EXHIBIT 10.11
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement (this "Agreement") is
entered into the 25th day of January 1999, by and between Xxxxxx X. Xxxxxx, Xx.
("Employee") and Billing Concepts Corp., a Delaware corporation (the "Company").
Subject to the conditions set forth below, this Agreement is to be effective as
of October 1, 1998.
WITNESSETH:
WHEREAS, the Company and Employee previously entered into an Amended and
Restated Employment Agreement through which Employee was employed as the
Company's Chairman of the Board and Chief Executive Officer; and
WHEREAS, the Company and Employee now wish to amend and restate the terms
of that prior Employment Agreement so as to set forth the ongoing terms of
Employee's employment with the Company and each party's duties and obligations
to the other on and after the Effective Date of the Amendment and Restatement of
the Employment Agreement;
NOW, THEREFORE, in consideration of the foregoing premises, the mutual
agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Prior Agreement is
hereby amended and restated in its entirety effective as of October 1, 1998 (the
"Effective Date") to read as follows:
ARTICLE I
DUTIES
1.1 DUTIES. During the term of this Agreement, the Company agrees to
employ Employee as the Company's Chairman of the Board and Chief Executive
Officer, and Employee agrees to serve the Company in such capacities or in such
other capacities (subject to Employee's termination rights under Section 4.2) as
the Board of Directors of the Company may direct, all upon the terms and subject
to the conditions set forth in this Agreement.
1.2 EXTENT OF DUTIES. Employee shall devote sufficient business time,
energy and skill to the affairs of the Company as shall reasonably be necessary
to discharge Employee's duties in such capacities. Employee may participate in
social, civic, charitable, religious, business, education or professional
associations, so long as such participation would not materially detract from
Employee's ability to perform his duties under this Agreement.
ARTICLE II
TERM OF EMPLOYMENT
The term of this Agreement shall commence on the Effective Date and
continue for a period of five years, provided that, on each one-year anniversary
of this Agreement, the term of this Agreement shall automatically be extended
for an additional one year. This Agreement is subject to earlier termination as
hereinafter provided.
ARTICLE III
COMPENSATION
3.1 ANNUAL BASE COMPENSATION. As compensation for services rendered under
this Agreement, Employee shall be entitled to receive from Company an annual
base salary of $375,000 (before standard deductions) during the first year of
this Agreement. Employee's annual base salary shall be subject to review and
adjustment by the Compensation Committee of the Company (the "Compensation
Committee") on an annual basis, provided that any such adjustment shall not
result in a reduction in Employee's annual base salary below $375,000, without
Employee's consent. Employee's annual base salary shall be payable at regular
intervals in accordance with the prevailing practice and policy of the Company.
3.2 INCENTIVE BONUS. As additional compensation for services rendered
under this Agreement, the Compensation Committee may, in its sole discretion and
without any obligation to do so, declare that Employee shall be entitled to an
annual incentive bonus (whether payable in cash, stock, stock rights or other
property) as the Compensation Committee shall determine. If any such bonus is
declared, the bonus shall be payable in accordance with the terms prescribed by
the Compensation Committee.
3.3 OTHER BENEFITS. Employee shall, in addition to the compensation
provided for in Sections 3.1 and 3.2 above, be entitled to the following
additional benefits:
(a) AUTOMOBILE ALLOWANCE. An automobile to be chosen by the
Employee, replaceable every two years and complete payment of all operating,
insurance and maintenance expenses attendant thereto. Upon termination of the
Company's obligation to provide this benefit, Employee shall have an option,
exercisable within 90 days of such termination, to purchase such automobile at
its net book value as shown upon the Company's records as of the date of
termination.
(b) COUNTRY CLUB MEMBERSHIP. Payment in full of membership fees and
dues to a country club of the Employee's choice in the area of his employment
together with payment or reimbursement of all charges incurred at such club
relating to entertainment of business guests. Upon termination of this Agreement
under Section 4.1, 4.2 or 4.6 hereof, such country club membership shall be
transferred to Employee without further consideration.
(c) HEALTH CLUB MEMBERSHIP. Payment in full of membership fees and
dues in a lunch or health club of the Employee's choice, in the area of his
employment together with payment or reimbursement of all charges incurred at
such club relating to entertainment of business guests.
(d) LIFE INSURANCE. Whole life insurance policies in the aggregate
amount of One Million Dollars ($1,000,000) to be owned by Employee or his
designee. The premiums are to be paid by the Company pursuant to a split dollar
program, whereby only a portion of the premium paid is taxable to Employee. The
policy is to be collaterally assigned by Employee or other owner of the policy
to reimburse the Company for certain premiums paid under the split dollar
program.
(e) MEDICAL, HEALTH AND DISABILITY BENEFITS. Employee shall be
entitled to receive all of the medical, health and disability benefits that may,
from time to time, be provided by the Company to its executive officers.
(f) OTHER BENEFITS. Employee shall also be entitled to receive any
other benefits provided by the Company to all employees of Company as a group,
or all executive officers of the Company as a group, including any profit
sharing, 401(k) or retirement benefits.
