This Executive Employment Agreement involves
Title: EXECUTIVE EMPLOYMENT AGREEMENT
Governing Law: Illinois Date: 8/8/2016
Industry: Investment Services Sector: Financial
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “ Agreement ”) is entered into effective as of April 4, 2016, by and among Calamos Asset Management, Inc., a Delaware corporation (“ CAM ”), Calamos Advisors LLC, a Delaware limited liability company (“ Advisors ”) and wholly owned subsidiary of its sole managing member, Calamos Investments LLC (“ CILLC ”), and CILLC (together with each of their respective successors and assigns permitted under this Agreement sometimes referred to herein as the “ Company ”), and John S. Koudounis (the “ Executive ”).
WHEREAS , the Company desires to employ Executive, and Executive desires to serve, as Chief Executive Officer of the Company;
NOW THEREFORE , the parties agree as follows:
1. Term . The Executive’s employment under this Agreement shall commence on April 4, 2016 (the “ Effective Date ”). The term of this Agreement (the “ Term ”) shall begin as of the Effective Date and shall continue until the fifth (5th) anniversary of the Effective Date, provided that upon such fifth anniversary and each anniversary thereafter the Term shall automatically renew for successive periods of one (1) year unless the Board of Directors (the “ Board ”) of CAM, and the Chairman of the Board of the Company (the “ Chairman ”), gives written notice to Executive or Executive gives written notice to the Company and the Chairman, in accordance with Section 18(c) , below at least sixty (60) days prior to the commencement of any such one (1) year renewal period that the Term shall not be further extended. The portion of the Term during which Executive is actually employed by the Company shall be hereinafter referred to as the “ Employment Period .”
2. Duties .
(a) Executive’s Position and Title . During the Employment Period, Executive’s position and title shall be Chief Executive Officer of each of CAM, Advisors and CILLC.
(b) Executive’s Duties . Executive shall have the power and authority to act for and in the name of the Company, shall have general and active management and control of the business and affairs of the Company, subject to the control of the Board and Chairman, and shall include the performance of such lawful and reasonable duties and responsibilities as the Board and/or the Chairman may from time to time assign to Executive consistent with Executive’s position as Chief Executive Officer. Executive recognizes that during the period of Executive’s employment hereunder, Executive owes an undivided duty of loyalty to the Company, and Executive will use Executive’s good faith efforts to promote and develop the business of the Company. The Company recognizes that during the period of Executive’s employment hereunder, Executive may maintain an investment or ownership interest in, and provide certain services to, (i) Calamos Family Partners, Inc., any entity established by Calamos Family Partners, Inc. to facilitate such investment or the provision of such services or any subsidiary of Calamos Family Partners, Inc. (which for purposes of this Agreement shall not include CAM, Advisors, CILLC or any of their subsidiaries) (Calamos Family Partners, Inc. and each such entity and subsidiary as referred to herein as “ CFP ”), (ii) Calamos Property Holdings LLC, any entity established by Calamos Property Holdings LLC to facilitate such investment or the providing of such services and any subsidiary of Calamos Property Holdings LLC (which for purposes of this Agreement shall not include CAM, Advisors, CILLC or any of their subsidiaries) (Calamos Property Holdings LLC, and each such entity and subsidiary referred to herein as “ CPH ”) and (iii) Exin Group,
including its subsidiaries and affiliates including Exin Re. The Company acknowledges and agrees that Executive’s provision of such services and maintaining any such investment or ownership interests shall not be in breach of this Agreement so long as the provision of such services and maintaining of such investment (A) do not interfere materially with Executive’s primary duties and responsibilities hereunder and (B) do not breach Executive’s obligations under the CRCA (as defined in Section 12 below) (each such service and investment a “ Permitted Activity ”). Recognizing and acknowledging that it is essential for the protection and enhancement of the name and business of the Company and the goodwill pertaining thereto, Executive shall perform his duties under this Agreement in accordance with the applicable laws, rules and regulations. Executive will not perform any duties for any other business, other than a Permitted Activity, without the prior written consent of the Chairman and/or the Board, but may engage in charitable, civic or community activities; provided that such duties or activities do not materially interfere with the proper performance of Executive’s duties under this Agreement. Executive shall be subject to the Company’s written code of ethics as well as all applicable written Company policies and procedures, copies of which have been provided to Executive.
