreement in whole or in part as of the payment date specified in this Agreement, either intentionally or unintentionally, other than with the express or implied consent of the Executive, the Company shall owe the Executive interest on the delayed payment at the applicable Federal rate provided for in section 7872(f)(2)(A) of the Code if the Executive (i) accepts the portion (if any) of the payment that the Company is willing to make (unless such acceptance will result in a relinquishment of the claim to all or part of the remaining amount) and (ii) makes prompt and reasonable good faith efforts to collect the remaining portion of the payment. Any such interest payments shall become due and payable effective as of the applicable payment date(s) specified in this Agreement with respect to the delinquent payments.
9.10    Funding.  The Executive shall have no right, title, or interest whatsoever in or to any assets of the Company or any investments which the Company may make to aid it in meeting its obligations under this Agreement.  The Executive’s right to receive payments under this Agreement shall be no greater than the right of an unsecured general creditor of the Company.  Immediately prior to a Change in Control, the Company shall create an irrevocable grantor trust (the “Rabbi Trust”) which shall be subject to the claims of creditors of the Company.  In the event that the Executive is a Specified Employee at the time he incurs a Separation From Service or at the time the Company determines that it is reasonably likely that the Executive will incur a Separation From Service in connection with a Change in Control, then immediately upon the Executive’s Separation From Service or, if earlier, the date on which the Company makes a determination that the Executive is reasonably likely to incur a Separation From Service in connection with a Change in Control, the Company shall transfer to the Rabbi Trust cash sufficient (on an undiscounted basis) to pay the cash amounts specified in Sections 3.2(a), 3.2(b), 3.2(d) and 3.2(f), and the estimated amount of the Gross-Up Payment to be made under Section 3.3.  The cash amounts specified in Sections 3.2(a), 3.2(b), 3.2(d) and 3.2(f), and the Gross-Up Payment shall be paid from the Rabbi Trust on the dates specified in Sections 3.3 and 4 herein, provided that the Company shall remain liable to pay any such amounts which for any reason are not paid from the Rabbi Trust.  The trustee of the Rabbi Trust shall be a bank or trust company selected by the Company prior to the Change in Control. 
9.11    Governing Law.  All provisions of this Agreement shall be construed in accordance with the laws of Texas, except to the extent preempted by federal law and except to the extent that the conflicts of laws provisions of the State of Texas would require the application of the relevant 

- 17 -

law of another jurisdiction, in which event the relevant law of the State of Texas will nonetheless apply, with venue for litigation being in Dallas, Texas.
9.12    Compliance With Section 409A.  It is intended that this Agreement shall comply with Section 409A.  The provisions of this Agreement shall be interpreted and administered in a manner that complies with Section 409A.
9.13    Entire Agreement.  This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes all prior agreements, promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereto.

- 18 -

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date above first written.
	
					
	 
	FURMANITE CORPORATION

	 
	 
	 
	 
	 

	 
	By:
	 
	 
	/s/ William F. Fry

	 
	 
	 
	 
	 

	 
	Name:
	 
	William F. Fry

	 
	Date:
	 
	May 27, 2014

	 
	Title:
	 
	General Counsel

	 
	 
	 
	 
	 

	 
	EXECUTIVE

	 
	 
	 
	 
	 

	 
	By:
	 
	 
	/s/ Robert S. Muff

	 
	 
	 
	 
	 

	 
	Address:
	 
	10370 Richmond Ave. Suite 600

	 
	 
	 
	 
	Houston, Texas 77042

	 
	 
	 
	 
	 

