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Executive Employment Agreement

Executive Employment Agreement

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TELETECH HOLDINGS INC | Customer Management Services | TeleTech Holdings, Inc | TeleTech Services Corporation, Inc

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Title: EXECUTIVE EMPLOYMENT AGREEMENT
Governing Law: Colorado     Date: 8/3/2016
Industry: Computer Services     Sector: Technology

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Exhibit 10.83

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

This Executive Employment Agreement (“Agreement”) is by and between TeleTech Services Corporation, Inc., a Delaware corporation (“TSC” or the “Company”), a wholly owned subsidiaries of TeleTech Holdings, Inc., a Delaware corporation (“TeleTech Parent”), and Martin F. DeGhetto ("Employee" or “DeGhetto”), each a “Party” and together the “Parties.” The Agreement is executed to be effective as of July 1, 2016 (“Effective Date”).

 

Whereas, Mr. DeGhetto joined TSC in March, 2010 and is currently employed as Executive Vice President for TeleTech business segment known as Customer Management Services (CMS); and in this role Mr. DeGhetto reports to TeleTech Parent company’s Chief Executive Officer, Mr. Kenneth D. Tuchman (the “CEO”), and is a member of the TeleTech Parent executive leadership team (known as the “Executive Committee” or the “EC”).

 

Whereas , Mr. DeGhetto currently is an employee at-will and does not have an employment agreement with TeleTech Parent or TSC; and, whereas it is the desire of TeleTech Parent and the Compensation Committee of the TeleTech Board of Directors (“Compensation Committee”) that all members of the TeleTech Parent Executive Committee should have formal contractual employment arrangements with the Company, and that such arrangements shall be approved by the Compensation Committee;

 

Now, Therefore, the purpose of this Agreement is not to change , but to formally document the terms and conditions of Mr. DeGhetto’s employment with the Company and to have such terms and the Agreement approved by the Compensation Committee as of the Effective Date. 

 

1. Appointment .  

 

a. The Agreement, hereby confirms Mr. DeGhetto’s appointment as Executive Vice President for TeleTech CMS business segment, reporting to TeleTech Parent CEO. Mr. DeGhetto shall retain his responsibilities as a member of TeleTech Parent Executive Committee.

 

b. Mr. DeGhetto shall devote his full-time and best efforts to the performance of all duties contemplated by his title and responsibilities, and as assigned to him from time to time by the CEO or his delegates. Unless otherwise specifically authorized in writing by TeleTech Parent, Employee shall not engage in any other business activity, or otherwise be employed by any other company other than TeleTech’s subsidiaries. Notwithstanding the foregoing, Mr. DeGhetto is not precluded by the terms of this Agreement from serving on boards of directors of other non-competitor companies or not-for-profit organizations with TeleTech Parent’s prior written approval.

 

c. As a member of TeleTech Parent Executive Committee, Mr. DeGhetto shall render services to TeleTech Parent as necessary and desirable to protect and advance the best interests of TeleTech Parent and all its affiliated companies, acting at all times, in accordance with TeleTech Ethics Code: How TeleTech Does Business (or a successor code of conduct document) and in accordance with all other material policies and procedures.

 

d. Mr. DeGhetto’s role with the company requires extensive travel and Mr. DeGhetto understands and agrees that such travel is a material part of his responsibilities.  Mr. DeGhetto shall travel in accordance with TeleTech Parent travel policy. Notwithstanding the provisions of the travel policy to the contrary, the Company agrees that Mr. DeGhetto will be permitted to travel in business class for international travel exceeding 6 hours in duration.

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e. Notwithstanding other provisions in this Agreement, Mr. DeGhetto understands and agrees that his role and responsibilities may change over time in the best interest of the business, and TeleTech Parent reserves the right to assign to Mr. DeGhetto different roles and assignments that best serve the business.

 

2. Compensation .

 

a. Salary and Period Salary Review .  As of the Effective Date, Mr. DeGhetto’s base salary is $400,000 per year (“Base Salary”), payable in equal installments in accordance with the Company’s standard payroll practice, less legally required deductions and withholdings.  Mr. DeGhetto’s Base Salary may be periodically reviewed and adjusted, at CEO’s discretion, to appropriately reflect his role in the business, the contribution of the role, and the market pay for such role in accordance with TeleTech standard compensation review practices. Notwithstanding the foregoing, nothing in this Agreement provides assurances that Mr. DeGhetto’s salary will be increased from time to time.

