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Exhibit 10.1
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT
AGREEMENT
This Amended and Restated Executive Employment Agreement (this "
Agreement ") is made and entered into by and between The
TriZetto Group, Inc. (the " Company ") and Jeffrey H.
Margolis (" Executive "). Once signed by both of the
parties, this Agreement will be deemed effective as of
January 1, 2006 (the " Effective Date "). This
Agreement supersedes all previous agreements, promises,
representations, understandings and negotiations between the
parties, whether written or oral, with respect to the subject
matter hereof, except as expressly provided herein.
WHEREAS, the Company and Executive previously entered into that
certain Executive Employment Agreement, effective January 2,
2005 (the " Original Employment Agreement "), which sets
forth the terms and conditions of Executive’s employment as
Chief Executive Officer of the Company; and
WHEREAS, the Company and Executive now desire to amend certain
terms and conditions of the Original Employment Agreement and
restate the agreement in its entirety.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the parties
hereto agree to amend and restate the Original Employment Agreement
as of the date hereof as follows:
1. Employment. The Company hereby employs
Executive as the Chief Executive Officer of the Company. Executive
accepts such employment, reporting directly to the Board of
Directors of the Company ("Board").
2. Term. The term of this Agreement and of
Executive’s employment pursuant to this Agreement shall
commence on the Effective Date and end on the date that
Executive’s employment may be terminated as provided in
Section 6 below.
3. Place of Performance. Executive shall be based
at the Company’s office located in Orange County, California,
but Executive from time-to time may be required to travel to other
geographic locations in connection with the performance of his
duties.
4. Duties and Responsibilities.
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4.1 Service with the Company. Executive shall work
exclusively for the Company and shall have all the customary powers
and duties associated with his position(s) as set forth in
Section 1, above. Executive shall devote his full business
time and effort to the performance of his duties for the Company,
which he shall perform faithfully and to the best of his ability.
Executive shall be subject to the Company’s policies,
procedures and approval practices, as generally in effect from
time-to-time.
4.2 No Conflicting Duties. During the term hereof,
Executive shall not serve as an officer, director, employee,
consultant or advisor to any other competing business or as an
officer, employee or consultant to any other business, unless such
other service is approved by the Board. Executive hereby confirms
that he is under no contractual commitments inconsistent with his
obligations set forth in this Agreement, and agrees that during the
term of this
Agreement he will not render or perform services,
or enter into any contract to do so, for any other corporation,
firm, entity or person which are inconsistent with the provisions
of this Agreement. The Company acknowledges and agrees that
Executive may serve as a member of the Pfizer Health Solutions
Advisory Board.
5. Compensation.
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5.1 Annual Base Salary. As compensation for all services
to be rendered by Executive under this Agreement, the Company shall
pay to Executive a base annual salary of Five Hundred Forty-Six
Thousand Twenty-One Dollars ($546,021) ("Annual Base Salary"),
which salary shall be paid in conformity with the Company’s
pay practices generally applicable to Company executives. Executive
will be eligible for annual pay increases as determined by the
Board. If this Agreement is signed by the parties after the
Effective Date, Executive’s Annual Base Salary shall be paid
retroactively to the Effective Date.
5.2 Bonus. Executive will be eligible for annual
bonus compensation in an amount to be determined by the
Compensation Committee of the Board based on the Company’s
achievement of financial performance and other objectives, as well
as Executive’s achievement of individual performance
objectives, established by the Compensation Committee each year. If
all Company and Executive’s individual performance objectives
are met, it is expected that the bonus paid, if any, will be equal
to Executive’s Annual Base Salary for the year for which the
bonus is paid. Any bonus awarded may be greater or less than
Executive’s Annual Base Salary, depending on whether the
Company’s and Executive’s performance exceeds or falls
short of the established objectives.
5.3 Stock Options. In connection with his
continuing employment with the Company, Executive was granted on
February 9, 2005 a stock option to purchase 150,000 shares of
the Company’s common stock at $8.48 per share (the "Option").
The Option shall be subject to all the terms of The TriZetto Group,
Inc. 1998 Long-Term Incentive Plan, under which it was granted, and
the option agreement between Executive and the Company evidencing
the Option.
5.4 [Reserved.]
5.5 Retention Incentive. As an incentive for Executive to
remain an employee of the Company, the Company shall make three
retention incentive payments (each, a "Retention Payment") in the
amount of $44,227.78, less tax and other customary payroll
withholdings and deductions, each to Executive. A Retention Payment
shall be made on each of January 1, 2006, January 1,
2007, and January 1, 2008. Except as set forth in
Section 6.7(a), Executive must be an active employee on the
payment date in order to be eligible to receive the applicable
Retention Payment.
5.6 Annual Perquisites. Executive shall be
entitled, at Company’s expense, to use for personal reasons
the Company’s owned or leased aircraft for up to twenty-five
(25) hours for each of the calendar years ending
December 31, 2006, 2007 and 2008.
