Exhibit 10.10
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of May 19, 2000
(the "Effective Date"), is between Navigant Consulting, Inc., a Delaware
corporation (the "Company"), and Xxx X. Xxxxx (the "Executive").
RECITALS
A. The Company desires to obtain the benefits of the Executive's
knowledge, skills, and experience by employing the Executive as its Executive
Vice President and Chief Financial Officer upon the terms and subject to the
conditions of this Agreement.
B. The Executive desires to be employed by the Company in such
positions upon the terms and subject to the conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Employment. Subject to the terms and conditions of this Agreement, the
Company agrees to employ the Executive, and the Executive agrees to be employed
by the Company, for the period stated in Paragraph 2 hereof.
2. Employment Term. The term of the Executive's employment by the Company under
this Agreement will begin on July 4, 2000, and will continue, subject to earlier
termination as provided in Paragraph 7 hereof, for a rolling two-year period,
such that the remainder of the term shall always be two full years, subject to
either party being able to reduce or limit the term, by written notice provided
as set forth in Paragraph 11(b) hereof (the "Employment Term").
3. Position and Responsibilities. During the Employment Term, the Executive
agrees to serve the Company, and the Company shall employ the Executive, as its
Executive Vice President and Chief Financial Officer. During the Employment
Term, the Executive shall possess such broad powers and perform such duties and
functions as are normally incident to the positions of Executive Vice President
and Chief Financial Officer with an entity of an equivalent size and nature as
the Company.
4. Performance of Duties; Commitment of Time. During the Employment Term the
Executive shall discharge the following obligations:
(a) Except for illness, reasonable vacation periods, and reasonable
leaves of absence, the Executive shall, subject to Paragraph 4(c) hereof, devote
his best efforts and full business time, attention and skills to the business
and affairs of the Company and its subsidiaries,
affiliates and divisions, as such business and affairs now exist and as they may
be hereafter changed or added to.
(b) The Executive shall report directly and exclusively to the Chairman of
the Company's Board of Directors (the "Board"), and he shall perform all of his
duties in accordance with such reasonable directions, requests, rules and
regulations as are specified by the Chairman in connection with his employment.
(c) Nothing herein shall preclude the Executive from devoting such
reasonable time as required to serve, or to continue to serve, on the boards of
directors of, or to hold any other offices or positions in or with respect to,
other companies, organizations or entities, provided that (i) the Executive
gives prior notice to the Company of such other activities, (ii) that such other
activities do not violate Paragraph 6 hereof, and (iii) such other activities
have no material effect on the time the Executive is required to spend in
connection with the services required of him hereunder.
5. Compensation and Benefits.
(a) Base Salary. During the Employment Term, the Executive will receive an
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annual salary, payable in monthly or more frequent installments, of $350,000
subject to authorized withholding and other deductions. The annual salary will
be reviewed annually and, if appropriate, increased by the Company in the sole
discretion of the Compensation Committee of its Board. Such annual salary, as so
increased, is hereinafter referred to as the "Base Salary." In no event shall
the Executive's Base Salary be reduced below $350,000.
(b) Annual Bonus. During the Employment Term, the Executive will be
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eligible to receive an annual cash bonus based upon the Executive's and/or the
Company's achievement of annual performance goals or objectives. The bonus goals
and objectives shall be determined by the Chairman, with the concurrence of the
Executive and the Compensation and Executive Committees of the Board. The
Executive shall have a maximum bonus opportunity of 100% of Base Salary (the
"Maximum Bonus"), with a target bonus equal to 65% of the Base Salary (the
"Target Bonus"). The Executive shall receive a prorated annual bonus for the
2000 calendar year calculated at the Target Bonus rate, which prorated annual
bonus shall equal 65% of the Executive's six months of Base Salary to be
received in 2000 (i.e. 65% of $175,000); provided, however, that any prorated
bonus paid for the 2000 calendar year in accordance with this Paragraph 5(b)
shall satisfy the Company's obligation, if any, for payment of a prorated bonus
payment pursuant to Paragraph 8(a) or (b) hereof for the calendar year of the
Executive's termination of employment, in the event the Executive's employment
is terminated on or before December 31, 2000. Subject to the preceding sentence,
the Compensation Committee shall have the sole discretion to determine whether
the bonus goals and objectives have been met.
