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EXHIBIT 10.10
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT dated as
of September 29, 1999 by and between PROTOCOL HOLDINGS, INC., a Delaware
corporation (the "Company"), and Xxxxxxx Xxxxxx (the "Executive").
W I T N E S S E T H :
WHEREAS the Company and the Executive have entered into that
certain Executive Employment Agreement dated as of June 8, 1998, as amended; and
WHEREAS the Company desires to induce the Executive to
continue his employment with the Company for the period provided in this
Agreement, and the Executive is willing to accept such continuation of
employment with the Company on a full-time basis, all in accordance with the
terms and conditions set forth below;
NOW, THEREFORE, for and in consideration of the premises
hereof and the mutual covenants contained herein, the parties hereto hereby
covenant and agree as follows:
1. Employment. (a) The Company hereby employs the Executive,
and the Executive hereby accepts such employment with the Company, for the
period set forth in Section 2 hereof, all upon the terms and conditions
hereinafter set forth.
(b) The Executive affirms and represents that he is under no
obligation to any former employer or other party that is in any way inconsistent
with, or that imposes any restriction upon, the Executive's acceptance of
employment hereunder with the Company, the employment of the Executive by the
Company, or the Executive's undertakings under this Agreement.
2. Term of Employment. Unless earlier terminated as provided
in this Agreement, the term of the Executive's employment under this Agreement
shall be for a period beginning on the date of the Initial Closing under (and as
defined in) the Recapitalization Agreement dated as of the date hereof among the
Company, BCI Growth V, L.P., Xxxxxx Xxxxx & Partners II, L.P. and the other
signatories thereto (the "Recapitalization Closing") and ending on the first
anniversary of such date (the "Initial Term"). Thereafter, this Agreement shall
be automatically renewed for successive one year periods commencing on the
anniversary date of this Agreement in each subsequent year (the Initial Term,
together with any subsequent employment period being referred to herein as the
"Employment Term"); provided, however, that either party may elect to terminate
this Agreement as of the end of the then current Employment Term, by written
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notice to such effect delivered to the other party at least 90 days prior to the
end of such Term.
3. Duties. The Executive shall be employed as Vice President,
Finance and Chief Financial Officer, or such other senior executive officer
position with a title to be determined by the President, shall faithfully
perform such duties consistent with such position and as are specified in the
Bylaws of the Company and shall also perform and discharge such other executive
employment duties and responsibilities consistent with such position as the
Board of Directors of the Company shall from time to time reasonably determine.
The Executive shall perform his duties principally at the executive offices of
the Company in Boston, Massachusetts, with such travel to such other locations
from time to time as the Board of Directors of the Company may reasonably
prescribe. Except as may otherwise be approved in advance by the Board of
Directors of the Company, and except during vacation periods and reasonable
periods of absence due to sickness, personal injury or other disability, the
Executive shall devote his full time throughout the Employment Term to the
services required of him hereunder. The Executive shall render his business
services exclusively to the Company and its subsidiaries during the Employment
Term and shall use his good faith efforts, judgment and energy to improve and
advance the business and interests of the Company and its subsidiaries in a
manner consistent with the duties of his position.
4. Salary; Bonus. (a) Salary. As compensation for the services
to be performed by the Executive hereunder during the Employment Term, the
Company shall pay the Executive a base salary at the annual rate of $190,000
(said amount, together with any increases thereto as may be determined from time
to time by the Compensation Committee of the Board of Directors of the Company
in its sole discretion, being hereinafter referred to as "Salary"). Any Salary
payable hereunder shall be paid in regular intervals in accordance with the
Company's regular payroll practices from time to time in effect.
