Exhibit 10.26
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "AGREEMENT") made and entered into as of the 7th
day of February, 2000, by and among NATIONWIDE CREDIT, INC. ("EMPLOYER") and
Xxxxx Xxxxx who resides at 0000 Xxxxx Xxxxxx Xxxx, Xxxxxxx, XX 00000
("EXECUTIVE").
W I T N E S S E T H:
WHEREAS, Employer desires to employ Executive and Executive desires to
accept employment with Employer upon the terms and conditions hereinafter set
forth;
NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter set forth, and intending to be legally bound hereby, it is hereby
agreed as follows:
1. EMPLOYMENT TERM. Employer agrees to employ Executive, and Executive
agrees to be so employed, in the capacity of Senior Vice President, Healthcare
of Employer, for a term commencing on the date hereof and ending on the third
anniversary of the date hereof (the "INITIAL TERM"); PROVIDED, HOWEVER, that,
notwithstanding anything to the contrary set forth in this Agreement, this
Agreement may be earlier terminated pursuant to Section 7 hereof. The term of
this Agreement will automatically extend past the Initial Term for succeeding
periods of one year each unless either party in its discretion shall terminate
this Agreement as of the end of the Initial Term, or as of the end of any
subsequent one-year period (in either case, the "TERMINATION DATE") by
delivering notice to the other party specifying the applicable Termination Date
not later than one hundred and twenty (120) days prior to the date so specified.
2. TIME AND EFFORTS; PLACE OF PERFORMANCE. Executive shall diligently and
conscientiously devote her full business time, attention, energy, skill and best
efforts to the business of Employer and the discharge of her duties hereunder.
Executive's duties under this Agreement shall be to serve as Vice President,
Healthcare of Employer, with the responsibilities, rights, authority and duties
customarily pertaining to such office as may be established from time to time by
or under the direction of the Board of Directors of Employer (the "BOARD") and
Executive shall report to the Chief Executive Officer. In the event Executive is
elected to the Board, Executive shall serve as a director without further
compensation, other than as provided in this Agreement. Executive shall also act
as an officer and/or director of such subsidiaries of Employer as may be
designated by the Board, commensurate with Executive's office, all without
further compensation other than as provided in this Agreement.
3. BASE SALARY. In partial consideration of the services of Executive
during the term of this Agreement, Employer shall pay to Executive a base salary
compensation at an annual rate of $200,000 (the "BASE SALARY"), in equal
installments in accordance with the Employer's payroll practices in effect from
time to time for
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executive officers, but in no event less frequently than monthly. The Base
Salary may be adjusted upward annually in the discretion of the Board, or an
authorized committee thereof.
4. BONUS. (a) After the Company has received its audited financial
statements for each year end during the term of this Agreement, Executive will
have the potential to receive an annual bonus for such year as set forth in this
Section 4(a). For the calendar year 2000, Executive shall receive a bonus equal
to $50,000. For the calendar year 2001, Executive shall receive a bonus equal to
4% of Direct Profits (as defined below), if any, for such calendar year. For the
calendar year 2002, Executive shall receive a bonus equal to 4% of the amount,
if any, by which Direct Profits for such calendar year exceeds $1,000,000. For
years after 2002, the amount of the potential bonus will be set by the Board of
Directors in good faith, based upon qualitative criteria and the attainment of
quantitative financial goals established annually by the Board of Directors, and
provided to Executive prior to commencement of the year, provided that the
potential bonus amount for each subsequent year will be not less than the
potential bonus amount for the immediately preceding year, so long as the
budgeted Direct Profit levels for the upcoming year are greater than the Direct
Profit levels for the immediately preceding year. Executive's bonus, to the
extent earned, shall be payable no later than thirty (30) days after the Board
has received the Company's audited financial statements for the applicable year.
(b) For purposes hereof, "DIRECT PROFITS" means contributions less
directly attributable overheads (comprised of without limitation selling costs
and specialist information technology costs) for the Employer's Healthcare
Division. Direct Profits shall be determined based on the audited financial
statements of the Company. Notwithstanding the provisions of Section 4(a), the
Direct Profit targets for any bonus period shall be subject to modification in
the reasonable discretion of the Board in the event of any material acquisitions
or dispositions during the applicable period.
(c) In the event Executive's employment is terminated by reason of
Cause (as herein defined) or the Executive's resignation, no bonus for the
calendar year in which such termination or resignation occurs shall be payable
to Executive. If Executive's employment terminates for any other reason
(including expiration of this Agreement), Executive's bonus for the year in
which termination occurs shall be payable to the extent earned as determined in
the reasonable discretion of the Board, but shall be prorated based upon the
number of days in such year that Executive was employed by Employer.
