EXHIBIT 10.45
EMPLOYMENT AGREEMENT
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This Employment Agreement is made and entered into on the 17th day of
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November, 1998, among CSG SYSTEMS INTERNATIONAL, INC. ("CSGS"), a Delaware
corporation, CSG SYSTEMS, INC. ("Systems"), a Delaware corporation, and XXXX X.
XXXXX (the "Executive"). CSGS and Systems collectively are referred to in this
Employment Agreement as the "Companies".
* * *
WHEREAS, Systems is a wholly-owned subsidiary of CSGS; and
WHEREAS, the Executive currently is employed by Systems and serves as the
President and Chief Operating Officer of both of the Companies; and
WHEREAS, the Companies desire to provide for the continued employment of
the Executive as their President and Chief Operating Officer; and
WHEREAS, the Executive desires to accept such continued employment upon the
terms set forth in this agreement;
NOW, THEREFORE, in consideration of the foregoing recitals and the
respective covenants and agreements of the parties contained in this document,
the Companies and the Executive agree as follows:
1. Employment and Duties. Each of the Companies hereby employs the
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Executive as its President and Chief Operating Officer throughout the term of
this agreement and agrees to cause the Executive from time to time to be elected
or appointed to such corporate offices or positions. The duties and
responsibilities of the Executive shall include the duties and responsibilities
of the Executive's corporate offices and positions referred to in the preceding
sentence which are set forth in the respective bylaws of the Companies from time
to time, overall responsibility for the day-to-day operations of the Companies,
and such other duties and responsibilities consistent with the Executive's
corporate offices and positions referred to in the preceding sentence and this
agreement which the Board of Directors of CSGS (the "Board") or the Chief
Executive Officer of CSGS from time to time may assign to the Executive. If the
Executive is elected or appointed as a director of CSGS or Systems or as an
officer or director of any of the respective subsidiaries of the Companies
during the term of this agreement, then he also shall serve in such capacity or
capacities but without additional compensation.
2. Term. The term of this agreement shall begin on the date of this
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agreement and shall continue thereafter through December 31, 2001, unless the
Executive's employment under this agreement is sooner terminated in accordance
with this agreement. On December 31 of each year during the term of this
agreement, as extended from time to time pursuant to this sentence, beginning
December 31, 1999, the term of this agreement automatically and without further
action being required shall be extended by one (1) year unless, not later than
one (1) year prior to a particular December 31, either CSGS notifies the
Executive and Systems in writing or the Executive notifies the Companies in
writing that such extension shall not occur on such December 31, in which latter
case this agreement shall terminate upon the expiration of its then current
term, unless the Executive's employment under this agreement is sooner
terminated in accordance with this agreement. References in this agreement to
the "current term" of this agreement shall include both the original term of
this agreement and any automatic extensions of such term which actually have
occurred pursuant to this Paragraph 2.
3. Place of Employment. Regardless of the location of the executive
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offices of the Companies during the term of this agreement, the Companies shall
maintain a suitably staffed office for the Executive in the Denver, Colorado,
metropolitan area during the term of this agreement; and the Executive will not
be required without his consent to relocate or transfer his executive office or
principal residence from the immediate vicinity of the Denver,
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
Colorado, metropolitan area.
4. Base Salary. For all services to be rendered by the Executive
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pursuant to this agreement, the Companies agree to pay the Executive during the
term of this agreement a base salary (the "Base Salary") at an annual rate of
$265,000 through December 31, 1998, and at an annual rate of not less than
$290,000 after December 31, 1998; provided, that the Base Salary as then in
effect shall be increased as of January 1 of each calendar year after 1999
during the term of this agreement by at least the same percentage that the
United States Department of Labor Consumer Price Index (All Items) for All Urban
Consumers, 1982-84=100 ("CPI-U") for the November immediately preceding such
January 1 increased over the CPI-U for the November one year earlier. The Board
shall review the Base Salary at least annually for the purpose of determining
whether a Base Salary increase greater than such CPI-U increase should be
granted to the Executive for a particular 12-month period. The Executive's
annual incentive bonus provided for in Paragraph 5 and all other compensation
and benefits to which the Executive is or may become entitled pursuant to this
agreement or under any plans or programs of the Companies shall be in addition
to the Base Salary.
5. Annual Incentive Bonus. As soon as practicable after the execution of
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this agreement, the Board and the Executive in good faith shall agree upon an
incentive bonus program for the Executive for 1999. Such incentive bonus
program shall be reflected either in a written supplement to this agreement
signed by the Companies and the Executive or in such other form as the Companies
and the Executive may agree upon. The same procedure shall be followed for
subsequent calendar years during the term of this agreement, so that an annual
incentive bonus program for the Executive will be in effect throughout the term
of this agreement. The Executive and the Companies understand and acknowledge
that, among other things, such incentive bonus program will involve achievement
by the Companies of various financial objectives, which may include but are not
limited to revenues and earnings, and also may include achievement by the
Companies of various non-financial objectives. Such incentive bonus program for
each calendar year shall provide the opportunity for the Executive to earn an
incentive bonus of not less than sixty percent (60%) of his Base Salary for such
calendar year if the agreed upon objectives are fully achieved. The Board from
time to time also may establish incentive compensation programs for the
Executive covering periods of more than one (1) year, and any such programs
shall be in addition to the annual incentive bonus program required by this
Paragraph 5. For 1998 the annual incentive bonus program previously established
by the Companies for the Executive shall remain in effect.
