EXHIBIT 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") made and entered into as of
the 31st day of December, 1997, by and among NATIONWIDE CREDIT, INC.
("Employer") and Xxxxx Xxxxx who resides at 0000 Xxxxxx Xxxxx, Xxxxxxx, XX 00000
("Executive").
W I T N E S S E T H:
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WHEREAS, Employer desires to employ Executive and Executive desires to
accept employment with Employer upon the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, and intending to be legally bound hereby, it is
hereby agreed as follows:
1. Employment Term. Employer agrees to employ Executive, and
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Executive agrees to be so employed, in the capacity of Chief Operating Officer
of Employer, for a term commencing on the date hereof and ending on the third
anniversary of the date hereof (the "Initial Term"); provided, however, that,
notwithstanding anything to the contrary set forth in this Agreement, this
Agreement may be earlier terminated pursuant to Section 7 hereof. The term of
this Agreement will automatically extend past the Initial Term for succeeding
periods of one year each unless either party in its discretion shall terminate
this Agreement as of the end of the Initial Term, or as of the end of any
subsequent one-year period (in either case, the "Termination Date") by
delivering notice to the other party specifying the applicable Termination Date
not later than one hundred and twenty (120) days prior to the date so specified.
2. Time and Efforts; Place of Performance. Executive shall
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diligently and conscientiously devote his full business time, attention, energy,
skill and best efforts to the business of Employer and the discharge of his
duties hereunder. Executive's duties under this Agreement shall be to serve as
Chief Operating Officer of Employer, with the responsibilities, rights,
authority and duties customarily pertaining to such office as may be established
from time to time by or under the direction of the Board of Directors of
Employer (the "Board") and Executive shall report to the Chief Executive
Officer. In the event Executive is elected to the Board, Executive shall serve
as a director without further compensation, other than as provided in this
Agreement. Executive shall also act as an officer and/or director of such
subsidiaries of Employer as may be designated by the Board, commensurate with
Executive's office, all without further compensation other than as provided in
this Agreement.
3. Base Salary. In partial consideration of the services of
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Executive during the term of this Agreement, Employer shall pay to Executive a
base salary compensation at an annual rate of $220,000 (the "Base Salary"), in
equal installments in accordance with the Employer's payroll practices in effect
from time to time for executive officers, but in no event less frequently than
monthly. The Base Salary may be adjusted upward annually in the discretion of
the Board, or an authorized committee thereof.
4. Bonus. (a) After the Company has received its audited financial
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statements for each year end during the term of this Agreement, Executive will
have the potential to receive an annual bonus for such year, with the payment of
such bonus and the amount thereof to be determined based upon qualitative
criteria and the attainment of quantitative financial goals established annually
by the Board of Directors. For the calendar year 1998 Employee will have the
potential to receive a bonus which would range from $0 to $150,000. In the
event annual EBITDA (as hereinafter defined) based upon the Company's audited
financial statements for such year is $26 million or less, $0 will be earned.
In the event annual EBITDA for such year equals or exceeds $28 million, $105,000
will be earned. For annual EBITDA levels for the calendar year 1998 between $26
million and $28 million, the amount of bonus will be apportioned between $0 and
$105,000 by linear interpolation. Payment of $45,000 of the 1998 bonus shall be
based on the attainment of certain qualitative criteria established by the Board
of Directors. For years after 1998, the amount of the potential bonus and the
criteria therefore will be set by the Board of Directors in good faith and
provided to Employee prior to commencement of the year, provided that the
potential bonus amount for each subsequent year will be not less than the
potential bonus amount for the immediately preceding year, so long as the
budgeted EBITDA levels for the upcoming year are greater than the EBITDA levels
for the immediately preceding year. Executive's bonus, to the extent earned,
shall be payable no later than thirty (30) days after the Bond has received the
Company's audited financial statements for the applicable year.
(b) For purposes hereof, "EBITDA" has the meaning ascribed to such
term in the Agreement and Plan of Merger, dated as of December 31, 1997, between
NCI Acquisition Corporation, Employer, NCI Merger Corporation, First Financial
Management Corporation and First Data Corporation. EBITDA shall be determined
based on the audited financial statements of the Company. Notwithstanding the
provisions of Section 4(a), the EBITDA targets for any bonus period shall be
subject to modification in the reasonable discretion of the Board in the event
of any material acquisitions or dispositions during the applicable period.
(c) In the event Executive's employment is terminated by reason of
Cause (as herein defined) or the Executive's resignation, no bonus for the
calendar year in
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which such termination or resignation occurs shall be payable to Executive. If
Executive's employment terminates for any other reason (including expiration of
this Agreement), Executive's bonus for the year in which termination occurs
shall be payable to the extent earned as determined in the reasonable discretion
of the Board, but shall be prorated based upon the number of days in such year
that Executive was employed by Employer.
