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EXHIBIT 10.28
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EMPLOYMENT AGREEMENT
This Agreement is made as of the 22nd day of March, 1994, between
FIRST FINANCIAL MANAGEMENT CORPORATION, a Georgia corporation ("FFMC"), and
PATRICK H. THOMAS (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is serving as Chairman of the Board, President
and Chief Executive Officer of FFMC pursuant to an Employment Agreement dated
January 31, 1989 (the "1989 Agreement"); and
WHEREAS, the parties desire to terminate the 1989 Agreement effective
as of December 31, 1994;
WHEREAS, the parties desire to enter into a revised employment
agreement with respect to the continued employment of the Executive by FFMC
which shall automatically become effective as of January 1, 1995;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, the parties hereto agree as follows:
1. Termination of 1989 Agreement. The 1989 Agreement shall
terminate and be of no further force and effect as of midnight on December 31,
1994, and this Agreement shall serve as the required notice of termination by
each party to the other pursuant to Section 3(a) of the 1989 Agreement.
2. Employment. The Executive hereby agrees to serve as Chairman
of the Board, President and Chief Executive Officer of FFMC for the term of
this Agreement, subject to the terms set forth herein and the provisions of the
Bylaws of FFMC. During his employment hereunder, the Executive shall devote
his effort and attention, substantially on a full-time basis, to the
performance of the duties required of him as an executive of FFMC.
3. Compensation. As compensation for his services during the
term of this Agreement, the Executive shall receive the amounts and benefits
set forth in subsections (a), (b), (c), (d), (e), (f), (g) and (h) of this
Section 3:
(a) An annual salary effective January 1, 1995 of
$950,000.00 prorated for any partial year of employment, subject to
annual review for increases in the light of the size and performance
of FFMC at such time as FFMC conducts salary reviews for its officers
generally. The Executive's salary shall be payable semimonthly or in
accordance with FFMC's regular payroll practices in effect from time
to time for officers of his level in the corporation;
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(b) In lieu of cash bonuses, a Restricted Stock Award to
be made contemporaneously with the execution of this Agreement under
FFMC's 1988 Incentive Stock Plan (the "Plan") containing an
opportunity to obtain 472,500 shares of FFMC Common Stock (the
"Stock") free of restrictions on December 31, 1999. The Stock awarded
pursuant to the Restricted Stock Award will be subject to the terms of
the Plan and the Restricted Stock Agreement attached to this Agreement
as Exhibit A;
(c) Participation in the employee benefit plans
maintained by FFMC for the purpose of providing retirement, deferred
compensation, healthcare, life insurance, disability and similar
benefits to its employees;
(d) Continued participation in the incentive stock plans,
Performance Units Incentive Plan or other incentive plans for senior
executives of FFMC;
(e) Provision at FFMC's expense of a term life insurance
policy insuring the Executive during the term of this Agreement in an
amount of not less than $5,000,000 payable to the Executive's estate
or designated beneficiary;
(f) Reimbursement of the dues and costs of club
memberships and automobile expenses, and the right to personal use of
FFMC's airplane in accordance with FFMC's policies in effect from time
to time;
(g) A Restricted Stock Award to be made contemporaneously
with the execution of this Agreement pursuant to the Restricted Stock
Agreement attached as Exhibit B; and
(h) An Option to be granted pursuant to the Option
Agreement attached as Exhibit C.
4. Term.
(a) This Agreement and the Executive's employment
hereunder shall be effective as of January 1, 1995 and shall continue
for a five-year term ending on December 31, 1999. This Agreement and
the Executive's employment hereunder shall automatically continue for
successive one-year periods at the end of the initial five-year term,
unless either party gives notice to the other of its intent to
terminate this Agreement and the Executive's employment hereunder not
less than 180 days prior to the commencement of any such one-year
renewal period. In the event such notice to terminate is properly
given, this Agreement and the Executive's employment hereunder shall
terminate at the end of the initial term or the one-year renewal
period during which the notice is given.
(b) This Agreement and the Executive's employment
hereunder may be terminated by either party prior to the end of the
initial term hereof (or any renewal period) upon 30 days' prior
written notice to the other party, provided, that, in the event
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of such termination, FFMC shall be obligated to make the payments and
provide the benefits described in Section 5 below.