(g) VACATION PAY. Employee shall be entitled to an annual vacation
as determined in accordance with the prevailing practice and policy of the
Company.
(h) HOLIDAYS. Employee shall be entitled to holidays in accordance
with the prevailing practice and policy of the Company.
(i) REIMBURSEMENT OF EXPENSES. The Company shall reimburse Employee
for all expenses reasonably incurred by Employee on behalf of the Company in
accordance with the prevailing practice and policy of the Company.
ARTICLE IV
TERMINATION
4.1 TERMINATION BY THE COMPANY WITHOUT CAUSE. Subject to the provisions of
this Section 4.1, this Agreement may be terminated by the Company without cause
upon 30 days prior written notice thereof given to Employee. In the event of
termination pursuant to this Section 4.1, (a) the Company shall pay Employee,
within 15 days of such termination, a lump-sum payment equal to (without
discounting to present value) his then effective base salary under Section 3.1
hereof through the expiration of the five-year term then in effect (without
giving effect to any further extensions thereof under Article II hereof), (b)
Employee shall be entitled to all benefits under Section 3.4 hereof, through the
expiration of the five year term then in effect, to the extent continuation of
such benefits is not prohibited by applicable state and/or federal law, and (c)
all outstanding stock options held by Employee not already vested and
exercisable shall become fully vested and exercisable. Payment by the Company in
accordance with this Section shall constitute Employee's full severance pay and
the Company shall have no further obligation to Employee arising out of such
termination.
4.2 VOLUNTARY TERMINATION BY EMPLOYEE FOR GOOD REASON. Employee may at any
time voluntarily terminate his employment for "good reason" (as defined below)
upon 30 days prior written notice thereof to the Company. In the event of such
voluntary termination for "good reason," (a) the Company shall pay Employee,
within 15 days of such termination, a lump-sum payment equal to (without
discounting to present value) his then effective base salary under Section 3.1
hereof through the expiration of the five-year term then in effect (without
giving effect to any further extensions thereof under Article II hereof), (b)
the Company shall provide the continued benefit coverage described in Section
4.1 in the event of the Employee's termination by the Company without cause, and
(c) all outstanding stock options held by Employee not already vested and
exercisable shall become fully vested and exercisable.
For purposes of this Agreement, "good reason" shall mean the occurrence of
any of the following events:
(a) Removal from the offices Employee holds on the date of this
Agreement or a material reduction in Employee's authority or
responsibility, including, without limitation, involuntary
removal from the Board of Directors, but not including
termination of Employee for "cause," as defined below;
(b) relocation of the Company's headquarters from Bexar County,
Texas;
(c) a reduction in the Employee's then effective base salary
under Section 3.1; or
(d) The Company otherwise commits a material breach of this
Agreement.
4.3. TERMINATION BY THE COMPANY FOR CAUSE. The Company may terminate this
Agreement at any time if such termination is for "cause" (as defined below), by
delivering to Employee written notice describing the cause of termination 30
days before the effective date of such termination and by granting Employee at
least 30 days to cure the cause. In the event the employment of Employee is
terminated for "cause," Employee shall be entitled only to the base salary
earned PRO RATA to the date of such termination with no entitlement to any base
salary continuation payments or benefits continuation (except as specifically
provided by the terms of an employee benefit plan of the Company). Except as
otherwise provided in this Agreement, the determination of whether Employee
shall be terminated for "cause" shall be made by the Board of Directors of the
Company, in the reasonable exercise of its business judgment, and shall be
limited to the occurrence of the following events:
(a) Conviction of or a plea of NOLO CONTENDERE to the charge of
a felony (which, through lapse of time or otherwise, is not
subject to appeal);
(b) Willful refusal without proper legal cause to perform, or
gross negligence in performing, Employee's duties and
responsibilities;
(c) Material breach of fiduciary duty to the Company through
the misappropriation of Company funds or property; or
(d) The unauthorized absence of Employee from work (other than for
sick leave or disability) for a period of 30 working days or
more during any period of 45 working days during the term of
this Agreement.
4.4 TERMINATION UPON DEATH OR PERMANENT DISABILITY. In the event that
Employee dies, this Agreement shall terminate 90 days following the Employee's
death. Likewise, if the Employee becomes unable to perform the essential
functions of the position, with or without reasonable accommodation, on account
of illness, disability, or other reason whatsoever for a period of more than six
consecutive or nonconsecutive months in any twelve-month period, this Agreement
shall terminate effective 90 days following such incapacity, and Employee (or
his legal representatives) shall be entitled to (a) a lump sum payment equal to
(without discounting to present value) his then effective base salary under
Section 3.1 hereof through the expiration of the five-year term then in effect
(without giving effect to any further extensions thereof under Article II
hereof), (b) the Company shall provide the continued benefit coverage described
in Section 4.1 in the event of the Employee's said disability, and (c) all
outstanding stock options held by Employee not already vested and exercisable
shall become fully vested and exercisable.