(c) Board Service . Executive has been appointed to the Board as a Class B Director, effective as of the Effective Date, to serve as provided in CAM’s Second Amended and Restated Certificate of Incorporation and Third Amended and Restated By-laws. The Company agrees to propose to the Nominating and Corporate Governance Committee of the Board that, at each annual meeting of stockholders during the Employment Period at which he is up for election, Executive shall be nominated for reelection as a member of the Board. If so elected, Executive agrees that he will serve as a member of the Board, and, if appointed, serve on the board of directors or managers, as applicable, of any of its subsidiaries and affiliates, in each case without additional compensation.
(d) Resignation from Positions . On or after the delivery of a Notice of Termination by the Company or the Executive pursuant to Section 5(g) or the last day of the Employment Period, the Executive shall resign, in writing, from the Board and any or all offices, directorships and fiduciary positions of the Company and its affiliates in which Executive is serving, as the Company may request.
(e) No Conflict with Prior Agreements . The Executive represents and warrants to the Company that the Executive’s execution of this Agreement, the Executive’s employment with the Company and the performance of the Executive’s proposed duties for the Company will not violate any obligations the Executive may have to his prior employer or other party. In the Executive’s work for the Company, the Executive will be expected not to make any unauthorized disclosure or use, and the Executive will not disclose or make use, of any information in violation of any agreements with or rights of such prior employer or other party. The Executive represents and warrants that the Executive will not possess or bring to the premises of the Company confidential or proprietary information, in tangible or electronic format, arising out of prior employment, consulting, or other third party relationship, which possession is in violation of any agreement with or rights of such prior employer or other party.
3. Compensation and Benefits .
(a) Base Salary . During the Employment Period, Executive shall receive a base salary (“ Base Salary ”), paid in accordance with the normal payroll practices (currently bi-monthly) of the Company, at an annual rate of $800,000, less applicable deductions. The Base Salary shall be reviewed from time to time in accordance with the Company’s policies and practices, but no less frequently than once annually and may be increased (but not decreased), at any time and from time to time by action of the Board and the Chairman or the Compensation Committee. The term “Base Salary” shall include any such increase to the Base Salary from time to time.
(b) Short Term Incentive (Annual Bonus) Compensation . In respect of each fiscal year of the Company that ends during the Employment Period, in supplement to the Base Salary, Executive shall
participate in such annual discretionary short-term incentive (bonus) plans and programs as may be in effect from time to time in accordance with the Company’s compensation practices and the terms and provisions of any such plans or programs (“ Annual Bonus Program ”); provided, however, that the annual bonus paid to Executive with respect to each calendar year ending within the Employment Period shall not be less than $2,600,000. The annual bonus under this Section 3(b) shall be paid to Executive in cash at such time as annual bonuses are paid to other senior executive officers of the Company under the Annual Bonus Program, but no later than March 15 following the calendar year to which such bonus relates.
(c) Long Term Incentive Program . In supplement to the Base Salary and participation in the Annual Bonus Program, Executive shall participate during the Employment Period in the Calamos Asset Management Inc. Incentive Compensation Plan, or any similar or successor plan (“ Long Term Incentive Program ”), as may be in effect from time to time in accordance with the Company’s compensation practices and the terms and provisions of any such plans or programs. Commencing with the first quarter of 2017, and during the first quarter of each subsequent calendar year ending within the Employment Period, Executive shall receive annual Long Term Incentive Program awards with an aggregate value of $1,600,000, plus such additional awards, if any, as the Compensation Committee may grant in its sole discretion based upon the Company’s and Executive’s performance. The Long Term Incentive Program awards will be awarded at such time, in such form(s) and subject to such terms and conditions generally applicable to the awards made to other senior executive officers under the Long-Term Incentive Program.
(d) Retirement and Welfare Benefit Plans . During the Employment Period, Executive and Executive’s dependents, as the case may be, shall participate in all retirement and similar benefit plans (qualified, non-qualified and supplemental), profit sharing, 401(k), medical and dental, disability, group and executive life, accidental death and travel accident insurance, and other similar welfare benefit plans and programs of the Company, subject to the terms and conditions thereof, as in effect from time to time.