6. Expenses. During the term of this agreement, the Executive shall be
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entitled to prompt reimbursement by the Companies of all reasonable ordinary and
necessary travel, entertainment, and other expenses incurred by the Executive
(in accordance with the policies and procedures established by the Companies for
their respective senior executive officers) in the performance of his duties and
responsibilities under this agreement; provided, that the Executive shall
properly account for such expenses in accordance with the policies and
procedures of the Companies, which may include but are not limited to itemized
accountings.
7. Other Benefits. During the term of this agreement, the Companies
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shall provide to the Executive and his eligible dependents at the expense of the
Companies individual or group medical, hospital, dental, and long-term
disability insurance coverages and group life insurance coverage, in each case
at least as favorable as those coverages which are provided to the other senior
executive officers of the Companies. During the term of this agreement, the
Executive shall be entitled to receive a monthly automobile allowance from the
Companies in the amount of $1,000.00 and also shall be entitled to participate
in such other benefit plans or programs which the Companies from time to time
may make available to their employees generally or to some or all of their other
senior executive officers (except such programs, such as the 1996 Employee Stock
Purchase Plan of CSGS, in which executive officers of CSGS are not eligible to
participate because of securities law reasons). During the term of this
agreement, the Companies shall pay an initiation fee and the monthly dues and
assessments necessary to provide and maintain for the Executive a social
membership in a country club or social club in the Denver, Colorado,
metropolitan area selected by the Executive; usage charges (such as but not
limited to charges for meals) imposed by such club shall be paid or reimbursed
to the Executive to the extent they fall within the scope of Paragraph 6 and
shall be paid by the Executive without right of reimbursement to the extent they
are personal in nature.
8. Vacations and Holidays. During the term of this agreement, the
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Executive shall be entitled to paid vacations and holidays in accordance with
the policies of the Companies in effect from time to time for their respective
senior executive officers, but in no event shall the Executive be entitled to
less than four (4) weeks of vacation during
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
each calendar year.
9. Full-Time Efforts and Other Activities. During the term of this
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agreement, to the best of his ability and using all of his skills, the Executive
shall devote substantially all of his working time and efforts during the normal
business hours of the Companies to the business and affairs of the Companies and
to the diligent and faithful performance of the duties and responsibilities
assigned to him pursuant to this agreement, except for vacations, holidays, and
sick days. However, the Executive may devote a reasonable amount of his time to
civic, community, or charitable activities, to service on the governing bodies
or committees of trade associations or similar organizations of which either or
both of the Companies are members, and, with the prior approval of the Board or
the Chief Executive Officer of CSGS, to service as a director of other
corporations and to other types of activities not expressly mentioned in this
paragraph, so long as the activities referred to in this sentence do not
materially interfere with the proper performance of the Executive's duties and
responsibilities under this agreement. The Executive also shall be free to
manage and invest his assets in such manner as will not require any substantial
services by the Executive in the conduct of the businesses or affairs of the
entities or in the management of the properties in which such investments are
made, so long as such activities do not materially interfere with the proper
performance of the Executive's duties and responsibilities under this agreement.
10. Termination of Employment.
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(a) Termination Because of Death. The Executive's employment by the
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Companies under this agreement shall terminate upon his death. If the
Executive's employment under this agreement terminates because of his death,
then the Executive's estate or his beneficiaries (as the case may be) shall be
entitled to receive the following compensation and benefits from the Companies:
(i) The Base Salary through the date of the Executive's
death;
(ii) A pro rata portion of the Executive's annual incentive
bonus for the calendar year in which his death occurs
(computed as if the Executive were employed by the
Companies throughout such calendar year), based upon
the number of days in such calendar year elapsed
through the date of the Executive's death as a
proportion of 365, to be paid at the same time that
such incentive bonus would have been paid had the
Executive's death not occurred;
(iii) Any other amounts earned, accrued, or owed to the
Executive under this agreement but not paid as of the
date of the Executive's death; and
(iv) Any other benefits payable by reason of the Executive's
death, or to which the Executive otherwise may be
entitled, under any benefit plans or programs of the
Companies in effect on the date of the Executive's
death.
