Exhibit 10.58
TRANSITION AGREEMENT AND GENERAL
RELEASE
This Transition Agreement and
General Release (“ Agreement ”) is made and
entered into as of May 3, 2005 (the “ Execution Date
”), by and among Aegis Communications Group, Inc., a Delaware
Corporation (the “ Parent ”), Advanced
Telemarketing Corporation, a Nevada corporation (“ ATC
”), IQI, Inc., a New York corporation (“ IQI
”) (together, Parent, ATC, and IQI are referred to as the
“ Company ”), and Richard Nelson Ferry (“
Ferry ” or “ Employee
”).
RECITALS
Whereas, Employee is presently
employed by the Company and serves as director, President and Chief
Executive Officer of the Parent and Chief Executive Officer of IQI
and ATC and has entered into an Employment Agreement with the
Company dated as of September 14, 2004, a copy of which is attached
hereto as Exhibit A (the “ Employment Agreement
”).
Whereas, the Company and Employee
mutually desire to terminate the employment relationship effective
as of May 1, 2005, while also providing for continuing director and
consulting relationships.
Whereas, the parties desire to
provide for an orderly transition and termination of the employment
relationship and to settle fully and finally, in the manner set
forth herein, any and all existing or potential claims and
controversies arising out of the relationship between Employee and
the Company.
Now, therefore, in consideration of
the mutual acts, payments, and promises described and agreed to be
performed herein, Employee and the Company agree as
follows:
1. Resignation . Employee
hereby tenders his resignation from his positions as President and
Chief Executive Officer of the Parent, Chief Executive Officer of
IQI and ATC, and all other officer positions he holds with the
Company and its subsidiaries and affiliates effective as of
midnight on May 1, 2005 (the “ Resignation Date
”).
2. Severance from Employment
. It is understood and agreed that with the full and complete
agreement of Employee and the Company, Employee’s employment
as President and Chief Executive Officer of the Parent, Chief
Executive Officer of IQI and ATC and any other officer positions
Employee holds with the Company and its subsidiaries will cease as
of the Resignation Date. Except as otherwise expressly provided for
herein, Employee will cease to accrue any rights under any pension
or compensation plan of the Company (including without limitation
any stock option plan, grant or agreement).
3. Director Service .
Employee and the Company agree that Employee will continue to serve
as a director on the Board of Directors of the Company (the “
Board ”) until such time that Employee resigns from
the Board or Employee is replaced and his successor is duly
elected.
4. Management Consulting
Services . Employee and Company agree that effective May 1,
2005, through October 31, 2005 (such date, the “
Consulting Completion ”), Employee will make himself
reasonably available from time to time to manage particular
projects designated to Employee by the Company, including those
projects described on the attached Exhibit B , and to
consult with and advise the management of the Company regarding the
business and affairs of the Company (the “ Consulting
Services ”). Employee and the Company
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agree that the Employee will provide the
Consulting Services on a full-time basis through August 1, 2005,
and will devote approximately 20 hours per week to the Consulting
Services from August 2, 2005 through October 31, 2005.
5. Payment of Wages and Earned
Benefits . On or promptly following the Resignation Date, the
Parent agrees to pay Employee all salary and all employee benefits
to which Employee is entitled under the Employment Agreement,
through April 30, 2005. (the “ Resignation Payment
”). Employee will be paid at his annualized salary level of
$250,000 through April 30, 2005, payable in installments in
accordance with the Parent’s standard payroll practices, but
not less than bi-weekly, and Employee will be entitled to medical,
dental, and vision benefits (including coverage for
Employee’s immediate family), disability insurance, 401-K
plans, life insurance, officer and director liability insurance,
and paid vacation on the same terms and conditions as provided to
Employee immediately prior to the Execution Date. Employee will be
paid for all vacation days that he has accrued but not taken during
his employment with the Company through the Resignation Date, if
any. Any reimbursable expenses incurred during Employee’s
employment with the Company through the Resignation Date, if any,
will be paid to Employee upon submission and approval of those
expenses in accordance with the Parent’s customary practices,
but not less than monthly. Except for the Resignation Payment, the
Company and Employee have determined and agreed that Employee is
not entitled to any other bonus or severance payment in connection
with the Resignation.
