EXHIBIT 10.74

 

December 9, 2005

 

Mr. Alan Michels

 

  Re: Separation Agreement and Release

 

Dear Mr. Michels:

 

This letter will confirm our understanding concerning the termination of your
employment with CSG Systems International, Inc. and CSG Software, Inc. (the
“Companies”). This letter (hereafter referred to as this “Agreement”) outlines
the benefits you will receive, and the legal rights you will waive, upon your
execution of this Agreement and will constitute a binding contract between you
and the Companies when executed by you. You are encouraged to consult an
attorney and to review this Agreement carefully.

 

1. Separation from Employment; Final Pay and Benefits Under Employment
Agreement.

 

Effective upon the closing of the sale of the GSS and ICMS businesses by the
Companies and certain related entities to Comverse, Inc. (the “Closing Date”),
you will cease performing your responsibilities for the Companies and will
relinquish all titles and authorities you have with respect to the Companies and
their affiliates. You will no longer be authorized to incur any expenses,
obligations or liabilities on behalf of the Companies and must return all
property of the Companies within your possession, including customer lists,
information, forms, formulas, plans, documents and other written and computer
materials, and copies of the same, as well as any software or hardware owned by
the Companies (e.g., laptop computers and cell phones and other wireless
communications devices) belonging to the Companies or any of their customers.

 

You will receive the benefits to which you are entitled under Paragraph 10(e) of
your Employment Agreement with the Companies dated June 1, 2005, which is hereby
incorporated by reference (the “Employment Agreement”), subject to the terms and
conditions of the Employment Agreement. The Company will withhold from amounts
payable to you under the

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

December 15, 2005

Page 2 of 6

 

Employment Agreement, as applicable, state and federal income taxes and payroll
taxes and all other deductions authorized by law or by you.

 

If you elect to sign this Agreement and not exercise your right of revocation as
described in paragraph 10 below, then your last date of employment will be the
Closing Date. If you elect not to sign this Agreement, or if you sign this
Agreement and subsequently exercise your right of revocation as described in
paragraph 10 below, then your last date of employment will be the Closing Date.

 

2. Separation Benefits.

 

Upon your execution of this Agreement and the expiration of the seven (7) day
revocation period described in paragraph 10 below without your revocation of
this Agreement, you will receive, in addition to the benefits provided for in
Paragraph 10(e) of the Employment Agreement, the benefits described in paragraph
3 below.

 

3. Stock Options and Restricted Shares.

 

If you were granted Stock Options during your employment with the Company, then
all vested and exercisable stock options must be exercised within ninety
(90) days after your last date of employment as defined in paragraph 1 above.
Subject to and contingent upon (i) the closing of the sale of the GSS and ICMS
businesses to Comverse, Inc. as described in paragraph 1 above and (ii) the
expiration of the seven (7) day revocation period described in paragraph 10
below without your revocation of this Agreement, the following shares of
restricted stock of CSG Systems International, Inc. previously granted to you
automatically shall become fully vested and the restrictions and forfeiture
provisions associated with such shares shall lapse:

 

Grant Date

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

 

Number of Shares

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

January 11, 2005

  25,000

March 25, 2005

  35,000,

 

but all other provisions of the Restricted Stock Award Agreements pertaining to
such shares shall remain in full force and effect.

 

4. Governing Law.

 

This agreement shall be interpreted and construed in accordance with the laws of
the State of Colorado.