- 19 -FRM - EX10.4 - 2014.06.30 - Q2

EXHIBIT 10.4

AGREEMENT
This Agreement (“Agreement”), dated July 30, 2014 is made and entered into by and between Charles R. Cox (the “Employee”) and Furmanite Corporation (the “Company”):
WHEREAS, Employee has tendered his resignation as Chairman of the Board, and has indicated his intent to resign as Chief Executive Officer of the Company effective December 31, 2014 (the “Separation Date”).
WHEREAS, Employee and the Company (the “Parties”) wish to terminate the employment relationship between them on the terms set forth in this Agreement;
WHEREAS, the Company wishes to retain Employee as an employee to the Company on the terms set forth in this Agreement;
WHEREAS, the Parties wish to mutually release each other from certain claims on the terms set forth in this Agreement;
WHEREAS, both Parties have read and understand the terms and provisions of this Agreement and desire and intend to be bound by the terms and provisions of this Agreement.
NOW, THEREFORE, in consideration of the covenants and mutual promises and agreements contained in this Agreement and other valuable consideration, the sufficiency of which is acknowledged, the Parties agree as follows:
1. Amendment of Prior Agreements.  This Agreement is intended to amend multiple agreements with Employee including the 2012 Long Term Equity Reward agreement, the 2013 Long Term Equity Reward agreement, the 2014 Long Term Incentive award, the 2014 Incentive Compensation Plan agreement, and other previous equity and option grants to Employee to the extent noted herein.  In the event of conflict with such other agreements this Agreement shall govern. 
2. Release and Waiver Agreement.  The Parties acknowledge and understand that this Agreement is a release and waiver contract and that this document is legally binding. Each Party understands that by signing this Agreement, he or it has read and understood each provision and is agreeing to all of the provisions set forth in this Agreement.
3. Cessation Of Employment. Employee’s retirement was approved by Company to be effective December 31, 2014 and at such time Employee will resign from all positions as an officer, and manager that he held with the Company and any subsidiary or affiliate of the Company, including but not limited to his positions as Chief Executive Officer of the Company.  
4. Compensation.  In exchange for the promises and covenants of Employee contained in this Agreement and subject to the provisions contained in this Agreement, as compensation, the Company covenants and agrees to:
(a) Options.  On the Separation Date, the Company shall (i) accelerate the vesting of all outstanding unvested stock options previously granted by the Company to Employee (the “Unvested Options”) with such accelerated vesting to be effective on the Separation Date, (ii) extend the period of exercisability of the following stock options previously granted by the Company to Employee to the earlier of December 31, 2015 or 1 year from the Separation Date: 

Page 1 of 7

	
				
	Grant Date
	Exercise Price per Share ($)
	 
	Number of Options

	 
	 
	 
	 

	3/10/2010
	3.85
	 
	100,000

	6/28/2012
	4.63
	 
	34,195

	5/09/2013
	6.89
	 
	29,198

	5/13/2014
	10.85
	 
	21,830

	 
	 
	 
	 

	 
	 
	 
	185,223

The Parties acknowledge that Employee also has the following vested options outstanding that were granted to Employee in his role as a director prior to his appointment to CEO. The Parties acknowledge that Employee will have until August 18, 2015 to exercise these options:
	
				
	Grant Date
	Exercise Price per Share ($)
	 
	Options

	8/19/2005
	2.38
	 
	20,000

However, in no event will Employee be permitted to exercise the Unvested Options before the expiration of seven days after Employee signs this Agreement without revocation (the “Effective Date”).
The Parties agree the stock option tables above represent a complete and accurate listing of all the Employee’s outstanding stock options and that no other stock options are or will be subject to this Agreement.
(b) Restricted Stock Units.  On or before the Separation Date, the Company shall accelerate the vesting of all outstanding unvested restricted stock unit awards previously granted by the Company to Employee so that effective on the Separation Date all substantial risk of forfeiture restrictions applicable to the restricted stock unit awards shall lapse and Employee shall be entitled to receive shares of the Company’s common stock related to the restricted stock unit awards as follows:
	
			
	Grant Date
	 
	Restricted Stock Units

	6/14/2011
	 
	10,054

	3/2/2012
	 
	8,345

	6/28/2012
	 
	8,261

	5/9/2013
	 
	25,907

	5/13/2014
	 
	25,070

	 
	 