 

b. Variable Incentive Compensation (annual cash bonus) .  As of the Effective Date, Mr. DeGhetto is eligible to participate in an annual performance based cash incentive program, currently referred to as TeleTech Variable Incentive Plan (“VIP”).  Mr. DeGhetto’s annual VIP opportunity currently is and shall remain to be up to   200% of his Base Salary (i.e. up to $800,000 in cash based on Mr. DeGhetto’s current level of Base Salary), tied to the annual targets and goals of the business as set by the CEO and TeleTech’s Board of Directors.  Mr. DeGhetto’s annual VIP awards will be based on a combination of metrics set-out and approved by TeleTech and its executive leadership team annually by the Compensation Committee.  At present these metrics include the (i) TeleTech-wide results of operations; (ii) business segment specific results, including Mr. DeGhetto’s business segment’s revenue and operating income goals; and (iii) Mr. DeGhetto individual performance against targets set-out by the CEO. The timing for VIP awards are determined from time to time by the Compensation Committee annually.

 

c. Annual Equity Grant .  Mr. DeGhetto is also eligible to participate in TeleTech’s annual Equity program, designed to provide long term incentives for senior executives of the Company and align their interests with company stockholders.  Currently, TeleTech offers its equity grants in the form of restricted stock units, vesting over a period of years (the “RSUs”).  Mr. DeGhetto is and shall remain eligible for an annual equity grant opportunity of up to   200% of his Base Salary (i.e. up to $800,000 in cash based on Mr. DeGhetto’s current level of Base Salary) in fair market value of TeleTech equity at time of the grant. The actual amount of the annual equity grant is discretionary and is not guaranteed. It is based on TeleTech’s performance overall, the performance of the business segment for which Mr. DeGhetto is responsible and Mr. DeGhetto’s individual performance against targets, as set by the TeleTech Board annually. The RSUs are granted under the terms of grant-specific agreements that are approved by the Compensation Committee from time to time (“Equity Agreements”).  These Equity Agreements provide vesting schedules, performance metrics, if any, and other material terms of each grant. TeleTech and its Compensation Committee reserve the right, at its discretion, to change the terms of future Equity Agreements and the equity granted thereunder. The use of the RSUs, as part of the annual equity grant, is discretionary and may be substituted, at the discretion of the Compensation Committee, by other equity instruments in accordance with incentive compensation plans adopted by the Compensation Committee from time to time.  All grants as part of TeleTech Parent Equity program are subject to Executive Stock Ownership Guidelines included in this Agreement as Exhibit C .

 

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d. Reimbursement of Business Expenses.  The Company agrees to reimburse Mr. DeGhetto for all reasonable out-of-pocket business expenses incurred by Mr. DeGhetto on behalf of the Company in accordance with TeleTech expense reimbursement policies.

 

e. Services  to  Subsidiaries . Mr. DeGhetto acknowledges that, as part of his employment responsibilities, he may be required to serve as an officer and/or director (“D&O”) of TeleTech subsidiaries, affiliates and related entities.  He hereby agrees to perform such duties   diligently and without additional compensation, and to follow TeleTech direction in the performance of such services. For the duration of such D&O services, TeleTech shall maintain appropriate D&O insurance policies for Mr. DeGhetto’s protection in connection with the services. Furthermore, Mr. DeGhetto agrees to resign such D&O roles, if requested to do so by TeleTech.  At the time contemporaneous with the execution of this Agreement, Mr. DeGhetto will sign a resignation letter attached hereto, as Exhibit A , which letter shall become effective on termination of this Agreement, for any reason, or without termination, at TeleTech’s discretion, if TeleTech determines that such resignation is in the best interest of the business.

 

f. Tax  Liability and Withholdings.  All compensation and other payments made under this Agreement will be subject to withholding of the federal, state, and local taxes, Social Security, Medicare and other withholdings in such amounts as is reasonably determined by Company. The withholdings taxes due with respect to any equity grants may, at Company’s discretion and in accordance with the relevant equity plans, be deducted directly from the equity being granted or as it vests.  The Company shall have the right to take all the action as it deems necessary to satisfy its and employees tax withholding obligations.

 

4. Benefits .

a. Health and Welfare Benefits Mr. DeGhetto shall continue to be eligible to participate in TeleTech health and wellness plans in a manner similar to others at his level of responsibility in the Company, including the participation for Mr. DeGhetto and dependents in TeleTech group medical, vision, and dental insurance and other welfare plans, as they continue or change from time to time. 

b. Executive Benefits .   Mr. DeGhetto will continue to be eligible for the special annual executive physical program and the Company will continue to pay premiums on his $4M life insurance policy.  

 

c. Miscellaneous benefits .  Mr. DeGhetto shall continue to be eligible for benefits generally applicable to other senior management employees of the Company, as they are in effect from time to time, including TeleTech 401(k) Plan and its Deferred Compensation Plan.

