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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This Agreement (this "Agreement") made as of the ___ day of
____________, 1996, by and between Mars Graphic Services, Inc. (the "Employer")
and Xxxxxxx X. Xxxxxx (the "Employee"), and Xxxxx-Xxxxx Communications, Inc., a
Delaware corporation ("Xxxxx-Xxxxx") solely with respect to Sections 5.06 and
5.07 of this Agreement.
W I T N E S S E T H:
WHEREAS, Employee is, and for some time in the past has been a
valued employee of Employer; and
WHEREAS, the Employer and Employee now wish to enter into this
Agreement of employment on the terms and conditions set forth hereafter,
thereby replacing any prior agreement of employment between Employer and
Employee;
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and intending to be legally bound, the parties hereto hereby
agree as follows:
Article 1. CAPACITY AND DUTIES
1.01. Employment; Acceptance of Employment. The Employer
hereby employs Employee, and Employee hereby accepts employment by the
Employer, subject to all the terms and conditions hereafter set forth.
1.02. Capacity. Employee shall serve Employer as Chairman
of the Board of Employer and shall have the duties and responsibilities
incident to that position.
1.03 Duties. During the term of this Agreement, Employee
shall devote his full attention and his best efforts to the performance of such
duties as shall be designated from time to time by Employer's Board of
Directors.
Article 2. TERM OF EMPLOYMENT; TERMINATION
2.01. Term. Unless earlier terminated as hereafter
provided, this Agreement shall commence on the date hereof, and shall expire on
______________________, 1998.
2.02. Termination.
(a) Death. The employment of Employee under this
Agreement shall immediately terminate upon the death of Employee.
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(b) Disability. In the event that Employee is
for any reason unable to perform the duties to be performed by Employee
hereunder for a period of 180 consecutive days (or for any 200 out of 365
consecutive days) by reason of Employee's disability, the Board of Directors of
the Employer shall have the option to terminate the employment of Employee
under this Agreement effective upon its giving written notice to Employee at
any time following the expiration of such 180-day period (or such 200 days).
The term "disability" as used in this Section 2.02(b) means the inability
because of injury or sickness to perform the substantial and material duties of
the Employee's offices with Employer.
(c) Discharge for Cause. The employment of
Employee under this Agreement shall terminate immediately if the Employer
discharges Employee for cause. For purposes of this Agreement, "cause" shall
mean willful and deliberate unlawful misconduct by the Employee, or breach by
the Employee of the provisions of this Agreement which, in any case, is
detrimental in a material way to the interests of Employer. It is the
understanding of the parties hereto that the failure of the Employer to operate
profitably shall not constitute cause for terminating Employee's employment
hereunder.
(d) Good Reason. Employee may terminate his
employment for "good reason." For purposes of this Agreement, "good reason"
shall mean:
(i) the assignment to Employee of any
duties inconsistent in any material respect with Employee's position,
authority, duties or responsibilities as contemplated by Section 1.02 of this
Agreement, or any other action by Employer which results in a material
diminution or material adverse change in such position, authority, duties or
responsibilities;
(ii) any failure by the Company to comply
with any of the provisions of Article 3 of this Agreement, other than an
immaterial or an isolated and inadvertent failure not occurring in bad faith
and which is remedied by Employer promptly after receipt of notice thereof
given by the Employee;
(iii) Employer's requiring Employee to be
based at any office or location other than the Philadelphia, Pennsylvania
metropolitan area;
(iv) any purported termination by
Employer of Employee's employment otherwise than as expressly permitted by this
Agreement; or
(v) any failure by the Employer to
comply with and satisfy Section 5.01 of this Agreement.
(e) Notice of Termination. Any termination of
Employee's employment, other than a termination by reason of death, shall be
communicated by Notice of Termination to the other party hereto. For purposes
of this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision of this Agreement relied upon,
(ii) if applicable, sets forth in reasonable detail the facts and
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circumstances claimed to provide a basis for termination of the Employee's
employment, under the provision so indicated, and (iii) specifies the
termination date (which date shall, except as otherwise expressly provided in
this Article 2, be not more than 15 days after the giving of such Notice). The
failure by Employee to set forth in the Notice of Termination any fact or
circumstances which contribute to a showing of "good reason," or the failure by
Employer to set forth in the Notice of Termination any fact or circumstances
which contribute to a showing of "cause," shall not waive any right of either
party hereunder or preclude either party from asserting such facts or
circumstances in enforcing such party's rights hereunder.
