Exhibit 10.1

 

SECOND AMENDMENT

TO EMPLOYMENT AGREEMENT

 

AMENDMENT made effective the 11th day of August, 2005 to the Employment
Agreement dated March 23, 1999, between Answerthink, Inc. (formerly known as
AnswerThink Consulting Group, Inc.) (the “Company”) and John F. Brennan (the
“Executive”).

 

WHEREAS the Company and the Executive have entered into the Employment Agreement
dated March 23, 1999 (the “Employment Agreement”); and

 

WHEREAS the Company and the Executive have entered into that certain Amendment
to Employment Agreement dated November 10, 2004; and

 

WHEREAS the Company and the Executive desire to further amend the Employment
Agreement.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth and other good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged, the parties hereto agree as
follows:

 

1. Section 3 of the Employment Agreement shall be amended in its entirety to
read and provide as follows:

 

3. Position and Duties. The Executive shall serve as Corporate Development
Officer during the Employment Period. As Corporate Development Officer, the
Executive shall render executive, policy and other management services to the
Chief Executive Officer of the Company of the type customarily performed by
persons serving in a similar officer capacity. The Executive shall report to the
Chief Executive Officer of the Company, except as otherwise determined by the
Chief Executive Officer or the Board. The Executive shall also perform such
duties as the Chief Executive Officer or the Board may from time to time
reasonably determine and assign to the Executive. The Executive shall devote his
reasonable best efforts and substantially full business time to the performance
of his duties and the advancement of the business and affairs of the Company.
Notwithstanding the foregoing, the Executive and the Company may mutually agree
that the Executive is not obligated to devote his full business time to the
Company; provided, however, that in no event will the Executive work less than
20 hours per week during the Employment Period. In the event the Executive works
less than forty (40) hours per week, his base salary shall be reduced in the
manner set forth in Section 5(a).

 

2. Section 5(a) of the Employment Agreement shall be amended and restated in its
entirety to read and provide as follows:

 

(a) Base Salary. During the Employment Period, the Company shall pay Executive
an annual base salary (the “Base Salary”), which shall be at the rate of
$369,591. The Base Salary shall be reviewed no less frequently than annually and
may be increased at the discretion of the Board. If the Executive’s Base Salary
is increased, the increased amount shall be the Base Salary for the remainder of
the Employment Period. Except as otherwise agreed in writing by the Executive,
the Base Salary shall not be reduced from the amount previously in effect during
the Employment Period. The Base Salary shall be payable biweekly or in such
other installments as shall be consistent with the Company’s payroll practice.
If the Executive works less than forty (40) hours in any one week, the
Executive’s pay will be prorated accordingly.

 

3. A new Section 5(f) shall be added to the Employment Agreement and shall read
as follows:

 

(f) Restricted Stock Units. Except as otherwise provided herein, all restricted
stock units previously granted by the Company to the Executive shall fully vest
and become nonforfeitable (and shares of stock shall be delivered to the
Executive in satisfaction thereof) on December 31, 2005, to the extent that such
restricted stock units are not vested or forfeited prior to such date.

 

4. Section 8(a) of the Employment Agreement shall be amended and restated in its
entirety to read and provide as follows:

 

(a) Permitted Terminations. The Executive’s employment hereunder may be
terminated during the Employment Period without any breach of this Agreement
under the following circumstances:

 

(i) Death. The Executive’s employment hereunder shall terminate upon the
Executive’s death.

--------------------------------------------------------------------------------

(ii) By the Company. The Company may terminate the Executive’s employment:

 

(A) If the Executive shall have been unable to perform all of the Executive’s
duties hereunder by reason of illness, physical or mental disability or other
similar incapacity, which inability shall continue for more than three
consecutive months; or

 

(B) for any other reason.

 

(iii) By the Executive. The Executive may terminate employment for any reason
after October 31, 2005.