(c) Signing Bonus. As of the Effective Date, or as soon thereafter as is
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practicable, the Company shall pay the Executive a cash signing bonus of
$90,000. In addition, as of the Effective Date the Company shall grant the
Executive 10,000 shares of restricted common stock of the Company pursuant to
the Company's Long-Term Incentive Plan, and the terms and conditions of such
restricted share award shall be set forth in an award agreement between the
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Company and the Executive, which terms shall include that such shares of
restricted common stock shall vest 50% on the January 4, 2001 and the remaining
50% shall vest on July 4, 2001; provided, however, all of such shares shall
become fully vested and nonforfeitable in the event of a Change of Control prior
to the Executive's termination of employment, or termination of Executive's
employment by the Company without Cause or by the Executive for Good Reason.
(d) Long-Term Incentive Compensation. (i) As of the Effective Date, the
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Company shall grant the Executive an option (the "Option") to purchase 150,000
shares of the Company's common stock, par value $0.001 per share (the "Common
Stock"). The purchase price per share will be the closing price of the Common
Stock on the date of grant (the "Exercise Price"). The Option will be granted in
accordance with the Company's Long-Term Incentive Plan and will be subject to
the terms and conditions contained in the Stock Award Agreement to be entered
into between the Company and the Executive, which terms shall include: (i) the
Option shall have a term equal to the lesser of ten years measured from the date
of grant or the longest period permitted by the Company's Long-Term Incentive
Plan after the date of the termination of the Executive's employment with the
Company; (ii) the greatest portion of the Option shares allowable under the
Company's Long-Term Incentive Plan shall be issued as incentive stock options;
(iii) the Option shares shall vest and become exercisable as follows: 50% shall
be fully vested as of July 4, 2000; an additional 25% shall be fully vested on
January 4, 2001; and the remaining 25% shall vest on July 4, 2001; (iv) in the
event of a Change of Control prior to the Executive's termination of employment,
or the termination of Executive's employment by the Company without Cause (as
hereinafter defined) or by the Executive for Good Reason (as hereinafter
defined) the Executive shall immediately become fully vested in his entire
Option; and (v) any vested options shall remain exercisable following the
Executive's termination of employment, other than for Cause, for the longer of
(i) the greatest length of time permissible under the Company's Long-Term
Incentive Plan, as such plan exists on the Effective Date or (ii) as it may be
amended hereafter; provided, however, such exercise period shall not be less
than 90 days nor more than 60 months following the Executive's termination of
employment.
(e) Employee Benefits. During the Employment Term, the Executive will be
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entitled to receive all benefits of employment generally available to other
members of the Company's senior executive management, upon his satisfaction of
the eligibility or participation criteria therefor.
(f) Reimbursement of Business Expenses. The Company shall pay or reimburse
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the Executive, in accordance with its normal policies and practices, for all
reasonable business expenses incurred by the Executive in connection with the
performance of his obligations hereunder. The Executive shall produce accounts
and vouchers or other reasonable evidence of expenses incurred or payments made
by the Executive, all in accordance with the Company's regular procedures in
effect from time to time and in form suitable to establish the validity and
deductibility of such expenses for tax purposes.
(g) Entitlement to Perquisites. During the Employment Term, the Executive
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shall be entitled to receive those perquisites from the Company which are
generally available to other members of the Company's senior management,
including, without limitation, an automobile
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allowance of $1,000 per month, reimbursement of parking fees, and reimbursement
of dues and expenses associated with one downtown luncheon club.
(h) Legal Fees. The Company shall pay, or reimburse the Executive for, the
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legal fees and expenses of counsel to the Executive in connection with the
preparation, negotiation, execution and delivery of this Agreement, up to a
maximum of $10,000.
(i) Withholding Taxes. There shall be deducted and withheld from the
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Base Salary and all other compensation payable to the Executive during or for
the Employment Term any and all amounts required to be deducted or withheld
under the provisions of any statute, regulation, ordinance or order.