4.5 VOLUNTARY TERMINATION BY EMPLOYEE. Employee may terminate this
Agreement at any time upon delivering 30 days' written notice of resignation to
the Company. In the event of such voluntary termination other than for "good
reason" (as defined above), Employee shall be entitled to his base salary earned
PRO RATA to the date of his resignation, but no base salary continuation
payments or benefits continuation (except as specifically provided by the terms
of an employee benefit plan of the Company). On or after the date the Company
receives notice of Employee's resignation, the Company may, at its option, pay
Employee his base salary through the effective date of his resignation and
terminate his employment immediately.
4.6 TERMINATION FOLLOWING CHANGE OF CONTROL.
(a) Notwithstanding anything to the contrary contained herein,
should Employee at any time within 24 months of the occurrence of a "change of
control" (as defined below) cease to be an employee of the Company (or its
successor), by reason of (i) termination by the Company (or its successor) other
than for "cause" (following a change of control, "cause" shall be limited to the
conviction of or a plea of NOLO CONTENDERE to the charge of a felony which,
through lapse of time or otherwise, is not subject to appeal), or a material
breach of fiduciary duty to the Company through the misappropriation of Company
funds or property) or (ii) voluntary termination by Employee for "good reason
upon change of control" (as defined below), then in any such event, (1) the
Company shall pay Employee, within 45 days of the severance of employment
described in this Section 4.6, a lump-sum payment equal to (without discounting
to present value) his then effective base salary under Section 3.1 hereof
through the expiration of the five-year term then in effect (without giving
effect to any further extensions thereof under Article II hereof), (2) the
Company shall provide the continued benefit coverage described in Section 4.1 in
the event of the Employee's termination by the Company without cause, and (3)
all outstanding stock options held by Employee not already vested and
exercisable shall become fully vested and exercisable.
(b) Employee shall be entitled to an additional payment, to the
extent all payments to Employee (whether pursuant to this Agreement or any other
agreement whatsoever) in connection with a change of control as defined in this
Section 4.6 do not exceed in aggregate, the maximum amount that could be paid to
Employee, without triggering an excess parachute payment under Section 280G(b)
of the Internal Revenue Code of 1986, as amended (the "Code"), and the resulting
excise tax under Section 4999 of the Code, (referred to herein as the "maximum
payment amount") equal to an amount, which when added to the amounts payable to
the Employee under paragraph (a) equals the maximum payment amount; it being the
express intention of the parties that Employee in all cases (whether through
this Agreement or any other agreement whatsoever) receive the maximum payment
amount in connection with a change of control without creating an excess
parachute payment. If such a payment is required under this paragraph (b) in
addition to the amounts set forth in paragraph (a) above, it shall be paid at
the time and in the manner set forth under paragraph (a)(1).
(c) In determining the amount to be paid to Employee under this
Section 4.6, as well as the limitation determined under Section 280G of the
Code, (i) no portion of the total payments which Employee has waived in writing
prior to the date of the payment of benefits under this Agreement will be taken
into account, (ii) no portion of the total payments which nationally recognized
tax counsel (whether through consultation or retention of any actuary,
consultant or other expert), selected by the Company's independent auditors and
acceptable to Employee, (referred to herein as "Tax Counsel") determines not to
constitute a "parachute payment" within the meaning of Section 280G(b)(2) of the
Code will be taken into account,
(iii) no portion of the total payments which Tax Counsel determines to be
reasonable compensation for services rendered within the meaning of Section
280G(b)(4) of the Code will be taken into account, and (iv) the value of any
non-cash benefit or any deferred payment or benefit included in the total
payments will be determined by the Company's independent auditors in accordance
with Sections 280G(d)(3) and (iv) of the Code.
(d) As used in this Section, voluntary termination by Employee for
"good reason upon change of control" shall mean (i) removal of Employee from the
offices Employee holds on the date of this Agreement, (ii) a material reduction
in Employee's authority or responsibility, including, without limitation,
involuntary removal from the Board of Directors, (iii) relocation of the
Company's headquarters from Bexar County, Texas, (iv) a reduction in Employee's
then effective base salary under Section 3.1, or (v) the Company otherwise
commits a breach of this Agreement.
(e) As used in this Agreement, a "change of control" shall be deemed
to have occurred if (i) any "Person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
is or becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing more
than 30% of the combined voting power of the Company's then outstanding
securities, or (ii) at any time during the 24-month period after a tender offer,
merger, consolidation, sale of assets or contested election, or any combination
of such transactions, at least a majority of the Company's Board of Directors
shall cease to consist of "continuing directors" (meaning directors of the
Company who either were directors prior to such transaction or who subsequently
became directors and whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least two-thirds of the directors
then still in office who were directors prior to such transaction), or (iii) the
stockholders of the Company approve a merger or consolidation of the Company
with any other corporation, other than a merger or consolidation that would
result in the voting securities of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 60% of the
total voting power represented by the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation, or
(iv) the stockholders of the Company approve a plan of complete liquidation of
the Company or an agreement of sale or disposition by the Company of all or
substantially all of the Company's assets.