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

December 15, 2005

Page 3 of 6

 

5. Your Release of the Company.

 

In consideration for the benefits provided to you under this Agreement, you
hereby fully and forever release and discharge the Companies and any parent,
subsidiary, affiliate or related entity of the Companies and all of their
respective officers, directors, shareholders, employees, agents, predecessors,
successors and assigns (collectively, the “Releasees”) from any and all claims,
causes of action, liabilities and demands of any kind whatsoever, whether
presently known or unknown, asserted or unasserted, matured or not yet matured,
that you now may have or in the future may have against the Releasees or any of
them, which arose on or before the date that you sign this Agreement and which
arise out of or are related to your employment with, or separation from
employment with, the Companies; provided, however, that the foregoing release
shall not apply to any rights of indemnification which you may have (i) under
the Indemnification Agreement referred to in paragraph 13 below, (ii) under the
certificate of incorporation or bylaws of the Companies, or (iii) under the
General Corporation Law of Delaware. The claims which you are releasing include,
but are not limited to, all claims of discrimination on the basis of race,
color, religion, sex, age, national origin, disability, or any other improper
factor; breach of contract; impairment of economic opportunity; interference
with contractual or employment relations; infliction of emotional distress;
fraud; misrepresentation; defamation; or invasion of privacy, and specifically
include but are not limited to claims under the Age Discrimination in Employment
Act, the Americans with Disabilities Act, the Family and Medical Leave Act, 42
U.S.C. Sec. 1981, Title VII of the Civil Rights Act of 1964, and any other
federal or state constitution, statute, ordinance or regulation, or common law.
Except as otherwise expressly provided in this paragraph 5 with respect to
rights of indemnification, this release includes all claims for compensatory,
punitive and liquidated damages, attorney fees and costs, is intended to fully
and forever eliminate all employment-related claims you may have against the
Releasees or any of them, and shall be broadly interpreted to achieve that goal.
You understand that this is a GENERAL RELEASE.

 

6. Confidential Information.

 

During your employment with the Companies you had access to the confidential and
proprietary information and trade secrets of the Companies, as well as those of
the parent, affiliated, subsidiary and related entities of the Companies (the
“CSG Group”) and of third parties with whom the CSG Group does business. This
includes information and data concerning research, development, strategic
planning, trade secrets, customer accounts, customer lists and preferences
(including preferred/best customer lists), marketing activities and procedures,
pricing policies and practices, salaries, personnel and contractors of the CSG
Group, accounting practices and procedures, financial data, arrangements and
practices, pro formas, sales methods, personnel files, data processing and other
record keeping systems, software, and other information relating to the
operations of the CSG Group. As further and essential consideration for the
benefits

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

December 15, 2005

Page 4 of 6

 

provided to you under this Agreement, you agree that you will not disclose or
impart to any other person, directly or indirectly, any of such information, nor
will you remove any of such information from the premises of the CSG Group; you
will immediately return to the Companies any confidential information that you
may have in your possession, including any copies, regardless of the form of
such information or the media on which it resides; and you will not retain any
copies of such information and will not assist another in the use, disclosure or
copying of such confidential information. In the event that you violate any of
the terms of this paragraph, the Companies may withhold and/or recover from you
all of the economic benefits paid or provided or agreed to be paid or provided
to you pursuant to paragraph 3 above, without waiving their right to pursue any
other legal or equitable remedies, and your entitlement to such benefits shall
cease and be forfeited.

 

7. Restrictive Covenants.

 

The restrictive covenants contained in the Employment Agreement, including but
not limited to Paragraphs 11, 18, and 19 thereof, as well as the agreements
granting you stock options or restricted shares of stock of CSG Systems
International, Inc. shall remain in full force and effect; provided, however,
that your employment after the Closing Date with Comverse, Inc. or an entity
which controls, is controlled by, or is under common control with Comverse, Inc.
shall not constitute a violation of Paragraph 19 of the Employment Agreement,
but the Companies do not otherwise waive or relinquish and shall continue to
have their right to enforce the provisions of Paragraph 19 of the Employment
Agreement.

 

8. Validity and Severability.

 

Both you and the Companies agree that neither you nor the Companies will seek to
defeat, or seek to have declared invalid, any provision of this Agreement. In
the event that any part of the covenants referenced in paragraph 7 above shall
be held to be invalid or unenforceable, the remaining parts thereof shall
nevertheless continue to be valid and enforceable as though the invalid and
unenforceable parts thereof had not been included therein. If any provision of
such covenants shall be declared by a court of competent jurisdiction to exceed
the maximum provisions which the court deems reasonable and enforceable, then
such provisions shall be deemed to be reformed to those which such court deems
reasonable and enforceable.