	77,637

Page 2 of 7

The Parties agree that the restricted stock units table above represents a complete and accurate listing of all the Employee’s outstanding unvested restricted stock units and that no other restricted stock units are or will be subject to this Agreement.
(c) Deferred Compensation. The Company shall pay Employee $820,000 in accordance with Exhibit A commencing six months from the Separation Date.  
(d) ICP. Employee is a participant in the Company’s 2014 Incentive Compensation Plan (“ICP Plan”) and has a target award of $288,000, subject to the terms and conditions of the ICP Plan.   Provided the performance measures are achieved and in accordance with the terms and conditions of the ICP Plan, Employee shall be entitled to compensation earned under and as provided by the ICP Plan, even though Employee will not have continued employment through the payment date of the award as required under the terms of the ICP Plan.  Any compensation earned under this section 4(d) is to be paid to Employee on or before March 15, 2015.  To the extent the Separation Date occurs prior to December 31, 2014, Employee’s compensation under the ICP shall be prorated.  In such event, the award shall be calculated by taking Employee’s actual days of service for the 2014 calendar year divided by 365 multiplied by Employee’s award earned under the ICP Plan.  
(e) Vacation. The Company shall pay Employee for all earned but unused vacation he is entitled to as of the Separation Date, to be paid to him within fourteen (14) business days after the Separation Date.
The Company’s payment of the compensation described in clauses (a), (b), (c), (d) and (e) of this Section 4 is subject to applicable federal, state and local taxes and withholding. Employee shall have no right to any further payments or benefits, however calculated or paid, including bonuses, commissions, or incentive compensation.  
5. Consultation With Attorney, Review Period and Revocation Period. (a) Employee is advised, and acknowledges that he has been advised, to consult with an attorney before executing this Agreement concerning the meaning, import, and legal significance of this Agreement. Employee acknowledges that he has read this Agreement, as signified by his signature hereto, and is voluntarily executing the same after advice of counsel for the purposes and consideration expressed in this Agreement.
(b) Employee acknowledges that he has been provided with a period of at least 21 days within which to consider, review, and reflect on the terms of this Agreement. In the event that he executes this Agreement prior to the expiration of the 21-day period, he hereby waives the balance of said period.
(c) Employee has seven days in which he may revoke this Agreement after he signs it. This Agreement shall not be effective until the expiration of seven days after Employee signs it without revocation. Any amounts payable under this Agreement shall be paid no sooner than the expiration of seven days after Employee signs it. Any revocation of this Agreement must be delivered to the Company, Attention: Legal, at 10370 Richmond Ave. Suite 600, Houston, Texas 77042, before the expiration of seven days after Employee signs this Agreement.
6. Releases. In exchange for the promises and covenants contained in this Agreement, the Parties covenant and agree as follows:

(a) Release and Waiver by Employee.   For and in consideration of the compensation described in Section 4, as well as the covenants and promises contained in this Agreement, the receipt and sufficiency of which are acknowledged, Employee on behalf of himself and his  family, assigns, representatives, agents, heirs and attorney, if any, fully, finally, and forever releases, acquits and discharges the Company, along with its former and present parents, subsidiaries, and affiliates, and its and their respective predecessors, successors and assigns, if any, as well as its and their respective former and present officers, administrators, directors, shareholders, general or limited partners, representatives, agents, employees and attorneys, if any, jointly and severally (collectively, the “Released Parties”), from any and all claims, 

