Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of August 1, 2002, by and between ICT GROUP,
INC., a Pennsylvania corporation (hereinafter called "Company"), and JOHN J.
BRENNAN, an individual (hereinafter called "Employee").
W I T N E S S E T H
Company wishes to continue to employ Employee and Employee wishes to
continue in the employ of Company on the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, Company and
Employee agree as follows:
1. Employment. Company hereby continues to employ Employee as Chief
Executive Officer, and Employee hereby accepts continued employment by Company,
for the period of time and upon the terms, conditions and restrictions contained
in this Agreement.
2. Duties and Responsibilities.
(a) Employee agrees to assume such duties and responsibilities
normally associated with the position indicated above, and as may be assigned to
Employee by the Board of Directors of the Company from time to time.
(b) During his employment with the Company, Employee may not engage
in any business which would detract from his responsibilities to the Company.
3. Term. This Agreement and Employee's employment hereunder shall be
for a term of three (3) years, commencing on August 1, 2002 and ending on July
31, 2005, unless sooner terminated as hereinafter provided. This Agreement shall
be renewed automatically for successive three (3) year periods, unless either
party gives written notice to the other, in accordance with Paragraph 15(c), at
least one hundred eighty (180) days prior to the expiration of the original or
applicable successive term.
4. Compensation and Benefits.
(a) For all of the services rendered by Employee to Company,
Employee shall receive a minimum gross annual base salary in the amount
specified on Attachment A hereto, less taxes and other deductions required by
law, payable in reasonable periodic installments in accordance with Company's
regular payroll practices in effect from time to time. Employee's base salary
shall be reviewed by Company's Board of Directors annually and may be increased
(but not decreased except as contemplated in Paragraph 11(i)) by the Board of
Directors in its sole discretion; provided, however, that with respect to
compensation and benefit matters generally (including, but not limited to,
matters addressed in Appendix A), the rights and obligations of the Board of
Directors may be delegated to the Board's Compensation Committee to the extent
consistent with the Company's governing instruments, and, in such event, all
references in this Agreement to the Board of Directors with respect to
compensation or benefits matters shall be deemed a reference to the Compensation
Committee.
(b) In addition to Employee's base salary, Employee shall be
eligible and Company shall pay Employee bonuses in accordance with the bonus
programs specified on Attachment A hereto. These bonus programs may be modified
by Company's Board of Directors and additional bonus programs may be
implemented, provided that any such modifications or additional programs
(individually or collectively) shall not result in a reduction in the bonuses,
on an annual basis, for which Employee is eligible below those set forth in
Attachment A hereto. Employee also shall be eligible to participate in any stock
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option plans developed for management, in addition to the specific grant of
stock options described in Appendix A; provided, however, that the Company's
Board of Directors shall retain discretion in determining whether, and to what
extent, any additional grants of equity compensation/options (other than those
described in Appendix A) are to be made to Employee.
(c) Throughout the term of this Agreement, Employee shall be
eligible to participate in the insurance and other benefit plans and programs
specified on Attachment A hereto. In addition, Employee shall be eligible to
participate in all other insurance and other benefit plans and programs as may
be offered by Company to its employees, subject to their respective eligibility
requirements, and other terms, conditions and restrictions. Employee also shall
be eligible for any insurance, bonus, stock, stock option or benefit plan or
program which is offered to any other senior executive of the Company, in
addition to any items described in Appendix A; provided, however, that the
Company's Board of Directors shall retain discretion in determining whether, and
to what extent, any additional grants of equity compensation/options (other than
those described in Appendix A) are to be made to Employee.
(d) The Company will continue to pay Employee additional
compensation in an amount sufficient for Employee: (i) to pay the premiums
relating to the two insurance policies issued in 1995 on his life that total $5
million in face amount and are owned by and payable to an irrevocable life
insurance trust and to pay the premiums for an additional face amount of $5
million of insurance policies on his life, or any comparable replacement
insurance thereof; provided, however, that the Company shall not be obligated to
acquire the additional $5 million of insurance or any replacement insurance if
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Employee has become uninsurable or if insurance is not available on reasonable
economic terms; and (ii) to pay all applicable taxes on such additional
compensation.
