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Exhibit 10.23
AGREEMENT WITH CHAIRMAN
This Agreement is made as of this ____ day of ___________ 2000 between
TeleSpectrum Worldwide Inc., a Delaware corporation (the "Company"), and Xxxxxx
X.Xxxxxxx (the "Chairman").
RECITALS
WHEREAS, the Company desires to retain the Chairman, and the Chairman
desires to provide services to the Company, upon the terms and conditions
hereinafter set forth.
WITNESSETH:
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:
1. Engagement.
(a) During the term of the Chairman's engagement under this Agreement
(the "Term"), the Chairman shall serve as Chairman of the Company's Board of
Directors (the "Board") and perform such duties consistent with such office as
described in the Company's Bylaws (a copy of which has been furnished to the
Chairman) and as determined by the Board.
(b) The Chairman represents to the Company that he is not subject or a
party to any employment agreement, non-competition covenant, non-disclosure
agreement or any other agreement, covenant, understanding or restriction of any
nature which would prohibit the Chairman from executing this Agreement and
performing fully his duties and responsibilities hereunder.
2. Term. The Term shall begin on the date first referenced above shall continue
until such time as the Chairman ceases to serve in the capacity of Chairman of
the Board, by reason of his resignation, removal, failure to be reappointed or
otherwise, all in accordance with the Company's Bylaws or as determined by the
Board consistent with applicable law.
3. Compensation.
(a) The basic annual rate of compensation of the Chairman for his
services to the Company shall be $200,000 or such higher annual rate as may in
the future be determined by the Compensation Committee (the "Compensation
Committee") of the Board (such amounts are referred to herein as the "Salary"),
which the Company shall pay to the Chairman in equal proportional installments
in accordance with the normal payroll practices of the Company.
(b) The Chairman shall be eligible to receive an annual bonus of up to
100% of his Salary, as in effect at the beginning of the bonus period. This
bonus will be awarded based on the Chairman's achievement of goals and
objectives established by the Compensation Committee. The determination of
whether the Chairman has achieved such goals and objectives
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shall be made by the Compensation Committee and their determination shall be
final and binding. In order to be eligible to receive this bonus the Chairman
must continue his engagement hereunder through the end of the applicable bonus
period. The bonus, if any, shall be payable within fifteen (15) days after the
end of the applicable bonus period. For the year 2000, this bonus shall be
prorated based on the number of months (or portions thereof) the Chairman serves
as Chairman of the Board hereunder. The Chairman will be eligible to receive
such other bonuses in such amounts and at such times and for such reasons as the
Compensation Committee, in its sole discretion, shall approve.
(c) The Company has granted the Chairman as of the date hereof stock
options ("Stock Options") to purchase an aggregate of 1,000,000 shares of the
Company's common stock, par value $.01 per share (the "Common Stock") as
follows:
(1) A Stock Option to purchase 500,000 shares of Common Stock (the
"Base Option") at an exercise price equal to the Fair Market Value (as defined
in the Telespectrum Worldwide Inc. 1996 Equity Compensation Plan (the "Plan"))
on the grant date ($1.50 per share), 50% of which Base Option shall be
immediately vested and exercisable and the balance of which Base Option shall
vest and become exercise in substantially equal quarterly installments over the
two year period ending on the second anniversary of the grant date.
(2) A Stock Option to purchase 500,000 shares of Common Stock (the
"Performance Option") at an exercise price equal to the Fair Market Value (as
defined in the Plan) on the grant date ($1.50 per share), which Performance
Option shall vest and become exercisable if and when the closing price of the
Common Stock on Nasdaq reaches $4.00 per share for ten consecutive trading days,
or if not vested by then, upon the fourth anniversary of the grant date.
Notwithstanding the foregoing, the Base Option shall become fully
vested and exercisable upon a Change of Control (as defined in the Plan). The
Stock Options shall be granted under and pursuant to the terms of the Plan, to
the extent permissible under the limitations set forth in the Plan. To the
extent the full complement of Stock Options cannot be granted under the Plan,
the Base Option shall be granted under the Plan and the Performance Option shall
be granted outside of the Plan.
(d) During the Term, the Company shall provide the Chairman with the
fringe benefits that are substantially equivalent to the fringe benefits
specified on Exhibit "A" (the "Fringe Benefits") at such levels that are
provided to senior officers of the Company.