 

5. Section 9(a) of the Employment Agreement shall be amended and restated in its
entirety to read and provide as follows:

 

(a) Death. If the Executive’s employment is terminated during the Employment
Period as a result of the Executive’s death, (i) the Company shall pay the
Executive’s estate, or as may be directed by the legal representatives of such
estate, the Executive’s full Base Salary through the Date of Termination and all
other unpaid amounts, if any to which the Executive is entitled as of the Date
of Termination in connection with any fringe benefits or under any bonus or
incentive compensation plan or program of the Company pursuant to Section 5(b)
and (c) hereof, at the time such payments are due; (ii) the Executive’s rights
with respect to stock options, shares of restricted stock and restricted stock
units previously granted by the Company shall be fully vested and
non-forfeitable (and shares of stock shall be delivered to the Executive’s
estate, or as may be directed by the legal representatives of such estate, in
satisfaction of restricted stock units) as of the Date of Termination; (iii) all
deferred and incentive compensation or bonus amounts awarded by the Company to
the Executive and other contingent or deferred compensation awards or grants
made by the Company to the Executive, or otherwise made in connection with the
Executive’s employment hereunder, shall become fully vested and non-forfeitable
upon the Date of Termination; (iv) the Company shall pay the COBRA premiums for
the Executive’s family until the Executive’s family ceases to be eligible for
COBRA; and (v) the Company shall pay the Executive’s estate, or as may be
directed by the legal representatives of such estate, an amount equal to
Executive’s Base Salary, payable in equal installments on the Company’s regular
salary payment dates (the “Severance Payments”) during the one-year period
commencing on the Date of Termination (the “Initial Period”); provided, however,
that in the event that the Initial Period straddles a calendar year end, then
the amount of the Severance Payments which would have become due after such
calendar year end shall be paid in a lump sum on the last regular salary payment
date during the year of the Executive’s death so that no portion of the
Severance Payments are paid after December 31st of the year of the Executive’s
death. The Company shall have no further obligations to the Executive under this
Agreement after the Executive’s death.

 

6. Section 9(b) of the Employment Agreement shall be amended and restated in its
entirety to read and provide as follows:

 

(b) Disability. If the Company terminates the Executive’s employment during the
Employment Period because of the Executive’s disability pursuant to Section
8(a)(ii)(A) hereof, (i) the Company shall pay the Executive the Executive’s full
Base Salary through the Date of Termination and all other unpaid amounts, if
any, to which the Executive is entitled as of the Date of Termination in
connection with any fringe benefits or under any bonus incentive compensation
plan or program of the Company pursuant to Sections 5(b) and (c) hereof, at the
time such payments are due; provided, that payments so made to the Executive
during any period that the Executive is unable to perform all of the Executive’s
duties hereunder by reason of illness, physical or mental illness or other
similar incapacity shall be reduced by the sum of the amounts, if any, payable
to the Executive at or prior to the time of any such payment under disability
plans of the Company and which amounts were not previously applied to reduce
such payment; (ii) the Executive shall be entitled to retain, and the Company
shall have no claim to, the personal computer (and all related equipment and
software) supplied to the Executive by the Company during the Employment Period;
(iii) the Executive’s rights with respect to stock options, shares of restricted
stock and restricted stock units previously granted by the Company shall be
fully vested and nonforfeitable (and shares of stock shall be delivered to the
Executive in satisfaction of restricted stock units) as of the Date of
Termination; (iv) all deferred and incentive compensation or bonus amounts
awarded by the Company to the Executive and other contingent or deferred
compensation awards or grants made by the Company to the Executive, or otherwise
made in connection with the Executive’s employment hereunder, shall become fully
vested and nonforfeitable upon the Date of Termination; (v) the Company shall
pay the COBRA premiums for the Executive and his family until the earlier of (x)
the time that the Executive and his family cease to be eligible for COBRA and
(y) the time that the Executive becomes eligible for coverage from a subsequent
employer; and (vi) during the Initial Period, the Company shall pay the
Executive an amount equal to the Severance Payments. If the Initial Period
straddles a calendar year end, then the amount of the Severance Payments which
would have become due after such calendar year end shall be paid in a lump sum
on the last regular salary payment date during the year in which the Executive’s
employment terminates so that no portion of the Severance Payments are paid
after December 31st of the year in which the Executive’s employment terminates.