 

d. Paid Leave .   Mr. DeGhetto shall continue to be eligible for paid time off (“PTO”) and sick leave benefit programs pursuant to the Company’s current time off/leave p olicy (or any other vacation/sick policy then in effect).  Mr. DeGhetto will also be paid for time off for holidays in accordance with the TeleTech holiday policy.

 

e. Tenure .  Notwithstanding the effective date of this Agreement, Mr. DeGhetto’s tenure for purposes of all benefits and otherwise shall date back to his original hire date in March 2010. 

 

 

 

 

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5. Change in Control .

 

a. Vesting . Notwithstanding the vesting schedules contained in Equity Agreements that Mr. DeGhetto would hold, upon a “Change in Control” event (as defined below), any unvested equity RSUs awards that would otherwise vest on or after the effective date of the Change in Control event shall be accelerated and become 100% vested on the effective date of the Change in Control event; provided ,   however , that for purposes of a Change in Control pursuant to Paragraph 5(c) of this Agreement, the unvested equity shall be deemed to have vested immediately prior to a Change in Control event, in order to allow such equity to participate in such Change in Control transaction.

 

b. Consistent with Other Similar Provisions . For the avoidance of doubt, the terms of this Change in Control provision are substantially similar to those that are included in the Equity Agreements that Mr. DeGhetto currently holds.  The sole purpose of the provision being restated in this Agreement is to reiterate the Change in Control provisions in this omnibus Agreement that control the terms of Mr. DeGhetto’s employment with the Company. 

c. Definition of “Change in Control.    For purposes of this Agreement, “Change in Control ” event shall mean the occurrence of any one of the following:

(i)Any consolidation, merger or other similar transaction (i) involving TeleTech Parent, if TeleTech Parent is not the continuing or surviving corporation, or (ii) which contemplates that all or substantially all of the business and/or assets of TeleTech Parent would be controlled by another corporation not controlled by TeleTech Parent;

(ii) Any sale, lease, exchange or transfer (in one transaction or series of related transactions) of all or substantially all of the assets of TeleTech Parent (a “ Disposition ”); provided ,   however , that the foregoing shall not apply to any Disposition with respect to which, following such Disposition, more than 51% of the combined voting power of the then outstanding voting securities of the receiving entity for the Disposition are directly or indirectly (beneficially or otherwise) owned by all or substantially all of the individuals and entities that were the beneficial owners of at least 51% of the outstanding common stock and/or other voting securities of TeleTech Parent immediately prior to such Disposition, in substantially the same proportion of total ownership as their ownership immediately prior to such Disposition;  

(iii)Approval by the stockholders of TeleTech Parent of any plan or proposal for the liquidation or dissolution of TeleTech, unless such plan or proposal is abandoned within 60 days following such approval;

(iv) The acquisition by any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the U.S. Securities Exchange Act of 1934, as amended (“the Exchange Act”)), or two or more persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of  the Exchange Act) of 51% or more of the outstanding shares of voting stock of TeleTech Parent; provided ,   however , that for purposes of the foregoing, the term “person” shall exclude Kenneth D. Tuchman and his affiliates; provided ,   further that the foregoing shall exclude any such acquisition (1) made directly from TeleTech Parent, (2) made by TeleTech Parent (directly or through an affiliated company), or (3) made by an TeleTech employee benefit plan (or related trust) sponsored or maintained by TeleTech Parent or any of its affiliate; or

(v) If, during any period of 15 consecutive calendar months commencing at any time on or after the Effective Date, those individuals (“Continuing Directors”) who either (1) were directors of TeleTech Parent on the first day of each such 15‑months period, or

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(2) subsequently became directors of TeleTech Parent and whose actual election or initial nomination for election subsequent to that date was approved by a majority of the Continuing Directors who were then members of the  TeleTech Parent Board of Directors, cease to constitute a majority of the Board of Directors of TeleTech Parent.

6. Termination .

 

a. Termination by Either Party Except as set forth in Paragraphs 6(c), (e) and (f), either Party may terminate the employment relationship with 30 days’ written notice to the other.  Both parties may mutually agree to a shorter period.  