5. Benefits. Executive shall be eligible to participate in all
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employee benefit programs of Employer offered from time to time during the term
of Executive's employment hereunder by Employer to employees or executives of
Executive's rank, to the extent that Executive qualifies under the eligibility
provisions of such plan or plans, in each case consistent with Employer's
current practice as approved by the Board prior to the date hereof, and provided
that Employer shall not be required to incur expenses in connection with any
such benefits in excess of the expenses for such benefits incurred in accordance
with such current practice.
6. Expenses. To the extent that Executive's reasonable and
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necessary expenditures for travel, entertainment and similar items made in
furtherance of Executive's duties under this Agreement comply with Employer's
expense reimbursement policy, are deductible by Employer for federal income tax
purposes pursuant to the Internal Revenue Code of 1986, as amended and are
documented and substantiated by Executive as required by the Internal Revenue
Service and the policies of Employer, Employer shall reimburse the Executive for
such expenditures.
7. Termination.
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(a) Executive's employment under this Agreement may be terminated by
Employer at any time for Cause. Upon termination of Executive's employment for
Cause, upon payment by Employer of any Base Salary that has accrued and is
unpaid to the date of such termination, Employer shall have no further liability
to Executive for any additional amounts including, without limitation, any Base
Salary or bonus. "Cause" as used in this Agreement shall mean (i) the gross
negligence or wilful misconduct of Executive in carrying out his obligations and
duties, (ii) any other breach by Executive of any other provision of this
Agreement which has not been cured within five (5) days after delivery of notice
by Employer to Executive of such breach (or such shorter period if such breach
adversely affects Employer's ability to conduct debt collection activities in
any jurisdiction), including, without limitation, Executive's insubordination,
chronic absences from work or alcoholism or drug dependency, (iii) Executive
shall have committed an act of fraud, theft or dishonesty against NCI or any of
its subsidiary or affiliated companies, or (iv) Executive shall be indicted for
or convicted of (or plead nolo contendre to) any felony or be convicted of (or
plead nolo
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contendre to) any misdemeanor involving fraud, dishonesty or moral turpitude or
any other misdemeanor that might, in the reasonable opinion of the Board of
Directors, adversely affect such Executive's ability to perform Executive's
obligations or duties to Employer in any material respect or adversely affect
the Employer's ability to conduct debt collection activities in any
jurisdiction.
(b) Subject to the terms of subsection (c) hereof, Employer may
terminate Executive's employment hereunder at any time other than for Cause (as
defined in Section 7(a) above) upon notice to Executive. In the event of any
such termination, in consideration for the obligations of Executive under
Section 8 hereof, the Employer shall pay to Executive a severance benefit (the
"Severance Benefit"), payable over a period of 12 months consistent with
Employer's past payroll practices, in an amount equal to 12 months of Base
Salary at the then current rate less the amount of any compensation, income or
benefits earned or paid to Executive as an employee or consultant from an
employer or company other than Employer during the last six (6) months of the
period during which the Severance Benefit shall be payable as provided above. In
the event that there is (i) a material change in Executive's duties or
responsibilities, or a material change in Executive's reporting relationships,
either of which results in or reflects a material diminution of the scope or
importance of Executive's duties or responsibilities, or (ii) a material
reduction in the level of benefits offered under the Employer's employee benefit
plans (other than any company-wide reduction in the level of benefits that is
applicable to all employees or executives of Executive's rank), which are made
available to Executive during the term of Executive's employment, including but
not limited to, annual and long-term incentive and stock-based plans and
programs, which is not cured within a period of ten (10) days following notice
to Employer by Executive, then Executive may by notice to the Board, deem a
constructive termination to have occurred, whereupon Executive shall be entitled
to the compensation set forth herein as if Executive had been terminated without
Cause as of the date of such notice to the Board. Upon termination of Executive
under this Section 7(b) for any reason (other than as a result of death),
Executive shall in good faith seek to obtain alternative employment and to
otherwise mitigate the amount of Severance Benefit payable by Employer.
(c) If Executive dies, this Agreement shall automatically terminate.
If Executive becomes permanently disabled during the term of this Agreement,
then at Employer's option, this Agreement will immediately terminate. In each
such case, upon payment by Employer of any Base Salary that has accrued and is
unpaid to the date of such termination, Employer shall have no further
obligations to Executive, his spouse or estate. Executive shall be deemed to be
permanently disabled if, during the term of this Agreement, he shall have been
unable or unwilling or shall have failed to perform his duties under this
Agreement (whether due to ill health, physical or mental incapacity or
disability, or for causes
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beyond his control) for a period of one-hundred and eighty (180) days, whether
consecutive or not. Any refusal by Executive to submit to a medical examination
for the purpose of certifying disability under this Section 7(c) shall be deemed
to constitute conclusive evidence of Executive's permanent disability. Upon
receipt of certifications from two physicians that the Executive's disability is
more likely than not to continue for a continuous period of one-hundred and
eighty (180) days or for shorter periods aggregating one-hundred and eighty
(180) days, Employer may immediately terminate this Agreement without waiting
for accrual of such one-hundred and eighty (180) day period. In the event of
Executive's death during the term of this Agreement, any accrued and unpaid
compensation due to Executive shall be paid to his estate.