(f) Certain Terminations.
(i) If Employee's services should be
terminated (A) by Employer for any reason other than for "cause" as defined in
Section 2.02(c) hereof, or (B) by Employee for "good reason" as defined in
Section 2.02(d), any stock option then held by Employee shall become fully
vested and exercisable as of the date of such termination.
(ii) If Employee's services shall be
terminated by (A) Employer for any reason other than for Employee's death,
Employee's disability for the period set forth in Section 2.02(b) hereof, or
for "cause" as defined in Section 2.02(c) hereof, or (B) by Employee for "good
reason" as defined in Section 2.02(d), Employee's base salary under Section
3.01 hereof, as of the date of such termination, shall continue to be paid by
Employer for the balance of the term hereof without any duty to mitigate
damages, but subject to diminution in the event Employee elects to be employed
in another capacity.
Article 3. COMPENSATION
3.01. Cash Compensation. During the term of this
Agreement, as compensation for services to the Employer pursuant to this
Agreement, the Employer shall pay to Employee a base salary of $150,000 per
year in accordance with the normal payroll practices of Employer.
3.02. Fringe Benefits. During the term hereof, Employer
shall provide Employee with the same fringe benefits, including life and health
insurance, vacation, and retirement programs, that it provides to its other
senior executives, but in no event shall the benefits so provided be less
favorable to Employee in amounts and other provisions than those in effect on
the date hereof.
Article 4. CERTAIN COVENANTS
4.01. Protection of Confidential Information.
(a) Employee agrees that he will not at any time
during or following his employment by Employer, without Employer's prior
written consent, divulge to any other Person any "Confidential Information" in
Employee's possession. "Confidential Information" shall include, without
limitation, trade secrets, methods or practices developed by Employer or one of
its Affiliates, customer or client names and addresses, personal information,
information
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relating to negotiations with clients or prospective clients of Employer or
one of its Affiliates, proprietary software, data bases, programming or data
transmission methods, or copyrighted materials (including without limitation,
brochures, layouts, letters, artwork, copy, photographs, illustrations). It is
expressly understood that the foregoing list shall be illustrative only and is
not intended to be an exclusive or exhaustive list of "Confidential
Information."
(b) Upon termination of employment for any reason
whatsoever, regardless of whether either party may be at fault, Employee will
return to Employer all physical Confidential Information in Employee's
possession.
4.02 Non-Competition; Non-solicitation of Employer's
Clients. Employee agrees, for so long as Employee remains employed by Employer,
and for a period of five (5) years following the later to occur of (A) the
termination of Employee's employment with Employer and (B) the termination of
payments to Employee pursuant to this Agreement, Employee shall not, directly
or indirectly, as an owner, employee, consultant or otherwise, engage in the
direct marketing (including printing) business in the continental United States
or in any foreign country in which Employer or one of its Affiliates is engaged
in the direct marketing (including printing) business as of the Applicable
Date, provided, however, that if Employer fails to make any payment to Employee
required by Section 2.02(f) of this Agreement and such failure continues for
five business days after notice to Employer, then the covenant set forth in
this Section 4.02 shall immediately terminate and be of no further force or
effect. Without limiting the generality of the foregoing, Employee shall not,
directly or indirectly, as an owner, employee, consultant or otherwise, solicit
or accept direct marketing business from any Person, or any Affiliate of a
Person, to which Employer or one of its Affiliates has either (i) provided
services during the term of Employee's employment by Employer, or (ii) extended
a formal written proposal to provide services within two (2) years prior to the
Applicable Date. As used herein, "Applicable Date" means the date on which the
employment relationship between Employee and Employer (or any Affiliate of
Employer) is terminated, or if such relationship has not been terminated, the
date on which this covenant is violated.
4.03. Non-Solicitation of Employees.
(a) Employee agrees, for so long as Employee
remains employed by Employer, and for a period of five (5) years following the
later to occur of (A) the termination of Employee's employment with Employer
and (B) the termination of payments to Employee pursuant to this Agreement,
Employee shall not, either for Employee's own account, or on behalf of any
other Person, solicit, suggest or request that any other Person employed by
Employer or one of its Affiliates leave such employment for the purpose of
becoming employed by Employee or any other Person, provided, however, that if
Employer fails to make any payment to Employee required by Section 2.02(f) of
this Agreement and such failure continues for five business days after notice
to Employer, then the covenant set forth in this Section 4.03(a) shall
immediately terminate and be of no further force or effect.