4. Termination Without Compensation.
(a) Total Disability. If the Chairman becomes totally disabled (as
defined below), the Company may terminate this Agreement by notice to the
Chairman, and as of the termination date, the Company shall have no further
liability or obligation to the Chairman hereunder except as follows: the
Chairman shall receive (i) unpaid Salary, Bonus, if any, and Fringe Benefits
that have accrued through the date of termination; and (ii) whatever benefits
that he may be entitled to receive under any then existing disability benefit
plans included in the Fringe Benefits. For
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the purposes hereof, the Chairman shall be deemed to be "totally disabled" if
the Chairman is considered totally disabled under any group or individual
disability plan maintained by the Company and in effect at that time, that
covers the Chairman, or in the absence of any such plan, under applicable Social
Security regulations. In the event of any dispute under this Section 4(a), the
Chairman shall submit to a physical examination by a licensed physician mutually
satisfactory to the Company and the Chairman, the cost of such examination to be
paid by the Company, and the determination of such physician shall be
determinative.
(b) Death. If the Chairman dies, this Agreement shall terminate on the
date of death, and thereafter the Company shall not have any further liability
or obligation to the Chairman, his executors, administrators, heirs, assigns or
any other person claiming under or through him except that the Chairman's estate
shall receive any unpaid Salary, Bonus, if any, and Fringe Benefits that have
accrued through the date of termination. In addition, any Stock Options that are
then vested and exercisable may thereafter be exercised by the Chairman's
representatives in accordance with the terms of the Plan.
(c) Cause. The Company may terminate this Agreement for "cause" by
giving the Chairman 30 days' notice of the termination date, and as of the
termination date, the Company shall not have any further liability or obligation
to the Chairman, except that the Chairman shall receive any unpaid Salary,
Bonus, if any, and Fringe Benefits that have accrued through the date of
termination. For purposes of this Agreement, "cause" shall mean the Chairman's
(i) breach (other than by reason of illness, injury or incapacity) of any of the
material terms or provisions of this Agreement, (ii) the willful and substantial
failure to comply fully with the lawful and reasonable directives of the Board,
(iii) substantial and willful misconduct, (iv) material neglect of the Company's
business, (v) conviction of a felony or other crime involving moral turpitude,
(vi) misappropriation of funds, or (vii) habitual abuse of alcohol, narcotics or
other controlled substances. In the case of a termination for "cause," the
notice of termination shall specify the basis for the Company's determination of
"cause"; provided, however, that in the case of conduct described in clauses
(i), (ii), (iii) and (iv) above, such conduct shall not constitute "cause" for
the purposes of this paragraph (c) unless (A) the Board shall have given the
Chairman notice setting forth with specificity (1) the conduct deemed to
constitute "cause," (2) reasonable action that would remedy the objectionable
conduct, and (3) a reasonable time (not less than 5 days) within which the
Chairman may take such remedial action, and (B) the Chairman shall not have
taken such specified remedial action within such specified reasonable time.
(d) Resignation. The Chairman shall have the right to terminate this
Agreement at any time by giving the Company 60 days' notice of the termination
date. Under such circumstances, the Company shall not have any further liability
or obligation to the Chairman, except that the Chairman shall receive any unpaid
Salary, Bonus, if any, and Fringe Benefits that have accrued through the date of
termination, net of any liabilities that the Chairman may have to the Company.
5. Termination With Compensation. The Company shall have the right to terminate
this Agreement without cause at any time by giving the Chairman 30 days' notice
of the termination date. In the event of a termination of the Term pursuant to
this Section 5, the Company shall continue to pay to the Chairman the Salary and
continue to provide the healthcare benefits
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referred to in item (a) of Exhibit A hereto for a period ending one year after
the date of any such termination. The Salary to be paid and the Fringe Benefits
to be provided under this Section 5 are referred to herein as the "Termination
Compensation." The Chairman shall not be entitled to any Termination
Compensation unless the Chairman executes and delivers to the Company after a
notice of termination a release in a form satisfactory to the Company in its
sole discretion by which the Chairman releases the Company from any obligations
and liabilities of any type whatsoever under this Agreement, except for the
Company's obligations with respect to the Termination Compensation, which
release shall not affect the Chairman's right to indemnification, if any, for
actions taken within the scope of his engagement hereunder. The parties hereto
acknowledge that the Termination Compensation to be provided under this Section
5 is to be provided in consideration for the above-specified release.