6. Consulting Services
Payments . In consideration of this Agreement and the
Consulting Services, the Company agrees to compensate Employee at
the pro rata amount Employee would have earned at his former
annualized salary of $250,000 for the period beginning on May 1,
2005 running through October 31, 2005 (the “ Consulting
Compensation ”). The Consulting Compensation will be
payable in installments in accordance with the Parent’s
standard payroll practices, but not less than bi-weekly. Due to
Employee’s independent contractor status during the period
for which Employee will provide the Consulting Services, Employee
will not be entitled to benefits such as medical, dental, life
insurance, short-term and long-term disability benefits;
provided , however , that Employee will continue to
receive director and officer liability insurance coverage as long
as Employee remains a director on the Board. On the earlier of (i)
the Company’s adoption of a new equity incentive plan; or
(ii) October 31, 2005, the Employee will receive options to
purchase 2,277,000 shares of Common Stock of the Company at a price
equal to the closing market price of the Common Stock of the
Company on the date of grant (the “ Option Grant
”), and which will be exercisable commencing on November 1,
2005, and will expire on November 1, 2010, if not exercised on or
before that date. The Option Grant will be made pursuant to the
terms and conditions of the non-qualified option agreement in
substantially the form attached as Exhibit C hereto.
Notwithstanding anything in this Agreement to the contrary,
Employee will be entitled to the Consulting Compensation and to the
Option Grant under this Section 6 as long as Employee
remains willing and able to perform the Consulting Services at the
time commitments set forth in Section 4 .
7. Amendment and Ratification of
Employment Agreement . Employee acknowledges, confirms, and
ratifies his Employment Agreement dated September 14, 2004, which
is attached hereto as Exhibit A . Employee specifically
confirms that, during the course of his employment, he received
special training, unique and confidential information, and actual
contacts and relationships with customers and potential customers,
as contemplated in Section 10 of the Employment Agreement.
Accordingly, except as modified by this Agreement,
Employee
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and the Company ratify the obligations stated in
the Employment Agreement, including specifically Sections 9
, 10 , 11 and 13 (including
arbitration).
8. Complete Releases
.
(a) In consideration of the promises
made in this Agreement, Employee RELEASES, ACQUITS, and FOREVER
DISCHARGES the Company and each of its past and present parents,
subsidiaries, affiliates, shareholders, directors, officers,
attorneys, accountants, agents, employees, and representatives,
from ANY and ALL causes of action, claims, and damages, including
attorney’s fees, Employee may have against the Company which
could have arisen out of Employee’s employment or separation
from employment with the Company or his service as an officer or
director of the Company or any other matter related to his
association with the Company, including the Employment Agreement
and any compensation due thereunder, whether known or unknown,
existing as of the Execution Date. Other than the monetary payments
and the Option Grant the Company agrees to make to Employee under
Sections 5 and 6 to the terms of this Agreement, the
Employee agrees that the Company does not owe Employee any other
monetary payments, including compensation for employment by the
Company such as salary, bonus, or otherwise. Employee hereby
irrevocably, unconditionally, and fully releases, acquits, and
forever discharges the Company, and its respective officers,
directors, partners, shareholders, employees, attorneys, and
agents, past and present, from any and all charges, complaints,
claims, liabilities, obligations, costs, losses, debts, and
expenses (including attorney’s fees and costs actually
incurred), of any nature whatsoever (excluding any felonious acts)
known or unknown, suspected or unsuspected, including without
limitation any rights arising out of alleged violations of any
contract, express or implied, written or verbal, any covenant of
good faith and fair dealing, express or implied, any tort, any
legal restrictions on the right of the Company to terminate,
discipline, or otherwise manage employees or any federal, state, or
other governmental statute, regulation, or ordinance.
Notwithstanding the foregoing, nothing herein will constitute a
release of the Company from causes of action, claims or damages,
including attorney’s fees, which may arise from acts or
omissions by the Company after the Execution Date or in
contravention of this Agreement.
(1) These releases and waivers
include, but are not limited to, Title VII of the Civil Rights Act
of 1964, the Civil Rights Act of 1991, The Age Discrimination in
Employment Act, the Employee Retirement Income Security Act of
1974, the Americans with Disabilities Act, the Rehabilitation Act
of 1973, the Equal Pay Act, the False Claims Act, the Civil Rights
Act of 1866, the Fair Labor Standards Act, the Occupational Safety
and Health Act, the Family and Medical Leave Act, the Texas
Commission on Human Rights Act, the Texas Payday Law, the Texas
Workers’ Compensation Act, any causes of action or claims
arising under analogous state laws or local ordinances or
regulations, any common law principle or public policy, including
all suits in tort or contract, or under the Company’s
personnel policies or any contract of employment that may exist
between Employee and the Company.
(2) Employee knowingly and
voluntarily waives any existing rights he may have pursuant to the
Age Discrimination in Employment Act of 1967 and the Older Workers
Benefit Protection Act. Further, Employee acknowledges the receipt
of good and valuable consideration set forth in this Agreement in
exchange for this waiver of potential
3
claims in addition to anything of value to which
Employee is already entitled, including specifically mutual
releases. Employee does not waive any claims that arise after the
date of execution of this Agreement. Employee is advised to consult
with an attorney prior to executing this Agreement.