6. Obligations of the Executive During and After Employment.
(a) The Executive acknowledges and agrees that solely by virtue of his
employment by, and relationship with, the Company, he will acquire "Confidential
Information," as defined in subparagraph (vii) below, as well as special
knowledge of the Company's relationships with its clients, and that, but for his
association with the Company, the Executive will not have had access to said
Confidential Information or knowledge of said relationships. The Executive
further acknowledges and agrees (1) that the Company has long term relationships
with its clients, and that those relationships were developed at great expense
and difficulty to the Company over several years of close and continuing
involvement; (2) that the Company's relationships with its clients are and will
continue to be valuable, special and unique assets of the Company and (3) that
the Company has the following protectable interests that are critical to its
competitive advantage in the industry and would be of demonstrable value in the
hands of a competitor: software designs and application; plans, modeling
products and tools (including, but not limited to, COMPPASS 2000); processes,
distribution networks, and protocols; research bases, systems, and industry
benchmarks; and concepts, ideas, marketing strategies, and other matters not
generally known to the public. In return for the consideration described in this
Agreement, and as a condition precedent both to the grant of the restricted
shares and the Option under the Company's Long-Term Incentive Plan and the
Company employing the Executive, and as an inducement to the Company to do so,
the Executive hereby represents, warrants and covenants as follows:
(i) The Executive has executed and delivered this Agreement as his
free and voluntary act, after having determined that the provisions contained
herein are of a material benefit to him, and that the duties and obligations
imposed on him hereunder are fair and reasonable and will not prevent him from
earning a comparable livelihood following the termination of his employment with
the Company;
(ii) The Executive has read and fully understands the terms and
conditions set forth herein, has had time to reflect on and consider the
benefits and consequences of entering into this Agreement, and has had the
opportunity to review the terms hereof with an attorney or other representative
if he so chooses;
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(iii) The execution and delivery of this Agreement by the Executive
does not conflict with, or result in a breach of or constitute a default under,
any agreement or contract, whether oral or written, to which the Executive is a
party or by which the Executive may be bound;
(iv) The Executive agrees that, during the time of his employment
with the Company and for a period of one year after termination of the
Executive's employment hereunder for any reason whatsoever or for no reason,
whether voluntary or involuntary, the Executive will not, except on behalf of
the Company, anywhere in North America or in any other place or venue where the
Company or any affiliate, subsidiary or division thereof now conducts or
operates, or may conduct or operate, its business prior to the date of the
Executive's termination of employment:
(A) directly or indirectly, contact, solicit or direct any person,
firm, corporation, association, or other entity to contact or solicit, any of
the Employer's clients or prospective clients (as they are hereinafter defined)
for the purpose of selling or distributing or attempting to sell or distribute,
any products and/or services in competition with the Company to its clients
during the term hereof. In addition, the Executive will not disclose the
identity of any such clients or prospective clients, or any part thereof, to any
person, firm, corporation, association, or other entity for any reason or
purpose whatsoever, except to the extent (1) required by any law, regulation or
order of any court or regulatory commission, department or agency, provided that
the Executive gives prompt notice of such requirement to the Company to enable
the Company to seek an appropriate protective order, or (2) such disclosure is
necessary to perform properly the Executive's duties under this Agreement;
(B) solicit on his own behalf or on behalf of any other person,
the services of any person who is an employee of the Company, nor solicit any of
the Company's employees to terminate employment with the Company;
(C) become directly or indirectly, an investor, owner or
stockholder (excluding investments representing less than 2% of the common stock
of a public company), lender, director, consultant, employee, agent or
salesperson, whether part-time or full-time, of any business which competes with
the Company in the marketing of products or services developed, marketed or
provided by the Company; and
(D) act as a consultant, advisor, officer, manager, agent,
director, partner, independent contractor, owner, or employee for or on behalf
of any of the Company's clients or prospective clients (as hereinafter defined),
with respect to any other business activities in which the Company engages
during the term hereof;
(v) The scope described above is necessary and reasonable in order to
protect the Company in the conduct of its business and that, if the Executive
becomes employed by another employer, he shall be required to disclose the
existence of this Paragraph 6 to such employer and the Executive hereby consents
to and the Company is hereby given permission to disclose the existence of this
Paragraph 6 to such employer.