6. Agreement Not to Compete.
(a) The Chairman covenants that for the period beginning on the
termination of Chairman's engagement hereunder and ending on the first
anniversary of the date of such termination, he will not, directly or
indirectly, own, manage, operate, join, control, finance or participate in the
ownership, management, operation, control or financing of, or be connected as a
partner, principal, agent, representative, consultant or otherwise with or use
or permit his name to be used in connection with, any business or enterprise
engaged directly or indirectly in competition with the business conducted by the
Company at any time during such period within any portion of the United States
in the telemarketing or teleservices industry ("Business"). It is recognized by
the Chairman and the Company that the Business is and is expected to continue to
be conducted throughout the United States and that more narrow geographical
limitations of any nature on this non-competition covenant (and the
non-solicitation covenant set forth in Section 6(b)) are therefore not
appropriate. The foregoing restriction shall not be construed to prohibit the
ownership by Chairman as a passive investment of not more than five percent (5%)
of any class of securities of any corporation which is engaged in any of the
foregoing businesses having a class of securities registered pursuant to the
Securities Exchange Act of 1934.
(b) The Chairman further covenants that for the period beginning on the
termination of Chairman's engagement hereunder and ending on the second
anniversary of the date of such termination of employment hereunder, he will
not, either directly or indirectly, (i) call on or solicit any person who or
which has been a customer of the Company with respect to the activities
prohibited by Section 6(a) or (ii) solicit the employment of any person who is
employed by the Company during such period on a full or part-time basis.
(c) The Chairman recognizes and acknowledges that by reason of his
engagement hereunder by the Company he will have access to Company Information
(as defined in Section 8) relating to the Business. The Chairman acknowledges
that such Company Information is a valuable and unique asset and covenants that
he will not disclose any such Company Information after the date hereof to any
person for any reason whatsoever, unless such information (i) is in the public
domain through no wrongful act of Chairman, (ii) has been rightfully received
from a third party without restriction and without breach of this Agreement or
(iii) is required by law.
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(d) The Chairman acknowledges that the restrictions contained in this
Section 6 are reasonable and necessary to protect the legitimate interests of
the Company, and that any violation will result in irreparable injury to the
Company.
(e) The Chairman agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits and
other benefits arising from any violation of this Section 6, which rights shall
be cumulative and in addition to any other rights or remedies to which the
Company may be entitled. In the event that any of the provisions of this Section
6 should ever be adjudicated to exceed the time, geographic, product or service,
or other limitations permitted by applicable law in any jurisdiction, then such
provisions shall be deemed reformed in such jurisdiction to the maximum time,
geographic, product or service, or other limitations permitted by applicable
law.
7. Inventions, Designs and Product Developments. All inventions,
innovations, designs, ideas and product developments, developed or conceived by
the Chairman, solely or jointly with others, whether or not patentable or
copyrightable, at any time during the Term that relate to the actual or planned
business activities of the Company (collectively, the "Developments") and all of
the Chairman's right, title and interest therein, shall be the exclusive
property of the Company. The Chairman hereby assigns, transfers and conveys to
the Company all of his right, title and interest in and to any and all such
Developments. The Chairman shall disclose fully, as soon as practicable and in
writing, all material and substantial Developments to the Board. At any time and
from time to time, upon the request of the Company, the Chairman shall execute
and deliver to the Company any and all instruments, documents and papers, give
evidence and do any and all other reasonable acts that, in the opinion of
counsel for the Company, are or may be necessary or desirable to document such
transfer or to enable the Company to file and prosecute applications for and to
acquire, maintain and enforce any and all patents, trademark registrations or
copyrights under United States or foreign law with respect to any such
Developments or to obtain any extension, validation, re-issue, continuance or
renewal of any such patent, trademark or copyright. The Company will be
responsible for the preparation of any such instruments, documents and papers
and for the prosecution of any such proceedings and will reimburse the Chairman
for all reasonable expenses incurred by his in compliance with the provisions of
this Section 7.