5. BENEFITS. Executive shall be eligible to participate in all employee
benefit programs of Employer offered from time to time during the term of
Executive's employment hereunder by Employer to employees or executives of
Executive's rank, to the extent that Executive qualifies under the eligibility
provisions of such plan or plans, in each case consistent with Employer's
current practice as approved by the Board prior to the date hereof, and provided
that Employer shall not be required to incur expenses in connection with any
such benefits in excess of the expenses for such benefits incurred in accordance
with such current practice.
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6. EXPENSES. To the extent that Executive's reasonable and necessary
expenditures for travel, entertainment and similar items made in furtherance of
Executive's duties under this Agreement comply with Employer's expense
reimbursement policy, are deductible by Employer for federal income tax purposes
pursuant to the Internal Revenue Code of 1986, as amended, and are documented
and substantiated by Executive as required by the Internal Revenue Service and
the policies of Employer, Employer shall reimburse the Executive for such
expenditures.
7. TERMINATION.
(a) Executive's employment under this Agreement may be terminated by
Employer at any time for Cause. Upon termination of Executive's employment for
Cause, upon payment by Employer of any Base Salary that has accrued and is
unpaid to the date of such termination, Employer shall have no further liability
to Executive for any additional amounts including, without limitation, any Base
Salary or bonus. "CAUSE" as used in this Agreement shall mean (i) the gross
negligence or willful misconduct of Executive in carrying out her obligations
and duties, (ii) any other breach by Executive of any other provision of this
Agreement which has not been cured within five (5) days after delivery of notice
by Employer to Executive of such breach (or such shorter period if such breach
adversely affects Employer's ability to conduct debt collection activities in
any jurisdiction), including, without limitation, Executive's insubordination,
chronic absences from work or alcoholism or drug dependency, (iii) Executive
shall have committed an act of fraud, theft or dishonesty against Employer or
any of its subsidiary or affiliated companies, or (iv) Executive shall be
indicted for or convicted of (or plead NOLO CONTENDRE to) any felony or be
convicted of (or plead NOLO CONTENDRE to) any misdemeanor involving fraud,
dishonesty or moral turpitude or any other misdemeanor that might, in the
reasonable opinion of the Board, adversely affect Executive's ability to perform
Executive's obligations or duties to Employer in any material respect or
adversely affect Employer's ability to conduct debt collection activities in any
jurisdiction.
(b) Subject to the terms of subsection (c) hereof, Employer may
terminate Executive's employment hereunder at any time other than for Cause (as
defined in Section 7(a) above) upon notice to Executive. In the event of any
such termination, in consideration for the obligations of Executive under
Section 8 hereof, the Employer shall pay to Executive a severance benefit (the
"SEVERANCE BENEFIT"), payable over a period of 12 months consistent with
Employer's past payroll practices, in an amount equal to 12 months of Base
Salary at the then current rate LESS the amount of any compensation, income or
benefits earned or paid to Executive as an employee or consultant from an
employer or company other than Employer during the last six (6) months of the
period during which the Severance Benefit shall be payable as provided above. In
the event that there is (i) a material change in Executive's duties or
responsibilities, or a material change in Executive's reporting relationships,
either of which results in or reflects a material diminution of the scope or
importance of Executive's duties or responsibilities, or (ii) a material
reduction in the level of benefits offered under the Employer's employee benefit
plans (other than any company-wide reduction in the level of benefits that is
applicable to all employees or executives of
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Executive's rank), which are made available to Executive during the term of
Executive's employment, including but not limited to, annual and long-term
incentive and stock-based plans and programs, which is not cured within a period
of ten (10) days following notice to Employer by Executive, then Executive may
by notice to the Board deem a constructive termination to have occurred,
whereupon Executive shall be entitled to the compensation set forth herein as if
Executive had been terminated without Cause as of the date of such notice to the
Board. Upon termination of Executive under this Section 7(b) for any reason
(other than as a result of death), Executive shall in good faith seek to obtain
alternative employment and to otherwise mitigate the amount of Severance Benefit
payable by Employer.
(c) If Executive dies, this Agreement shall automatically terminate. If
Executive becomes permanently disabled during the term of this Agreement, then
at Employer's option, this Agreement will immediately terminate. In each such
case, upon payment by Employer of any Base Salary that has accrued and is unpaid
to the date of such termination, Employer shall have no further obligations to
Executive, her spouse or estate. Executive shall be deemed to be permanently
disabled if, during the term of this Agreement, she shall have been unable or
unwilling or shall have failed to perform her duties under this Agreement
(whether due to ill health, physical or mental incapacity or disability, or for
causes beyond her control) for a period of one-hundred and eighty (180) days,
whether consecutive or not. Any refusal by Executive to submit to a medical
examination for the purpose of certifying disability under this Section 7(c)
shall be deemed to constitute conclusive evidence of Executive's permanent
disability. Upon receipt of certifications from two physicians that the
Executive's disability is more likely than not to continue for a continuous
period of one-hundred and eighty (180) days or for shorter periods aggregating
one-hundred and eighty (180) days, Employer may immediately terminate this
Agreement without waiting for accrual of such one-hundred and eighty (180) day
period. In the event of Executive's death during the term of this Agreement, any
accrued and unpaid compensation due to Executive shall be paid to her estate.