(e) Employee shall accrue vacation pay at a rate of 2 1/2 days per
full-month of employment.
(f) Employee will not receive any remuneration or any other benefit
from any client or any other company or individual in connection with any
transaction in which Company is involved, directly or indirectly, without the
prior permission of the Company's Board of Directors. Nor will Employee assign
or give any part of the compensation which he receives from Company to any other
employee, agent or representative of Company, to any client or any of its
employees, agents or representatives, or to any other person or entity involved,
directly or indirectly, with Company, without the prior permission of the
Company's Board of Directors.
(g) Company shall reimburse Employee for actual expenses incurred
with regard to personal financial planning, up to a maximum of $25,000 per
calendar year and to pay all applicable taxes on such compensation. Company also
shall reimburse Employee for reasonable attorneys' fees incurred by him in
connection with the re-negotiation of this Employment Agreement and to pay all
applicable taxes on such additional compensation.
5. Expenses. Company will reimburse Employee for all reasonable
expenses incurred by Employee in connection with the performance of Employee's
duties hereunder upon receipt of vouchers therefor satisfactory to Company and
in accordance with Company's regular reimbursement procedures and practices in
effect from time to time.
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6. Company Obligations Upon Termination By Company Not For "Willful
Misconduct", By Employee for "Good Reason," or By Employee For Other Than "Good
Reason:"
(a) If (1) Company terminates this Agreement pursuant to Paragraph 3
and terminates Employee's employment pursuant to Paragraph 10; (2) Employee's
employment is terminated by Company pursuant to Paragraph 10; or (3) Employee
terminates his employment for "Good Reason" pursuant to Paragraph 11(i)
(including as a result of non-renewal under Paragraph 3), Company shall fulfill
all of its obligations under this Agreement (including, but not limited to, with
regard to salary, bonuses and benefits) through the period ending thirty-six
(36) months from the date of termination.
(b) If Employee terminates his employment for other than "Good
Reason" pursuant to Paragraph 11(ii), Company shall fulfill all of its
obligations under the Agreement (including, but not limited to, with regard to
salary, bonuses and benefits) through the expiration of Employee's obligations
under Paragraph 13(a) and (d) below.
(c) Employee shall have no obligation to make efforts to obtain
replacement income (through employment or other sources) during the period in
which Employee receives post-termination payments or benefits from Company and
there shall be no offset for replacement income (through employment or other
sources) derived.
(d) Bonuses for purposes of subparagraphs 6(a) and 6(b) above shall
be no less than the combined average of the bonuses for the preceding two years
and shall be due and payable to Employee only if the Company's Board of
Directors has determined with respect to the applicable periods set forth in
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subparagraphs 6(a) or 6(b) above that the financial performance of the Company
justifies the payment of bonuses to other employees of the Company under the
applicable bonus plans.
7. Inability. If Employee is unable to perform the essential functions
of his position as Chief Executive Officer, with or without reasonable
accommodations, for whatever reason, for a period of thirteen (13) consecutive
weeks or for a cumulative period of nineteen (19) weeks during any twelve (12)
month period, or if Company determines in good faith based on a reasonable
written determination by a reputable physician (the "Determination"), prior to
the expiration of either of such periods, that such inability of Employee is of
a long-term or permanent nature which is likely to extend beyond either of such
periods and Employee is unable to perform the essential functions of his
position as Chief Executive Officer, with or without reasonable accommodations,
Company shall have the right to terminate Employee's employment pursuant to
Paragraph 10 of this Agreement, in which event Employee shall be eligible for
payments and benefits pursuant to Paragraph 6(a) of this Agreement. The
Determination must be based upon a written determination by a reputable
physician selected by the Company, provided, however, that if Employee disagrees
with the Determination, Employee must submit within ten (10) business days after
receipt of the Determination a written assessment by a reputable physician
disagreeing with the Determination (the "Disagreement Notice"), in which case
the two physicians and the parties (or their representatives) shall attempt to
resolve the matter. If such resolution is not reached within ten (10) business
days after the receipt of the Disagreement Notice, the two physicians shall
immediately at the end of such ten (10) business day period jointly identify a
third reputable physician with whom neither physician has an economic or
referral relationship to resolve the matter, and that physician's written
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determination, which shall be made within ten (10) business days after that
physician first received written notice of such disagreement, shall be final and
binding on the parties.