8. Confidential Information.
(a) The Chairman has had and will have possession of or access to
confidential information relating to the business of the Company, including
writings, equipment, processes, drawings, reports, manuals, invention records,
financial information, business plans, customer lists, the identity of or other
facts relating to prospective customers, inventory lists, arrangements with
suppliers and customers, computer programs, or other material embodying trade
secrets, customer or product information or technical or business information of
the Company. All such information, other than any information that is in the
public domain through no act or omission of the Chairman or which he is
authorized to disclose, is referred to collectively as the "Company
Information." During and after the Term, the Chairman shall not (i) use or
exploit in any manner the Company Information for himself or any person,
partnership, association,
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corporation or other entity other than the Company, (ii) remove any Company
Information, or any reproduction thereof, from the possession or control of the
Company or (iii) treat Company Information otherwise than in a confidential
manner.
(b) All Company Information developed, created or maintained by the
Chairman, alone or with others while engaged by the Company hereunder, and all
Company Information maintained by the Chairman thereafter, shall remain at all
times the exclusive property of the Company. The Chairman shall return to the
Company all Company Information, and reproductions thereof, whether prepared by
his or others, that are in his possession immediately upon request and in any
event upon the completion of his engagement by the Company hereunder.
9. Remedies. The Chairman expressly acknowledges that the remedy at law
for any breach of Sections 6, 7 and 8 will be inadequate and that upon any such
breach or threatened breach, the Company shall be entitled as a matter of right
to injunctive relief in any court of competent jurisdiction, in equity or
otherwise, and to enforce the specific performance of the Chairman's obligations
under these provisions without the necessity of proving the actual damage to the
Company or the inadequacy of a legal remedy.
10. General.
(a) Governing Law. This Agreement is made and entered into in the
Commonwealth of Pennsylvania, and shall in all respects be interpreted, enforced
and governed by and under the laws of the Commonwealth.
(b) Company. For purposes of Sections 6, 7, 8 and 9, the term "Company"
shall be deemed to include any incorporated or unincorporated entities that are
controlled, directly or indirectly, by the Company through ownership, agreement
or otherwise, and any such entity to which the Company assigns its rights
hereunder.
(c) Binding Effect. All of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit and be enforceable by the
respective heirs, representatives, successors (including any successor as a
result of a merger or similar reorganization) and assigns of the parties hereto,
except that the duties and responsibilities of the Chairman hereunder are of a
personal nature and shall not be assignable in whole or in part by the Chairman.
(d) Notices. All notices required to be given under this Agreement
shall be in writing and shall be deemed to have been given when personally
delivered or when mailed by registered or certified mail, postage prepaid,
return receipt requested, or when sent by Federal Express or other overnight
delivery service, addressed to the Chairman at the address then on record with
the Company and, if to the Company as follows:
000 X. Xxxxx Xxxx
Xxxx xx Xxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Chief Executive Officer
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With a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxxxx X. Xxxxxx, Esquire
(e) Entire Agreement; Modification. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and may not be modified or amended in any way except in writing by the parties
hereto.
(f) Duration. Notwithstanding the termination of this Agreement and of
the Chairman's engagement by the Company, this Agreement shall continue to bind
the parties for so long as any obligations remain under the terms of this
Agreement.
(g) Waiver. No waiver of any breach of this Agreement shall be
construed to be a waiver as to succeeding breaches.
(h) Severability. If any provision of this Agreement or application
thereof to anyone under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto duly executed this Agreement as of the day and year first written
above.
TELESPECTRUM WORLDWIDE INC.
By:___________________________________
______________________________________
XXXXXX X. XXXXXXX
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EXHIBIT A
FRINGE BENEFITS
(a) Health insurance and short-term and long-term disability insurance
for the Chairman, with the same benefits generally provided to the Company's
most senior executive employees from time to time during the Term.
(b) Eligibility to participate in any 401(k) savings plans maintained
by the Company during the Term consistent with the Plan parameters.
(c) Term life insurance and SERP participation on a basis commensurate
with the Company's other senior officers. In the event of a Change of Control
(as defined in the Plan) and termination without cause all Company contributions
to the SERP plan will become fully vested.
(d) Eligibility to continue to participate in any employee stock option
plan maintained by the Company during the Term.
(e) Reimbursement, in accordance with the Company's policies and upon
receipt of proper accounting of expenses.
(f) Paid holidays in accordance with the Company's policies.
(g) Paid vacation of four weeks per year.
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