(b) Bonus. On the date of the Recapitalization Closing, the
Executive shall be paid $70,000 in respect of the Company's existing Executive
Cash Incentive Program. Upon such payment, such program shall terminate and the
Executive shall have no further rights thereunder. Commencing with the first
fiscal quarter of 2000, the Executive shall be eligible to participate in the
new Executive Cash Incentive Program (the "New Executive Cash Incentive
Program"), the terms of which are outlined in Exhibit A hereto, which shall be
approved by the Board of Directors of the Company at its first meeting
subsequent to the Recapitalization Closing. The terms of an executive cash
incentive program for the fourth fiscal quarter of 1999 shall be proposed by the
Executive and reviewed by the Board of Directors at its first meeting subsequent
to the Recapitalization Closing. In addition, the Executive shall be eligible to
receive bonus compensation ("Bonus") from the Company in respect of each fiscal
year occurring during the Employment Term in amounts, if any, as may be
determined by the
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Compensation Committee of the Board of Directors of the Company in its sole
discretion on the basis of performance-based criteria to be established from
time to time by such Committee and that are reasonably acceptable to the
Executive.
(c) Withholding, etc. The payment of any Salary and Bonus
under this Section 4, and the payment of any severance pay pursuant to Section 7
hereof, shall be subject to applicable withholding and payroll taxes and such
other deductions as may be required under the Company's employee benefit plans.
(d) Shares and Options. Simultaneously with the
Recapitalization Closing all shares of the Company's common stock issued to the
Executive pursuant to the Company's 1998 Stock Option Plan, the Stock Grant
Agreement executed by the execution pursuant thereto and otherwise shall vest in
the Executive free and clear of any and all rights of the Company with respect
thereto, except as otherwise specifically set forth in the Stockholders
Agreement dated as of the Recapitalization Closing among the Company and its
stockholders named therein.
(e) The Company will adopt its 2000 Stock Option Plan, a copy
of which has been delivered to the Executive pursuant to which the Company will
reserve for issuance of options with the terms set forth in Exhibit B hereto
covering up to 785,000 of such shares to the persons set forth on Schedule I
hereto.
5. Other Benefits. During the Employment Term, the Executive
shall:
(i) be eligible to participate in employee fringe
benefits and pension and/or profit sharing plans that may be provided
by the Company for its senior executive employees in accordance with
the provisions of any such plans, as the same may be in effect from
time to time;
(ii) be eligible to participate in any medical and
health plans or other employee welfare benefit plans that may be
provided by the Company for its senior executive employees in
accordance with the provisions of any such plans, as the same may be in
effect from time to time;
(iii) be entitled to twenty (20) paid vacation days in
each calendar year (subject to expiration in accordance with Company
policy in effect from time to time) and also be entitled to all paid
holidays given by the Company to its senior executive officers;
(iv) be entitled to sick leave, sick pay and
disability benefits in accordance with any Company policy that may be
applicable to senior executive employees from time to time; and
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(v) be entitled to reimbursement for all reasonable
out-of-pocket business expenses incurred by the Executive in the
performance of his duties hereunder (including, without limitation,
business travel and entertainment expenses) in accordance with Company
policy that may be applicable to senior executive employees from time
to time.
6. Confidential Information. The Executive hereby covenants,
agrees and acknowledges as follows:
(a) The Executive has and will have access to and will
participate in the development of or be acquainted with confidential or
proprietary information and trade secrets related to the business of
the Company and any other present or future subsidiaries or affiliates
of the Company (collectively with the Company, the "Company Group"),
including but not limited to the following: (i) customer lists, the
identity, lists or descriptions of new or prospective customers,
financial statements, cost reports or other financial information,
contract proposals or bidding information, business plans, training and
operations methods and manuals, personnel records, software programs,
reports and correspondence, and management systems, policies or
procedures, including related forms and manuals, (ii) information
pertaining to future developments, such as future marketing or
acquisition plans or ideas, and (iii) all other tangible and intangible
property that is used in the business and operations of the Company
Group but not made public by the Company Group. The information and
trade secrets relating to the business of the Company Group described
above in this paragraph (a) are hereinafter referred to collectively as
the "Confidential Information"; provided that the term Confidential
Information shall not include any information (w) that is or becomes
generally publicly available (other than as a result of violation of
this Agreement by the Executive), (x) that the Executive receives or
received on a nonconfidential basis from a source (other than the
Company Group or its representatives) that is not actually known by him
to be bound by an obligation of secrecy or confidentiality to any
member of the Company Group, (y) that is the personal property of the
Executive, including, but not limited to, phone lists of the Executive
or (z) that has been or is independently acquired or developed by the
Executive without violating any of the terms of this Agreement (other
than any such information developed or acquired by the Executive in
connection with his employment by the Company).