Page 3 of 7

demands, actions, liabilities, obligations and causes of action of whatever kind or character, whether known or unknown, that Employee or anyone on his behalf or for his benefit has or might claim to have against the Released Parties for any and all injuries, harm, damages (actual and punitive), penalties, costs, losses, expenses, attorney’s fees and liability or other detriment, if any, whatsoever and whenever incurred or suffered by Employee arising out of, relating to, or in connection with any transaction, occurrence or omission that transpired before the execution of this Agreement, including, without limitation:
(i) any claim under federal, state, or local law that provides civil remedies for the enforcement of rights arising out of the employment relationship, including, without limitation, discrimination and retaliation claims, such as claims or causes of action under Title VII of the Civil Rights Act of 1964 as amended, 42 U.S.C. § 2000 et seq.; The Civil Rights Act of 1866, as amended, 42 U.S.C. § 1981; The Civil Rights Act of 1991. as amended, 42 U.S.C. § 198; Age Discrimination in Employment Act, as amended, 29 U.S.C. § 621 et seq.; Americans With Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; Fair Labor Standards Act, as amended, 29 U.S.C. § 201, et seq.; Employee Retirement Income Security Act, as amended, 29 U.S.C. 1000 et seq.; Family and Medical Leave Act, as amended, 29 U.S.C. § 2601, et seq.; the Texas Commission on Human Rights Act, as amended, Texas Labor Code § 21.001, et seq.; or any other statute prohibiting discrimination or retaliation in employment under any federal, state, or local law; and (ii) except as set forth in Section 4. Compensation claims for unpaid or withheld wages, relocation allowances or benefits, other benefits, commissions, stock options, bonuses or profit-sharing, wrongful discharge, breach of contract, breach of fiduciary duty, promissory estoppel, fraud, breach of any implied covenants, assault, battery, negligence, defamation, invasion of privacy, slander, intentional infliction of emotional distress, or any other contract, tort, or statutory claim; provided that nothing in this Agreement shall be construed as a release by Employee of any (i) salary earned through the Separation Date, (ii) outstanding expense reimbursement claims as of the Separation Date in accordance with the Company’s policies, (iii) rights under the Company’s 401(k) Plan earned through the Separation Date, (iv) rights under the Company’s medical and  dental insurance plan to which Employee is entitled through the Separation Date, (v) rights of Employee to indemnification and advance of expenses pursuant to the Company’s bylaws and pursuant to the indemnification assurance agreement between the Parties (the “Indemnification Documents”), (vi) rights of the Employee under any insurance policies maintained by the Company and (vii) rights of Employee under this Agreement;

Employee covenants and agrees that he will not initiate, or cause to be initiated, any action or cause of action against the Company or any of the other Released Parties in the future asserting  any claim covered by the release contained in this Agreement. Employee further agrees to indemnify the Company and all other Released Parties for (i) any additional sum of money that any of them may be compelled to pay Employee as a result of a claim covered by this release, and (ii) any of the associated legal fees, costs and expenses of the Company or any other Released Party on account of Employee bringing or allowing to be brought on his behalf any legal action based directly or indirectly on the claims covered by the release.  For and in consideration of the compensation described in Section 4, as well as the covenants and promises contained in this Agreement, Employee agrees to execute and deliver to Company the Post Separation Waiver included below within 7 days of the Separation Date. 

(b) Release and Waiver by the Company. The Company covenants and agrees that it will not initiate, or cause to be initiated, any action or cause of action against Employee asserting a claim associated with Employee’s duties and responsibilities as an employee of the Company, if acting within the scope of his employment and not illegally. The Company further agrees to indemnify Employee for any sum of money that Employee may be compelled to pay, together with associated legal fees, costs and expenses, as a result of any action or claim brought by the Company or any Released Party that the Company has agreed not to initiate pursuant to the immediately preceding sentence. Notwithstanding the foregoing, nothing in this Agreement shall be construed as a release by the Company of any (i) rights of the Company under the Furmanite Corporation Proprietary Information, Inventions and Non-Solicitation Agreement between Employee and the Company (the “Proprietary Information Agreement”) and (ii) rights of the Company under this Agreement. The Company shall pay Employee the indemnification and reimbursement amounts described in this Section 6(b) within ten business days after the delivery of Employee’s written request for the payment accompanied by such evidence of costs and expenses as the Company may reasonably require. The parties intend and agree that such ten business day deadline is not to be extended as a result of the following sentence which is included solely for the purpose of complying with Section 409A. The Company shall pay Employee the indemnification and reimbursement amount described in this Section 6(b) by the last day of the Employee’s taxable year following the taxable year in which Employee incurred such costs and expenses. The costs and expenses that are subject to reimbursement pursuant to this Section 6(b) shall not be limited as a result of when the costs and expenses are incurred. The amount of costs and 