(f) Anything in this Agreement to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the Company
or any of its affiliates to or for the benefit of Employee, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise (any such payments or distributions being individually referred to
herein as a "Payment," and any two or more of such payments or distributions
being referred to herein as "Payments"), would be subject to the excise tax
imposed by Section 4999 of the Code (such excise tax, together with any interest
thereon, any penalties, additions to tax, or additional amounts with respect to
such excise tax, and any interest in respect of such penalties, additions to tax
or additional amounts, being collectively referred herein to as the "Excise
Tax"), then Employee shall be entitled to receive an additional payment or
payments (individually referred to herein as a "Gross-Up Payment" and any two or
more of such additional payments being referred to herein as "Gross-Up
Payments") in an amount such that after payment by Employee of all taxes (as
defined in paragraph (p) below) imposed upon the Gross-Up Payment, Employee
retains an amount of such Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
(g) Subject to the provisions of paragraph (h) through (n) below,
any determination (individually, a "Determination") required to be made under
this Section 4.6, including whether a Gross-Up Payment is required and the
amount of such Gross-Up Payment, shall initially be made, at the Company's
expense, by Tax Counsel. Tax Counsel shall provide detailed supporting legal
authorities, calculations, and documentation both to the Company and Employee
within 15 business days of the termination of Employee's employment, if
applicable, or such other time or times as is reasonably requested by the
Company or Employee. If Tax Counsel makes the initial Determination that no
Excise Tax is payable by Employee with respect to a Payment or Payments, it
shall furnish Employee with an opinion reasonably acceptable to Employee that no
Excise Tax will be imposed with respect to any such Payment or Payments.
Employee shall have the right to dispute any Determination (a "Dispute") within
15 business days after delivery of Tax Counsel's opinion with respect to such
Determination. The Gross-Up Payment, if any, as determined pursuant to such
Determination shall, at the Company's expense, be paid by the Company to
Employee within five business days of Employee's receipt of such Determination.
The existence of a Dispute shall not in any way affect Employee's right to
receive the Gross-Up Payment in accordance with such Determination. If there is
no Dispute, such Determination shall be binding, final and conclusive upon the
Company and Employee, subject in all respects, however, to the provisions of
paragraph (h) through (n) below. As a result of the uncertainty in the
application of Sections 4999 and 280G of the Code, it is possible that Gross-Up
Payments (or portions thereof) which will not have been made by the Company
should have been made ("Underpayment"), and if upon any reasonable written
request from Employee or the Company to Tax Counsel, or upon Tax Counsel's own
initiative, Tax Counsel, at the Company's expense, thereafter determines that
Employee is required to make a payment of any Excise Tax or any additional
Excise Tax, as the case may be, Tax Counsel shall, at the Company's expense,
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to Employee.
(h) The Company shall defend, hold harmless, and indemnify Employee
on a fully grossed-up after tax basis from and against any and all claims,
losses, liabilities, obligations, damages, impositions, assessments, demands,
judgements, settlements, costs and expenses (including reasonable attorneys',
accountants', and experts' fees and expenses) with respect to any tax liability
of Employee resulting from any Final Determination (as defined in paragraph (o)
below) that any Payment is subject to the Excise Tax.
(i) If a party hereto receives any written or oral communication
with respect to any question, adjustment, assessment or pending or threatened
audit, examination, investigation or administrative, court or other proceeding
which, if pursued successfully, could result in or give rise to a claim by
Employee against the Company under this paragraph (i) ("Claim"), including, but
not limited to, a claim for indemnification of Employee by the Company under
paragraph (h) above, then such party shall promptly notify the other party
hereto in writing of such Claim ("Tax Claim Notice").
(j) If a Claim is asserted against Employee ("Employee Claim"),
Employee shall take or cause to be taken such action in connection with
contesting such Employee Claim as the Company shall reasonably request in
writing from time to time, including the retention of counsel and experts as are
reasonably designated by the Company (it being understood and agreed by the
parties hereto that the terms of any such retention shall expressly provide that
the Company shall be solely responsible for the payment of any and all fees and
disbursements of such counsel and any experts) and the execution of powers of
attorney, provided that:
(i) within 30 calendar days after the Company receives or
delivers, as the case may be, the Tax Claim Notice relating to such
Employee Claim (or such earlier date that any payment of the taxes claimed
is due from Employee, but in no event sooner than five calendar days after
the Company receives or delivers such Tax Claim Notice), the Company shall
have notified Employee in writing ("Election Notice") that the Company
does not dispute its obligations (including, but not limited to, its
indemnity obligations) under this Agreement and that the Company elects to
contest, and to control the defense or prosecution of, such Employee Claim
at the Company's sole risk and sole cost and expense; and
(ii) the Company shall have advanced to Employee on an
interest-free basis, the total amount of the tax claimed in order for
Employee, at the Company's request, to pay or cause to be paid the tax
claimed, file a claim for refund of such tax and, subject to the
provisions of the last sentence of paragraph (l) below, xxx for a refund
of such tax if such claim for refund is disallowed by the appropriate
taxing authority (it being understood and agreed by the parties hereto
that the Company shall only be entitled to xxx for a refund and the
Company shall not be entitled to initiate any proceeding in, for example,
United States Tax Court) and shall indemnify and hold Employee harmless,
on a fully grossed-up after tax basis, from any tax imposed with respect
to such advance or with respect to any imputed income with respect to such
advance; and
(iii) the Company shall reimburse Employee for any and all
costs and expenses resulting from any such request by the Company and
shall indemnify and hold Employee harmless, on fully grossed-up after-tax
basis, from any tax imposed as a result of such reimbursement.