 

b.  Termination by the Company without Cause .   Upon 30 days written notice, the Company, in its sole discretion, may terminate Mr. DeGhetto’s employment without Cause (as “Cause” is defined in Paragraph 6(f) below).  If Mr. DeGhetto executes a separation agreement in a form substantially similar to the agreement set forth in Exhibit B (attached hereto), releasing all legal claims except for those that cannot legally be released and Mr. DeGhetto continues to comply with all terms of such separation agreement, and any other agreements signed by the Employee with the Company, then the Company shall pay Mr. DeGhetto severance compensation equal to twelve (12) full calendar months of Mr. DeGhetto’s then current base pay.  Salary continuation payments will be made at the Company’s regular payroll intervals, provided, however, payments accruing for payroll periods prior to the date that the Company has received a signed and effective separation agreement and release shall be suspended and paid on the first payroll date following the effective date of the separation and release. 

 

If the Company terminates this Agreement  without Cause  under this Paragraph  6(b), and the Company pays Mr. DeGhetto the compensation earned as of the effective date of the termination, and provides Mr. DeGhetto severance compensation in the amount and on the terms specified in this Paragraph 6(b), the Company’s acts in doing so shall be in complete accord and satisfaction of any claim that Mr. DeGhetto has or may at any time have for compensation or payments of any kind from the Company or TeleTech Parent arising from or relating in whole or part to Mr. DeGhetto's employment with the Company and/or this Agreement. If the separation agreement and legal release referenced above is not signed within thirty (30) days from the date that such agreement is presented to Mr. DeGhetto(which the Company shall present no later than fifteen (15) days after the effective date of Employee’s termination), then Mr. DeGhetto waives his right to receive any severance compensation pursuant to this Agreement, even if Mr. DeGhetto were to successfully litigate any claim against the Company and/or TeleTech Parent.  

 

c. Termination by the Company for Cause The Company may terminate this Agreement with no notice for Cause , as that term is defined in Paragraph 6(g), with the Company's only obligation being the payment of any salary and compensation earned as of the date of termination, and any continuing obligations under the Company benefit plans then in effect, and without liability for severance compensation of any kind, including the base pay severance set forth in Paragraph 6(b). 

 

d. Termination by Employee . Mr. DeGhetto is not entitled to severance compensation if he terminates his employment with Company for any reason.

 

e. Termination upon Employee’s Death .  This Agreement shall terminate immediately upon Employee’s death.  Thereafter, the Company shall pay to the Employee’s estate all compensation fully earned, and benefits fully vested as of the last date of Employee’s

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continuous, full-time active employment with the Company.  For purposes of this Agreement, continuous, full-time active employment shall be defined as the last date upon which Employee continuously performed his job responsibilities on a regular, full-time basis consisting of at least 35 hours per week, and in the usual course of the Company’s business (“Continuous Full-Time Active Employment”).  In case of Employee’s death, the Company shall not be required to pay any form of severance or other compensation concerning or on account of the Employee’s employment with the Company or the termination thereof.

 

f. Termination Due to or Following Disability During the first ninety (90) calendar days after a mental or physical condition that renders Employee unable to perform the essential functions of his position with reasonable accommodation (the “Initial Disability Period”), Employee shall continue to receive his base salary pursuant to Paragraph 2(a) of this Agreement.  Thereafter, if Employee qualifies for benefits under the Company’s long term disability insurance plan (the “LTD Plan”), then Employee shall remain on leave for as long as Employee continues to qualify for such benefits, up to a maximum of 180 consecutive days (the “Long Term Leave Period”).  The Long Term Leave Period shall begin on the first day following the end of the Initial Disability Period.  During the Long Term Leave Period, Employee shall be entitled to any benefits to which the LTD Plan entitles Employee, but no additional compensation from the Company in the form of salary, performance bonus, equity grants, allowances or otherwise. If during or at the end of the Long Term Leave Period Employee remains unable to perform the essential functions of his position, then the Company may terminate this Agreement and/or Employee’s employment. If the Company terminates this Agreement or Employee’s employment under this Paragraph 6(f), the Company’s payment obligation to Employee shall be limited to all compensation fully earned, and benefits fully vested as of the last date of Employee’s Continuous, Full-Time Active Employment with the Company. 

 

g. Definition of “Cause”.  For purposes of this Agreement, “Cause” shall have the following meaning:

 

(i) Fraud,  theft, embezzlement (or attempted fraud, theft, embezzlement), dishonest acts or illegal conduct;

 

(ii) Other similar acts of willful misconduct on the part of Employee resulting in damage to TeleTech Parent or the Company;

 

(iii) A material breach by the Employee of this Agreement;

 

(iv) Use of any controlled substance or alcohol while performing Employee’s duties, except as part of a TeleTech Parent or Company-sponsored event in connection with a business-related social engagement such as a trade conference or customer entertainment, but only in moderation and in a professional manner that reflects positively on TeleTech Parent and the Company; with visible inebriation at a business-related social engagement constituting a cause for immediate termination;

 

(v) A  breach of a  fiduciary duty that results in an adverse impact to TeleTech Parent or the Company or in personal profit to the Employee (as determined by the Company based on its conflict of interest policies outlined in the TeleTech Ethics Code);

 

(vi) Use of trade secrets or confidential information of TeleTech Parent or the Company, other than in pursuit of TeleTech Parent or the Company’s business; 

 

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(vii) Aiding a competitor of TeleTech Parent; or

 

(viii) Failure by Employee in the performance of his duties that results in material adverse effect on TeleTech Parent, the Company or TeleTech Parent subsidiary companies. 