(b) The Executive shall not disclose, use or make known for
his or another's benefit any Confidential Information or use such
Confidential Information in any way except as is in the best interests
of the Company Group in the performance of the Executive's duties under
this Agreement. The Executive may disclose Confidential Information
when required by a third party and applicable law or judicial process,
but (to the extent reasonably practicable) only
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after providing (i) prompt notice to the Company of any third party's
request for such information, which notice shall include the
Executive's intent with respect to such request, and (ii) sufficient
opportunity for the Company to challenge or limit the scope of the
disclosure on behalf of the Company Group, the Executive or both.
(c) The Executive acknowledges and agrees that a remedy at law
for any breach of the provisions of this Section 6 would be inadequate
and, therefore, agrees that the Company shall be entitled to injunctive
relief in addition to any other available rights and remedies in case
of any such breach; provided, however, that nothing contained herein
shall be construed as prohibiting the Company from pursuing any other
rights and remedies available for any such breach.
(d) The Executive agrees that upon termination of his
employment with the Company for any reason, the Executive shall
forthwith return to the Company all Confidential Information in
whatever form maintained (including, without limitation, computer disks
and other electronic media).
(e) The obligations of the Executive under this Section 6
shall, except as otherwise provided herein, survive the termination of
the Employment Term and the expiration or termination of this Agreement
until two years from the date of his termination.
7. Termination. (a) The Executive's employment hereunder shall
be terminated upon the occurrence of any of the following:
(i) death of the Executive;
(ii) the Executive's inability to perform his duties
on account of disability or incapacity for a period of 180 or more
days, whether or not consecutive, within any period of twelve
consecutive months;
(iii) a Termination For Cause (as defined herein);
(iv) the Company giving written notice, at any time,
to the Executive that the Executive's employment is being terminated
other than pursuant to clause (ii) or (iii) above;
(v) a termination of the Executive's employment
hereunder by the Executive for Good Reason (as defined herein); or
(vi) a termination of the Executive's employment
hereunder by the Executive at any time other than for Good Reason.
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(b) In the event that the Executive's employment is terminated
pursuant to paragraph (a)(iv) or (a)(v) above or in the event that the Company
shall, at any time, elect not to renew this Agreement, then for the remainder of
the then current Employment Term plus an additional 12-month period following
the Employment Term the Company shall (i) pay (as severance or liquidated
damages or both) the Salary that would have otherwise been payable to the
Executive during such period and (ii) maintain for the benefit of the Executive
those medical and health benefits contemplated by clause (ii) of Section 5 of
this Agreement. One-half of the payments described in clause (i) of this
paragraph (b) shall be made in a lump sum on the date that the Executive's
employment is terminated, and one-half of such payments shall be made in equal
installments during the Non-Compete Period (as defined below) in accordance with
the Company's regular payroll policies. In addition, in the event of such
termination, the Company shall pay to the Executive any Bonus and any amounts
earned under the New Executive Cash Incentive Program that would have been
payable to the Executive through the date of termination of the Executive's
employment in accordance with the Company's regular payroll practices.