(b) Termination Because of Disability. If the Executive becomes incapable
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by reason of physical injury, disease, or mental illness of substantially
performing his duties and responsibilities under this agreement for a continuous
period of six (6) months or more or for more than one hundred eighty (180) days
in the aggregate (whether or not consecutive) during any 12-month period, then
at any time after the elapse of such six-month period or such 180 days, as the
case may be, the Board may terminate the Executive's employment by the Companies
under this agreement. If the Executive's employment under this agreement is
terminated by the Board because of such disability on the part of the Executive,
then the Executive shall be entitled to receive the following compensation and
benefits from the Companies:
(i) The Base Salary through the effective date of such
termination;
(ii) A pro rata portion of the Executive's annual incentive
bonus for the calendar year in which such termination
occurs (computed as if the Executive were employed by
the Companies throughout such calendar year), based
upon the
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
number of days in such calendar year elapsed through
the effective date of such termination as a proportion
of 365, to be paid at the same time that such incentive
bonus would have been paid if such termination had not
occurred;
(iii) Any other amounts earned, accrued, or owed to the
Executive under this agreement but not paid as of the
effective date of such termination;
(iv) Continued participation in the following benefit plans
or programs of the Companies which may be in effect
from time to time and in which the Executive was
participating as of the effective date of such
termination, to the extent that such continued
participation by the Executive is permitted under the
terms and conditions of such plans (unless such
continued participation is restricted or prohibited by
applicable governmental regulations governing such
plans), until the first to occur of the cessation of
such disability, the Executive's death, the Executive's
attainment of age sixty-five (65), or (separately with
respect to the termination of each benefit) the
provision of a substantially equivalent benefit to the
Executive by another employer of the Executive:
(1) Group medical and hospital insurance,
(2) Group dental insurance,
(3) Group life insurance, and
(4) Group long-term disability insurance;
and
(v) Any other benefits payable by reason of the Executive's
disability, or to which the Executive otherwise may be
entitled, under any benefit plans or programs of the
Companies in effect on the effective date of such
termination.
For purposes of this subparagraph (b), decisions with respect to the Executive's
disability shall be made by the Board, using its reasonable good faith judgment;
and, in making any such decision, the Board shall be entitled to rely upon the
opinion of a duly licensed and qualified physician selected by a majority of the
members of the Board who are not employees of either of the Companies or any of
their respective subsidiaries.
(c) Termination for Cause. The Board may terminate the Executive's
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employment by the Companies under this agreement for cause; however, for
purposes of this agreement "cause" shall mean only (i) the Executive's
confession or conviction of theft, fraud, embezzlement, or other crime involving
dishonesty, (ii) the Executive's excessive absenteeism (other than by reason of
physical injury, disease, or mental illness) without a reasonable justification,
(iii) material violation by the Executive of the provisions of Paragraph 11,
(iv) habitual and material negligence by the Executive in the performance of his
duties and responsibilities under or pursuant to this agreement and failure on
the part of the Executive to cure such negligence within twenty (20) days after
his receipt of a written notice from the Board or the Chief Executive Officer of
CSGS setting forth in reasonable detail the particulars of such negligence, (v)
material non-compliance by the Executive with his obligations under Paragraph 9
and failure to correct such non-compliance within twenty (20) days after his
receipt of a written notice from the Board or the Chief Executive Officer of
CSGS setting forth in reasonable detail the particulars of such non-compliance,
(vi) material failure by the Executive to comply with a lawful directive of the
Board or the Chief Executive Officer of CSGS and failure to cure such non-
compliance within twenty (20) days after his receipt of a written notice from
the Board or the Chief Executive Officer of CSGS setting forth in reasonable
detail the particulars of such non-compliance, (vii) a material breach by the
Executive of any of his fiduciary duties to the Companies and, if such breach is
curable, the Executive's failure to cure such breach within ten (10) days after
his receipt of a written notice from the Board or the Chief Executive Officer of
CSGS setting forth in reasonable detail the particulars of such breach, or
(viii) willful misconduct or fraud on the part of the Executive in the
performance of his duties under this agreement. In no event shall the results
of operations of the Companies or any business judgment made in good faith by
the Executive constitute an independent basis for termination for cause of the
Executive's employment under this agreement. Any termination of the Executive's
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
employment for cause must be authorized by a majority vote of the Board taken
not later than nine (9) months after a majority of the members of the Board
(other than the Executive) have actual knowledge of the occurrence of the event
or conduct constituting the cause for such termination. If the Executive's
employment under this agreement is terminated by the Board for cause, then the
Executive shall be entitled to receive the following compensation and benefits
from the Companies:
(i) The Base Salary through the effective date of such
termination;
(ii) Any other amounts earned, accrued, or owed to the
Executive under this agreement but not paid as of the
effective date of such termination; and
(iii) Any other benefits payable to the Executive upon his
termination for cause, or to which the Executive
otherwise may be entitled, under any benefit plans or
programs of the Companies in effect on the effective
date of such termination.
(d) Termination Without Cause Prior to a Change of Control. If, prior to
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the occurrence of a Change of Control, the Companies terminate the Executive's
employment under this agreement for any reason other than cause or the
Executive's death or disability, then the Executive shall be entitled to receive
the following compensation, benefits, and other payments from the Companies:
(i) The Base Salary through the last day of the then
current term of this agreement (the "Ending Date"), to
be paid at the same times that the Base Salary would
have been paid if such termination had not occurred;
provided, that if the Executive commences employment
with another employer, whether as an employee or as a
consultant, prior to the Ending Date (for purposes of
this Paragraph 10, the "Other Employment"), then such
payments of the Base Salary shall be reduced from time
to time by the aggregate amount of salary, cash bonus,
and consulting fees received or receivable by the
Executive from the Other Employment for services
performed by him during the period from the
commencement of the Other Employment through the Ending
Date;
(ii) The Executive's annual incentive bonus for the calendar
year in which such termination occurs (computed as if
the Executive were employed by the Companies throughout
such calendar year), to be paid at the same time that
such incentive bonus would have been paid if such
termination had not occurred and to be no less than the
Executive's annual incentive bonus for the calendar
year immediately preceding the calendar year in which
such termination occurs;
(iii) An amount equal to one hundred eighty percent (180%) of
the Base Salary in effect on the effective date of such
termination, such amount to be paid, without interest,
to the extent of fifty percent (50%) one year after the
effective date of such termination and to the extent of
the remaining fifty percent (50%) two years after the
effective date of such termination.