(k) Subject to the provisions of paragraph (j) above, the Company
shall have the right to defend or prosecute, at the sole cost, expense and risk
of the Company, such Employee Claim by all appropriate proceedings, which
proceedings shall be defended or prosecuted diligently by the Company to a Final
Determination; PROVIDED, HOWEVER, that (i) the Company shall not, without
Employee's prior written consent, enter into any compromise or settlement of
such Employee Claim that would adversely affect Employee, (ii) any request from
the Company to Employee regarding any extension of the statute of limitations
relating to assessment, payment, or collection of taxes for the taxable year of
Employee with respect to which the contested issues involved in, and amount of,
the Employee Claim relate is limited solely to such contested issues and amount,
and (iii) the Company's control of any contest or proceeding shall be limited to
issues with respect to the Employee Claim and Employee shall be entitled to
settle or contest, in his sole and absolute discretion, any other issue raised
by the Internal Revenue Service or any other taxing authority. So long as the
Company is diligently defending or prosecuting such Employee Claim, Employee
shall provide or cause to be provided to the Company any information reasonably
requested by the Company that relates to such Employee Claim, and shall
otherwise cooperate with the Company and its representatives in good faith in
order to contest effectively such Employee Claim. The Company shall keep
Employee informed of all developments and events relating to any such Employee
Claim (including, without limitation, providing to Employee copies of all
written materials pertaining to any such Employee Claim), and Employee or his
authorized representatives shall be entitled, at Employee's expense, to
participate in all conferences, meetings and proceedings relating to any such
Employee Claim.
(l) If, after actual receipt by Employee of an amount of a tax
claimed (pursuant to an Employee Claim) that has been advanced by the Company
pursuant to paragraph (j)(ii) above, the extent of the liability of the Company
hereunder with respect to such tax claimed has been established by a Final
Determination, Employee shall promptly pay or cause to be paid to the Company
any refund actually received by, or actually credited to, Employee with respect
to such tax (together with any interest paid or credited thereon by the taxing
authority and any recovery of legal fees from such taxing authority related
thereto), except to the extent that any amounts are then due and payable by the
Company to Employee, whether under the provisions of this Agreement or
otherwise. If, after the receipt by Employee of an amount advanced by the
Company pursuant to paragraph (j)(ii) above, a determination is made by the
Internal Revenue Service or other appropriate taxing authority that Employee
shall not be entitled to any refund with respect to such tax claimed and the
Company does not notify Employee in writing of its intent to contest such denial
of refund prior to the expiration of thirty days after such determination, then
such advance shall be forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent thereof, the amount of any
Gross-Up Payments and other payments required to be paid hereunder.
(m) With respect to any Employee Claim, if the Company fails to
deliver an Election Notice to Employee within the period provided in paragraph
(j)(i) above or, after delivery of such Election Notice, the Company fails to
comply with the provisions of paragraph (j)(ii) above and (iii) and (k) above,
then Employee shall at any time thereafter have the right (but not the
obligation), at his election and in his sole and absolute discretion, to defend
or prosecute, at the sole cost, expense and risk of the Company, such Employee
Claim. Employee shall have full control of such defense or prosecution and such
proceedings, including any settlement or compromise thereof. If requested by
Employee, the Company shall cooperate, and shall cause its affiliates to
cooperate, in good faith with Employee and his authorized representatives in
order to contest effectively such Employee Claim. The Company may attend, but
not participate in or control, any defense, prosecution, settlement or
compromise of any Employee Claim controlled by Employee pursuant to this
paragraph (m) and shall bear its own costs and expenses with respect thereto. In
the case of any Employee Claim that is defended or prosecuted by Employee,
Employee shall, from time to time, be entitled to current payment, on a fully
grossed-up after tax basis, from the Company with respect to costs and expenses
incurred by Employee in connection with such defense or prosecution.