(d) Subject to the terms of subsections (a) and (c) hereof, payment of
the Severance Benefit shall be Executive's sole remedy in the event of the
Employer's termination of this Agreement for any reason. Executive will
cooperate in order to allow Employer to purchase disability insurance regarding
Executive in order to fund its obligation hereunder.
(e) The terms of Sections 8 and 9 of this Agreement shall survive and
be binding upon Executive upon the termination of this Agreement.
(f) If Executive unilaterally terminates her employment with Employer,
other than under the conditions set forth in Section 7(b) hereof, during the
term of this Agreement, Employer shall have no further obligation to make any
payments under this Agreement and Executive shall forfeit any right to such
payments.
8. RESTRICTIVE COVENANTS. (a) In consideration of Employer's grant of
options to purchase shares of common stock of NCI Acquisition Corporation
pursuant
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to the NCI Acquisition Corporation's 1997 Management Performance Option Plan to
Executive and its covenant to pay, pursuant to the terms of Section 7, a
Severance Benefit, without prior written consent of the Board, Executive agrees
that she will not for a period of twelve (12) months (except in the case of
clause (iii) below, which will continue for a period of eighteen (18) months)
following the termination of Executive's employment with Employer for any reason
whatsoever (or to such lesser extent and for such lesser period as may be deemed
enforceable by a court of competent jurisdiction, it being the intention of the
parties that this Section 8 shall be so enforced): (i) directly or indirectly
engage, participate or make any financial investment in or become employed by or
render any services to or for any person or company in competition with the
credit reporting, collection or accounts receivable management business
conducted by Employer or any of its subsidiaries, or any similar business (the
"BUSINESS"), within any area in which Employer is doing business at such time
(whether as an employee, independent contractor, five (5%) percent or greater
owner, partner, lender, stockholder or otherwise); (ii) directly or indirectly
raid, entice, induce, solicit, canvass, or accept any business (of the type
conducted by Employer) for any other person or company from any past, present or
future (as defined below) customer of Employer; (iii) directly or indirectly
raid, entice, induce or attempt to cause any current or future (as defined
below) employee or other advisor of Employer to terminate her employment by or
engagement with Employer; (iv) directly or indirectly request any present or
future ("FUTURE", as used herein, shall mean at or prior to the time of
termination of Executive's employment) entities with whom Employer has business
relationships to curtail or cancel their business with Employer or (v) directly
or indirectly authorize or assist any other person or company in taking any of
the foregoing actions.
(b) Executive acknowledges and agrees that during the course of her
performance of services for the Employer she will acquire knowledge with respect
to information, technology or other matters which the Employer maintains and
preserves on a confidential basis concerning the Employer's business operations,
including, by way of illustration, such information concerning the Employer's
trade secrets, business and financial methods or practices, plans, pricing,
customer, vendor and sales information and other confidential or proprietary
information and any other information, documents or materials owned, developed
or possessed by the Employer, the confidentiality of which the Employer takes
reasonable steps to protect (any and all of which being hereinafter referred to
as "CONFIDENTIAL INFORMATION").
(c) Executive agrees that she will not, while she is employed by the
Employer or at any time thereafter, divulge to any person, directly or
indirectly, except to the Employer or its directors, officers and agents as
reasonably required in connection with her duties on behalf of the Employer
during her employment, or use the Confidential Information in any manner or for
any purpose in contravention of the Employer's policies or procedures,
inconsistent with the Employer's measures to protect its interest therein or
otherwise to the detriment of the Employer. Executive further agrees that she
will not, at any time after her employment with the Employer has ended, divulge
to any person or utilize for commercial or any other purpose not authorized in
writing by the Employer, directly or indirectly, any Confidential Information.
Executive further agrees that, if Executive's relationship with the Employer is
terminated (for
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whatever reason) she shall not take with her but will leave with the Employer
all records, papers and computer data and any copies thereof relating to the
Confidential Information (or if such papers, records, computer data or copies
are not on the premises of the Employer, Executive agrees to return such papers,
records and computer data as soon as practicable after her termination).
Executive acknowledges that all such papers, records, computer data or copies
thereof, are and remain the property of Employer.
