Exhibit 10.31
AMENDED AND
RESTATED
EXECUTIVE EMPLOYMENT
AGREEMENT
eLoyalty Corporation
(the “Company”), and
Christopher J. Danson , an individual
(“Employee”), enter into this Amended and Restated
Employment Agreement (“Agreement”) as of
September 8 , 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, Delivery, 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 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.
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(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
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 he was paid for
year immediately preceding the termination and (B) his target
bonus 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 option and other equity
grants that Employee 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.
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(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 equal to
100% of the average of (x) the annual bonus he was paid for
the year immediately preceding the termination and (y) his
target bonus 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 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.
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(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
schedule. Employee’s base salary (as well as his eligibility
for incentive equity grants) shall be subject to annual review and
his base salary may, at the discretion of the Company’s Board
of Directors, be increased from time to time.
5. Bonuses. Subject to the requirements set
forth below, the Company may elect to pay Employee bonuses in its
sole discretion. Employee will be offered the opportunity to
participate in the Company’s then-current bonus plan, and,
subject to and in accordance with the terms and conditions of such
plan and this paragraph, upon achievement of all target bonus
objectives set by the Board of Directors and/or the Chief Executive
Officer for the Company and for Employee, shall receive a cash
bonus equal to 100% (“Targe