(iv) Any other amounts earned, accrued, or owed to the
Executive under this agreement but not paid as of the
effective date of such termination;
(v) Continued participation in the following benefit plans
or programs of the Companies which may be in effect
from time to time and in which the Executive was
participating as of the effective date of such
termination, to the extent that such continued
participation by the Executive is permitted under the
terms and conditions of such plans (unless such
continued participation is restricted or prohibited by
applicable governmental regulations governing such
plans), until the first to occur of the Ending Date or
(separately with respect to
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
the termination of each benefit) the provision of a
substantially equivalent benefit to the Executive by
another employer of the Executive:
(1) Group medical and hospital insurance,
(2) Group dental insurance,
(3) Group life insurance, and
(4) Group long-term disability insurance;
and
(vi) Any other benefits payable to the Executive upon his
termination without cause, or to which the Executive
otherwise may be entitled, under any benefit plans or
programs of the Companies in effect on the effective
date of such termination.
(e) Termination Without Cause After a Change of Control. If, after the
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occurrence of a Change of Control, the Companies or any Permitted Assignee
terminates the Executive's employment under this agreement for any reason other
than cause or the Executive's death or disability, then the Executive shall be
entitled to receive from the Companies and the Permitted Assignee, if any (all
of whom shall be jointly and severally liable therefor), all of the
compensation, benefits, and other payments from the Companies which are
described and provided for in subparagraph (d) of this Paragraph 10; provided,
however, that (i) the aggregate Base Salary payable under subparagraph (d)(i)
for all periods through the Ending Date shall be paid to the Executive in a lump
sum without regard to Other Employment not later than thirty (30) days after the
effective date of such termination, (ii) the minimum annual incentive bonus
payable under subparagraph (d)(ii) shall be paid to the Executive not later than
thirty (30) days after the effective date of such termination (with any balance
of such annual incentive bonus being payable as provided in such subparagraph
(d)(ii)), and (iii) the amount payable under subparagraph (d)(iii) shall be paid
to the Executive in a lump sum not later than thirty (30) days after the
effective date of such termination.
(f) Constructive Termination. If at any time during the term of this
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agreement the Board, the Chief Executive Officer of CSGS, or a Permitted
Assignee materially alters the duties and responsibilities of the Executive
provided for in Paragraph 1 or assigns to the Executive duties and
responsibilities inappropriate to the chief operating officer of the Companies
without the Executive's written consent, then, at the election of the Executive
(such election to be made by written notice from the Executive to the Board or
the Permitted Assignee, as may be appropriate in the circumstances), (i) such
action by the Board, the Chief Executive Officer of CSGS, or such Permitted
Assignee shall constitute a constructive termination of the Executive's
employment by the Companies for a reason other than cause, (ii) the Executive
thereupon may resign from his offices and positions with the Companies and shall
not be obligated to perform any further services of any kind to or for the
Companies, and (iii) the Executive shall be entitled to receive from the
Companies (and the Permitted Assignee, if applicable) at the applicable times
all of the compensation, benefits, and other payments described in subparagraph
(d) or subparagraph (e) of this Paragraph 10 (whichever may be applicable), as
if the effective date of the Executive's resignation were the effective date of
his termination of employment for purposes of determining such compensation,
benefits, and other payments.
(g) Voluntary Resignation. If the Executive voluntarily resigns as an
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employee of the Companies and thereby voluntarily terminates his employment
under this agreement and if none of subparagraphs (a) through (f) of this
Paragraph 10 is applicable to such termination, then the Executive shall be
entitled to receive only the following compensation, benefits, and other
payments from the Companies:
(i) The Base Salary through the effective date of such
voluntary resignation;
(ii) Any other amounts earned, accrued, or owed to the
Executive under this agreement but not paid as of the
effective date of such voluntary resignation;
(iii) If (and only if) the Executive's voluntary resignation
is effective on December 31 of a particular calendar
year, the Executive's annual incentive bonus (if any)
for such calendar year, to be paid in accordance with
the regular schedule for its
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
payment; and
(iv) Any other benefits payable to the Executive upon his
voluntary resignation, or to which the Executive
otherwise may be entitled, under any benefit plans or
programs of the Companies in effect on the effective
date of such voluntary resignation.
The Executive understands and agrees that if this subparagraph (g) is applicable
to the termination of the Executive's employment with the Companies, then,
unless his voluntary resignation is effective on December 31 of a particular
calendar year, the Executive will not be entitled to any annual incentive bonus
for the calendar year in which his voluntary resignation becomes effective.
