E XHIBIT 10.2
AMENDED AND
RESTATED
EXECUTIVE EMPLOYMENT
AGREEMENT
eLoyalty Corporation
(the “Company”), and
Steven C. Pollema , an individual (“Employee”),
enter into this Amended and Restated Employment Agreement
(“Agreement”) as of May 15, 2008.
W HEREAS , the Company desires to continue to employ
Employee to provide personal services to the Company and to provide
Employee with certain compensation and benefits in return for his
services; and
W HEREAS , Employee wishes to continue to be employed by
the Company and to provide personal services to the Company in
return for certain compensation and benefits.
N OW ,
T HEREFORE
, in consideration of the mutual
promises and covenants contained herein, it is hereby agreed by and
between the parties hereto as follows:
1. Duties.
The Company shall continue to employ
Employee as its Vice President, Integrated Contact Solutions/CRM
Business Unit, and Employee accepts such employment upon the terms
and conditions herein. Employee shall have such responsibilities,
duties and authority in all material respects as are currently
assigned to Employee and such other responsibilities, duties and
authority as the President & Chief Executive Officer may
reasonably designate and are customarily associated with his
position. During the term of his employment with the Company,
Employee shall perform faithfully the duties assigned to him to the
best of his ability, and Employee shall devote his full and
undivided business time and attention to the transaction of the
Company’s business.
2. Outside
Activities.
(a) Non-Company
Activities. Except in
conformity with the requirements with the Company’s
then-effective Code of Ethical Business Conduct, Employee will not
during the term of this Agreement undertake or engage (other than
as a passive investor) in any other employment, occupation or
business enterprise, whether as an agent, partner, proprietor,
officer, director, employee, consultant, contractor or otherwise,
whether during or outside the business hours of the Company.
Employee may engage in civic and not-for-profit activities so long
as such activities do not interfere with the performance of his
duties hereunder.
(b) No Adverse
Interests. Except as
permitted by Paragraph 2(c), during his employment Employee
agrees not to acquire, assume or participate in, directly or
indirectly, any position, investment or interest which is known or
should be known by him to be adverse or antagonistic to the
Company, its business or prospects, financial or
otherwise.
(c) Non-Competition.
During the term of his employment by
the Company, except on behalf of the Company, Employee will not
directly or indirectly, whether as a stockholder, agent, partner,
proprietor, officer, director, employee, consultant, contractor, or
in any capacity whatsoever, engage in, become financially
interested in, be employed by or have any business connection with
any other person, corporation, firm, partnership or other entity
whatsoever known by him to compete directly with the
Company,
anywhere throughout the world, in any line of
business engaged in (or planned to be engaged in) by the Company;
provided, however, that anything above to the contrary
notwithstanding, Employee may own, as a passive investor, public
securities of any competitor corporation, so long as his direct
holdings in any one such corporation shall not in the aggregate
constitute more than one percent (1%) of the voting stock of
such corporation.
3. Term Of Employment;
Termination.
(a) At-Will
Relationship. Employee’s employment relationship is
at-will. Either Employee or the Company may terminate the
employment relationship at any time, for any reason or no reason,
with or without Cause or advance notice.
(b) Termination By The Company
Without Cause; Termination By Employee With Good
Reason.
(i) Cause Definition.
For purposes of this Agreement,
“Cause” shall mean any of the following:
(A) conviction, including a plea of guilty or no contest, of
any felony or any crime involving moral turpitude or dishonesty;
(B) fraud upon the Company (or an affiliate), embezzlement or
misappropriation of corporate funds; (C) willful acts of
dishonesty materially harmful to the Company; (D) activities
materially harmful to the Company’s reputation;
(E) Employee’s willful misconduct, willful refusal to
perform his duties, or substantial willful disregard of his duties,
provided that the Company first provides Employee with
written notice of such conduct and thirty (30) days to cure
such conduct, if such conduct is reasonably susceptible to cure; or
(E) material breach causing material harm to the Company of
this Agreement, any other agreement with the Company, any policy of
the Company, or any statutory duty or common law duty of loyalty
owed to the Company; provided , no act or omission on
Employee’s part shall be considered “willful”
unless it is done by the Employee without reasonable belief that
the Employee’s action was in the best interests of the
Company.