5. Termination Payments. Upon termination of the Executive's
employment prior to the end of the term of this Agreement (including any
renewal term), FFMC shall pay to the Executive, within three business days
after the end of the 30-day notice period provided in Section 4 above, a
payment in cash determined under subsection (a), (b) or (c) of this Section 5
and shall for the period or at the time specified provide the other benefits
described in subsections (d), (e) and (g) of this Section 5:
(a) The payment shall be 300% of the Executive's "Current
Total Annual Compensation" as defined in subsection (f) of this
Section 5, if: (i) the Executive's employment is terminated by FFMC,
whether with or without cause, within three (3) years after any
"Change in Control" of FFMC as defined in subsection (f) of this
Section 5, or at the request of or pursuant to an agreement with a
third party who has taken steps reasonably calculated to effect a
Change in Control, or otherwise in connection with or in anticipation
of a Change in Control; or (ii) the Executive elects to terminate
employment within three (3) years after any Change in Control of FFMC.
(b) The payment shall be 200% of the Executive's Current
Total Annual Compensation, if: (i) the Executive's employment is
terminated by FFMC, whether with or without cause, and such
termination is not described in (a) above; (ii) the Executive elects
to terminate his employment for "Good Reason", as defined in
subsection (f) of this Section 5, and such termination is not
described in (a) above; or (iii) the Executive's employment is
terminated by reason of his "Disability", as defined in subsection (f)
of this Section 5.
(c) The payment shall be 100% of the Executive's Current
Total Annual Compensation, if the Executive's employment is terminated
and such termination is not described in subsections (a) or (b) of
this Section 5.
(d) In addition to the amount payable to the Executive
under subsection (a), (b) or (c) of this Section 5, the health care
and life insurance benefits coverage provided to the Executive at his
date of termination shall be continued at the same level and in the
same manner as if his employment had not terminated (subject to the
customary changes in such coverages if the Executive reaches age 65 or
similar events), beginning on the date of such termination and ending
on the date sixty (60) months from the date of termination. Any
additional coverages the Executive had at termination, including
dependent coverage, will also be continued for such period on the same
terms. Any costs the Executive was paying for such coverages at the
time of termination shall continue to be paid by the Executive. If
the terms of any benefit plan referred to in this section do not
permit continued participation by the Executive, then FFMC will
arrange for other coverage providing substantially similar benefits.
In addition, the Executive may elect by notice to FFMC to continue the
term life insurance policy described in
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Section 3(e) above at his expense and FFMC shall take all actions
necessary to transfer such policy to the Executive or his designee at
the time of his termination.
(e) FFMC agrees that there will be no change made in any
stock option or restricted stock award under FFMC's 1982 or 1988
Incentive Stock Plans or any award under FFMC's Performance Units
Incentive Plan during the term of the Executive's employment hereunder
which adversely affects the Executive's rights under such stock
option, restricted stock or other award without the prior written
consent of the Executive.
(f) For purposes of this Agreement, the following
definitions shall apply:
(i) The "Board" shall mean the Board of
Directors of FFMC.
(ii) "The Incumbent Board" shall mean the
members of the Board as of the date hereof and any person
becoming a member of the Board hereafter whose election, or
nomination for election by FFMC's shareholders, was approved
by a vote of at least a majority of the directors then
comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office
is in connection with an actual or threatened election contest
relating to the election of the directors of FFMC, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act).
(iii) "Change in Control" shall mean:
(A) The acquisition (other than from FFMC)
by any person, entity or "group", within the
meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act (excluding, for this purpose, any
employee benefit plan of FFMC or its
subsidiaries which acquires beneficial ownership
of voting securities of FFMC) of beneficial
ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or
more of either the then outstanding shares of
Common Stock or the combined voting power of
FFMC's then outstanding voting securities
entitled to vote generally in the election of
directors; or
(B) The failure for any reason of
individuals who constitute the Incumbent Board
to continue to constitute at least a majority of
the Board; or
(C) Approval by the stockholders of FFMC
of a reorganization, merger, consolidation, in
each case, with respect to which the shares of
FFMC voting stock outstanding immediately prior
to such reorganization, merger or consolidation
do not constitute or become exchanged for or
converted into more than 50% of the combined
voting power entitled to vote generally in the
election of directors of
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the reorganized, merged or consolidated
company's then outstanding voting securities,
or a liquidation or dissolution of FFMC or of
the sale of all or substantially all of the
assets of FFMC.