(e) Perquisites . During the Employment Period, Executive shall be entitled to participate in perquisite programs on a basis no less favorable to Executive than the perquisite programs applicable to the Company’s Chairman or as such are made available to senior executive officers of the Company.
(f) Expenses . During the Employment Period, Executive shall be entitled to receive prompt reimbursement for all reasonable business expenses incurred by him in accordance with the policies and practices of the Company as in effect from time to time.
(g) Vacation . During the Employment Period, Executive shall be entitled to paid vacation in accordance with the policies and practices of the Company as in effect from time to time with respect to senior executive officers employed by the Company, but in no event shall such vacation time be less than twenty-five (25) business days per calendar year.
(h) Certain Amendments . Nothing herein shall be construed to prevent the Company from amending, altering, eliminating or reducing any plans, benefits or programs so long as Executive continues to receive compensation and benefits consistent with Sections 3(a) through (g) above.
4. Sign-On Award . In addition to the compensation and benefits described in Section 3 above, on or within thirty (30) days after the Effective Date, Executive shall receive a cash-based incentive award (“ Cash-Based Award ”) in the amount of $1,250,000. The terms and conditions applicable to the Cash-Based Award shall be as set forth in the Deferred Bonus Award Statement delivered to Executive with this Agreement.
5. Termination .
(a) Permanent Disability . Either Executive or the Company may terminate Executive’s employment, by giving notice of his or its intention to terminate Executive’s employment, after having established Executive is unable to substantially perform his duties even with a reasonable accommodation as a result of becoming permanently disabled within the definition of the Company’s then current long-term disability plan or program (whether employer or employee paid) (“ Permanent Disability ”).
(b) Cause .
(i)The Company may terminate Executive’s employment for “ Cause ” following the occurrence of any of the following events:
(A)Executive is convicted of, or has pled guilty or nolo contendere to any felony, other than a traffic related felony;
(B)Executive is found to have willfully and wrongfully misappropriated (1) money, assets or other property of the Company or its affiliates, in any such case representing more than a de minimis amount, or (2) any amount of money, assets or other property of a client of the Company or its affiliates;
(C)Executive or the Company or any of its affiliates are censured by the Securities and Exchange Commission (the “ SEC ”) pursuant to Section 203(e) or 203(f) of the Investment Advisers Act of 1940, as amended (the “ Advisers Act ”), or Section 9(b) of the Investment Company Act of 1940 (the “ Investment Company Act ”), as amended, because Executive’s willful action(s) or failure(s) to act was (were) material to the censure by the SEC pursuant to Section 203(e) or 203(f) of the Advisers Act or Section 9(b) of the Investment Company Act;
(D)Executive has acted with gross negligence in the performance of his duties under this Agreement, or has engaged in acts of gross moral turpitude which result in material harm, or can reasonably be expected to result in material harm, to the Company or its affiliates;
(E)Executive’s willful material breach of any term of this Agreement which results in material harm, or can reasonably be expected to result in material harm, to the Company or its affiliates;
(F)Executive’s continued and willful failure to substantially perform his duties as reasonably directed by the Chairman and/or the Board;
(G)Executive’s failure to maintain such licenses as are required for the performance of his duties;
(H)Executive’s material breach of the CRCA (as defined in Section 12 below); or
(I)Executive’s willful and material breach of his representations or obligations set forth in Section 2(e) above.
(ii)Provided that the applicable conditions in Section 5(b)(iii) are met, if the Company desires to terminate Executive’s employment for Cause, the Company’s cessation of Executive’s employment shall not be deemed to be for Cause by the Company unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the Board (not including
Executive) at a meeting of the Board called and held for such purpose in good faith to which Executive and his counsel are invited to attend, finding that Executive’s conduct gives rise to “Cause” as described in Section 5(b)(i) above.