(c) Notwithstanding anything to the contrary expressed or
implied herein, except as required by applicable law and except as set forth in
Section 7(b) above, the Company (and its affiliates) shall not be obligated to
make any payments to the Executive or on his behalf of whatever kind or nature
by reason of the Executive's cessation of employment (including, without
limitation, by reason of a Termination For Cause), other than (i) such amounts,
if any, of his Salary as shall have accrued and remained unpaid as of the date
of said cessation and (ii) such other amounts, if any, which may be then
otherwise payable to the Executive pursuant to the terms of the Company's
benefits plans or pursuant to clause (v) of Section 5 above.
(d) No interest shall accrue on or be paid with respect to any
portion of any payments hereunder if paid when due.
For purposes of this Agreement, the term "Termination for
Cause" shall mean the termination of the Executive's employment hereunder by the
Company determined in good faith by a majority of the Board of Directors at any
time as a result of any of the following with respect to the Executive: (a) a
breach of trust, including without limitation, acts of moral turpitude, theft,
embezzlement and self-dealing, (b) the disclosure of confidential information
which results (or can reasonably be expected to result) in material harm to the
Company, or (c) willful misconduct which results (or can reasonably be expected
to result) in material harm to the Company.
For purposes of this Agreement, the term termination for "Good
Reason" shall mean a termination of the Executive's employment with the Company
as a result of (i) requiring the Executive to engage in any illegal act, (ii)
relocation of the Executive's principal place of performance other than to
Boston, Massachusetts, without his prior
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written consent, (iii) a material adverse change in any of the Executive's
titles, positions, duties or compensation (including without limitation, Salary,
Bonus or stock options or awards), or (iv) a material failure by the Company to
comply with the terms of this Agreement. Notwithstanding the foregoing, a change
in the Executive's title, positions and/or duties from Vice President, Finance
and Chief Financial Officer to another position pursuant to Section 3 hereof
shall not permit the Executive to terminate his employment with the Company for
Good Reason.
8. Right and Option of the Company to Repurchase Shares and
Options Upon the Termination of Employment. (a) In the event that the
Executive's employment is terminated for any reason (including, without
limitation, election by the Company or the Executive not to renew this
Agreement), the Company shall have the right, exercisable as set forth in
Section 8(d), at any time on or after the date of such termination and prior to
30 days after such termination, to purchase from the Executive all or any part
of the shares of capital stock or options to purchase capital stock of the
Company held by the Executive as of the date his employment so ceases at a
purchase price equal to: (i) for the shares, the Fair Market Value (as defined
below) of such shares as of the date the Executive's employment so ceases and
(ii) for the options to purchase capital stock, an amount equal to the Fair
Market Value of the shares subject thereto as of the date the Executive's
employment so ceases less the aggregate exercise price thereof.
(b) In the event that the Executive's employment is terminated
for any reason (including, without limitation, election by the Company not to
renew this Agreement) other than pursuant to Section 7(a)(iii) or (vi), the
Executive shall have the right, exercisable as set forth in Section 8(d), at any
time on or after the date of such termination and prior to 30 days after such
termination in accordance with Section 8(d) below, to require the Company to
purchase from the Executive all or any part of the shares of capital stock or
options to purchase capital stock of the Company held by the Executive as of the
date his employment so ceases at a purchase price equal to: (i) for the shares,
the Fair Market Value (as defined below) of such shares as of the date the
Executive's employment so ceases and (ii) for the options to purchase capital
stock, an amount equal to the Fair Market Value of the shares subject thereto as
of the date the Executive's employment so ceases less the aggregate exercise
price thereof.