5.7 Standard Benefits. During the term of this
Agreement, Executive shall be entitled to participate in all
employee benefit plans and programs, including paid vacations, to
the same extent generally available to Company executives, in
accordance with the terms of
those plans and programs. The Company shall have
the right to terminate or change any such plan or program at any
time.
5.8 Expense Reimbursement. Executive shall be
entitled to receive prompt reimbursement for all reasonable and
customary travel and business expenses he incurs in connection with
his employment, but must incur and account for those expenses in
accordance with the policies and procedures established by the
Company.
5.9 Indemnification. The Company shall indemnify
Executive in his capacities as a director and officer of the
Company to the fullest extent allowed by law, as more fully
described in the Indemnification Agreement dated April 17,
2003 or any successor agreement.
5.10 Sarbanes-Oxley Act Loan Prohibition. To the
extent that any Company benefit, program, practice, arrangement or
this Agreement would or might otherwise result in Executive’s
receipt of an illegal loan ("Loan"), the Company shall use
reasonable efforts to provide Executive with a substitute for the
Loan that is lawful and of at least equal value to Executive. If
this cannot be done, or if doing so would be significantly more
expensive to the Company than making the Loan, the Company need not
make the Loan to Executive or provide him a substitute for it.
6. Termination.
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6.1 Termination by the Company Without Cause. The Company
may terminate Executive’s employment pursuant to this
Agreement without Cause (defined below) by giving ninety
(90) days’ written notice to Executive.
6.2 Termination by the Company for Cause. The
Company may terminate Executive’s employment and this
Agreement for Cause. As used herein, "Cause" shall mean:
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(a) The continued, unreasonable refusal or omission by Executive
to perform any material duties required of him by this Agreement or
as reasonably requested by the Board of Directors of the Company if
consistent with the terms of this Agreement;
(b) Any material act or omission by Executive involving
malfeasance or gross negligence in the performance of
Executive’s duties to, or material deviation from any of the
material policies or directives of, the Company, in a manner that
materially damages the Company;
(c) Conduct on the part of Executive which constitutes the
breach of any statutory or common law duty of loyalty to the
Company, in a manner that materially damages the Company; or
(d) Any illegal act by Executive which materially and adversely
affects the business of the Company or any felony (other than
traffic violations) committed by Executive, as evidenced by
conviction thereof, provided that the Company may suspend the
Executive with pay while any allegation of such illegal or
felonious act is investigated.
Termination by the Company for cause shall be
accomplished by written notice to Executive and shall be preceded
by a written notice providing a reasonable opportunity and
timeframe (which timeframe shall not in any case exceed thirty
(30) days) for Executive to correct his conduct. Any such
termination shall be without prejudice to any other remedy to which
the Company may be entitled either at law, in equity, or under this
Agreement.
6.3 Termination by Company for Death or
Disability. Executive’s employment pursuant to this
Agreement shall be immediately terminated without notice by the
Company (i) upon the death of the Executive or (ii) upon
the Executive becoming totally disabled. For purposes of this
Agreement, the term "totally disabled" means an inability of
Executive, due to a physical or mental illness, injury or
impairment, to perform a substantial portion of his duties for a
period of one hundred eighty (180) or more consecutive days,
as determined by the Company’s Board of Directors.
6.4 Termination by Executive Without Good Reason.
Executive may terminate Executive’s employment pursuant to
this Agreement without any reason by giving ninety
(90) days’ written notice to the Company.
6.5 Termination by Executive for Good Reason.
Executive’s employment pursuant to this Agreement may be
terminated by Executive for "good reason" if Executive voluntarily
terminates his employment as a result of any of the following:
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(a) Without Executive’s prior written consent, a reduction
in his then current Annual Base Salary, other than as part of
across-the-board salary reductions affecting all similar executives
of the Company;
(b) The taking of any action by the Company that would
substantially diminish the aggregate value of the benefits provided
the Executive under the Executive’s medical, health,
accident, disability insurance, life insurance, thrift and
retirement plans in which he was participating on the date of this
Agreement, other than any such reduction which is (i) required
by law, (ii) implemented in connection with a general
concessionary arrangement affecting all employees or affecting the
group of employees (senior management) of which the Executive is a
member or (iii) generally applicable to all beneficiaries of
such plans;
(c) Without Executive’s prior written consent, a
relocation of the Executive’s place of employment outside of
Orange County, California
(d) Removal of Executive from his position of Chief Executive
Officer or from his position on the Company’s Board of
Directors;
(e) A reduction in duties and responsibilities which results in
Executive no longer having duties customary for a Chief Executive
Officer;
(f) The Company materially breaches any provision of this
Agreement; or
(g) Any failure by any successor to the Company to assume the
obligations under this Agreement.
An event that is or would consti
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