Page 4 of 7

expenses eligible for reimbursement pursuant to this Section 6(b) during a given taxable year of Employee shall not affect the amount of costs and expenses eligible for reimbursement in any other taxable year of Employee. The right to reimbursement pursuant to this Section 6(b) is not subject to liquidation or exchange for another benefit.

(c) The Parties acknowledge and agree that although Section 6(b) prohibits Employee from filing a lawsuit concerning claims covered by the release, it does not prohibit Employee from lodging a complaint with or participating in a proceeding before any governmental agency or challenging whether this Agreement was entered into on a knowing and voluntary basis.

(d) Employee acknowledges and agrees that the payment of monies under this Agreement includes monies to which Employee was not previously otherwise entitled and, further, that the payment of monies under this Agreement constitutes fair and adequate consideration for the execution of this Agreement.

7. Nondisparagement; Cooperation.  Each Party agrees to refrain from engaging in any conduct, verbal or otherwise, that would disparage or harm the reputation of the other.  Such conduct shall include, but not be limited to, any negative statements made verbally or in writing by Employee about the Company or any of the Released Parties, or by the Company or any of the Released Parties about Employee. Employee agrees to cooperate with the Company and its advisors in connection with business matters in which the Employee was involved or any claims, investigations, administrative proceedings or lawsuits which relate to his employment with the Company and of which the Employee has knowledge.  Any request for cooperation will be upon reasonable advance notice.  The Company shall pay Employee’s reasonable out of pocket expenses in connection with such cooperation.

8. Property and Confidential Information.  (a) Employee acknowledges that the Company has furnished, and may continue to furnish, him with information (the “Confidential Information”) that is secret, non-public or otherwise confidential, including without limitation: the Company’s technical and business information, whether patentable or not, which is of a confidential, trade secret, or proprietary character, and which was either developed by the Company, with others or by others; lists of customers; identity of customers; identity of prospective customers; contract terms; bidding information and strategies; pricing methods or information; computer software; computer software methods and documentation; hardware; the Company’s methods of operation; the procedures, forms and techniques used in servicing the Company’s customers; claims or potential claims by or against the Company or any other Released Party, strategies and future plans, and corporate governance matters. In consideration of receiving and retaining payments or benefits under this Agreement, Employee shall not disclose to anyone, including without limitation, any person, firm, corporation or other entity, or publish, or use for any purpose, any Confidential Information, except as explicitly authorized in writing by the Company. Employee agrees that if it appears that Employee will be compelled by law or judicial process to disclose any Confidential Information to avoid potential liability, Employee will notify the Company in writing immediately upon Employee’s receipt of a subpoena or other legal process and will cooperate with the Company to minimize publication of the subject Confidential Information. The agreements contained in the foregoing two sentences shall terminate on the third anniversary of the Effective Date.  

(b) Notwithstanding the provisions of Section 8(a), Employee is authorized to use the Confidential Information as necessary for the performance of services for the Company.  Employee will promptly return to the Company all originals and copies of all documents and information in any form relating to the business of the Company or any of the other Released Parties by the earlier of the Separation Date or December 31, 2014.

9. Choice Of Law And Venue. The Parties agree that the Agreement shall be performed in Harris County, Texas and that the laws of the State of Texas shall govern the enforceability, interpretation and legal effect of this Agreement. The Parties also agree that venue of any action to enforce the provisions of this Agreement, or any document executed in connection with this Agreement, shall be in Harris County, Texas.

10. Change In Control Agreement.  The parties acknowledge a separate Change In Control Agreement with Employee dated May 27, 2014 (the “Change In Control Agreement”).  To the extent compensation is received by Employee under the Change In Control Agreement, Employee shall not be entitled to any of the Deferred Compensation listed in 4(c), above.