8. Death. If Employee dies, Company shall have no further obligations
or liabilities to Employee's estate or legal representative or otherwise after
the date of his death, except as follows: Employee's estate shall be entitled to
receive: (i) all monies owed in terms of salary, bonuses and otherwise, (ii) a
lump sum payment in an amount equal to twelve (12) months' salary, (iii) a
prorated payment of any bonuses earned for the period prior to Employee's death.
In addition, the rights of Employee's estate or beneficiary under any employee
benefit or equity compensation plan or arrangement (including, but not limited
to, any vested stock options held by Employee) maintained by the Company shall
be determined under the relevant plan and ancillary agreements.
9. Discharge for "Willful Misconduct". Company may discharge Employee
at any time without prior notice for "Willful Misconduct," which is defined as
fraud, misappropriation, embezzlement, self-dealing or conviction of a crime of
moral turpitude. In the event Company terminates Employee's employment for
"Willful Misconduct," Company shall have no further obligations or liabilities
to Employee after the date of his termination. The termination of Employee's
employment with Company pursuant to this Paragraph shall not release Employee
from Employee's obligations and restrictions under Paragraphs 12 and 13 of this
Agreement or under any other binding agreement or common law obligation to which
Employee is subject.
10. Discharge Not for "Willful Misconduct". Notwithstanding any other
provision of this Agreement, Company may discharge Employee at any time for
reasons other than "Willful Misconduct" by providing Employee with thirty (30)
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days' written notice, which notice Company may waive, in whole or in part, in
its sole discretion, by paying Employee for such thirty (30) days. Upon
termination of Employee pursuant to this Paragraph, whether during the then
current term of this Agreement, upon expiration of its then current term or
subsequent to its expiration, Company shall be obligated to provide Employee
with post-termination payments and benefits in accordance with Paragraph 6(a) of
this Agreement. The termination of Employee's employment with Company pursuant
to this Paragraph shall not release Employee from Employee's obligations and
restrictions under Paragraphs 12 and 13 of this Agreement or under any other
binding agreement or common law obligation to which Employee is subject.
11. Termination by Employee. Employee may terminate his employment
under this Agreement at any time by providing Company with thirty (30) days'
written notice, which notice Company may waive, in whole or in part, in its sole
discretion, by paying Employee for such thirty (30) days. In such event:
(i) Termination By Employee For "Good Reason": Upon termination of his
employment by Employee for "Good Reason," whether during the then
current term of this Agreement, upon expiration of its then current
term or subsequent to its expiration, Company shall be obligated to
provide Employee with post-termination payments and benefits in
accordance with Paragraph 6(a) of this Agreement. "Good Reason" is
defined as: (i) a substantial (20% or more) reduction in Employee's
salary or benefits; provided, however, that such a reduction which is
part of a general salary or benefit reduction applicable to all
senior Executives of the Company shall not be deemed to constitute
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Good Reason; (ii) a substantial change in Employee's duties and
responsibilities which change would reduce Employee's stature,
importance and dignity within Company; (iii) a "Change of Control."
As used herein, a "Change of Control" shall be deemed to have
occurred if:
(a) Any "person" (as such term is used in sections 13(d) and
14(d) of the Exchange Act) other than Employee becomes a "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing more than 50%
of the voting power of the then outstanding securities of the
Company; provided that a Change of Control shall not be deemed to
occur as a result of any transaction in which the shareholders of the
Company, immediately prior to the transaction, will beneficially own,
immediately after the transaction, shares entitling such shareholders
directly or indirectly to more than 50% of the voting power of the
successor or surviving entity; or
(b) The consummation of (i) a merger or consolidation of the
Company with another corporation where the shareholders of the
Company, immediately prior to the merger or consolidation, will not
beneficially own, immediately after the merger or consolidation,
shares entitling such shareholders directly or indirectly to more
than 50% of the voting power of the surviving corporation, or (ii) a
sale or other disposition of all or substantially all of the assets
of the Company; or
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(c) The consummation of any other transaction which, in the
reasonable judgment of the Company's Board of Directors (but
excluding Employee), effectively constitutes a Change of Control of
the Company.