(ii) Good Reason
Definition. For the
purposes of this Agreement, “Good Reason” shall mean:
(A) a reduction of Employee’s base salary below the
amount set forth in Paragraph 4 of this Agreement, or a reduction
in the “Target Bonus Percentage” defined in Paragraph 5
of this Agreement, unless such reduction is shared proportionally
by the three most highly-salaried officers of the Company in
addition to Employee; (B) an involuntary relocation of
Employee’s place of work to any location outside of the
metropolitan area in which his primary office is located
immediately prior to the relocation, excluding temporary periods of
thirty (30) days or less and ordinary course business travel;
(C) a significant diminution by the Company in
Employee’s position (including offices, titles and reporting
relationships), authority, duties or responsibilities, (excluding
diminutions resulting in the ordinary course from the Company
becoming pursuant to a Change of Control of (x) part of a
larger organization in which Employee directly reports to the Chief
Executive Officer of such organization; or (y) a subsidiary or
equivalent separate functional business unit of a larger
organization); (D) a material breach by the Company of this
Agreement; or (E) failure by the Company to assign this
Agreement to a successor upon a Change of Control. No Good Reason
shall exist where: (1) Employee consents, in writing, to the
event that forms the basis for the Good Reason resignation;
(2) Employee does not provide the Company’s President
and Chief Executive Officer with written notice describing in
detail the Good Reason within thirty (30) days of its
occurrence; or (3) the Company cures the Good Reason within
thirty (30) days of its receipt of such notice, if such
conduct is reasonably susceptible to cure.
2.
(iii) Severance
Benefits. In the event
that Employee’s employment is terminated without Cause by the
Company or terminated by Employee with Good Reason, Employee shall
receive the following as his sole and exclusive severance benefits
(collectively, the “Severance Benefits”):
(1) Severance Pay.
Employee will receive a lump sum
payment, within seven (7) days following the effective date of
termination, equal to twelve (12) months of his then current
base salary, less standard payroll deductions and
withholdings.
(2) Severance Bonus.
Employee will be paid a cash bonus
(the “Severance Bonus”), within seven (7) days
following the effective date of termination, equal to 100% of the
average of (A) the annual bonus (whether paid in stock,
options, or cash) he was paid for year immediately preceding the
termination and (B) his target bonus (whether to be paid in
stock, options, or cash) under the Company’s then-current
bonus plan, if any, less standard payroll deductions and
withholdings.
(3) Severance Health Premium
Reimbursements. If
Employee timely elects to continue his Company-provided group
health insurance coverage pursuant to the federal COBRA law, the
Company will reimburse Employee for the cost of such COBRA premiums
to continue health insurance coverage at the same level of coverage
for Employee and his dependents (if applicable) in effect as of the
termination date, through the end of twelve (12) months or
until such time as Employee qualifies for health insurance benefits
through a new employer, whichever occurs first (“Severance
Health Premium Benefits”). Employee shall notify the Company
in writing of such new employment not later than five
(5) business days after securing it.
(4) Severance Vesting.
The vesting of Employee’s
restricted stock, stock options and other equity grants that
Employee previously has then received or may in the future receive
from the Company, shall be accelerated so that, as of the date of
the termination, such restricted stock and stock option grants
shall vest as to the number of shares that would have vested had
Employee provided an additional twelve (12) months of
continuous service to the Company; provided, however, that if
Employee is terminated without cause within six (6) months
following a Change in Control, Employee terminates his employment
for Good Reason within six (6) months following a Change in
Control, or Employee terminates his employment for the Good Reason
described in clause (E) of Section 3(b)(ii), then such
restricted stock and stock option grants shall vest as to the
number of shares that would have vested had Employee provided an
additional twenty-four (24) months of continuous service to
the Company.
(iv) Severance
Conditions. As a
condition of and prior to the receipt of all or any of the
Severance Benefits, Employee must execute and allow to become
effective a general release of claims in the form attached hereto
as Exhibit A within sixty (60) days of termination and
to comply with the terms of this Agreement (the “Severance
Conditions”). Upon any termination of Employee’s
employment by the Company without Cause or by Employee for Good
Reason, the Company and its affiliates (by and through their
respective directors and senior executive officers) and Executive
agree not to disparage the other party.