(b) In consideration of the promises
made in this Agreement, the Company RELEASES, ACQUITS, and FOREVER
DISCHARGES Employee from ANY and ALL causes of action, claims and
damages, including attorney’s fees, the Company may have
against Employee which could have arisen out of Employee’s
employment or separation from employment with the Company or his
service as an officer or director of the Company or any other
matter related to his association with the Company, including the
Employment Agreement and any compensation due thereunder, whether
known or unknown, existing as of the Execution Date. The Company
hereby irrevocably, unconditionally, and fully releases, acquits,
and forever discharges Employee from any and all charges,
complaints, claims, liabilities, obligations, costs, losses, debts
and expenses (including attorney’s fees and costs actually
incurred), of any nature whatsoever (excluding any felonious acts)
known or unknown, suspected or unsuspected, including without
limitation any rights arising out of alleged violations of any
contract, express or implied, written or verbal, any covenant of
good faith and fair dealing, express or implied, any tort, or any
federal, state or other governmental statute, regulation, or
ordinance. Notwithstanding the foregoing, nothing herein will
constitute a release of Employee from causes of action, claims, or
damages, including attorney’s fees, which may arise from acts
or omissions of Employee after the Execution Date or in
contravention of this Agreement.
(c) Employee and the Company (as
defined above in this Section 8 ), in consideration for the
promises made in this Agreement, will once again reaffirm, execute,
and deliver mutual releases in the form attached as Exhibit
D upon satisfaction of all applicable obligations by the
Company under Sections 4, 5 and 6 (through the date
on which the mutual release is executed).
(d) It is expressly agreed and
understood by Employee and the Company that this Agreement
Section 8(a)-(e) constitutes a general release.
(e) The Company will indemnify and
hold harmless the Employee in respect of acts or omissions as a
director, officer, employee, or consultant occurring up to and
including the Execution Date to the same extent and with the same
limitations as if he was an officer of the Company to the fullest
extent permitted by the Texas Business Corporation Act, as amended,
and the Company’s articles of incorporation and bylaws in
effect on the date of this Agreement, and will indemnify and hold
harmless the Employee in respect of any claims, liabilities,
obligations, or expenses in respect of or relating to this
Agreement and the transactions contemplated hereby.
9. Nature of the Agreement .
This Agreement and all its provisions are contractual, not mere
recitals, and will continue in permanent force and effect, unless
revoked as provided herein. In the event that any portion of this
Agreement is found to be unenforceable for any reason whatsoever,
the unenforceable provision will be severed and the remainder of
the Agreement will continue in full force and effect.
10. Non-Competition Agreement
. Employee agrees and covenants that for a period continuing
through October 31, 2006, Employee will not, in connection with any
business that is
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engaged in, or is about to be engaged in as of
the date the resignation or termination, by the Company or the
Parent, which includes, but is not limited to, inbound and outbound
telemarketing and customer care services, whether conducted by
telephone or the internet, and the provision of market research
services as currently provided by the Company or the Parent, the
consulting, design and implementation of any of these services,
including organization and investment in related industries or
professions (the “ Business ”), directly or
indirectly, either as an individual or as an employee, partner,
officer, director, shareholder, advisor, or consultant or in any
other capacity whatsoever, of any person (other than ownership of
less than 1% of the issued and outstanding voting securities of a
publicly held corporations): (a) recruit, hire, assist others in
recruiting or hiring, discuss employment with, or refer to others
for employment any person who is, or within the 12 month period
immediately preceding the date of any such activity was, an
employee of the Company or the Parent or their affiliates; or (b)
conduct or assist others in conducting any business or activity
that competes with the Business in the United States, its
territories or possessions, provided, however, that nothing in this
Section 10 shall preclude Employee from becoming (or
continuing as) a partner in EMF Partners, a Florida limited
liability partnership.
It is understood and agreed that the
scope of the foregoing covenant is reasonable as to time, area and
persons and is necessary to protect the legitimate business
interests of the Company, the Parent and their affiliates. It is
further agreed that such covenant will be regarded as divisible and
will be operative as to time, area and persons to the extent that
it may be so operative, and if any part of such covenant is
declared invalid, unenforceable, or void as to time, area or
persons, the validity and enforceability of the remainder will not
be affected.
If Employee violates the restrictive
covenants of this Section 10 and the Company or the Parent
brings legal action for injunctive or other relief, neither the
Company nor the Parent will be deprived of the benefit of the full
period of the restrictive covenant, as a result of the time
involved in obtaining the relief. Accordingly, Employee agrees that
the restricted period following the Consulting Completion will have
a duration of one year, and the regularly scheduled expiration date
of such covenant will be extended by the same amount of time that
Emplo