(n) In the case of any Employee Claim that is defended or prosecuted
to a Final Determination pursuant to the terms of this paragraph (n), the
Company shall pay, on a fully grossed-up after tax basis, to Employee in
immediately available funds the full amount of any taxes arising or resulting
from or incurred in connection with such Employee Claim that have not
theretofore been paid by the Company to Employee, together with the costs and
expenses, on a fully grossed-up after tax basis, incurred in connection
therewith that have not theretofore been paid by the Company to Employee, within
ten calendar days after such Final Determination. In the case of any Employee
Claim not covered by the preceding sentence, the Company shall pay, on a fully
grossed-up after tax basis, to Employee in immediately available funds the full
amount of any taxes arising or resulting from or incurred in connection with
such Employee Claim at least ten calendar days before the date payment of such
taxes is due from Employee, except where payment of such taxes is sooner
required under the provisions of this paragraph (n), in which case payment of
such taxes (and payment, on a fully grossed-up after tax basis, of any costs and
expenses required to be paid under this paragraph (n) shall be made within the
time and in the manner otherwise provided in this paragraph (n).
(o) For purposes of this Agreement, the term "Final Determination"
shall mean (i) a decision, judgment, decree or other order by a court or other
tribunal with appropriate jurisdiction, which has become final and
non-appealable; (ii) a final and binding settlement or compromise with an
administrative agency with appropriate jurisdiction, including, but not limited
to, a closing agreement under Section 7121 of the Code; (iii) any disallowance
of a claim for refund or credit in respect to an overpayment of tax unless a
suit is filed on a timely basis; or (iv) any final disposition by reason of the
expiration of all applicable statutes of limitations.
(p) For purposes of this Agreement, the terms "tax" and "taxes" mean
any and all taxes of any kind whatsoever (including, but not limited to, any and
all Excise Taxes, income taxes, and employment taxes), together with any
interest thereon, any penalties, additions to tax, or additional amounts with
respect to such taxes and any interest in respect of such penalties, additions
to tax, or additional amounts.
(q) For purposes of this Agreement, the terms "affiliate" and
"affiliates" mean, when used with respect to any entity, individual, or other
person, any other entity, individual, or other person which, directly or
indirectly, through one or more intermediaries controls, or is controlled by, or
is under common control with such entity, individual or person. The term
"control" and derivations thereof when used in the immediately preceding
sentence means the ownership, directly or indirectly, of 50% or more of the
voting securities of an entity or other person or possessing the power to direct
or cause the direction of the management and policies of such entity or other
person, whether through the ownership of voting securities, by contract or
otherwise.
(r) The Company shall defend, hold harmless, and indemnify Employee
on a fully grossed-up after tax basis from and against any and all costs and
expenses (including reasonable attorneys', accountants' and experts' fees and
expenses) incurred by Employee from time to time as a result of any contest
(regardless of the outcome) by the Company or others contesting the validity or
enforcement of, or liability under, any term or provision of this Agreement,
plus in each case interest at the applicable federal rate provided for in
Section 7872(f)(2)(B) of the Code.
4.7 EXCLUSIVITY OF TERMINATION PROVISIONS. The termination provisions of
this Agreement regarding the parties' respective obligations in the event
Employee's employment is terminated, are intended to be exclusive and in lieu of
any other rights or remedies to which Employee or the Company may otherwise be
entitled at law, in equity or otherwise. It is also agreed that, although the
personnel policies and fringe benefit programs of the Company may be
unilaterally modified from time to time, the termination provisions of this
Agreement are not subject to modification, whether orally, impliedly or in
writing, unless any such modification is mutually agreed upon and signed by the
parties.
ARTICLE V
CONFIDENTIAL INFORMATION, NONCOMPETITION AND COOPERATION
5.1 NONDISCLOSURE. During the term of this Agreement and thereafter,
Employee shall not, without the prior written consent of the Board of Directors,
disclose or use for any purpose (except in the course of his employment under
this Agreement and in furtherance of the business of the Company) confidential
information, proprietary data or trade secrets of the Company (or any of its
subsidiaries), including but not limited to customer, business planning or
business strategy information, except as required by applicable law or legal
process; provided, however, that confidential information shall not include any
information known generally to the public or ascertainable from public or
published information (other than as a result of unauthorized disclosure by
Employee) 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 Company (or any of its subsidiaries). All documents which Employee prepared
or which may have been provided or made available to Employee in the course of
work for the Company shall be deemed the exclusive property of the Company and
shall remain in the Company's possession. Upon the termination of Employee's
employment with the Company, regardless of the reason for such termination,
Employee shall promptly deliver to the Company all materials of a confidential
nature relating to the business of the Company (or any of its subsidiaries)
which are within Employee's possession or control.
5.2 NONCOMPETITION. The Company and Employee agree that the services
rendered by Employee hereunder are unique and irreplaceable. For this reason and
in consideration of the benefits of this Agreement, specifically including but
not limited to applicable termination pay provisions, as well as
confidential/proprietary/trade secret information provided to Employee, Employee
hereby agrees that, during the term of this Agreement and for a period of
eighteen months thereafter, he shall not (except in the course of his employment
under this Agreement and in furtherance of the business of the Company (or any
of its subsidiaries)) (i) engage in as principal, consultant or employee in any
segment of a business of a company, partnership or firm ("Business Segment")
that is directly competitive with any significant business of the Company in one
of its major commercial or geographic markets or (ii) hold an interest (except
as a holder of less than 5% interest in a publicly traded firm or mutual funds,
or as a minority stockholder or unitholder in a form not publicly traded) in a
company, partnership or firm with a Business Segment that is directly
competitive, without the prior written consent of the Company.