In the event Company terminates this Agreement pursuant to Paragraph 3, but does
not terminate Employee's employment in conjunction with its termination of this
Agreement, Employee shall be entitled to terminate his employment for Good
Reason within one year after Employee's actual knowledge of the event
constituting Good Reason and receive post-termination payments and benefits in
accordance with Paragraph 6(a) above.
(ii) Termination by Employee For Other Than "Good Reason:" In the event
that Employee terminates his employment for other than "Good Reason,"
whether during the then current term of this Agreement, upon
expiration of its then current term or subsequent to its expiration,
Company shall be obligated to provide Employee with post-termination
payments and benefits in accordance with Paragraph 6(b) of this
Agreement.
The termination of Employee's employment with Company pursuant to this Paragraph
11 shall not release Employee from Employee's obligations and restrictions under
Paragraphs 12 and 13 of this Agreement, or under any other binding agreement or
common law obligation to which Employee is subject.
12. Company Property.
(a) All advertising, sales, manufacturers' and other materials or
articles or information, including without limitation, data processing reports,
client sales analyses, invoices, price lists or information, samples, or any
other materials or data of any kind furnished to Employee by Company or
developed by Employee on behalf of Company or at Company's direction or for
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Company's use or otherwise in connection with Employee's employment hereunder,
are and shall remain the sole and confidential property of Company.
(b) Immediately upon termination of Employee's employment, whether
by Employee or Company, whether during the then current term of this Agreement,
upon expiration of its then current term or subsequent to its expiration,
Employee shall deliver to Company all Company property (for example, keys and
credit cards) and all documents, books, records, lists, computer programs and
other documents relating to Company's business, regardless of where or by whom
said writings were kept or prepared, retaining no copies.
(c) In the event Employee receives notice from Company that his
employment is or will be terminated or Employee provides Company with notice of
his intent to resign, within ten (10) days of receiving or providing such
notice, and thereafter as may be requested by Company, Employee shall provide
Company with a list of all clients and potential clients with whom he is working
and/or negotiating and a summary of the status of each matter with which he is
involved, directly or indirectly.
13. Restrictive Covenants, Trade Secrets, Etc.
(a) For a period of one (1) year after the termination of his
employment with Company, for any reason whatsoever, whether during the then
current term of this Agreement, upon expiration of its then current term or
subsequent to its expiration, whether by Employee or Company, Employee shall
not, for his own benefit or for the benefit of any third party, directly or
indirectly, in any capacity, participate in any of the following activities: (i)
hire or do any business with any employee of Company or otherwise induce or
attempt to influence any employee of Company to terminate his or her employment
with Company; (ii) divert, solicit, or do any business with any current, former
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(within two (2) years of the date of termination), or potential (engaged in
discussion with Company as of the date of termination) client of Company; or
(iii) cause or attempt to cause any current, former, or potential client to
refrain from doing business with Company. In light of the fact that the clients
of Company will be engaged in operations worldwide and Company will be
contacting potential customers for its clients throughout the world, the
restrictions set forth in this Paragraph 13(a) shall apply worldwide.
(b) During his employment and for a period of two (2) years
thereafter, Employee shall not use for his personal benefit, or disclose,
communicate or divulge to, or use for the direct or indirect benefit of any
person, firm, association or company other than Company, any material referred
to in Paragraph 12 above or any information regarding the business methods,
business policies, procedures, techniques, research or development projects or
results, trade secrets, or other knowledge or processes of or developed by
Company or any names and addresses of clients or customers or any data on or
relating to past, present or prospective clients or customers or any other
confidential information relating to or dealing with the business operations or
activities of Company, made known to Employee or learned or acquired by Employee
while in the employ of Company.