(c) For the purposes of this Agreement, the "Fair Market
Value" of a share of capital stock of the Company as of any date shall mean the
value of a share of capital stock as determined in good faith by mutual
agreement of the Board of Directors of the Company and the Executive based on
(X) the most recently completed arm's-length sale for cash by the Company to a
third party of shares of the same class of capital stock, the closing of which
shall have occurred within the three months preceding such date, or (Y) in the
case of the Company's Common Stock, if no such transaction shall have occurred
within such three-month period, the exercise price of options granted pursuant
to the Company's option plan within the three months preceding such date. If the
Executive
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does not agree to the amount of such valuation with respect to any of his shares
of capital stock, the value will be determined by an independent investment bank
selected by the Company (at the Company's expense) and reasonably satisfactory
to the Executive. The Executive may request a second appraisal by an independent
investment bank selected by the Executive and reasonably acceptable to the
Company. In the event that (i) the valuation of the second appraisal is equal to
or less than the valuation of the first appraisal, the expenses of such
appraisal shall be borne by the Executive, (ii) the valuation of the second
appraisal is greater than the valuation of the first appraisal but equal to or
less than 120% of the valuation of the first appraisal, the expenses of such
appraisal shall be borne equally by the Company and the Executive, and (iii) the
valuation of the second appraisal is greater than 120% of the valuation of the
first appraisal, the expenses of such appraisal shall be borne by the Company.
In the event that the two banks cannot agree on the fair market value, such
value shall be determined by taking the average of the two valuations of the
investment banks. The value of a share of capital stock of the Company shall
assume that all shares of outstanding capital stock of the Company are
fully-converted into shares of Common Stock without applying any premium with
respect to preferred stock or discount with respect to Common Stock. Any
investment bank hired pursuant to this paragraph (c) shall be given full access
to the Company in making its valuation, and both the Company and the Executive
shall be involved in all communications with such banks.
(d) The Company or the Executive may exercise the right and
option provided in Section 8(a) or (b) above by giving written notice of such
election within the time period provided in such Section 8(a) and (b), as the
case may be. The closing for the purchase by the Company of any shares or
options pursuant to the provisions of said Section 8(a) or (b) shall take place
at the offices of the Company on the date specified in such written notice,
which date shall be a business day not later than 10 days after the date on
which the Fair Market Value is finally determined. At such closing, the
Executive will deliver or cause to be delivered stock certificate(s) or option
agreements and option exercise forms representing the shares or options to be
sold, duly endorsed for transfer and free and clear of any and all liens,
claims, options, charges, security interests and other encumbrances of whatever
nature (collectively, "Encumbrances"), against payment of the applicable
purchase price therefor. Such purchase price shall be payable to the Executive
by wire transfer of immediately available funds to an account designated by the
Executive. At such closing the Executive shall also represent to the Company
that such shares or options, as the case may be, are free and clear of any and
all Encumbrances. To the extent the Company or the Executive fails to duly
exercise such right and option under Section 8(a) or (b) to purchase any shares
or options, all shares or options owned by the Executive shall thereupon cease
to be subject to the provisions of this Section 8.
9. Non-Assignability. (a) Neither this Agreement nor any right
or interest hereunder shall be assignable by the Executive or his beneficiaries
or legal representatives
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without the Company's prior written consent; provided, however, that nothing in
this Section 9(a) shall preclude the Executive from designating a beneficiary to
receive any benefit payable hereunder upon his death or incapacity or the
transfer of any such benefits by the laws of intestate descent.
(b) Except as permitted by Section 9(a) above or as required
by law, no right to receive payments under this Agreement shall be subject to
anticipation, commutation, alienation, sale, assignment, encumbrance, charge,
pledge, or hypothecation or to exclusion, attachment, levy or similar process or
to assignment by operation of law, and any attempt, voluntary or involuntary, to
effect any such action shall be null, void and of no effect.
10. Restrictive Covenants.
(a) Non-Competition. During the Non-Compete Period (as defined
herein), the Executive will not, directly or indirectly (as a director, officer,
executive employee, manager, consultant, independent contractor, advisor or
otherwise), engage in competition with the Company, or own any interest in,
perform any services for, participate in or be connected with any business or
organization which engages in activities in competition with the Company;
provided, however, that the provisions of this Section 10(a) shall not be deemed
to prohibit the Executive's ownership, whether directly or indirectly, of (x)
not more than 2% of the total shares of all classes of stock outstanding of any
publicly held company or (y) not more than 1% of the aggregate outstanding
equity interests of any other business entity.