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(vi) For purposes of this Paragraph 6, "client" shall be defined as
any person, firm, corporation, association, or entity that purchased any type of
product and/or service from the Company or is or was doing business with the
Company within the 12-month period immediately preceding termination of the
Executive's employment. For purposes of this Paragraph 6, "prospective client"
shall be defined as any person, firm, corporation, association, or entity
contacted or solicited in writing by the Company or who contacted the Company
within the 12-month period immediately preceding the termination of the
Executive's employment for the purpose of having such persons, firms,
corporations, associations, or entities become a client of the Company;
(vii) Both during his employment and thereafter he will not, for any
reason whatsoever, use for himself or disclose to any person not employed by the
Company any "Confidential Information" of the Company acquired by the Executive
during his relationship with the Company, except to the extent that such
Confidential Information (a) becomes a matter of public record or is published
in a newspaper, magazine or other periodical, or in other media, available to
the general public, other than as a result of any act or omission of the
Executive, (b) is required to be disclosed by law, regulation or order of any
court or regulatory commission, department or agency, provided that the
Executive gives prompt notice of such requirement to the Company to enable the
Company to seek an appropriate protective order, or (c) is required to be
disclosed in order to perform properly the Executive's duties under this
Agreement. The Executive further agrees to use Confidential Information solely
for the purpose of performing duties with the Company and further agrees not to
use Confidential Information for his own private use or commercial purposes. The
Executive agrees that "Confidential Information" includes but is not limited to:
(1) any financial, engineering, business, planning, operations, services,
potential services, products, potential products, technical information and/or
know-how, organization charts, formulas, business plans, production, purchasing,
marketing, pricing, sales, profit, personnel, customer, broker, supplier, or
other lists or information of the Company; (2) any papers, data, records,
processes, methods, techniques, systems, models, samples, devices, equipment,
compilations, invoices, client lists, or documents of the Company; (3) any
confidential information or trade secrets of any third party provided to the
Company in confidence or subject to other use or disclosure restrictions or
limitations; and (4) any other information, written, oral, or electronic,
whether existing now or at some time in the future, and whether pertaining to
current or future developments, which pertains to the Company's affairs or
interests or with whom or how the Company does business. The Company
acknowledges and agrees that Confidential Information does not include
information properly in the public domain;
(viii) During the Employment Term, the Executive will not remove from
the Company's premises any documents, records, files, notebooks, correspondence,
reports, video or audio recordings, computer printouts, computer programs,
computer software, price lists, microfilm, drawings, or other similar documents
containing Confidential Information, including copies thereof, whether prepared
by him or others, except as his duties under this Agreement shall require, and
in such cases, will promptly return such items to the Company. Upon termination
of his employment with the Company, all such items including summaries or copies
thereof, then in the Executive's possession, shall be returned to the Company
immediately;
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(ix) All ideas, inventions, designs, processes, discoveries,
enhancements, plans, writings, and other developments or improvements (the
"Inventions") conceived by the Executive, alone or with others, during the term
of his employment, whether or not during working hours, that are within the
scope of the Executive's business operations or that relate to any of the
Company's work or projects (including any and all inventions based wholly or in
part upon ideas conceived during the Executive's employment with the Company),
are the sole and exclusive property of the Company. The Executive further agrees
that (1) he will promptly disclose all Inventions to the Company and hereby
assigns to the Company all present and future rights he has or may have in those
Inventions, including without limitation those relating to patent, copyright,
trademark or trade secrets; and (2) all of the Inventions eligible under the
copyright laws are "work made for hire." At the request of and without charge to
the Company, the Executive will do all things deemed by the Company to be
reasonably necessary to perfect title to the Inventions in the Company and to
assist in obtaining for the Company such patents, copyrights or other protection
as may be provided under law and desired by the Company, including but not
limited to executing and signing any and all relevant applications, assignments
or other instruments. Notwithstanding the foregoing, pursuant to the Employee
Patent Act, Illinois Public Act 83-493, the Company hereby notifies the
Executive that the provisions of this subparagraph (ix) shall not apply to any
Inventions for which no equipment, supplies, facility or trade secret
information of the Company was used and which were developed entirely on the
Executive's own time, unless (1) the Invention relates (i) to the business of
the Company, or (ii) to actual or demonstrably anticipated research or
development of the Company, or (2) the Invention results from any work performed
by the Executive for the Company;
(x) All client lists, supplier lists, and client and supplier
information are and shall remain the exclusive property of the Company,
regardless of whether such information was developed, purchased, acquired, or
otherwise obtained by the Company or the Executive. The Executive also agrees to
furnish to the Company on demand at any time during his employment, and upon the
termination of his employment, any records, notes, computer printouts, computer
programs, computer software, price lists, microfilm, or any other documents
related to the Company's business, including originals and copies thereof; and
(xi) The Executive may become aware of "material" nonpublic
information relating to clients whose stock is publicly traded. The Executive
acknowledges that he is prohibited by law as well as by Company policy from
trading in the shares of such clients while in possession of such information or
directly or indirectly disclosing such information to any other persons so that
they may trade in these shares. For purposes of this subparagraph (xi),
"material" information may include any information, positive or negative, which
might be of significance to an investor in determining whether to purchase, sell
or hold the stock of publicly traded clients. Information may be significant
for this purpose even if it would not alone determine the investor's decision.