(h) Liquidated Damages. The Executive agrees to accept the compensation,
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benefits, and other payments provided for in subparagraph (d), subparagraph (e),
or subparagraph (f) of this Paragraph 10, as the case may be, as full and
complete liquidated damages for any breach of this agreement resulting from the
actual or constructive termination of the Executive's employment under this
agreement for a reason other than cause or the Executive's death or disability;
and the Executive shall not have and hereby waives and relinquishes any other
rights or claims in respect of such breach.
(i) Notice of Other Employment and of Benefits. The Executive promptly
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shall notify the Companies in writing of (i) his acceptance of the Other
Employment referred to in subparagraph (d) of this Paragraph 10, (ii) the
effective date of such Other Employment, and (iii) the amount of salary, cash
bonus, and consulting fees which the Executive receives or is entitled to
receive from the Other Employment for services performed by him during the
period from the commencement of the Other Employment through the Ending Date.
Whenever relevant for purposes of this Paragraph 10, the Executive also promptly
shall notify the Companies of his receipt from another employer of any benefits
of the types referred to in subparagraphs (b)(iv) and (d)(v) of this Paragraph
10. Such information shall be updated by the Executive whenever necessary to
keep the Companies informed on a current basis.
(j) Modification of Benefit Plans or Programs. Nothing contained in this
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Paragraph 10 shall obligate the Companies to institute, maintain, or refrain
from changing, amending, or discontinuing any benefit plan or program referred
to in subparagraph (b)(iv) or (d)(v) of this Paragraph 10 so long as such
actions are similarly applicable to senior executives of the Companies
generally.
(k) Rights of Estate. If the Executive dies prior to his receipt of all
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of the cash payments to which he may be entitled pursuant to subparagraph (b),
(c), (d), (e), (f), or (g) of this Paragraph 10 if any such subparagraph becomes
applicable, then the unpaid portion of such cash payments shall be paid by the
Companies to the personal representative of the Executive's estate at the same
time or times that the payments would have been made to the Executive if he
still were living.
(l) Excess Parachute Payments. If any of the payments required to be made
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to the Executive pursuant to subparagraph (d), (e), or (f) of this Paragraph 10
constitute "excess parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended, and any regulations thereunder, and
the Executive becomes liable for any excise tax on such "excess parachute
payments" and any interest or penalties thereon (such excise tax, interest, and
penalties, collectively, the "Tax Penalties"), then the Companies (and the
Permitted Assignee, if applicable) promptly shall make a cash payment (the
"Additional Payment") to the Executive in an amount equal to the Tax Penalties.
The Companies also promptly shall make an additional cash payment to the
Executive in an amount rounded to the nearest $100.00 which is equal to any
additional income, excise, and other taxes (using the individual tax rates
applicable to the Executive for the year for which such Tax Penalties are owed)
for which the Executive will be liable as a result of the Executive's receipt of
the Additional Payment (the additional cash payment provided for in this
sentence being referred to as a "Gross-Up Payment"). In addition, the Executive
shall be entitled to promptly receive from the Companies (and the Permitted
Assignee, if applicable) a further Gross-Up Payment in respect of each prior
Gross-Up Payment until the amount of the last Gross-Up Payment is less than
$100.00.
11. Nondisclosure. During the term of this agreement and thereafter, the
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Executive shall not, without the
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
prior written consent of the Board or a person (other than the Executive) so
authorized by the Board, disclose or use for any purpose (except in the course
of his employment under this agreement and in furtherance of the business of the
Companies or any of their respective subsidiaries) any confidential information,
trade secrets, or proprietary data of the Companies or any of their respective
subsidiaries (collectively, for purposes of this agreement, "Confidential
Information"); provided, however, that Confidential Information shall not
include any information then known generally to the public or ascertainable from
public or published information (other than as a result of unauthorized
disclosure by the Executive) or any information of a type not otherwise
considered confidential by persons engaged in the same business or a business
similar to that conducted by the Companies or their respective subsidiaries, as
the case may be.
12. Successors and Assigns. This agreement and all rights under this
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agreement shall be binding upon, inure to the benefit of, and be enforceable by
the parties hereto and their respective personal or legal representatives,
executors, administrators, heirs, distributees, devisees, legatees, successors,
and assigns. This agreement is personal in nature, and none of the parties to
this agreement shall, without the written consent of the others, assign or
transfer this agreement or any right or obligation under this agreement to any
other person or entity, except as permitted by Paragraph 14.
13. Notices. For purposes of this agreement, notices and other
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communications provided for in this agreement shall be deemed to be properly
given if delivered personally or sent either by next-business-day prepaid
express delivery by a recognized national express delivery service or by United
States certified mail, return receipt requested, postage prepaid, in either case
addressed as follows:
If to the Executive: Xxxx X. Xxxxx
c/o CSG Systems, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000
If to the Companies: CSG Systems International, Inc.
and CSG Systems, Inc.
0000 Xxxx Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxx 00000,
or to such other address as either party may have furnished to the other party
in writing in accordance with this paragraph. Such notices or other
communications shall be effective only upon receipt.