(c) Any and all writings, inventions, improvements, processes,
procedures and/or techniques which Employee may make, conceive, discover or
develop, either solely or jointly with any other person or persons, at any time
during his employment with the Company, whether during working hours or at any
other time and whether at the request or upon the suggestion of Company or
otherwise, which relate to or are useful in connection with any business now or
hereafter carried on or contemplated by Company, including developments or
expansions of its present fields of operations, shall be the sole and exclusive
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property of Company. Employee shall make full disclosure to Company of all such
writings, inventions, improvements, processes, procedures and techniques, and
shall do everything necessary or desirable to vest the absolute title thereto in
Company. Employee shall write and prepare all specifications and procedures
regarding such inventions, improvements, processes, procedures and techniques
and otherwise aid and assist Company so that Company can prepare and present
applications for copyright or Letters Patent therefor and can secure such
copyright or Letters Patent wherever possible, as well as reissues, renewals,
and extensions thereof, and can obtain the record title to such copyright or
patents so that Company shall be the sole and absolute owner thereof in all
countries in which it may desire to have copyright or patent protection.
Employee shall not be entitled to any additional or special compensation or
reimbursement regarding any and all such writings, inventions, improvements,
processes, procedures and techniques, except that Company shall reimburse
Employee for any expenses which Employee may incur in vesting absolute title
thereto in Company.
(d) For a period of one (1) year after the termination of his
employment with Company, for any reason whatsoever, whether during the then
current term of this Agreement, upon its expiration or subsequent to its
expiration, whether by Employee or Company, Employee shall not engage in or be
financially interested in any business which is engaged in the business of
telemarketing in any country in which the Company has an active operation.
(e) Employee acknowledges that the restrictions contained in the
foregoing subparagraphs (a), (b), (c) and (d), in view of the nature of the
business in which Company is engaged, are reasonable and necessary in order to
protect the legitimate interests of Company, and that any violation thereof
would result in irreparable injuries to Company, and Employee therefore
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acknowledges that, in the event of his violation of any of these restrictions,
Company shall be entitled to obtain from any court of competent jurisdiction
preliminary and permanent injunctive relief as well as damages and an equitable
accounting of all earnings, profits and other benefits arising from such
violation, which rights shall be cumulative and in addition to any other rights
or remedies to which Company may be entitled.
(f) Employee agrees that if any or any portion of the foregoing
covenants or the application thereof, is construed to be invalid or
unenforceable, the remainder of such covenant or covenants shall not be affected
and the remaining covenant or covenants shall then be given full force and
effect without regard to the invalid or unenforceable portion(s). If the
covenant is held to be unenforceable because of the area covered, the duration
thereof or the scope thereof, Employee agrees that the court making such
determination shall have the power to reduce the area and/or the duration and/or
scope thereof, and the covenant shall then be enforceable in its reduced form.
(g) If Employee violates any of the restrictions contained in the
foregoing subparagraph (a), (b) or (d), the restrictive period shall not run in
favor of Employee from the time of the commencement of any violation until such
time as the violation shall be cured by Employee to the satisfaction of Company.
14. Prior Agreements. Employee represents to Company that: (a) there
are no restrictions, agreements or understandings whatsoever to which Employee
is a party which would prevent or make unlawful his execution of this Agreement
or his employment hereunder; (b) there are no agreements, restrictions or
understandings whatsoever to which Employee is a party which place any
limitations as to the companies or individuals with whom he may do business; (c)
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his execution of this Agreement and his employment hereunder shall not
constitute a breach of any contract, agreement or understanding, oral or
written, to which he is a party and by which he is bound; and (d) he is free and
able to execute this Agreement and to enter into employment by Company.
15. Miscellaneous.
(a) Waiver. The waiver by either party of a breach of any provision
of this Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach by the waiving party. No waiver shall be valid
unless in writing and signed by Employee and a representative of the Company
authorized to sign on behalf of the Company by the Company's Compensation
Committee.