5.3 VALIDITY OF NONCOMPETITION. The foregoing provisions of Section 5.2
shall not be held invalid because of the scope of the territory covered, the
actions restricted thereby, or the period of time such covenant is operative.
Any judgment of a court of competent jurisdiction may define the maximum
territory, the actions subject to and restricted by Section 5.2 and the period
of time during which such agreement is enforceable.
5.4 NONCOMPETITION COVENANTS INDEPENDENT. The covenants of the Employee
contained in Section 5.2 will be construed as independent of any other provision
in this Agreement; and the existence of any claim or cause of action by the
Employee against the Company will not constitute a defense to the enforcement by
the Company of said covenants. The Employee understands that the covenants
contained in Section 5.2 are essential elements of the transaction contemplated
by this Agreement and, but for the agreement of the Employee to Section 5.2, the
Company would not have agreed to enter into such transaction. The Employee has
been advised to consult with counsel in order to be informed in all respects
concerning the reasonableness and propriety of Section 5.2 and its provisions
with specific regard to the nature of
the business conducted by the Company and the Employee acknowledges that Section
5.2 and its provisions are reasonable in all respects.
5.5 COOPERATION. In the event of termination, and regardless of the reason
for such termination, Employee agrees to cooperate with the Company and its
representatives by responding to questions, attending meetings, depositions,
administrative proceedings and court hearings, executing documents and
cooperating with the Company and its legal counsel with respect to issues,
claims, litigation or administrative proceedings of which Employee has personal
or corporate knowledge. Employee further agrees to maintain in strict confidence
any information or knowledge Employee has regarding current or future claims,
litigation or administrative proceedings involving the Company (or any of its
subsidiaries). Employee agrees that any communication with a party adverse to
the Company, or with a representative, agent or counsel for such adverse party,
relating to any claim, litigation or administrative proceeding, shall be solely
and exclusively through counsel for the Company.
5.6 REMEDIES. In the event of a breach or threatened breach by the
Employee of any of the provisions of Sections 5.1, 5.2 or 5.5, the Company shall
be entitled to a temporary restraining order and an injunctive restraining the
Employee from the commission of such breach. Nothing herein shall be construed
as prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of money damages.
ARTICLE VI
ARBITRATION
Except for the provisions of Sections 5.1, 5.2 and 5.5 dealing with issues
of nondisclosure, noncompetition and cooperation, with respect to which the
Company reserves the right to petition a court directly for injunction or other
relief, any controversy of any nature whatsoever, including but not limited to
tort claims or contract disputes, between the parties to this Agreement or
between the Employee, his heirs, executors, administrators, legal
representatives, successors, and assigns and the Company and its affiliates,
arising out of or related to the Employee's employment with the Company, any
resignation from or termination of such employment and/or the terms and
conditions of this Agreement, including the implementation, applicability and
interpretation thereof, shall, upon the written request of one party served upon
the other, be submitted to and settled by arbitration in accordance with the
provisions of the Federal Arbitration Act, 9 U.S.C. ss.ss.1-15, as amended. Each
of the parties to this Agreement shall appoint one person as an arbitrator to
hear and determine such disputes, and if they should be unable to agree, then
the two arbitrators shall chose a third arbitrator from a panel made up of
experienced arbitrators selected pursuant to the procedures of the American
Arbitration Association (the "AAA") and, once chosen, the third arbitrator's
decision shall be final, binding and conclusive upon the parties to this
Agreement. Each party shall be responsible for the fees and expenses of its
arbitrator and the fees and expenses of the third arbitrator shall be shared
equally by the parties. The terms of the commercial arbitration rules of AAA
shall apply except to the extent they conflict with the provisions of this
paragraph. It is further agreed that any of the parties hereto may petition the
United States District Court for the Western District of Texas, San Antonio
Division, for a judgment to be entered upon any award entered through such
arbitration proceedings.
ARTICLE VII
MISCELLANEOUS
7.1 COMPLETE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and cancels and supersedes all other agreements between the
parties which may have related to the subject matter contained in this
Agreement.
7.2 MODIFICATION; AMENDMENT; WAIVER. No modification, amendment or waiver
of any provisions of this Agreement shall be effective unless approved in
writing by both parties. The failure at any time to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of either party thereafter to enforce
each and every provision hereof in accordance with its terms.
7.3 GOVERNING LAW; JURISDICTION. This Agreement and performance under it,
and all proceedings that may ensue from its breach, shall be construed in
accordance with and under the laws of the State of Texas.
7.4 EMPLOYEE'S REPRESENTATIONS. Employee represents and warrants that he
is free to enter in to this Agreement and to perform each of the terms and
covenants of it. Employee represents and warrants that he is not restricted or
prohibited, contractually or otherwise, from entering into and performing this
Agreement, and that his execution and performance of this Agreement is not a
violation or breach of any other agreement between Employee and any other person
or entity.