Examples include a potential business acquisition, internal financial
information that departs in any way from what the market would expect, the
acquisition or loss of a major contract, or an important financing transaction.
(xii) Notwithstanding Paragraph 6(a)(iv) hereof, if the Executive
desires to contact, solicit, or direct any person, firm, corporation,
association, or other entity to contact or solicit any person or entity for the
purpose of selling or distributing or attempting to sell or
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distribute any products and/or services during the one-year period identified in
Paragraph 6(a)(iv), and is uncertain whether such contact or solicitation might
violate Subparagraph 6(a)(iv)(A), the Executive may contact the Chief Executive
Officer of the Company in writing by facsimile or reputable courier requesting
approval of such contact or solicitation on behalf of the Company. The Company
agrees to respond in writing to any such request for approval as soon as
reasonably practicable, but in no event later than fourteen (14) days from the
date on which such request was sent or mailed. The Company further agrees to not
unreasonably withhold any such approval. If the Executive receives no written
response from the Company within the aforementioned fourteen (14) day period,
the approval of the Company with respect to such contact or solicitation for
which approval was requested shall be deemed to have been given and the Company
shall have no right to assert any claim against the Executive under Subparagraph
6(a)(iv) in connection with such contact or solicitation. The Company further
agrees that any request for approval submitted by the Executive hereunder shall
be kept strictly confidential and only employees of the Company directly
involved in such approval process shall be privy to the information contained in
any such request for approval.
(b) Remedy for Breach. The Executive agrees that in the event of a
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material breach or threatened material breach of any of the covenants contained
in this Paragraph 6, the Company will have the right and remedy to have such
covenants specifically enforced by any court having jurisdiction, it being
acknowledged and agreed that any material breach of any of the covenants will
cause irreparable injury to the Company and that money damages will not provide
an adequate remedy to the Company.
(c) Blue-Penciling. The Executive acknowledges and agrees that the
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noncompetition and nonsolicitation provisions contained herein are reasonable
and valid in geographic, temporal and subject matter scope and in all other
respects, and do not impose limitations greater than are necessary to protect
the goodwill, Confidential Information and other business interests of the
Company. Nevertheless, if any court determines that any of said noncompetition
and other restrictive covenants and agreements, or any part thereof, is
unenforceable because of the duration or geographic scope of such provision,
such court will have the power to reduce the duration or scope of such
provision, as the case may be, and, in its reduced form, such provision will
then be enforceable to the maximum extent permitted by applicable law.
7. Termination of Employment.
(a) Termination as a Result of Death or Disability. The Executive's
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employment with the Company shall terminate automatically upon the Executive's
death during the Employment Term. If the Disability of the Executive has
occurred during the Employment Term (pursuant to the definition of "Disability"
set forth below), the Company may give to the Executive written notice of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Company (the "Disability Effective
Date"), provided that, within the 30 days after receipt of notice, the Executive
shall not have returned to substantial performance of the Executive's duties.
For purposes of this Agreement, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company for 120 consecutive days,
or a total of 180 days in any 12-month period, as a result of incapacity due to
mental or physical illness
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which is determined to be total and permanent by a physician jointly selected by
the Company and the Executive or the Executive's legal representative, or, if
the parties cannot agree on the selection of such physician then each shall
choose a physician and the two physicians shall jointly select a physician to
make such binding determination.
(b) Termination by the Company for Cause. The Company may terminate
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the Executive's employment during the Employment Term for Cause at any time upon
written notice from the Board specifying such Cause and the expiration of the
cure period specified below, and thereafter, the Company's obligations hereunder
(other than the obligation to pay any accrued salary or benefit) shall cease and
terminate; provided, however, that such written notice shall not be delivered
until after the Board shall have given the Executive written notice specifying
the conduct alleged to have constituted such Cause. The Executive shall have 30
days to cure the matters specified in the notice delivered by the Board (to the
extent that such matters are curable). For purposes of this Agreement, "Cause"
shall mean the Executive's willful misconduct, dishonesty or other willful
actions (or willful failures to act) which are materially and demonstrably
injurious to the Company, or a material breach by the Executive of one or more
terms of this Agreement, which shall include the Executive's habitual neglect of
the material duties required of him under this Agreement. For purposes of this
Section, no act or failure to act, on the part of the Executive, shall be
considered "willful" unless it is done, or omitted to be done, by the Executive
in bad faith or without reasonable belief that the Executive's action or
omission was in the best interests of the Company. Any act, or failure to act,
based upon authority given pursuant to a resolution duly adopted by the Board or
based upon the advice of counsel for the Company shall be conclusively presumed
to be done, or omitted to be done, by the Executive in good faith and in the
best interests of the Company. The cessation of employment of the Executive
shall not be deemed to be for Cause unless and until there shall have been
delivered to the Executive a copy of a resolution duly adopted by the Board by
the vote of a majority of the entire Board at a meeting of the Board duly called
and held for such purpose, at which the Executive shall have an opportunity to
be present and to be heard, finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described above, and specifying
the particulars thereof in detail.