(b) Non-Solicitation. During the applicable Non-Compete
Period, the Executive will not directly or indirectly induce or attempt to
induce any employee of the Company to leave the employ of the Company or such
subsidiary or affiliate, or in any way interfere with the relationship between
the Company and any employee thereof; provided, however, that if an individual
is not an employee of the Company at any time during the Employment Term, the
terms of this paragraph (b) shall not apply with respect to such individual.
For purposes hereof, the "Non-Compete Period" shall mean the
Employment Term plus (x) 12 months from the date of termination in the event of
a Termination For Cause, (y) any period in respect of which payments pursuant to
Section 7(b) hereof are required to be, and are, paid in full or (z) the greater
of 24 months or the balance of the current Employment Term (without giving
effect to the termination of the Employee's employment hereunder or to any
extensions thereof), in the event of a resignation pursuant to Section 7(a)(vi).
(c) Injunctive Relief. The Executive acknowledges and agrees
that a remedy at law for any breach or threatened breach of the provisions of
Section 6 or 10 hereof would be inadequate and, therefore, agrees that the
Company and any of its
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subsidiaries or affiliates shall be entitled to injunctive relief in addition to
any other available rights and remedies in cases of any such breach or
threatened breach; provided, however, that nothing contained herein shall be
construed as prohibiting the Company or any of its affiliates from pursuing any
other rights and remedies available for any such breach or threatened breach.
11. Binding Effect. Without limiting or diminishing the effect
of Section 8 hereof, this Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, successors, legal
representatives and assigns.
12. Notices. All notices which are required or may be given
pursuant to the terms of this Agreement shall be in writing and shall be
sufficient in all respects if given in writing and (i) delivered personally,
(ii) mailed by certified or registered mail, return receipt requested and
postage prepaid, (iii) sent via a nationally recognized overnight courier or
(iv) sent via facsimile confirmed in writing to the recipient, if to the Company
at the Company's principal place of business, and if to the Executive, at his
home address most recently filed with the Company, or to such other address or
addresses as either party shall have designated in writing to the other party
hereto.
13. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Massachusetts.
14. Severability. The Executive agrees that in the event that
any court of competent jurisdiction shall finally hold that any provision of
Section 6 or 10 hereof is void or constitutes an unreasonable restriction
against the Executive, the provisions of such Section 6 or 10 shall not be
rendered void but shall apply with respect to such extent as such court may
judicially determine constitutes a reasonable restriction under the
circumstances. If any part of this Agreement other than Section 6 or 10 is held
by a court of competent jurisdiction to be invalid, illegible or incapable of
being enforced in whole or in part by reason of any rule of law or public
policy, such part shall be deemed to be severed from the remainder of this
Agreement for the purpose only of the particular legal proceedings in question
and all other covenants and provisions of this Agreement shall in every other
respect continue in full force and effect and no covenant or provision shall be
deemed dependent upon any other covenant or provision.
15. Waiver. Failure to insist upon strict compliance with any
of the terms, covenants or conditions hereof shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
16. Entire Agreement; Modifications. This Agreement
constitutes the entire and final expression of the agreement of the parties with
respect to the subject matter hereof and supercedes all prior agreements, oral
and written, between the parties
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hereto with respect to the subject matter hereof. This Agreement may be modified
or amended only by an instrument in writing signed by both parties hereto.
17. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
18. Recapitalization Closing. In the event that the
Recapitalization Closing shall not occur, this Agreement shall be void ab
initio.
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IN WITNESS WHEREOF, the Company and the Executive have duly
executed and delivered this Agreement as of the day and year first above
written.
PROTOCOL HOLDINGS, INC.
By /s/ Xxxxxxx X. XxXxxx
---------------------------------
Name: Xxxxxxx X. XxXxxx
Title: President/CEO
/s/ Xxxxxxx Xxxxxx
---------------------------------
Xxxxxxx Xxxxxx
