EXHIBIT 11.16
AGREEMENT WITH CHAIRMAN
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This Agreement is made as of this 30th day of June 1999 between
TeleSpectrum Worldwide Inc., a Delaware corporation (the "Company"), and Xxxxxxx
X. Xxxxxxxx (the "Chairman").
RECITALS
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WHEREAS, the Chairman and International Data Response Corporation ("IDRC")
previously entered into an employment agreement dated July 1, 1996;
WHEREAS, pursuant to the transactions contemplated by the Agreement and
Plan of Merger among the Company, IDRC and certain stockholders of IDRC dated
January 14, 1999, IDRC shall become a wholly-owned subsidiary of the Company;
and
WHEREAS, the Company desires to retain the Chairman, and the Chairman
desires to provide services to the Company, upon the amended and restated terms
and conditions hereinafter set forth.
WITNESSETH:
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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.
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(a) During the term of the Chairman's engagement under this Agreement (the
"Term"), the Chairman shall, for an average of one day per week during the Term,
perform such duties consistent with such office as described in the Company's
Bylaws and as are assigned by the Company's Board of Directors (the "Board").
The Chairman shall perform his duties at Company-provided office space located
in Rancho Santa Fe, California.
(b) 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 Chairman from executing this Agreement and performing fully
his duties and responsibilities hereunder.
2. Term. The Term shall begin on the date hereof and, unless terminated
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earlier pursuant to the terms of this Agreement, continue until June 30, 2001.
3. Compensation for Employment.
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(a) The basic annual rate of compensation of the Chairman for his services
to the Company during the first six months of the Term shall be $200,000 and
thereafter shall be at the annual rate of $100,000 (such amounts are referred to
herein as the "Salary"), which the Company shall pay to the Chairman in equal
installments in accordance with the normal payroll policies of the Company.
(b) The Chairman shall be eligible to receive annual bonuses (such amounts
are referred to herein as the "Bonus") in such amounts as approved by the
Compensation Committee of the Board of Directors.
(c) On the date hereof, the Company shall grant Chairman a stock option
(the "Stock Option") to purchase 250,000 shares of the Company's common stock,
par value $.01 per share (the "Common Stock"). The Stock Option will vest in
three equal amounts (each representing 33.33% of the shares underlying such
option) on June 30, 2000, June 30, 2001 and June 30, 2002, be exercisable at a
price par share equal to the fair market value on the date of grant. The Stock
Option will include such terms as contained in the form of Grant Letter attached
as "Exhibit A" hereto.
(d) The Company shall provide the Chairman with the fringe benefits that
were offered by IDRC to its employees on June 29, 1999, as specified on Exhibit
"B" (the "Fringe Benefits"), until such time as the terms and conditions of the
Fringe Benefits are changed by the Company. At such time as the terms and
conditions of the Fringe Benefits offered to former IDRC employees prior to June
30, 1999 are changed by the Company, the Company shall provide the Chairman with
fringe benefits that are equivalent to the fringe benefits provided to the
senior executive officers of the Company.
4. Termination Without Compensation.
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(a) Total Disability. If the Chairman becomes totally disabled (as
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defined below), the Company may terminate the Term 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 of the
Company, including any such plans included in the Fringe Benefits. For the
purposes hereof, the Chairman shall be deemed to be "totally disabled" if the
Chairman is considered totally disabled under any group disability plan
maintained by the Company and in effect at that time, 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.
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(b) Death. If the Chairman dies, this Agreement shall terminate on the
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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 his 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.
(c) Cause. The Company may terminate the Term for "cause" by giving the
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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
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(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 the Term
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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
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terminate the Term 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 Fringe Benefits listed in paragraph (a)
of Exhibit B 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
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employment. 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.
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(a) The Chairman covenants that for the period beginning on the
termination of Chairman's employment hereunder and ending on the first
anniversary of the date of such termination of employment hereunder, 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 employment 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
employment 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.
(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,
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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,
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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 or during his employment by the Company prior to the
commencement of the Term and 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.
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(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, 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.
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(b) All Company Information developed, created or maintained by the
Chairman, alone or with others while employed by the Company, 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 employment by the Company.
9. Remedies. The Chairman expressly acknowledges that the remedy at law for
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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.
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(a) Governing Law. This Agreement is made and entered into in the
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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"
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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
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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
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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 as follows:
TO CHAIRMAN:
Xx. Xxxxxxx X. Xxxxxxxx
17037 El Mirador
X.X. Xxx 0000
Xxxxxx Xxxxx Xx, XX 00000
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TO THE COMPANY:
000 X. Xxxxx Xxxx
Xxxx xx Xxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Chief Executive Officer
With a copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esquire
(e) Entire Agreement; Modification. This Agreement constitutes the entire
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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 the Term and of the
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Chairman's employment 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
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to be a waiver as to succeeding breaches.
(h) Severability. If any provision of this Agreement or application
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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:__________________________________________
Xxxxx X. Xxxxxx, Chairman, Chief Executive
Officer and President
______________________________________
XXXXXXX X. XXXXXXXX
EXHIBIT A
Form of Grant Letter
EXHIBIT B
FRINGE BENEFITS
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(a) Health insurance
(b) Short-term and long-term disability
(c) Eligibility to participate in a 401(k) savings plan
(d) Term life insurance
(e) Eligibility to participate in a stock option plan
(f) Reimbursement, in accordance with the Company's policies and upon
receipt of proper documentation, of reasonable expenses for the monthly fee of a
mobile telephone and for any business telephone calls made on the Chairman's
personal telephone
(g) Paid holidays in accordance with the Company's policies
(h) A monthly allowance of $2,500 for the reimbursement of all reasonable
expenses incurred in commuting between Chairman's residence and the Company's
offices, in accordance with the Company's policies and upon receipt of proper
documentation of such expenses.
(i) A monthly allowance of $2,500 for the rental and related expenses
associated with the lease of local housing for the Chairman, in accordance with
the Company's policies and upon receipt of proper documentation of such
expenses.
(j) A monthly automobile allowance of $1,200 in accordance with the
Company's policies and upon receipt of proper documentation of such expenses.