(c) Termination by the Executive for Good Reason. The Executive's
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employment with the Company may be terminated by the Executive for Good Reason.
For purposes of this Agreement, "Good Reason" shall mean any of the following
actions, if taken without the express written consent of the Executive: (1) any
material change by the Company in the Executive's title, functions, duties, or
responsibilities, which changes would cause the Executive's position with the
Company to become of significantly less responsibility, importance or scope as
compared to the position and attributes that applied to the Executive as of the
Effective Date; (2) any material failure by the Company to comply with any of
the provisions of the Agreement; (3) the requirement made by the Company that
the Executive change his manner of performing his responsibilities so as to
require a change of his residence, or (4) termination by the Executive, for any
reason, within 6 months following a Change of Control.
(d) Notice of Termination. Any termination by the Company for Cause, or
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by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (1)
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indicates the specific termination provision in this Agreement relied upon, (2)
to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (3) if the Date of Termination
(as defined in Section (e) hereof) is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than 30
days after the giving of such notice). The failure by the Executive or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Executive or the Company, respectively, hereunder or preclude the Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (1) if the
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Executive's employment is terminated by the Company for Cause, the expiration of
the cure period specified in Paragraph 7(b) hereof, (2) if the Executive's
employment is terminated by the Executive for Good Reason, the date of receipt
of the Notice of Termination or any later date specified therein, as the case
may be, (3) if the Executive's employment is terminated by reason of death or
Disability, the date of death of the Executive or the Disability Effective Date,
as the case may be, and (4) if the Executive's employment is terminated by the
Company other than for Cause or Disability, or by the Executive without Good
Reason, 30 days after the date of receipt by the non-terminating party of a
written notice of termination or such shorter time as the Board thereafter
specifies in a written notice to the Executive.
(f) Change of Control of the Company. For the purpose of this Agreement,
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a "Change of Control" shall have been deemed to have occurred if at any time
during the Employment Term:
(i) the Company sells or otherwise disposes in an arms length
transaction assets of the Company having a fair market value of at least
60% of the total assets of the Company and its subsidiaries on a
consolidated basis, or the Company sells or otherwise disposes of a
majority of the equity ownership or voting control of any member of any
corporation or other entity holding substantially all of the assets of the
Company, in a single transaction or series of related transactions, or
(ii) acquisition by (A) any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
or (B) two or more Persons of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either
(1) the shares of Common Stock outstanding immediately after such
acquisition (the "Company Common Stock") or (2) the combined voting power
of the voting securities of the Company entitled to vote generally in the
election of directors outstanding immediately after such acquisition (the
"Company Voting Securities"); provided, however, that for purposes of this
subsection (i) the following acquisitions of securities shall not
constitute or be included when determining whether there has been a Change
of Control: (1) any acquisition by the Company, or (2) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company; or
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(iii) consummation of a reorganization, merger or consolidation or
the sale or other disposition of all or substantially all of the assets of
the Company, or the acquisition of the assets of another corporation by the
Company (in each case, a "Business Combination"), unless, following any
such Business Combination, (A) all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Company
Common Stock and Company Voting Securities outstanding immediately prior to
such Business Combination beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding shares of common stock or
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business
Combination, of the Company Common Stock and Company Voting Securities
outstanding, as the case may be, (B) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan or
related trust of the Company or any corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 50% or
more of, respectively, the then outstanding shares of common stock of the
corporation resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation except
to the extent that such ownership existed prior to the Business Combination
and (C) at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination.