14. Merger, Consolidation, Sale of Assets. In the event of (a) a merger
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of Systems with another corporation (other than CSGS) in a transaction in which
Systems is not the surviving corporation, (b) the consolidation of Systems into
a new corporation resulting from such consolidation, (c) the sale or other
disposition of all or substantially all of the assets of Systems, the Companies
may assign this agreement and all of the rights and obligations of the Companies
under this agreement to the surviving, resulting, or acquiring entity (for
purposes of this agreement, a "Permitted Assignee"); provided, that such
surviving, resulting, or acquiring entity shall in writing assume and agree to
perform all of the obligations of the Companies under this agreement; and
provided further, that the Companies shall remain jointly and severally liable
for the performance of the obligations of the Companies under this agreement in
the event of a failure of the Permitted Assignee to perform its obligations
under this agreement.
15. Change of Control. For purposes of this agreement, a "Change of
-----------------
Control" shall be deemed to have occurred upon the happening of any of the
following events:
(a) CSGS is merged or consolidated into another corporation, and
immediately after such merger or consolidation becomes effective the
holders of a majority of the outstanding shares of voting capital
stock of CSGS immediately prior to the effectiveness of such merger or
consolidation do not own (directly or indirectly) a majority of the
outstanding shares of voting capital stock of the surviving or
resulting corporation in such merger or consolidation,
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
(b) CSGS ceases to own (directly or indirectly) a majority of the
outstanding shares of voting capital stock of Systems (unless such
event results from the merger of Systems into CSGS, with no change
in the ownership of the voting capital stock of CSGS, or from the
dissolution of Systems and the continuation of its business by
CSGS),
(c) Systems is merged or consolidated into a corporation other than
CSGS, and at any time after such merger or consolidation becomes
effective CSGS does not own (directly or indirectly) a majority of
the outstanding shares of voting capital stock of the surviving or
resulting corporation in such merger or consolidation,
(d) the stockholders of Systems vote (or act by written consent) to
dissolve Systems (unless the business of Systems will be continued
by CSGS) or to sell or otherwise dispose of all or substantially all
of the property and assets of Systems (other than to an entity or
group of entities which is then under common ownership (directly or
indirectly) with Systems),
(e) any person, entity, or group of persons within the meaning of
Sections 13(d) or 14(d) of the Securities Exchange Act of 1934 (the
"1934 Act") and the rules promulgated thereunder becomes the
beneficial owner (within the meaning of Rule 13d-3 under the 0000
Xxx) of thirty percent (30%) or more of the outstanding voting
capital stock of CSGS, or
(f) during any period of two consecutive years or less, individuals who
at the beginning of such period constituted the Board of Directors
of CSGS cease, for any reason, to constitute at least a majority of
the Board of Directors of CSGS, unless the election or nomination
for election of each new director of CSGS who took office during
such period was approved by a vote of at least seventy-five percent
(75%) of the directors of CSGS still in office at the time of such
election or nomination for election who were directors of CSGS at
the beginning of such period.
16. Miscellaneous. No provision of this agreement may be modified,
-------------
waived, or discharged unless such waiver, modification, or discharge is agreed
to in writing and is signed by the Executive and an officer of CSGS (other than
the Executive) so authorized by the Board. No waiver by any party to this
agreement at any time of any breach by any other party of, or compliance by any
other party with, any condition or provision of this agreement to be performed
by such other party shall be deemed to be a waiver of similar or dissimilar
provisions or conditions at the same or any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter of this agreement have been made by any party that
are not expressly set forth in this agreement.
17. Representations of Companies. The Companies severally represent and
----------------------------
warrant to the Executive that they have full legal power and authority to enter
into this agreement, that the execution and delivery of this agreement by the
Companies have been duly authorized by their respective boards of directors, and
that the performance of their respective obligations under this agreement will
not violate any agreement between the Companies, or either of them, and any
other person, firm, or organization.
18. Non-Solicitation of Employees. For a period of one (1) year after
-----------------------------
the effective date of the termination of the Executive's employment under this
agreement for any reason, whether voluntarily or involuntarily and with or
without cause, without the prior written consent of CSGS the Executive agrees
(i) not to directly or indirectly employ, solicit for employment, assist any
other person in employing or soliciting for employment, or advise or recommend
to any other person that such other person employ or solicit for employment any
person who then is an employee of the Companies (or either of them) or any of
the respective subsidiaries of the Companies and (ii) not to recommend to any
then employee of the Companies (or either of them) or any of the respective
subsidiaries of the Companies that such employee leave the employ of such
employer.
19. Post-Termination Noncompetition. Because the Confidential
-------------------------------
Information known to or developed by the Executive during his employment by the
Companies encompasses at the highest level information concerning the plans,
strategies, products, operations, and existing and prospective customers of the
Companies and could not practically be
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
disregarded by the Executive, the Executive acknowledges that his provision of
executive services to a competitor of the Companies or either of them soon after
the termination of the Executive's employment by the Companies would inevitably
result in the use of the Confidential Information by the Executive in his
performance of such executive services, even if the Executive were to use his
best efforts to avoid such use of the Confidential Information. To prevent such
use of the Confidential Information and the resulting unfair competition and
wrongful appropriation of the goodwill and other valuable proprietary interests
of the Companies, the Executive agrees that for a period of one (1) year after
the termination of his employment by the Companies for any reason, whether
voluntarily or involuntarily and with or without cause, the Executive will not,
directly or indirectly:
(a) engage, whether as an employee, agent, consultant, independent
contractor, owner, partner, member, or otherwise, in a business
activity which then competes in a material way with a business
activity then being actively engaged in by the Companies or
either of them;
(b) solicit or recommend to any other person that such period solicit
any then customer of the Companies or either or them, which
customer also was a customer of the Companies or either of them
at any time during the one (1) year period prior to the
termination of the Executive's employment by the Companies, for
the purpose of obtaining the business of such customer in
competition with the Companies or either of them; or
(c) induce or attempt to induce any then customer or prospective
customer of the Companies or either of them to terminate or not
commence a business relationship with the Companies or either of
them.