(b) Controlling Law. This Agreement and all questions relating to
validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
and without the aid of any canon, custom or rule of law requiring construction
against the draftsman.
(c) Notices. All notices, requests, demands and other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been duly given, made and received only when delivered
(personally, by courier service such as Federal Express, or by other messenger)
or when deposited in the United States mails, registered or certified mail,
postage prepaid, return receipt requested, addressed in the case of Company, to
the Company's Compensation Committee with a copy to the Company's General
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Counsel, at the Company's principal place of business, and in the case of
Employee, to 1513 Harvest Drive, Yardley, Pennsylvania 19067.
(d) Binding Nature of Agreement. This Agreement shall be binding
upon and inure to the benefit of Company and its successors and assigns and
shall be binding upon Employee his heirs and legal representatives.
(e) Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument.
(f) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
(g) Entire Agreement. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
including, without limitation, any prior employment agreement(s) between
Employee and Company. The express terms hereof control and supersede any course
of performance and/or usage of the trade inconsistent with any of the terms
hereof. This Agreement may not be modified or amended other than by an agreement
in writing and signed by Employee and a representative of the Company authorized
by the Company's Compensation Committee to sign such modification or amendment
on behalf of the Company.
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(h) Paragraph Headings. The paragraph headings in this Agreement are
for convenience only; they form no part of this Agreement and shall not affect
its interpretation.
(i) Survival. The covenants contained in Paragraphs 12 and 13 shall
survive the expiration of this Agreement and the termination of Employee's
employment.
(j) Number of Days. In computing the number of days for purposes of
this Agreement, all days shall be counted, including Saturdays, Sundays and
Holidays; provided, however, that if the final day of any time period falls on a
Saturday, Sunday or Holiday on which federal banks are or may elect to be
closed, then the final day shall be deemed to be the next day which is not a
Saturday, Sunday or such Holiday.
(k) Consolidation Merger. Nothing in this Agreement shall preclude
Company from consolidating or merging into or with, or transferring all or
substantially all of its assets to, another entity which assumes this Agreement
and all obligations and undertakings of Company hereunder. Under such a
consolidation, merger or transfer of assets and assumption, the term "the
Company," as used herein, shall mean such other entity and this Agreement shall
continue in full force and effect.
(l) Ownership of Stock or Stock Options. Except as expressly
provided for in this Agreement, nothing in this Agreement shall affect, change,
diminish or eliminate any rights which Employee currently has, previously had or
subsequently may have with regard to stocks, stock options or other ownership
interests pursuant to other agreements, plans or trusts.
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement in Newtown, Pennsylvania on the date first above written.
ICT GROUP, INC.
By:________________________________ ________________________________
Chairman, Compensation Committee John J. Brennan
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APPENDIX A
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A. ANNUAL BASE SALARY:
Employee's annual base salary shall be a minimum of Five Hundred
Seventy-Five Thousand Dollars ($575,000). Employee's annual base salary shall be
reviewed by the Company's Compensation Committee at least annually on the
anniversary of this Agreement, and may be increased at the discretion of the
Company's Compensation Committee based on Employee's performance. In no event
shall Employee's annual base salary be reduced during the term of this
Agreement.
B. BONUSES:
1. Employee shall be eligible to participate in a Quarterly Incentive
Plan (QIP) equal to up to one hundred fifty percent (150%) of his then base
salary. Eighty percent (80%) of Employee's QIP is based on corporate performance
each quarter measured against the Company's then current Business Plan. The
remaining twenty percent (20%) of Employee's QIP is based on his achievement of
specific management objectives set each year. Both portions of the QIP are paid
out within 105 days of year-end in cash and/or stock options, the mix of which
is determined by the Company's Compensation Committee.
2. Employee shall be eligible to participate in an Annual Incentive
Plan (AIP) equal to up to two hundred percent (200%) of the QIP bonus Employee
achieves during the year. The AIP bonus is based on the Company's achieving
specific operating profit and profitability targets for the year. The AIP is
determined after completion of the audited results for the year and is paid out
within 105 days of year-end. Payout is in the form of cash and/or stock options,
the mix of which is determined by the Company's Compensation Committee.