(d) Executive acknowledges that (i) the Confidential Information is
commercially and competitively valuable to the Employer; (ii) the unauthorized
use or disclosure of the Confidential Information would cause irreparable harm
to Employer; (iii) the Employer has taken and is taking all reasonable measures
to protect its legitimate interest in its Confidential Information, including,
without limitation, affirmative action to safeguard the confidentiality of such
Confidential Information; (iv) the restrictions on the activities in which
Executive may engage set forth in this Agreement, and the periods of time for
which such restrictions apply, are reasonably necessary in order to protect the
Employer's legitimate interests in its Confidential Information; and (v) nothing
herein shall prohibit the Employer from pursuing any remedies, whether in law or
equity, available to the Employer for breach or threatened breach of this
Agreement, including the recovery of damages from Executive.
(e) For the purposes of this Section 8, the term "Employer" shall be
deemed to include Employer and all of its subsidiaries engaged in the Business.
9. INVENTIONS. All inventions, discoveries, improvements, processes,
formulae and data relating to Employer's business that Executive may make,
conceive or learn during the term of her employment by the Employer (whether
before, during or after the term of this Agreement, whether during working hours
or otherwise) shall be the exclusive property of Employer. Executive agrees to
make prompt disclosure to the Board of all such inventions, etc., and to do all
things necessary or useful to assist Employer in securing their full enjoyment
and protection.
10. NO CONFLICTS. Executive represents and warrants that the execution,
delivery and performance of this Agreement by Executive will not violate and
agreement, undertaking or covenant to which Executive is party or is otherwise
bound.
11. NOTICES. Any notice given hereunder shall be in writing and delivered
or mailed by certified mail or overnight courier service (with proof of
delivery) and addressed to the appropriate party at the address set forth below
or at such other address as the party shall designate from time to time in a
notice:
If to Employer:
Nationwide Credit, Inc.
0000 Xxxxxx Xxxx
Xxxxxxxx 000
Xxxxxxxx, XX 00000
Attention: Chief Executive Officer
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If to Executive:
Xxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
12. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon Employer, its successors and assigns. Executive acknowledges that
these services are unique and personal. Accordingly, Executive may not assign
any of her rights or delegate any of her duties or obligations under this
Agreement.
13. WAIVER. Failure to insist in any one or more instances on strict
compliance with the terms of this Agreement shall not be deemed a waiver. Waiver
of a breach of any provision of this Agreement shall not be construed as a
waiver of any subsequent breach.
14. GOVERNING LAW; INJUNCTIVE RELIEF. This Agreement is made and delivered
in, and shall be construed in accordance with the substantive laws of, the State
of New York and the United States of America without regard to conflict of law
principles. Executive acknowledges that the services to be rendered by her are
of a special, unique and extraordinary character and, in connection with such
services, Executive will have access to confidential information vital to
Employer's and its subsidiary and affiliated companies' businesses. By reason of
this, Executive consents and agrees that if she violates any of the provisions
of this Agreement, Employer and its subsidiary and affiliated companies would
sustain irreparable harm and, therefore, in addition to any other remedies which
Employer may have under this Agreement or otherwise, Employer shall be entitled
to an injunction from any court of competent jurisdiction restraining Employer
from committing or continuing any such violation of this Agreement.
15. SEVERABILITY. In the event that any provision of this Agreement shall
be determined to be invalid by a court of competent jurisdiction, such
determination shall in no way affect the validity or enforceability of any other
provisions hereof.
16. ENTIRE AGREEMENT; MISCELLANEOUS. The parties acknowledge and agree
that they are not relying on any representations, oral or written, other than
those expressly contained herein. This Agreement supersedes all proposals, oral
or written, all negotiations, conversations or discussions between the parties
and all course of dealing. All prior understandings and agreements between the
parties regarding employment matters are hereby merged in this Agreement, which
alone is the complete and exclusive statement of their understanding as to
employment. No waiver or modification of this Agreement shall be valid unless
the same shall be in writing and signed by the party sought to be charged
therewith. Time is of the essence in this Agreement and each and every provision
hereof. This is a personal services agreement; no agency, partnership, joint
venture or other joint relationship is created hereby. The parties acknowledge
that they each participated in drafting this Agreement, and there shall be not
presumption
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against any party on the ground that such party was responsible for preparing
this Agreement or any part hereof. Paragraph headings are for convenience of
reference only and are not intended to create substantive rights or obligations.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
undersigned as of the day and year first above written.
NATIONWIDE CREDIT, INC.
By: /s/ XXXXXXX XXXX
-------------------------------------
Xxxxxxx Xxxx
EXECUTIVE
/s/ XXXXX XXXXX
---------------
Xxxxx Xxxxx
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