7.5 COMPANY'S REPRESENTATIONS. Company represents and warrants that it is
free to enter into this Agreement and to perform each of the terms and covenants
of it. Company representat and warrants that it is not restricted or prohibited,
contractually or otherwise, from entering into and performing this Agreement and
that its execution and performance of this Agreement is not a violation or
breach of any other agreements between Company and any other person or entity.
The Company represents and warrants that this Agreement is a legal, valid and
binding agreement of the Company, enforceable in accordance with its terms.
7.6 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
7.7 ASSIGNMENT. The rights and obligations of the parties under this
Agreement shall be binding upon and inure to the benefit of their respective
successors, assigns, executors, administrators and heirs, provided, however,
that neither the Company nor Employee any assign any duties under this Agreement
without the prior written consent of the other.
7.8 LIMITATION. This Agreement shall not confer any right or impose any
obligation on the Company to continue the employment of Employee in any
capacity, or limit the right of the Company or Employee to terminate Employee's
employment.
7.9 ATTORNEYS' FEES AND COSTS. If any action at law or in equity is
brought to enforce or interpret the terms of this Agreement or any obligation
owing thereunder, venue will be in Bexar County, Texas and the prevailing party
shall be entitled to reasonable attorney's fees and
all costs and expenses of suit, including, without limitation, expert and
accountant fees, and such other relief which a court of competent jurisdiction
may deem appropriate.
7.10 NOTICES. All notices and other communications under this Agreement
shall be in writing and shall be given in person or by either personal delivery,
overnight delivery, or first class mail, certified or registered with return
receipt requested, with postage or delivery charges prepaid, and shall be deemed
to have been duly given when delivered personally, upon actual receipt, and on
the next business day when sent via overnight delivery, or three days after
mailing first class, certified or registered with return receipt requested, to
the respective persons named below:
If to the Company: Corporate Secretary
Billing Concepts Corp.
0000 Xxxx Xxxxx Xx.
Xxx Xxxxxxx, Xxxxx 00000
If to the Employee: Xxxxxx X. Xxxxxx, Xx.
00000 Xxxxx Xxxx
Xxx Xxxxxxx, Xxxxx 00000
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the day and year indicated above.
COMPANY: BILLING CONCEPTS CORP.
By /S/ XXX XXXXX
Name: Xxx Xxxxx
Title: Chairman, Compensation Committee
EMPLOYEE: /S/ XXXXXX X. XXXXXX, XX.
Xxxxxx X. Xxxxxx, Xx.
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Employment Agreement is entered into on February 10,
2000 between Xxxxxx X. Xxxxxx, Xx. ("Employee") and Billing Concepts Corp., a
Delaware corporation (the "Company").
WHEREAS, Employee and the Company entered into an Amended and Restated
Employment Agreement on January 25, 1999 (the "Employment Agreement"); and
WHEREAS, Employee has been granted and may hereinafter be granted options
under the Company's 1996 Employee Comprehensive Stock Plan (as amended from time
to time, the "Option Plan") to acquire shares of Common Stock, $.01 par value
("Common Stock"), of the Company;
WHEREAS, on August 21, 1996, August 25, 1997 and August 27, 1998, Employee
was granted options to purchase 300,000, 400,000 and 275,000 shares of Common
Stock at exercise prices of $8.0625, $16.844 and $8.3125 per share,
respectively, said options vesting over a three-year, four-year and four-year
period, respectively, with 106,667, 266,667 and 183,333 shares remaining
outstanding under the respective grants as of the date of this Amendment
("Out-of-the-Money Options");
WHEREAS, the Company and Employee desire to amend the Employment Agreement
whereby certain options granted to Employee under the Option Plan become fully
exercisable by Employee upon termination of the Employment Agreement under
certain circumstances.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, notwithstanding any provisions to the contrary
contained in resolutions granting or agreements governing Options heretofore or
hereafter granted to Employee under the Option Plan, in the event of termination
of the Employment Agreement under Section 4.1 thereof, TERMINATION BY THE
COMPANY WITHOUT CAUSE, Section 4.2 thereof, VOLUNTARY TERMINATION BY EMPLOYEE
FOR GOOD REASON, or Section or 4.6 thereof, TERMINATION FOLLOWING CHANGE OF
CONTROL, then, in any such event, immediately prior to the effective date of
such termination, all Out-of-the-Money Options which have not lapsed shall
become fully vested and exercisable (if not already vested and exercisable) by
Employee for the remainder of the exercise period established under the option
agreement or three (3) years following the date of termination, whichever occurs
later.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date indicated above.
COMPANY: BILLING CONCEPTS CORP.
By: /S/ XXXXXX X. XXXXXXXX
Name: XXXXXX X. XXXXXXXX
Title: CHAIRMAN, COMPENSATION COMMITTEE
EMPLOYEE: /S/ XXXXXX X. XXXXXX, XX.
Xxxxxx X. Xxxxxx, Xx.