 

If a court finds that any provision of this Agreement is unenforceable, then
that provision will be severed and the balance of the Agreement will be
enforceable; provided, however, that if you petition or otherwise request a
court to declare any of paragraphs 6, 7 or 8 of this Agreement unenforceable and
such court enters an order or judgment to such effect, then this entire
Agreement may, at the option of the Companies, be declared to be null and void,
in which case the Companies

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

December 15, 2005

Page 5 of 6

 

shall have the right to recover from you the shares of stock referred to in
paragraph 3 above or the proceeds thereof if you have sold any of such shares.

 

9. Non-Disclosure.

 

You agree not to disclose the existence or contents of this Agreement or the
benefits provided to you hereunder. Notwithstanding the prohibition in the
preceding sentence, (a) the Companies and you may disclose this Agreement in
confidence to their respective attorneys, accountants, auditors, tax preparers,
and financial or other advisors, (b) the Companies may disclose this Agreement
as necessary to fulfill standard or legally required corporate or public
reporting or disclosure requirements, (c) the Companies may disclose this
Agreement upon request from any government entity, and (d) the Companies and you
may disclose this Agreement insofar as such disclosure may be necessary to
enforce its terms or as otherwise required by law. If the Companies make a
public disclosure of this document (or the contents thereof) pursuant to an
exception set forth above, then you will be released from the obligations set
forth in this paragraph 9.

 

10. Time to Consider and Right to Revoke.

 

You may, at your option, before signing this Agreement, consider it for a period
of 45 days from the day it is presented to you. During that period you should
review and discuss it with your attorney. After you sign this Agreement, you
will have a period of seven (7) days to revoke it by notifying the Company in
writing delivered to the SVP Corporate Development and General Counsel of CSG
Systems, Inc. in Denver, Colorado. This Agreement will not become effective or
enforceable until the seven (7) day revocation period expires, and no rights
under paragraph 3 above shall arise until such period has expired without your
revocation of this Agreement.

 

11. References.

 

The Companies agree to provide neutral reference responses to inquiries about
you from prospective employers. The responses will include a verification of
past employment, dates of employment and job titles.

 

12. No Admission.

 

Neither the payment of any sum of money nor any rights or benefits granted to
you in this Agreement nor the execution of this Agreement by the Companies shall
in any way be construed to be an admission of any wrongful or unlawful act
whatsoever on the part of the Companies, and the Companies specifically disclaim
any liability to you for any wrongful or unlawful act against you.

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

December 15, 2005

Page 6 of 6

 

13. Indemnification Agreement.

 

The Companies hereby confirm to you that the Indemnification Agreement between
CSG Systems International, Inc. and CSG Systems, Inc. (as the Company) and you
(as the Indemnitee) dated as of January 1, 2005, will remain in effect in
accordance with its terms after the termination of your employment with the
Companies on the Closing Date.

 

If this Agreement is acceptable to you, please sign and date the enclosed copy
of this Agreement in the space indicated and return it to me.

 

Sincerely yours,

/s/ Joseph T. Ruble

Joseph T. Ruble

SVP Corporate Development and General Counsel

of CSG Systems, Inc. and General Counsel of CSG

Systems International, Inc.

 

By signing below, I accept the foregoing Agreement in its entirety. I
acknowledge that I have been encouraged to consult an attorney, have been
allowed 45 days to consider this Agreement, understand every provision of this
Agreement, and execute this Agreement voluntarily and without duress or
coercion.

 

/s/ Alan Michels       12/9/05 EMPLOYEE    (Alan Michels)       DATE

 

If an attorney reviews this Agreement on your behalf, please have the attorney
sign below.

 

APPROVED AS TO FORM AND CONTENT    Attorney for Employee