(b) Employee agrees, for a period of five (5)
years following the later to occur of (A) the termination of Employee's
employment with Employer and (B) the
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termination of payments to Employee pursuant to this Agreement, neither
Employee, nor any Person controlled by Employee, shall hire any Person whose
last position was as an employee of Employer or one of its Affiliates,
provided, however, that if Employer fails to make any payment to Employee
required by Section 2.02(f) of this Agreement and such failure continues for
five business days after notice to Employer, then the covenant set forth in
this Section 4.03(b) shall immediately terminate and be of no further force or
effect.
4.04. Extent of Restrictions.
If any court having jurisdiction shall find any part of the
restrictions set forth in this Agreement are unreasonable in any respect, it is
the intent of the parties that the restrictions set forth herein shall not be
terminated, but that this Agreement shall remain in full force and effect to
the extent (as to time periods and other relevant factors) that the court shall
find reasonable.
4.05. Remedies of Employer.
Employee acknowledges that the restrictions contained in
Sections 4.01 through 4.03 of this Agreement correctly set forth the
understanding of the parties at the time this Agreement is entered into, are
reasonable and necessary to protect the legitimate interests of Employer, and
that any violation will cause substantial injury to Employer. In the event of
any such violation, Employer shall be entitled, in addition to any other
remedy, to preliminary or permanent injunctive relief. The waiver by Employer
of a breach of any provision of this Agreement by Employee shall not operate or
be construed as a waiver by Employer of any other or subsequent branch by
Employee.
4.06 Counsel Fees.
If Employer engages counsel to enforce the terms of this
Article 4 against Employee, and the court determines that Employee has violated
the terms of this Article 4, Employee shall reimburse Employer for its costs of
enforcement, including reasonable attorney's fees and costs of suit. If the
court determines that employee has not violated the terms of this Article 4,
Employer shall reimburse Employee for its reasonable attorneys' fees and costs
of suit.
4.07 Definitions.
Terms used in this Article 4 shall have the following
meanings:
(a) The terms "Employer" shall mean the Employer, and its
successors and assigns.
(b) The term "Person" shall include a natural individual,
as well as any other legally created entity, including partnership, limited
partnership, trust or corporation.
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(c) The term "Affiliate" of a Person shall mean any
entity controlled by, controlling or under common control with such Person.
Article 5. MISCELLANEOUS
5.01. Assignment. This Agreement shall not be assignable
by Employee and shall be assignable by Employer only to a person, firm or
corporation which may become a successor in interest to the Employer with
respect to the business or a portion of the business presently operated by it.
Employer will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of Employer to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Employer would be
required to perform if no such succession had taken place.
5.02 Entire Agreement. This writing represents the entire
agreement and understanding of the parties with respect to the subject matter
hereof, and it may not be altered or amended except by an agreement in writing.
5.03 Binding Effect. Subject to Section 5.01, this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors, assigns, heirs, executors and administrators.
If any provision of this Agreement shall be or become illegal or unenforceable
in whole or in part for any reason whatsoever, the remaining provisions shall
nevertheless be deemed valid, binding and subsisting.
5.04 Governing Law. This Agreement has been negotiated
and executed within the Commonwealth of Pennsylvania, and the validity,
interpretation and enforcement of this Agreement shall be governed by the laws
of Pennsylvania.
5.05 Headings. The headings of paragraphs in this
Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.
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5.06 Termination Payment. Employer and Employee
acknowledge that, as further consideration to Employee for entering into this
Agreement and the Non-Competition Agreement contained herein in place of his
prior employment agreement, Employee is receiving, as of the date hereof, a
payment of $500,000 from Xxxxx-Xxxxx.
5.07 Xxxxx-Xxxxx Guaranty. Xxxxx-Xxxxx hereby agrees to
guarantee the payment obligations of Employer pursuant to the terms of this
Agreement.
IN WITNESS HEREOF, the parties have executed this Agreement as
of the date first above written.
MARS GRAPHIC SERVICES, INC.
By:
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Title:
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Xxxxxxx X. Xxxxxx
XXXXX-XXXXX COMMUNICATIONS, INC.,
solely with respect to Sections
5.06 and 5.07 of this Agreement
By:
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Title:
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