Page 5 of 7

11. Entire Agreement. This Agreement constitutes the entire understanding and agreement of the Parties, and supersedes all prior understandings and agreements, if any, among or between the Parties with respect to the subject matter of this Agreement. There are no representations, agreements, arrangements or understandings, oral or written, concerning the subject matter of this Agreement between the Parties that are not fully expressed or incorporated by reference in this Agreement. Notwithstanding the foregoing two sentences of this Section 9, any existing agreements between Employee and the Company or any of its subsidiaries or affiliates with respect to proprietary information, inventions, non-competition or non-solicitation, including without limitation the Proprietary Information Agreement, shall remain in full force and effect.

12. Continuity of Employment. For and in consideration of the compensation described in Section 4, as well as the covenants and promises contained in this Agreement, Employee agrees to continue his employment with Company through December 31, 2014.  In the event Employee is determined, by the sole and exclusive judgment of the Board of Directors, to be unable to adequately perform his duties, for reasons beyond his reasonable control, prior to December 31, 2014, the Separation Date shall be deemed to be the date when such determination is made and Employee shall still be entitled to the compensation described in Section 4 contained herein.  
13. Amendments. Any modification of this Agreement or additional obligation assumed by either Party in connection with this Agreement shall be binding only if evidenced in writing signed by each Party. This Agreement cannot be changed or terminated orally, but may be changed only through a written document executed by both Parties.

14. Severability. If any term of this Agreement shall be determined by a court of competent jurisdiction to be illegal, invalid, unconscionable or unenforceable, the remaining provisions will remain effective and legally binding, and the illegal, invalid, unconscionable or unenforceable term shall be deemed not to be a part of this Agreement. 

15. Binding Effect. This Agreement and the terms, covenants, conditions, provision , obligations, undertakings, rights and benefits of this Agreement shall be binding on, and shall inure to the benefit of, the Parties and their respective heirs, executors, administrators, representatives, officers, directors, shareholders, predecessors, successors, parents, subsidiaries, affiliated entities, spouses, agents, attorneys, servants, Employees, principals, partners, whether limited or general, and assigns, if any. In the event of Employee’s death, prior to the Separation Date, Employee’s Separation Date shall be deemed the date of death, and the compensation contained in section 4 shall be payable to Employee’s estate in accordance with the payment terms in section 4.  Each of the Parties represents and warrants that he or it has the authority to act on his or its behalf and to bind him or it to this Agreement. 

16. Disputes Relating to Agreement. If any action at law or in equity, including without limitation an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the party prevailing in the action shall recover from the adverse party his or its actual damages and reasonable costs and expenses, including without limitation reasonable attorneys’ fees incurred in connection with the action. In the event of the violation or threatened violation of any of the covenants or promises in this Agreement, the non-breaching party shall be entitled to injunctive relief, both preliminary and final, enjoining and restraining the violation or threatened violation, which injunctive relief shall be in addition to all other remedies available to the non-breaching party, at law or in equity.

[Intentionally left blank]

Page 6 of 7

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date above first written.
	
						
	 
	 
	FURMANITE CORPORATION
	 

	 
	 
	 
	 
	 
	 

	 
	 
	By:
	 
	/s/ Joseph E. Milliron
	 

	 
	 
	 
	 
	 
	 

	 
	 
	Name:
	Joseph E. Milliron
	 

	 
	 
	Date:
	July 30, 2014
	 

	 
	 
	Title:
	President & COO

	 
	 
	 
	 
	 
	 

	 
	 
	EMPLOYEE, CHARLES R. COX
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	/s/ Charles R. Cox
	 

	 
	 
	 
	 
	 
	 

	 
	 
	Date:
	July 30, 2014
	 

	 
	 
	 
	 
	 
	 

                 

POST SEPARATION WAIVER

For and in consideration of the compensation described in Section 4 of the Agreement attached, Charles R. Cox (“Employee”) affirms the language indicated in Section 6(a), above for all matters through the date listed below.