(iv) "Good Reason" shall mean:
(A) The assignment to the Executive of any
duties inconsistent in any respect with the
Executive's position (including status, offices,
titles and reporting requirements), authority,
duties or responsibilities as contemplated by
Section 2 above, or any other action by FFMC
which results in a diminution in such position,
authority, duties or responsibilities, excluding
for this purpose any action taken with the
consent of the Executive and any isolated,
insubstantial and inadvertent action not taken
in bad faith and which is remedied by FFMC
promptly after receipt of notice thereof given
by the Executive;
(B) A reduction in the overall level of the
Executive's compensation or benefits;
(C) FFMC's requiring the Executive to be
based at any office or location other than
FFMC's executive offices in Atlanta, Georgia,
except for travel reasonably required in the
performance of the Executive's responsibilities;
(D) Any purported termination by the
Company of the Executive's employment otherwise
than as expressly permitted by this Agreement;
or
(E) Any failure by FFMC to comply with and
satisfy Section 9 below.
For purposes of this Agreement, any good faith
determination of "Good Reason" made by the
Executive shall be conclusive.
(v) "Current Total Annual Compensation" shall
be the total of the following amounts: (A) the greater of the
Executive's current annual salary for the calendar year in
which his employment terminates or such salary for the
calendar year prior to the year of such termination; (B) if
the year of termination is 1995, the Executive's additional
annual incentive compensation for 1994 as provided in the 1989
Agreement; (C) if the year of termination is 1996 or later,
the greater of i) $1,800,000 or ii) the fair market value (as
determined in accordance with paragraph 3(b) of the Restricted
Stock Agreement referred to in Section 3(b) above) of any
shares of Stock earned for the calendar year prior to the year
of termination pursuant to the terms of paragraph 3 of the
Restricted
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Stock Agreement referred to in Section 3(b) above; and
(D) any total amount that became payable to the Executive
under the FFMC Performance Units Incentive Plan during the
calendar year prior to the calendar year in which his
employment terminates, regardless of when such amounts are
actually to be paid.
(vi) "Disability" shall mean the total and
permanent inability of the Executive due to illness, accident
or other physical or mental incapacity to perform the usual
duties of his employment under this Agreement, as determined
by a physician selected by FFMC and acceptable to the
Executive or the Executive's legal representative (which
agreement as to acceptability shall not be unreasonably
withheld).
(vii) The "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
(g) In addition to the amounts payable under subsection
(a), (b) or (c) of this Section 5, FFMC shall pay the Executive a tax
equalization payment in accordance with this subsection. The tax
equalization payment shall be in an amount which when added to the
other amounts payable to the Executive under this Section 5 will place
the Executive in the same after-tax position as if the excise tax
penalty of Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any successor statute of similar import, did
not apply to any of the amounts payable under this Section 5 including
any amounts paid under this subsection (g). The amount of this tax
equalization payment shall be determined by FFMC's independent
accountants and shall be payable to the Executive at the same time as
the payment under subsection (a), (b) or (c) of this Section 5.
6. Noncompetition. The Executive agrees that if his employment
terminates during the term of this Agreement and such termination is not
covered by the provisions of Sections 5(a) or 5(b) above, he will not for one
year after such termination:
(a) directly or indirectly acquire or join with others in
acquiring more than 10% of the outstanding Common Stock of FFMC,
without the prior approval of the Board of Directors of FFMC;
(b) directly or indirectly engage in providing data
processing, storage and management products or services of the type
currently provided by FFMC or any of its subsidiaries as of the date
of this Agreement, including merchant credit card authorization,
processing and settlement, check guarantee and verification, in-store
marketing programs and systems for supermarkets, debt collection and
accounts receivable management, data imaging and micrographics,
database management, health care claims processing and integrated
management services, the development and marketing of data
communications and information processing systems and related services
and products (the "Services" and "Products") in the continental United
States, Alaska, Hawaii, the District of Columbia, the Caribbean or
Mexico (the "Territory"),
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the Executive acknowledging that he directs and is responsible for
FFMC's operations throughout the Territory and that FFMC must protect
itself on such basis;
(c) directly or indirectly on behalf of himself or any
other entity contact, divest, take away or solicit, for the purpose of
providing or permitting others to provide Services or Products in the
Territory, any person or entity which was a customer that the
Executive had material contact with during the term of this Agreement
and that received Services or Products from FFMC or any of its
subsidiaries during the term of this Agreement as shown on the books
and records of FFMC or any of its subsidiaries; or
(d) induce any employee of FFMC or any of its
subsidiaries to leave the employment of FFMC or any of its
subsidiaries.
Notwithstanding anything to the contrary above, this Section 6 shall not be
violated by the ownership by the Executive of less than 1% of the shares of
common stock of a publicly-held corporation or by any activities of the
Executive as an employee, agent or consultant in a capacity unrelated to
providing any Services or Products in the Territory.