The Companies and the Executive acknowledge and agree that the restrictions
contained in this Paragraph 19 are both reasonable and necessary in view of the
Executive's positions with the Companies and that the Executive's compensation
and benefits under this agreement are sufficient consideration for the
Executive's acceptance of such restrictions. Nevertheless, if any of the
restrictions contained in this Paragraph 19 are found by a court having
jurisdiction to be unreasonable, or excessively broad as to geographic area or
time, or otherwise unenforceable, then the parties intend that the restrictions
contained in this Paragraph 19 be modified by such court so as to be reasonable
and enforceable and, as so modified by the court, be fully enforced. Nothing
contained in this paragraph shall be construed to preclude the investment by the
Executive of any of his assets in any publicly owned entity so long as the
Executive has no direct or indirect involvement in the business of such entity
and owns less than 2% of the voting equity securities of such entity. Nothing
contained in this paragraph shall be construed to preclude the Executive from
becoming employed by or serving as a consultant to or having dealings with a
publicly owned entity one of whose businesses is a competitor of the Companies
or either of them so long as such employment, consultation, or dealings do not
directly or indirectly involve or relate to the business of such entity which is
a competitor of the Companies or either of them.
20. Joint and Several Obligations. All of the obligations of the
-----------------------------
Companies under this agreement are joint and several; and neither the
bankruptcy, insolvency, dissolution, merger, consolidation, or reorganization
nor the cessation of business or corporate existence of one of the Companies
shall affect, impair, or diminish the obligations under this agreement of the
other of the Companies. The compensation and benefits to which the Executive is
entitled under this agreement are aggregate compensation and benefits, and the
payment of such compensation or the provision of such benefits by one of the
Companies shall to the extent of such payment or provision satisfy the
obligations of the other of the Companies. The Companies may agree between
themselves as to which of them will be responsible for some or all of the
Executive's compensation and benefits under this agreement, but any such
agreement between the Companies shall not diminish to any extent the joint and
several liability of the Companies to the Executive for all of such compensation
and benefits.
21. Injunctive Relief. The Executive acknowledges that his violation of
-----------------
the provisions and restrictions contained in Paragraphs 11, 18, and 19 could
cause significant injury to the Companies for which the Companies would have no
adequate remedy at law. Accordingly, the Executive agrees that the Companies
will be entitled, in addition to any other rights and remedies that then may be
available to the Companies, to seek and obtain injunctive relief to prevent any
breach or potential breach of any of the provisions and restrictions contained
in Paragraph 11, 18, or 19.
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
22. Dispute Resolution. Subject to the provisions of Paragraph 21, any
------------------
claim by the Executive or the Companies arising from or in connection with this
agreement, whether based on contract, tort, common law, equity, statute,
regulation, order, or otherwise (a "Dispute"), shall be resolved as follows:
(a) Such Dispute shall be submitted to mandatory and binding
arbitration at the election of either the Executive or the
particular Company involved (the "Disputing Party"). Except as
otherwise provided in this Paragraph 22, the arbitration shall be
pursuant to the Commercial Arbitration Rules of the American
Arbitration Association (the "AAA").
(b) To initiate the arbitration, the Disputing Party shall notify the
other party in writing within 30 days after the occurrence of the
event or events which give rise to the Dispute (the "Arbitration
Demand"), which notice shall (i) describe in reasonable detail
the nature of the Dispute, (ii) state the amount of any claim,
(iii) specify the requested relief, and (iv) name an arbitrator
who (A) has been licensed to practice law in the U.S. for at
least ten years, (B) has no past or present relationship with
either the Executive or the Companies, and (C) is experienced in
representing clients in connection with employment related
disputes (the "Basic Qualifications"). Within fifteen (15) days
after the other party's receipt of the Arbitration Demand, such
other party shall serve on the Disputing Party a written
statement (i) answering the claims set forth in the Arbitration
Demand and including any affirmative defenses of such party, (ii)
asserting any counterclaim, which statement shall (A) describe in
reasonable detail the nature of the Dispute relating to the
counterclaim, (B) state the amount of the counterclaim, and (C)
specify the requested relief, and (iii) naming a second
arbitrator satisfying the Basic Qualifications. Promptly, but in
any event within five (5) days thereafter, the two arbitrators so
named shall select a third neutral arbitrator from a list
provided by the AAA of potential arbitrators who satisfy the
Basic Qualifications and who have no past or present relationship
with the parties' counsel, except as otherwise disclosed in
writing to and approved by the parties. The arbitration will be
heard by a panel of the three arbitrators so chosen (the
"Arbitration Panel"), with the third arbitrator so chosen serving
as the chairperson of the Arbitration Panel. Decisions of a
majority of the members of the Arbitration Panel shall be
determinative.