3.
(c) Termination for Cause;
Voluntary or Mutual Termination.
(i) No Severance.
In the event Employee’s
employment is terminated by the Company at any time for Cause, or
Employee terminates his employment without Good Reason, or the
parties mutually terminate their employment relationship, Employee
will not be entitled to any Severance Benefits, pay in lieu of
notice, or any other severance, compensation, benefits, equity,
acceleration, or any other amounts, with the exception of any
benefit to which Employee has a vested right under a written
benefit plan.
(ii) Resignation.
Employee may voluntarily terminate
his employment with the Company at any time, without liability
therefore. Employee agrees to use good faith to give the Company
reasonable notice of any such voluntary termination. Upon receipt
of any termination notice from Employee, the Company, at its
election, may require Employee to resign his employment prior to
the occurrence of any requested termination date.
(d) Termination for Death or
Disability.
(i) Termination.
Employee’s employment will
terminate upon his death or Disability.
(ii) Disability
Definition. For the
purposes of this Agreement, “Disability” shall have the
meaning set forth in the Company’s then current long term
disability benefit program or, if no such program is then in
effect, shall mean a permanent disability rendering Employee unable
to perform his duties for the Company for ninety
(90) consecutive days or one hundred eighty (180) days in
any twelve (12) month period, which determination shall be
made after the period of disability, unless an earlier
determination can be made, by an independent physician appointed by
the Board.
(iii) Death or Disability
Benefit. Following the
death or Disability of Employee while employed by the Company, the
Company will provide Employee (or, in the case of death,
Employee’s estate) a lump sum amount payable within thirty
(30) days thereafter, equal to: (A) Employee’s
salary for twelve (12) months; (B) an amount, in cash,
equal to 100% of the average of (x) the annual bonus he was
paid (whether paid in cash or in stock) for the year immediately
preceding the termination and (y) his target bonus (whether to
be paid in cash or in stock) under the Company’s then-current
bonus plan if any, less standard payroll deductions and
withholdings; plus (C) the cost of such COBRA premiums to
continue health insurance coverage at the same level of coverage
for Employee and his dependents (if applicable) in effect as of the
termination date, through the end of twelve (12) months. All
restricted stock and stock option grants that Employee has then
received from the Company or may in the future receive from the
Company, shall be vested as to half of the unvested shares (or such
greater amount, if any, as is provided for in the agreement for the
applicable grant), and all such stock options shall,
notwithstanding any lesser period, if any, provided for in the
agreement for the applicable grant, be exercisable for one
(1) year following such termination (but not exceeding the
term of such option).
(iv) Severance
Conditions. As a
condition of and prior to the receipt of all or any of the
Severance provided for death or Disability, Employee (or, in the
case of death, Employee’s estate) must execute and allow to
become effective a general release of claims in the form attached
hereto as Exhibit A within sixty (60) days of
termination and to comply with the terms of this
4.
Agreement (the “Severance
Conditions”). Upon any termination of Employee’s
employment for death or Disability, the Company and its affiliates
(by and through their respective directors and senior executive
officers) and Executive (or, in the case of death, Employee’s
estate) agree not to disparage the other party.
(e) No Mitigation.
In no event shall Employee be
obligated to seek other employment or take any other action by way
of mitigation of the severance amounts payable to the Employee
under Paragraph 3 of this Agreement, and such amounts (other than
as provided at Paragraph 3(b)(iii)(3)) shall not be reduced whether
or not the Employee obtains other employment.
(f) Accrued
Obligations. Not later
than ten (10) days after termination of Employee’s
employment, the Company shall pay Employee (“Accrued
Obligations”): (i) his accrued and unpaid base salary at
the rate in effect at the time of notice of termination;
(ii) any previous year’s earned but unpaid bonus and
other earned and unpaid incentive cash compensation; and
(iii) accrued and unused vacation time, unpaid expense
reimbursements and other unpaid cash entitlements earned by
Employee as of the date of termination pursuant to the terms of the
applicable Company plan or program.
4. Salary.
For services rendered hereunder, the
Company shall pay Employee a base salary at the per annum rate of
$300,000, less standard payroll deductions and withholdings, and
payable in accordance with the Company’s regular
payroll