7. Damages and Injunctive Relief. The Executive agrees that the
breach of any of his obligations under Section 6 above (a) may cause injury to
FFMC and that FFMC is entitled to seek and obtain compensation and damages, and
(b) may cause irreparable injury to FFMC and that, accordingly, FFMC may seek
and obtain injunctive relief against the breach or threatened breach of those
provisions, in addition to other remedies at law or in equity which may be
available; provided, however, that no such claims by FFMC shall permit FFMC to
offset, reduce, suspend or withhold any of the payments or benefits provided
under Section 5 above or to seek an injunction providing for such offset,
reduction, suspension or withholding.
8. Stock Sales. As an inducement to the Executive to execute
this Agreement, the Compensation Committee agrees that it is in the best
interests of the Executive and FFMC for the Executive to be able to make
limited sales of FFMC Common Stock in the market at appropriate times in
compliance with Rule 144 under the Securities Act of 1933, as amended, in order
to provide him with liquidity and an opportunity for investment
diversification, as provided in this section, while at the same time retaining
a substantial equity interest in FFMC. The Executive agrees that, until the
termination of this Agreement, he will not make any sales of Common Stock
without prior approval of the Compensation Committee, except for sales of up to
100,000 shares in 1994, and sales not in excess of 100,000 shares per year
during each year of the term of this Agreement made during the period of ten
business days beginning on the third business day following the release for
publication of FFMC's report of sales and earnings for a quarter or a year.
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9. Assignment; Successors.
(a) The rights and benefits of the Executive under this
Agreement, other than accrued and unpaid amounts due hereunder, are
personal to him and shall not be assignable, except with the prior
written consent of FFMC.
(b) Subject to the provisions of subsection (c) of this
Section 9, this Agreement shall not be assignable by FFMC, provided,
that with the consent of the Executive, FFMC may assign this Agreement
to another corporation wholly-owned by it, either directly or through
one or more other corporations, or to any corporate successor of FFMC
or any such corporation.
(c) Any business entity succeeding to substantially all
of the business of FFMC by purchase, merger, consolidation, sale of
assets or otherwise, shall be bound by and shall adopt and assume this
Agreement and FFMC shall obtain the assumption of this Agreement by
such successor.
10. Notices. Any notice or other communications under this
Agreement shall be in writing, signed by the party making the same, and shall
be delivered personally or sent by certified or registered mail, postage
prepaid, addressed as follows:
If to the Executive: Mr. Patrick H. Thomas
First Financial Management Corporation
3 Corporate Square, Suite 700
Atlanta, Georgia 30329
If to FFMC: The Board of Directors
First Financial Management Corporation
3 Corporate Square, Suite 700
Atlanta, Georgia 30329
Copy to:
Sutherland, Asbill & Brennan
999 Peachtree Street, N.E.
Atlanta, Georgia 30309
Attn: Mr. George L. Cohen
or to such other address or agent as may hereafter be designated by either
party hereto. All such notices shall be deemed given on the date personally
delivered or mailed.
11. Full Settlement and Legal Expenses. FFMC's obligation to make
the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counter-claim,
recoupment, defense or other claim, right or action which
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FFMC may have against the Executive or others. In no event shall the Executive
be obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement. FFMC agrees to pay, to the full extent permitted by law,
all legal fees and expenses which the Executive may reasonably incur as a
result of any contest (regardless of the outcome thereof) by FFMC or others of
the validity or enforceability of, or liability under, any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to Section 5
of this Agreement), plus in each case interest at the applicable Federal rate
provided for in Section 7872(f)(2) of the Code.
12. Governing Law. This Agreement shall be interpreted and
enforced in accordance with the laws of the State of Georgia.
13. Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid, but
if any one or more of the provisions contained in this Agreement shall be
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provisions in every other respect and
of the remaining provisions of this Agreement shall not be in any way impaired.
14. Entire Agreement. This Agreement and the 1989 Agreement
contain the entire agreement of the parties hereto with respect to the subject
matter contained herein. There are no restrictions, promises, covenants, or
undertakings, other than those expressly set forth herein or therein or
contained in the FFMC employee benefit or incentive compensation plans,
Performance Units Incentive Plan and agreements (including restricted stock
agreements and stock options), between FFMC and the Executive. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to the matters set forth herein other than the 1989 Agreement. This
Agreement may not be amended or modified except by a writing executed by the
parties.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the day and year first above written.
FIRST FINANCIAL MANAGEMENT CORPORATION
By:/s/ Robert E. Coleman
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Robert E. Coleman, Chairman of the
Compensation Committee
EXECUTIVE
/s/ Patrick H. Thomas
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Patrick H. Thomas
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