(c) The arbitration hearing shall be held in Denver, Colorado. The
Arbitration Panel is specifically authorized to render partial or
full summary judgment as provided for in the Federal Rules of
Civil Procedure. The Arbitration Panel will have no power or
authority, under the Commercial Arbitration Rules of the AAA or
otherwise, to relieve the parties from their agreement hereunder
to arbitrate or otherwise to amend or disregard any provision of
this agreement, including, without limitation, the provisions of
this Paragraph 22.
(d) If an arbitrator refuses or is unable to proceed with arbitration
proceedings as called for by this Paragraph 22, such arbitrator
shall be replaced by the party who selected such arbitrator or,
if such arbitrator was selected by the two party-appointed
arbitrators, by such two party-appointed arbitrators' selecting a
new third arbitrator in accordance with Paragraph 22(b), in
either case within five (5) days after such declining or
withdrawing arbitrator's giving notice of refusal or inability to
proceed. Each such replacement arbitrator shall satisfy the Basic
Qualifications. If an arbitrator is replaced pursuant to this
Paragraph 22(d) after the arbitration hearing has commenced, then
a rehearing shall take place in accordance with the provisions of
this Paragraph 22(d) and the Commercial Arbitration Rules of the
AAA.
(e) Within ten (10) days after the closing of the arbitration
hearing, the Arbitration Panel shall prepare and distribute to
the parties a writing setting forth the Arbitration Panel's
finding of facts and conclusions of law relating to the Dispute,
including the reason for the giving or denial of any award. The
findings and conclusions and the award, if any, shall be deemed
to be confidential information.
(f) The Arbitration Panel is instructed to schedule promptly all
discovery and other procedural
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
steps and otherwise to assume case management initiative and
control to effect an efficient and expeditious resolution of the
Dispute. The Arbitration Panel is authorized to issue monetary
sanctions against either party if, upon a showing of good cause,
such party is unreasonably delaying the proceeding.
(g) Any award rendered by the Arbitration Panel will be final,
conclusive, and binding upon the parties, and any judgment on
such award may be entered and enforced in any court of competent
jurisdiction.
(h) Each party will bear a pro rata share of all fees, costs, and
expenses of the arbitrators; and, notwithstanding any law to the
contrary, each party will bear all of the fees, costs, and
expenses of his or its own attorneys, experts, and witnesses.
However, in connection with any judicial proceeding to compel
arbitration pursuant to this agreement or to enforce any award
rendered by the Arbitration Panel, the prevailing party in such a
proceeding will be entitled to recover reasonable attorneys' fees
and expenses incurred in connection with such proceedings, in
addition to any other relief to which such party may be entitled.
(i) Nothing contained in the preceding provisions of this Paragraph
22 shall be construed to prevent either party from seeking from a
court a temporary restraining order or other injunctive relief
pending final resolution of a Dispute pursuant to this Paragraph
22.
23. No Duty to Seek Employment. The Executive shall not be under any
--------------------------
duty or obligation to seek or accept other employment following the termination
of his employment by the Companies; and, except as expressly provided in
subparagraphs (b)(iv), (d)(i), and (d)(v) of Paragraph 10, no amount, payment,
or benefit due the Executive under this agreement shall be reduced, suspended,
or discontinued if the Executive accepts such other employment.
24. Withholding of Taxes. The Companies may withhold from any amounts
--------------------
payable to the Executive under this agreement all federal, state, and local
taxes which are required to be so withheld by any applicable law or governmental
regulation or ruling.
25. Validity. The invalidity or unenforceability of any provision or
--------
provisions of this agreement shall not affect the validity or enforceability of
any other provision of this agreement, which other provision shall remain in
full force and effect; nor shall the invalidity or unenforceability of a portion
of any provision of this agreement affect the validity or enforceability of the
balance of such provision.
26. Counterparts. This document may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute a single agreement.
27. Headings. The headings of the paragraphs contained in this document
--------
are for reference purposes only and shall not in any way affect the meaning or
interpretation of any provision of this agreement.
28. Applicable Law. This agreement shall be governed by and construed in
--------------
accordance with the internal substantive laws, and not the choice of law rules,
of the State of Colorado.
IN WITNESS WHEREOF, the Companies and the Executive have executed this
agreement on the day and year first above written.
CSG SYSTEMS INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Xxxx X. Xxxxxx, Chairman of the
Board and Chief Executive Officer
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
CSG SYSTEMS, INC., a Delaware
corporation
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Xxxx X. Xxxxxx, Chairman of the
Board and Chief Executive Officer
/s/ Xxxx X. Xxxxx
-----------------------------------------
Xxxx X. Xxxxx
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CONFIDENTIAL AND PROPRIETARY INFORMATION - FOR USE BY AUTHORIZED EMPLOYEES OF
THE PARTIES HERETO ONLY AND IS NOT FOR GENERAL DISTRIBUTION WITHIN OR OUTSIDE
THEIR RESPECTIVE COMPANIES