8. Obligations of the Company upon Termination of Employment.
(a) Termination by the Company Other Than for Cause, Death or
---------------------------------------------------------
Disability or by the Executive for Good Reason or for any Reason Following a
----------------------------------------------------------------------------
Change of Control. If during the Employment Term (i) the Company terminates the
-----------------
Executive's employment other than for Cause, death or Disability or (ii) the
Executive terminates his employment for Good Reason, then in any such case the
Company shall pay to the Executive in a lump sum in cash within 30 days after
the Date of Termination (or, in the event any amounts due cannot be determined
within this period, as soon thereafter as is practicable) an amount equal to (A)
1.5 times the Executive's then current Base Salary plus the annual bonus most
recently paid to the Executive and (B) a pro rata bonus for the calendar year of
termination. The provisions of this Subparagraph 8(a) shall not affect any
rights of the Executive under the Company's benefit plans or programs.
(b) Termination as a result of the Executive's Disability or death.
--------------------------------------------------------------
If during the Employment Term the Executive's employment is terminated by reason
of the Executive's Disability or death, then the Company shall pay to the
Executive or the Executive's legal representatives in a lump sum in cash within
30 days after the Date of Termination (or, in the event any amounts due cannot
be determined within this period, as soon thereafter as is practicable) an
amount equal to (A) 1.5 times the Executive's then current Base Salary plus the
annual bonus most recently paid to the Executive and (B) a pro rata bonus for
the calendar year
11
of termination, at the Target Bonus level. The provisions of this Subparagraph
8(b) shall not affect any rights of the Executive's heirs, administrators,
executors, legatees, beneficiaries or assigns under the Company's benefit plans
or programs.
(c) Termination by the Company for Cause or by the Executive other
--------------------------------------------------------------
than for Good Reason. If during the Employment Term either (i) the Executive's
--------------------
employment is terminated by the Company for Cause or (ii) the Executive
voluntarily terminates his employment prior to a Change of Control, excluding
termination by him for Good Reason, then the Company shall have no further
obligation to the Executive other than the obligation to pay to the Executive
(A) his Base Salary through the Date of Termination and (B) any other
compensation and benefits due to the Executive in accordance with this
Agreement, in each case to the extent theretofore unpaid.
9. Golden Parachute Provision.
In the event that in the opinion of tax counsel selected by the Executive
and compensated by the Company ("Executive's Tax Counsel"), a payment or benefit
received or to be received by the Executive following his termination of
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company or any of its subsidiaries, affiliates
or divisions) (collectively, with the payments provided for in the foregoing
provisions of Paragraph 8, the "Post Termination Payments") would be subject to
excise tax (in whole or in part) as a result of Section 2806 of the Internal
Revenue Code of 1986, as amended (the "Code"), and as a result of such excise
tax, the net amount of Post Termination Payments retained by the Executive
(taking into account federal and state income taxes and such excise tax) would
be less than the net amount of Post Termination Payments retained by the
Executive (taking into account federal and state income taxes) if the Post
Termination Payments were reduced or eliminated as described in this Paragraph
9, then the Post Termination Payments shall be reduced or eliminated until no
portion of the Post Termination Payments is subject to excise tax, or the Post
Termination Payments are reduced to zero. For purposes of this limitation (i) no
portion of the Post Termination Payments the receipt or enjoyment of which the
Executive shall have waived in writing prior to the date of payment following
termination of the Post Termination Payments shall be taken into account, (ii)
no portion of the Post Termination Payments shall be taken into account which in
the opinion of Executive's Tax Counsel does not constitute a "parachute payment"
within the meaning of Section 280G(b)(2) of the Code, (iii) the Post Termination
Payments shall be reduced only to the extent necessary so that the Post
Termination Payments (other than those referred to in clauses (i) and (ii)) in
their entirety constitute reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code or are otherwise not
subject to excise tax, in the opinion of Executive's Tax Counsel, and (iv) the
value of any non-cash benefit and all deferred payments and benefits included in
the Post Termination Payments shall be determined by the mutual agreement of the
Company and the Executive in accordance with the principles of Sections
280G(d)(3) and (4) of the Code.