(iii)Cause may not be found under Section 5(b)(i)(C) , where Executive has acted or failed to act based on the direction of the Board, the Chairman or legal counsel of the Company or its affiliates, or Executive has acted or failed to act based upon the failure of the Board, Chairman or the legal counsel of the Company or its affiliates to provide direction in response to Executive’s request for direction. Cause may not be found under Section 5(b)(i)(E), (F) or (H) , unless Executive has first been provided with written notice specifying the Cause condition in reasonable detail such that Executive can cure such Cause condition, if capable of being cured, and Executive has not substantially cured such Cause condition after being given a reasonable opportunity to cure. Cause may not be found under Section 5(b)(i)(G) , unless Executive has first been provided with written notice of the Company’s intention to terminate his employment for Cause due to the licensure issue, and a reasonable opportunity to cure the licensure issue and such assistance as is reasonable to provide.
(iv)For purposes of this Section 5(b) , no act or failure to act, on the part of Executive, shall be considered willful if it was done, or omitted to be done, by him in good faith and with a reasonable belief that his action or omission was in the best interests of the Company.
(c) Good Reason .
(i)Executive shall have the right to terminate his employment upon thirty (30) days’ written notice to the Board for “ Good Reason ” in the event of any of the following Good Reason conditions occurring without his consent and continuing for thirty (30) days after Executive’s written notice to the Board specifying , in reasonable detail, such Good Reason condition such that the Board can cure such Good Reason condition; provided that Executive provides such written notice of the condition constituting Good Reason within ninety (90) days after Executive has actual knowledge of the occurrence of the condition constituting Good Reason, the Company fails to cure such condition within thirty (30) days after receipt of such written notice and Executive terminates his employment within thirty (30) days following end of the thirty (30) day cure period:
(1)any material breach by the Company of this Agreement (including any reduction in Executive’s Base Salary, or failure to pay or provide annual bonus compensation contemplated by Section 3(b) or annual long-term incentive awards contemplated by Section 3(c) );
(2)any material adverse change in the status, position or responsibilities of Executive, including a change in Executive’s reporting relationship so that he no longer reports directly to either the Chairman and/or the Board or the removal from or failure to re-elect Executive as a member of the Board;
(3)assignment of duties to Executive that are materially inconsistent with Executive’s position and responsibilities described in this Agreement;
(4)after a Change in Control (as defined in the Long Term Incentive Program), Executive is not the Chief Executive Officer of the ultimate parent entity, if any, of the Company or its successor;
(5)the failure of the Company to assign this Agreement to a successor to the Company or failure of a successor to the Company to explicitly assume and agree to be bound by this Agreement; or
(6)requiring Executive to be principally based at any office or location more than forty (40) miles from the current offices of the Company in Naperville, Illinois.
(d) Termination by Executive without Good Reason . Executive may, at any time without Good Reason, by at least ninety (90) days’ prior written notice, voluntarily terminate his employment without liability.
(e) Termination by the Company without Cause . The Company may terminate this Agreement and Executive’s employment hereunder at any time without Cause.
(f) Expiration of Agreement . Upon expiration of the Term, Executive’s employment shall automatically terminate. For purposes of Section 6 , such termination shall be treated as a termination by the Company without Cause if such expiration is by reason of the Company having provided Executive with a notice of non-renewal pursuant to Section 1 , and shall be treated as a termination by Executive without Good Reason if such expiration is by reason of Executive having provided the Company with a notice of non-renewal pursuant to Section 1 .
(g) Notice of Termination . Any termination of Executive’s employment by the Company for Permanent Disability or with or without Cause, or by Executive for Permanent Disability or with or without Good Reason, shall be communicated by a Notice of Termination to the other party hereto given in accordance with Section 18(c) . For purposes of this Agreement, a “ Notice of Termination ” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon; (ii) in the case of termination by the Company for Permanent Disability or Cause, or by the Executive for Permanent Disability or Good Reason, sets forth in reasonable detail the circumstances claimed to provide a basis for the termination of Executive’s employment under the provision so indicated; and (iii) specifies the Date of Termination (defined below); provided, such Notice of Termination may be conditional if coupled with a notice of the Board’s consideration of “Cause” or Executive’s intention to resign for “Good Reason,” as the case may be, as provided above. The failure by 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 constitute a waiver of any right of Executive or the Company, respectively, hereunder or preclude Executive or the Company, respectively, from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.