--------------------------------------------------------------------------------

7. Section 9(c) of the Employment Agreement shall be deleted in its entirety.

 

8. Section 9(d) of the Employment Agreement shall be amended and restated in its
entirety to read and provide as follows:

 

(d) Termination. If the Executive’s employment is terminated during the
Employment Period for any reason (other than for disability pursuant to Section
8(a)(ii)(A) or death pursuant to Section 8(a)(i) hereof) or if either party
gives notice to the other party that it is terminating the term of employment
pursuant to Section 2 hereof: (i) the Company shall pay the Executive his full
Base Salary through the Date of Termination and all other unpaid amounts, if
any, to which the Executive is entitled as of the Date of Termination in
connection with any fringe benefits or under any bonus incentive compensation
plan or program of the Company pursuant to Sections 5(b) and (c) hereof, at the
time such payments are due; (ii) the Executive shall be entitled to retain, and
the Company shall have no claim to, the personal computer (and all related
equipment and software) supplied to the Executive by the Company during the
Employment Period; (iii) except as provided below, the Executive’s rights with
respect to stock options, shares of restricted stock and restricted stock units
previously granted by the Company shall be fully vested and nonforfeitable (and
shares of stock shall be delivered to the Executive in satisfaction of
restricted stock units) as of the Date of Termination; (iv) the Company shall
pay the COBRA premiums for the Executive and his family until the earlier of (x)
the time that the Executive and his family cease to be eligible for COBRA and
(y) the time that the Executive becomes eligible for coverage from a subsequent
employer; and (v) during the Initial Period, the Company shall pay the Executive
an amount equal to the Severance Payments. If the Initial Period straddles a
calendar year end, then the amount of the Severance Payments which would have
become due after such calendar year end shall be paid in a lump sum on the last
regular salary payment date during the year in which the Executive’s employment
terminates so that no portion of the Severance Payments are paid after December
31st of the year in which the Executive’s employment terminates.

 

With respect to any shares of Company common stock issued to the Executive in
connection with any restricted stock units that vest and become nonforfeitable
on the Date of Termination as a result of this Section 9(d), (i) such shares
shall not be sold, pledged, assigned or otherwise encumbered by the Executive
until October 31, 2006 and (ii) the Company shall withhold a number of such
shares having a Fair Market Value (as defined in the AnswerThink, Inc. 1998
Stock Option and Incentive Plan), on the date the tax is to be determined, equal
to an amount sufficient to satisfy the minimum federal, state, and local taxes
required by law to be withheld with respect to such issuance. The share
certificate issued to the Executive in connection with the vesting of such
shares shall bear the following legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
TRANSFER AND CERTAIN OTHER AGREEMENTS REFERENCED IN THE EMPLOYMENT AGREEMENT
BETWEEN THE ISSUER AND THE HOLDER DATED MARCH 23, 1999 AS AMENDED ON NOVEMBER
10, 2004 AND ON AUGUST 2nd, 2005. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY
THE HOLDER HEREOF AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE.

 

9. The definitions of “Beneficial Owner”, “Benefit Plan”, “Cause”, “Extended
Period”, “Good Reason”, and “Other Agreements” in Section 21 of the Employment
Agreement shall be deleted in their entirety.

 

10. The following new definitions shall be added to Section 21 of the Employment
Agreement and shall read as follows:

 

“Bonus” is the annual and quarterly bonus(es) paid the Executive pursuant to any
bonus plan maintained by the Company.

 

“COBRA” means the provisions of Section 4980B of the Code and Sections 601
through 608 of the Employee Retirement Income Security Act of 1974, as amended.

 

11. The definition of “Date of Termination” in Section 21 of the Employment
Agreement shall be amended and restated in its entirety to read and provide as
follows:

 

“Date of Termination” means (i) if the Executive’s employment is terminated by
the Executive’s death, the date of the Executive’s death; (ii) if the
Executive’s employment is terminated because of the Executive’s disability
pursuant to Section 8(a)(ii)(A) hereof, 30

--------------------------------------------------------------------------------

days after Notice of Termination, provided that the Executive shall not have
returned to the performance of the Executive’s duties on a full-time basis
during such 30-day period; (iii) if the Executive’s employment is terminated for
any other reason, the date on which the Notice of Termination is given, and (iv)
if either party gives notice to the other party that it is terminating the term
of employment pursuant to Section 2 hereof, the last day of the Initial Term or
Extended Term, as the case may be (or if earlier, a Date of Termination
occurring pursuant to (i), (ii) or (iii) above).