	
					
	 
	 
	EMPLOYEE, CHARLES R. COX
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	Date:
	(must be dated after Employee’s separation)

                                                

Page 7 of 7

Exhibit A
The following payment schedule sets forth the payments to be made in accordance with Section 4(c) of the agreement between Charles R. Cox and Furmanite Corporation dated July 30, 2014 (“Agreement”).
As noted in Section 4 of the Agreement, the payments below are subject to applicable federal, state and local taxes and withholding.
	
					
	July 2, 2015
	 $ 136,666.67 
	 
	October 7, 2016
	 $   10,512.82 

	July 17, 2015
	      10,512.82 
	 
	October 21, 2016
	      10,512.82 

	July 31, 2015
	      10,512.82 
	 
	November 4, 2016
	      10,512.82 

	August 14, 2015
	      10,512.82 
	 
	November 18, 2016
	      10,512.82 

	August 28, 2015
	      10,512.82 
	 
	December 2, 2016
	      10,512.82 

	September 11, 2015
	      10,512.82 
	 
	December 16, 2016
	      10,512.82 

	September 25, 2015
	      10,512.82 
	 
	December 30, 2016
	      10,512.82 

	October 9, 2015
	      10,512.82 
	 
	January 13, 2017
	      10,512.82 

	October 23, 2015
	      10,512.82 
	 
	January 27, 2017
	      10,512.82 

	November 6, 2015
	      10,512.82 
	 
	February 10, 2017
	      10,512.82 

	November 20, 2015
	      10,512.82 
	 
	February 24, 2017
	      10,512.82 

	December 4, 2015
	      10,512.82 
	 
	March 10, 2017
	      10,512.82 

	December 18, 2015
	      10,512.82 
	 
	March 24, 2017
	      10,512.82 

	December 31, 2015
	      10,512.82 
	 
	April 7, 2017
	      10,512.82 

	January 15, 2016
	      10,512.82 
	 
	April 21, 2017
	      10,512.82 

	January 29, 2016
	      10,512.82 
	 
	May 5, 2017
	      10,512.82 

	February 12, 2016
	      10,512.82 
	 
	May 19, 2017
	      10,512.82 

	February 26, 2016
	      10,512.82 
	 
	June 2, 2017
	      10,512.82 

	March 11, 2016
	      10,512.82 
	 
	June 16, 2017
	      10,512.82 

	March 24, 2016
	      10,512.82 
	 
	June 30, 2017
	      10,512.82 

	April 8, 2016
	      10,512.82 
	 
	July 14, 2017
	      10,512.82 

	April 22, 2016
	      10,512.82 
	 
	July 28, 2017
	      10,512.82 

	May 6, 2016
	      10,512.82 
	 
	August 11, 2017
	      10,512.82 

	May 20, 2016
	      10,512.82 
	 
	August 25, 2017
	      10,512.82 

	June 3, 2016
	      10,512.82 
	 
	September 8, 2017
	      10,512.82 

	June 17, 2016
	      10,512.82 
	 
	September 22, 2017
	      10,512.82 

	July 1, 2016
	      10,512.82 
	 
	October 6, 2017
	      10,512.82 

	July 15, 2016
	      10,512.82 
	 
	October 20, 2017
	      10,512.82 

	July 29, 2016
	      10,512.82 
	 
	November 3, 2017
	      10,512.82 

	August 12, 2016
	      10,512.82 
	 
	November 17, 2017
	      10,512.82 

	August 26, 2016
	      10,512.82 
	 
	December 1, 2017
	      10,512.83 

	September 9, 2016
	      10,512.82 
	 
	December 15, 2017
	      10,512.83 

	September 23, 2016
	      10,512.82 
	 
	December 29, 2017
	      10,512.83 

	 
	 
	 
	 
	 

	 
	 
	 
	Total
	 $ 820,000.00

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