(h) Date of Termination . “ Date of Termination ” means the date Notice of Termination is given pursuant to Section 18(c) or any later date specified therein; provided, (i) any Notice of Termination by the Company or Executive due to Disability pursuant to Section 5(a) shall be effective not more than ninety (90) days after the date given, (ii) any Notice of Termination by the Company for Cause pursuant to Section 5(b) shall be effective as of the date set forth therein, (iii) any Notice of Termination by Executive for Good Reason pursuant to Section 5(c) shall be effective not less than thirty (30) nor more than sixty (60) days after the date given, (iv) any Notice of Termination by Executive without Good Reason pursuant to Section 5(d) shall be effective not less than ninety (90) days after the date given, or such other date as may be necessary to comply with any required notice period under the CRCA, and (v) any Notice of Termination by the Company without Cause pursuant to Section 5(e) shall be effective not less than ninety (90) days after the date given. The period from the date of the Notice of Termination given pursuant to Section 5(g) to the Date of Termination as determined under this Section 5(h) is the “ Notice Period ”. At any time during the Notice Period, the Company may, in its sole discretion, request resignations pursuant to Section 2(d), elect
to reduce or remove Executive from Executive’s duties, place Executive on a leave of absence, or accelerate the Executive’s Date of Termination and such actions shall not be deemed a termination of employment by the Company for any purpose or create a condition constituting Good Reason. In the event of Executive’s death during the Term, the Date of Termination shall be the date of his death. In the event of expiration of the Term, the Date of Termination shall be the day following the last day of the Term.
6. Obligations of the Company and Executive upon Termination . Executive’s entitlements upon termination of employment are set forth below. Except to the extent otherwise provided in this Agreement, the disposition of Executive’s awards under the Long Term Incentive Program upon the termination of Executive’s employment shall be determined pursuant to the terms and provisions of the plan, arrangement and/or agreement applicable to such awards. For purposes of this Section 6 , the term “ Accrued Obligations ” shall mean, as of the Date of Termination, (i) Executive’s full Base Salary through the Date of Termination, at the rate in effect at the time Notice of Termination is given (disregarding any reduction constituting Good Reason), to the extent not theretofore paid, (ii) the amount of any bonus, incentive compensation, deferred compensation and other cash compensation earned and vested as of the Date of Termination to the extent not theretofore paid, (iii) any benefits payable under the terms and conditions of the retirement and welfare benefit plans described in Section 3(d) above, and (iv) any accrued vacation pay, expense reimbursements and other cash entitlements to which Executive is entitled as of the Date of Termination to the extent not theretofore paid. For purposes of determining an Accrued Obligation under this Section 6 , no discretionary compensation shall be deemed awarded, earned or vested unless it is specifically approved by the Board or the Compensation Committee in accordance with the applicable plan, program or policy.
(a) Death . If Executive’s employment is terminated by reason of Executive’s death, then this Agreement shall terminate without further obligations by the Company to Executive’s legal representatives under this Agreement, except as set forth in this Section 6(a) or as contained in an applicable Company plan or program which takes effect at the date of his death:
(i)Executive’s Accrued Obligations not theretofore paid, paid within thirty (30) days following the Date of Termination or such other date as provided in the applicable Company plan or program; and
(ii)A lump sum cash payment equal to the annual bonus that Executive would have been entitled to receive under Section 3(b) for the calendar year in which the Date of Termination occurs, multiplied by a fraction, the numerator of which is the number of days in the calendar year prior to the Date of Termination, and the denominator of which is 365. Such pro-rated annual bonus amount shall be paid when annual bonuses are paid to non-terminated employee participants in the applicable Annual Bonus Program, but in no event shall such payment occur later than March 15 of the calendar year following the year in which the Date of Termination occurs).
(b) Permanent Disability . If Executive’s employment is terminated by reason of Executive’s Permanent Disability, then this Agreement shall terminate without further obligations by the Company, except that Executive shall be entitled to receive:
(i)Executive’s Accrued Obligations not theretofore paid, paid within thirty (30) days following the Date of Termination or such other date as provided in the applicable Company plan or program; and
(ii)A lump sum cash payment equal to the annual bonus that Executive would have been entitled to receive under Section 3(b) for the cale