 

12. The definition of “Initial Period” in Section 21 of the Employment Agreement
shall be amended and restated in its entirety to read and provide as follows:

 

“Initial Period” is defined in Section 9(a) above.

 

13. The definition of “Severance Payments” in Section 21 of the Employment
Agreement shall be amended and restated in its entirety to read and provide as
follows:

 

“Severance Payments” is defined in Section 9(a) above.

 

14. Section 22 of the Employment Agreement shall be amended and restated in its
entirety to read and provide as follows:

 

22. Vesting and Transaction Bonus Upon a Change of Control. In the event of a
Change of Control during the Employment Period, and regardless of whether or not
the Executive’s employment is terminated in connection with such Change of
Control, (i) the Executive’s rights with respect to stock options, shares of
restricted stock and restricted stock units held by the Executive as of the date
of the Change of Control and granted by the Company shall be fully vested and
nonforfeitable (and shares of stock shall be delivered to the Executive in
satisfaction of restricted stock units); (ii) all deferred and incentive
compensation or bonus amounts awarded by the Company to the Executive and other
contingent or deferred compensation awards or grants made by the Company to the
Executive, or otherwise made in connection with the Executive’s employment
hereunder, shall become fully vested and nonforfeitable; and (iii) the Company
shall pay the Executive an aggregate amount equal to two hundred percent (200%)
of the sum of (A) Executive’s Base Salary and (B) Executive’s Bonus for the
twelve month period immediately preceding the Change of Control (the
“Transaction Bonus”), payable in a lump sum on the first regular salary payment
date after the Change of Control occurs. Notwithstanding anything in this
Agreement to the contrary, if the Executive receives the Transaction Bonus in
accordance with this Section 22, the Executive shall not be entitled to any of
the Severance Payments that are described in Section 9.

 

15. A new Section 23 shall be added to the Employment Agreement and shall read
as follows:

 

23. Directors and Officers Insurance and Indemnification. The Company shall
provide directors and officers insurance covering the Executive for events
occurring during the Employment Period on terms at least as favorable as
coverage provided to members of the Board of Directors of the Company from time
to time, and the Company shall provide indemnification to the Executive to the
full extent allowed by the law of its jurisdiction of incorporation, such
indemnification to continue in accordance with its terms as in effect from time
to time as to the Executive even if the Executive ceases to be an officer,
director, employee or agent of the Company, and shall inure to the benefit of
the Executive’s heirs, executors and administrators. The insurance and
indemnification provided by the Company under this Section 23 shall apply to any
indemnifiable or insurable acts or omissions of the Executive during the
Employment Period as an officer, director or employee of the Company or any of
its subsidiaries or affiliates, and the obligations of the Company under this
Section 23 shall continue during the Employment Period and, after the Executive
ceases to be a director, officer, employee or agent of the Company, during any
period which the Executive may be liable for acts or omissions as an officer,
director or employee of the Company or its subsidiaries or affiliates.

 

16. A new Section 24 shall be added to the Employment Agreement and shall read
as follows:

 

24. IRC Section 409A Savings Clause. If any provision of this Agreement
contravenes any regulations or guidance promulgated under Section 409A of the
Code, the Company may reform this Agreement or any provision hereof to maintain
to the maximum extent practicable the original intent of the applicable
provision without violating the provisions of Section 409A of the Code.

 

17. All other provisions of the Employment Agreement shall remain in full force
and effect.

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties have executed this Agreement on August 2, 2005.

 

Answerthink, Inc.

 

Attest:         By:  

/s/ Frank A. Zommerfeld

--------------------------------------------------------------------------------

  By:  

/s/ Ted A. Fernandez

--------------------------------------------------------------------------------

Name:   Ted A. Fernandez         Title:   Chairman and CEO         John F.
Brennan         Attest:         By:  

/s/ Frank A. Zommerfeld

--------------------------------------------------------------------------------

 

/s/ John F. Brennan

--------------------------------------------------------------------------------