(d) Subject to the terms of subsections (a) and (c) hereof, payment of
the Severance Benefit shall be Executive's sole remedy in the event of the
Employer's termination of this Agreement for any reason. Executive will
cooperate in order to allow Employer to purchase disability insurance regarding
Executive in order to fund its obligation hereunder.
(e) The terms of Sections 8 and 9 of this Agreement shall survive and
be binding upon Executive upon the termination of this Agreement.
(f) If Executive unilaterally terminates his employment with Employer,
other than under the conditions set forth in Section 7(b) hereof, during the
term of this Agreement, Employer shall have no further obligation to make any
payments under this Agreement and Executive shall forfeit any right to such
payments.
8. Restrictive Covenants. (a) In consideration of Employer's grant
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of options to purchase shares of common stock of NCI Acquisition Corporation
pursuant to the NCI Acquisition Corporation's 1997 Management Performance Option
Plan to Executive and its covenant to pay, pursuant to the terms of Section 7, a
Severance Benefit, without prior written consent of the Board, Executive agrees
that he will not for a period of twelve (12) months (except in the case of
clause (iii) below, which will continue for a period of eighteen (18) months)
following the termination of Executive's employment with Employer for any reason
whatsoever (or to such lesser extent and for such lesser period as may be deemed
enforceable by a court of competent jurisdiction, it being the intention of the
parties that this Section 8 shall be so enforced): (i) directly or indirectly
engage, participate or make any financial investment in or become employed by or
render any services to or for any person or company in competition with the
credit reporting, collection or accounts receivable management business
conducted by Employer or any of its subsidiaries, or any similar business (the
"Business"), within any area in which Employer is doing business at such time
(whether
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as an employee, independent contractor, five (5%) percent or greater owner,
partner, lender, stockholder or otherwise); (ii) directly or indirectly raid,
entice, induce, solicit, canvass, or accept any business (of the type conducted
by Employer) for any other person or company from any past, present or future
(as defined below) customer of Employer; (iii) directly or indirectly raid,
entice, induce or attempt to cause any current or future (as defined below)
employee or other advisor of Employer to terminate his employment by or
engagement with Employer; (iv) directly or indirectly request any present or
future ("future", as used herein, shall mean at or prior to the time of
termination of Executive's employment) entities with whom Employer has business
relationships to curtail or cancel their business with Employer or (v) directly
or indirectly authorize or assist any other person or company in taking any of
the foregoing actions.
(b) Executive acknowledges and agrees that during the course of his
performance of services for the Employer he will acquire knowledge with respect
to information, technology or other matters which the Employer maintains and
preserves on a confidential basis concerning the Employer's business operations,
including, by way of illustration, such information concerning the Employer's
trade secrets, business and financial methods or practices, plans, pricing,
customer, vendor and sales information and other confidential or proprietary
information and any other information, documents or materials owned, developed
or possessed by the Employer, the confidentiality of which the Employer takes
reasonable steps to protect (any and all of which being hereinafter referred to
as "Confidential Information").
(c) Executive agrees that he will not, while he is employed by the
Employer or at any time thereafter, divulge to any person, directly or
indirectly, except to the Employer or its directors, officers and agents as
reasonably required in connection with his duties on behalf of the Employer
during his employment, or use the Confidential Information in any manner or for
any purpose in contravention of the Employer's policies or procedures,
inconsistent with the Employer's measures to protect its interest therein or
otherwise to the detriment of the Employer. Executive further agrees that he
will not, at any time after his employment with the Employer has ended, divulge
to any person or utilize for commercial or any other purpose not authorized in
writing by the Employer, directly or indirectly, any Confidential Information.
Executive further agrees that, if Executive's relationship with the Employer is
terminated (for whatever reason) he shall not take with him but will leave with
the Employer all records, papers and computer data and any copies thereof
relating to the Confidential Information (or if such papers, records, computer
data or copies are not on the premises of the Employer, Executive agrees to
return such papers, records and computer data as soon as practicable after his
termination). Executive acknowledges that all such papers, records, computer
data or copies thereof, are and remain the property of Employer.