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C. GRANT OF STOCK OPTIONS:
1. The Company agrees to take all appropriate steps to cause a grant of
stock options under the terms of the Company's 1996 Equity Compensation Plan or
successor plan, if applicable (the "Plan") to be made by the Committee (as that
term is defined in the Plan) on May 1, 2003 (the "Initial Date of Grant"), and
on each of the meetings of the Board of Directors occurring on or about the
first and second anniversaries of the Initial Date of Grant, each such stock
option to be subject to the terms and conditions of the Plan, and consistent
with the terms and conditions of the applicable form of Grant Letter (as that
term is defined in the Plan), except that each such stock option shall, to the
extent permissible under the terms of the Plan, be granted on the following
terms and conditions:
(a) Each such grant shall be a Nonqualified Stock Option (as that
term is defined in the Plan), providing Employee with the right to acquire
100,000 shares of Company Stock (as that term is defined in the Plan).
(b) The purchase price per share for each such grant shall be equal
to the Fair Market Value (as that term is defined in the Plan) of a share of
Company Stock determined under the terms of the Plan as of the date of grant of
the Nonqualified Stock Option.
(c) The Nonqualified Stock Option shall be subject to such
additional terms and conditions regarding vesting, term and termination and
related matters as shall be determined by the Committee, consistent and in
accordance with the provisions of the Plan; provided, however, that 25% of the
Nonqualified Stock Option shall vest on the Grant Date and the remainder in
equal installments as of the first, second, and third anniversaries of the
relevant Grant Date so long as Executive remains employed by the Company on the
relevant vesting date.
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(d) With respect to the grants of Nonqualified Stock Options to be
made on or about the Initial Date of Grant as well as on or about the first and
second anniversaries of the Initial Date of Grant, the Committee shall have the
right to reduce or eliminate such grant if the Committee determines that the
Company's earnings per share for the Company's most recent fiscal year are not
in excess of the Company's earnings per share for the Company's fiscal year
prior to the most recent fiscal year. In addition, in the event of (i) a
material change in the capitalization of the Company (including, but not limited
to, a public offering, stock split or spin-off); or (ii) a material negative
performance variance from the Company's business plan resulting from
circumstances not attributable to Employee's performance or, alternatively,
reflecting inadequate performance by Employee, the Committee shall have the
right to increase or decrease the number of shares subject to the grants of
Nonqualified Stock Options under Section C(1)(a) above to reflect such
circumstances in such manner as the Committee in its discretion may determine.
2. The Company shall also take all appropriate steps to cause the
Committee to approve the stock option grants as described above, subject in all
events to the availability of shares of Common Stock to make such grants under
the Plan, and subject further to Executive's continued employment by the Company
as of the date of each such stock option grant.
D. BENEFIT PLANS AND POLICIES:
1. Employee shall be eligible to participate in all of the Company's
benefit plans and policies, including, but not limited to, the Company's health
insurance plan, life insurance plan, short-term disability plan and long-term
disability plan.
2. In addition to the foregoing, Employee is entitled to the following
benefits:
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(a) The Company will continue to lease for Employee in the Company's
name a luxury car; Company is responsible for the full cost of the lease as well
as the full cost of insurance and any and all repairs.
(b) The Company will continue to pay in full the premiums for
Employee's whole life insurance policy with Manufacturers' Life Insurance
Company, which policy has a face value of $500,000 to be paid to Employee's
Estate upon the death of Employee.
(c) The Company will continue to pay the premiums associated with
Employee's individual disability policy with Phoenix Home Life Insurance Company
to ensure the continuation of the level of disability coverage existing as of
the date of the execution of this Agreement; in the event that Phoenix Home Life
Insurance Company should terminate this disability policy for any reason, the
Company will pay all expenses in connection with the purchase of a replacement
policy which provides substantially identical coverage to Employee.
ICT GROUP, INC.
By:________________________________ _________________________________
Chairman, Compensation Committee John J. Brennan
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