 

If the act or acts constituting Cause are susceptible of cure, Company will provide Employee with written notice setting forth the acts constituting Cause and providing that Employee may cure such acts within thirty (30) business days of receipt of such notice.  Any recurrence of acts constituting Cause within one (1) year of the original occurrence will void Employee’s right to such pre-termination right to cure.

 

h. Continuing Obligations . Mr. DeGhetto shall remain subject to the Company’s Agreement to Protect Confidential Information, Assign Inventions and Prevent Unfair Competition and Unfair Solicitation (“Confidentiality Agreements”), Arbitration agreements, Equity Agreements, and any other similar agreements executed at any time during his employment, including without limitation this Agreement, all of which survive termination of employment.

7. Non-Disclosure, Non-Competition and Non-Solicitation.    

 

As a senior member of the executive leadership team of TeleTech Parent, the Employee is privy to TeleTech Parent company wide global business and financial strategy.  Therefore, in addition to the provisions of the Confidentiality Agreements that the Employee signed at the time of his original employment with the Company, the Employee in consideration of the employment opportunity and compensation provided hereunder, agrees and covenants during the term of his affiliation with the Company (as an employee or otherwise):

a. Non-Compete Undertaking . For a period of twelve (12) months from separation from TeleTech Parent and/or the Company, not to work or otherwise contribute his knowledge, directly or indirectly, in whole or in part, as an employee, officer, owner, manager, advisor, consultant, agent, partner, director, significant shareholder (i.e. a shareholder holding more than 5% of outstanding equity in the company), volunteer, intern or in any other similar capacity anywhere in the world to a business entity engaged in the same or substantially similar business as TeleTech Parent its subsidiaries and affiliates, including entities engaged in the full life cycle of customer strategy, analytics-driven, technology-enabled customer engagement management solutions from customer engagement strategy consulting, to technology and analytics driven customer acquisition to technology solution development and integration to business process outsourcing customer care (collectively, “TeleTech Business”).  The Non-Compete Undertaking shall apply throughout, and shall be limited by, the territory where the Employee performs services for the Company and TeleTech Parent, as provided in this Agreement.  For the avoidance of doubt, the term ‘performs services for’ shall not be limited to ‘works at’ or any other limitation delineating where the Employee performs the actual services, but instead shall relate to the entire territory where the Company and TeleTech Parent benefits and is reasonable to expect to benefit from the Employee’s services. Given Mr. DeGhetto’s role as the Executive Vice President for CMS business, the territory for purposes of this Agreement shall be worldwide.

b. Employee Non-Solicitation Undertaking . For a period of twelve (12) months from separation from TeleTech Parent and the Company, Employee agrees not to solicit, hire, recruit, attempt to hire or recruit, or induce the termination of employment, directly or indirectly, of any then current employee of the Company or its subsidiaries and affiliates; and

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c. Client Non-Solicitation Undertaking . For a period of twelve (12) months from separation from TeleTech Parent or the Company, Employee agrees not to solicit or interfere with business relationships between TeleTech Parent, the Company, and current and prospective (currently actively pursued) clients of TeleTech Parent, or any of its subsidiaries and affiliates, for purposes of offering or accepting goods or services similar to or competitive with those offered by TeleTech Parent or any of its subsidiaries and affiliates.

d. Consequences of Breach. If Employee breaches any of the covenants and undertakings set forth in this Paragraph 7:

(i)All of Employee’s unvested equity shall be immediately forfeited and neither TeleTech Parent nor the Company shall have any further liabilities to Employee pursuant to this Agreement, including without limitation no liability for any equity not yet granted or granted and unvested;

(ii)Employee and those who aid him in such breach shall be liable for all costs and business loses including any damages and out-of-pocket expenses associated with or resulting from such breach; and

(iii)Employee hereby consents and agrees that TeleTech Parent and the Company shall be entitled to seek, in addition to other available remedies, a temporary or permanent injunction or other equitable relief against such breach or threatened breach from any court of competent jurisdiction, without the necessity of showing any actual damages or that money damages would not afford an adequate remedy, and


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