12
10. Governing Law; Arbitration; Jurisdiction; Attorneys' Fees.
This Agreement is made and entered into and will be governed by and
interpreted in accordance with the laws of the State of Illinois. The Company
and the Executive agree that any dispute regarding this Agreement, that cannot
be resolved amicably by the parties, will be submitted to arbitration within 60
days of the date the dispute arose and will be resolved in accordance with the
rules of the American Arbitration Association for expedited cases then in
effect. The arbitrator will be mutually selected by the parties or in the event
the parties cannot mutually agree, then appointed by the American Arbitration
Association. Any arbitration will be held in Chicago, Illinois and the
arbitrator will apply Illinois law. Judgment upon any award rendered by the
arbitrator will be final and binding and may be entered in any court of
competent jurisdiction. The Company will have the absolute right to seek
equitable remedies in any state court of competent jurisdiction in the State of
Illinois, County of Xxxx, or in a United States District Court in the State of
Illinois pursuant to Paragraph 6(b) hereof. The parties shall be responsible for
their own costs and expenses under this Paragraph 10; provided, however, all
costs, fees and expenses (including reasonable attorneys' fees associated with
such arbitration and court action to enforce judgment upon any award made by an
arbitrator which satisfies clause (i) or (ii) of this sentence) shall be borne
by the Company if (i) the Executive prevails, or (ii) if the arbitrator finds
the Executive's position in such arbitration had substantial merit.
11. Miscellaneous.
(a) Entire Agreement. This Agreement constitutes the entire agreement
----------------
between the parties hereto with respect to the subject matter hereof and
supersedes any and all previous agreements, written or oral, regarding the
subject matter hereof between the parties hereto. This Agreement shall not be
modified or amended, except by a written agreement signed by the parties hereto.
(b) Notices. All notices, requests, demands and other communications
-------
required or permitted to be given or made under this Agreement shall be in
writing and shall be deemed to have been given if delivered by hand, sent by
generally recognized overnight courier service, telex or telecopy with
confirmation of receipt, or mail:
(i) to the Company:
Navigant Consulting, Inc.
Attn: General Counsel
000 X. Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
with a copy to:
Winston & Xxxxxx
Attention: Gov. Xxxxx X. Xxxxxxxx
00 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000
13
(ii) to the Executive:
Xxx X. Xxxxx
_________________
_________________
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxx Price Xxxxxxx & Kammholz
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications will be effective
when actually received by the addressee.
(c) Indemnification.
---------------
To the fullest extent permitted by law and in addition to any other rights
permitted or granted under the Company's certificate of formation and operating
agreement, each as amended to date, or any agreement or policy of insurance, or
by law, the Company shall indemnify the Executive if the Executive is made a
party, or threatened to be made a party, to any threatened, pending, or
contemplated action, suit or proceeding, whether civil, criminal, administrative
or investigative, by reason of the fact that the Executive is or was an
employee, officer or director of the Company or any subsidiary of the Company,
in which capacity the Executive is or was serving at the Company's request,
against any and all costs, losses, damages, judgments, liabilities and expenses
(including reasonable attorneys' fees) which may be suffered or incurred by him
in connection with any such action, suit or proceeding; provided, however, that
there shall be no indemnification in relation to matters as to which the
Executive is adjudged to have been guilty of fraud or bad faith or as a result
of the Executive's material breach.
(d) Successors.
----------
This Agreement is personal to the Executive and without the prior written
consent of the Company it shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This Agreement will inure
to the benefit of and be enforceable against the Executive's legal
representatives. This Agreement will inure to the benefit of and be binding
upon the Company and its successors and assigns. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation, share
exchange or otherwise) to all or substantially all of the business and/or assets
of the Company to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. For purposes of this Agreement, the
term "Company" means the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
14
(e) Severability. If any provision of this Agreement is held invalid or
------------
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision will thereupon be deemed modified only to
the extent necessary to render such provision valid, or not applicable to given
circumstances, or excised from this Agreement, as the situation may require, and
this Agreement will be construed and enforced as if such provision had been
included herein as so modified in scope or application, or had not been included
herein, as the case may be. Should this Agreement, or any one or more of the
provisions hereof, be held to be invalid, illegal or unenforceable within any
governmental jurisdiction or subdivision thereof, the Agreement or any such
provision or provisions will not as a consequence thereof be deemed to be
invalid, illegal or unenforceable in any other governmental jurisdiction or
subdivision thereof.
(f) Waiver. The Executive's or the Company's failure to insist upon
------
strict compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, will not be deemed to
be a waiver of such provision or right or any other provision or right of this
Agreement.
(g) Counterparts. This Agreement may be executed in two counterparts,
------------
each of which will be deemed an original and both of which taken together will
constitute a single instrument.
(signature page follows)
15
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
__________________________________
Xxx X. Xxxxx
Navigant Consulting, Inc.
By________________________________
Its_______________________________
16