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(d) Executive acknowledges that (i) the Confidential Information is
commercially and competitively valuable to the Employer; (ii) the unauthorized
use or disclosure of the Confidential Information would cause irreparable harm
to Employer; (iii) the Employer has taken and is taking all reasonable measures
to protect its legitimate interest in its Confidential Information, including,
without limitation, affirmative action to safeguard the confidentiality of such
Confidential Information; (iv) the restrictions on the activities in which
Executive may engage set forth in this Agreement, and the periods of time for
which such restrictions apply, are reasonably necessary in order to protect the
Employer's legitimate interests in its Confidential Information; and (v) nothing
herein shall prohibit the Employer from pursuing any remedies, whether in law or
equity, available to the Employer for breach or threatened breach of this
Agreement, including the recovery of damages from Executive.
(e) For the purposes of this Section 8, the term "Employer" shall be
deemed to include Employer and all of its subsidiaries engaged in the Business.
9. Inventions. All inventions, discoveries, improvements,
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processes, formulae and data relating to Employer's business that Executive may
make, conceive or learn during the term of his employment by the Employer
(whether before, during or after the term of this Agreement, whether during
working hours or otherwise) shall be the exclusive property of Employer.
Executive agrees to make prompt disclosure to the Board of all such inventions,
etc., and to do all things necessary or useful to assist Employer in securing
their full enjoyment and protection.
10. No Conflicts. Executive represents and warrants that the
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execution, delivery and performance of this Agreement by Executive will not
violate and agreement, undertaking or covenant to which Executive is party or is
otherwise bound.
11. Notices. Any notice given hereunder shall be in writing and
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delivered or mailed by certified mail or overnight courier service (with proof
of delivery) and addressed to the appropriate party at the address set forth
below or at such other address as the party shall designate from time to time in
a notice:
If to Employer:
Nationwide Credit, Inc.
0000 Xxxxxx Xxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
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If to Executive:
Xxxxx Xxxxx
0000 Xxxxxx Xxxxx
Xxxxxxx, XX 00000
12. Binding Effect. This Agreement shall inure to the benefit of and
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be binding upon Employer, its successors and assigns. Executive acknowledges
that these services are unique and personal. Accordingly, Executive may not
assign any of his rights or delegate any of his duties or obligations under this
Agreement.
13. Waiver. Failure to insist in any one or more instances on strict
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compliance with the terms of this Agreement shall not be deemed a waiver.
Waiver of a breach of any provision of this Agreement shall not be construed as
a waiver of any subsequent breach.
14. Governing Law; Injunctive Relief. This Agreement is made and
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delivered in, and shall be construed in accordance with the substantive laws of,
the State of New York and the United States of America without regard to
conflict of law principles. Executive acknowledges that the services to be
rendered by him are of a special, unique and extraordinary character and, in
connection with such services, Executive will have access to confidential
information vital to Employer's and its subsidiary and affiliated companies'
businesses. By reason of this, Executive consents and agrees that if he
violates any of the provisions of this Agreement, Employer and its subsidiary
and affiliated companies would sustain irreparable harm and, therefore, in
addition to any other remedies which Employer may have under this Agreement or
otherwise, Employer shall be entitled to an injunction from any court of
competent jurisdiction restraining Employer from committing or continuing any
such violation of this Agreement.
15. Severability. In the event that any provision of this Agreement
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shall be determined to be invalid by a court of competent jurisdiction, such
determination shall in no way affect the validity or enforceability of any other
provisions hereof.
16. Entire Agreement; Miscellaneous. The parties acknowledge and
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agree that they are not relying on any representations, oral or written, other
than those expressly contained herein. This Agreement supersedes all proposals,
oral or written, all negotiations, conversations or discussions between the
parties and all course of dealing. All prior understandings and agreements
between the parties regarding employment matters are hereby
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merged in this Agreement, which alone is the complete and exclusive statement of
their understanding as to employment. No waiver or modification of this
Agreement shall be valid unless the same shall be in writing and signed by the
party sought to be charged therewith. Time is of the essence in this Agreement
and each and every provision hereof. This is a personal services agreement; no
agency, partnership, joint venture or other joint relationship is created
hereby. The parties acknowledge that they each participated in drafting this
Agreement, and there shall be not presumption against any party on the ground
that such party was responsible for preparing this Agreement or any part hereof.
Paragraph headings are for convenience of reference only and are not intended to
create substantive rights or obligations.
17. Attorney's Fees and Costs. Employer agrees to pay the reasonable
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costs and expenses of Ungaretti & Xxxxxx with respect to its representation of
Executive and certain other management employees of the Employee, up to a
maximum of $10,000 (including costs and disbursements) in the aggregate for
Executive and all such other management employees of Employer.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
undersigned as of the day and year first above written.
NATIONWIDE CREDIT, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: President and Chief Executive Officer
EXECUTIVE
By: /s/ Xxxxx Kranx
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Name: Xxxxx Xxxxx
Title: Chief Operating Officer
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