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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
This Agreement is made as of this 29th day of September, 2000 between
TeleSpectrum Worldwide Inc., a Delaware corporation (the "Company"), and Xxxx
Xxxxxxxxxxx (the "Employee").
RECITALS
WHEREAS, the Company desires to employ the Employee, and the Employee
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. Employment.
(a) During the term of the Employee's employment under this Agreement
(the "Employment Term"), the Employee shall be the Executive Vice President and
Chief Financial Officer and Secretary of the Company and shall perform such
duties consistent with such office as described in the Company's Bylaws (a copy
of which has been furnished to the Employee) and as are assigned by the
Company's Chief Executive Officer or his designees (collectively and including
the Chief Executive Officer, the "Designated Officer") and the Company's Board
of Directors (the "Board"). It is understood that until the Employee completes
his Executive MBA, but in no event later than 5/31/01, the Employee will be
permitted to work nine days our of ten.
(b) Employee 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 Employee from executing this Agreement and
performing fully his duties and responsibilities hereunder.
2. Term. The Employment Term shall begin on the date hereof and, unless
terminated earlier pursuant to the terms of this Agreement, for a period of two
years; provided that the Employment Term shall automatically renew for
successive one year periods unless a notice of non-renewal is provided by the
Company not less than 30 days prior to the then applicable scheduled expiration
date.
3. Compensation for Employment.
(a) The basic annual rate of compensation of the Employee for his
services to the Company during the Employment Term shall be $200,000 (such
amounts are referred to herein as the "Salary"), which the Company shall pay to
the Employee in equal proportional
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installments in accordance with the normal payroll policies of the Company. The
Employee's Salary rate shall be increased to $250,000 effective July 1, 2002.
(b) The Employee shall be eligible to receive a target bonus for the
period January 1, 2001 to June 30, 2002 equal to 70% of the Employee's initial
Salary. This bonus will be awarded based on the Employee's achievement of goals
and objectives established by the Compensation Committee of the Board of
Directors of the Company (the "Compensation Committee") which goals and
objectives shall be comparable to the goals and objectives established for the
Chief Executive Officer and Chairman of the Board of the Company; provided,
however, in no event shall this bonus be less than $70,000 (the "Minimum
Bonus"). The determination of whether the Employee has achieved such goals and
objectives shall be made by the Compensation Committee and their determination
shall be final and binding on all parties. In order to be eligible to receive
this bonus the Employee must continue in the employ of the Company through June
30 2002, the end of the bonus period; provided that if the Employee is
terminated without cause prior to June 30, 2002, the Employee will be entitled
to receive the Minimum Bonus. The bonus shall be payable on July 15, 2002. The
first $70,000 of the bonus is deemed earned and payable on June 30, 2002
provided you are employed as of that date. That $70,000 is also deemed earned
and payable should you be terminated without cause prior to June 30, 2002.
Thereafter, the Employee will be eligible to receive such bonuses in such
amounts as approved by the Compensation Committee of the Board of Directors and
participate in such bonus programs as are established for executive officers of
the Company.
(c) The Company shall, as of the date hereof, grant the Employee under
and pursuant to the terms of the Telespectrum Worldwide Inc. 1996 Equity
Compensation Plan (the "Plan") stock options (the "Stock Option") to purchase an
aggregate of 200,000 shares of the Company's common stock, per value $.01 per
share (the "Common Stock") at an exercise price equal to the Fair Market Value
(as of the closed of business on 9/18/00). This option shall vest and become
exercisable in three substantially equal annual installments beginning on the
first anniversary of the date of grant and ending on the third anniversary of
the date of grant. In addition, on the date hereof, the Company shall grant
Employee a stock option (the "Performance Option") to purchase 100,000 shares of
Common Stock. This Performance Option will have the following vesting schedule:
(i) 33,334 shares if the closing price of the Common Stock on
Nasdaq reaches $6.50 per share for ten consecutive trading days beginning prior
to the 18 month anniversary of the date of this Agreement;
(ii) 33,333 share if the closing price of the Common Stock on
Nasdaq reaches $11.50 per share for ten consecutive trading days beginning prior
to the 27 month anniversary of the date of this Agreement;
(iii) 33,333 shares if the closing price of the Common Stock
on Nasdaq reaches $17.50 per share for ten consecutive trading days beginning
prior to the 36 month anniversary of the date of this Agreement; and
(iv) if not vested by the fourth anniversary of the date of
this
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Agreement, then all shares underlying the Performance Option shall automatically
vest on such date.
Each of the Performance and Base Options shall immediately vest as to any
non-vested portion upon any termination of employment pursuant to Section 5
hereof.
(d) During the Employment Term, the Company shall provide the Employee
with fringe benefits that are substantially equivalent to the fringe benefits
specified on Exhibit "A" (the "Fringe Benefits") at such levels that are
provided to the senior officers of the Company.
(e) All amounts payable by the Company under Sections 3(a) and (b) and
the Fringe Benefits allowed under Section 3(d) shall be subject to pro-ration
based upon the number of days in each such year that the Employee was employed
by the Company hereunder.
4. Termination Without Compensation.
(a) Total Disability. If the Employee becomes totally disabled (as
defined below), the Company may terminate the Employment Term by notice to the
Employee, and as of the termination date, the Company shall have no further
liability or obligation to the Employee hereunder except as follows: the
Employee 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 Employee shall be deemed to be "totally disabled"
if the Employee 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 Employee shall submit to a physical
examination by a licensed physician mutually satisfactory to the Company and the
Employee, the cost of such examination to be paid by the Company, and the
determination of such physician shall be determinative.
(b) Death. If the Employee dies, this Agreement shall terminate on the
date of death, and thereafter the Company shall not have any further liability
or obligation to the Employee, his executors, administrators, heirs, assigns or
any other person claiming under or through him except that the Employee'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 Employment Term for "cause"
by giving the Employee 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 Employee, except that the Employee 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 Employee'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 any
Designated Officer or 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,
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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 Chief Executive Officer or the Board shall have given the
Employee 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
Employee may take such remedial action, and (B) the Employee shall not have
taken such specified remedial action within such specified reasonable time.
(d) Resignation. The Employee shall have the right to terminate the
Employment Term 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 Employee, except that the Employee 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 Employee may
have to the Company.
5. Termination With Compensation. The Company shall have the right to
terminate the Employment Term without cause, or determine not to have the
Employment Term continue for a successive one year period, at any time by giving
the Employee 30 days' notice of the termination date or its non-renewal
election. Subject to Section 9 hereof, in the event of a termination of the
Employment Term pursuant to this Section 5 or election not to continue the
Employment Term for a successive one year period, the Company shall continue to
pay to the Employee the Salary (at the rate of $250,000 per year) and continue
to provide the healthcare benefits referred to in item (a) of Exhibit A for a
period ending one year after the date of any such termination or election. In
addition, Employee shall be entitled to outplacement services of up to $10,000
at the cost of the Company. 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 Employee shall not be entitled to any Termination
Compensation unless the Employee executes and delivers to the Company after a
notice of termination a release in the form satisfactory to the Company, in by
which the Employee 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
Employee's right to indemnification, if any, for actions taken within the scope
of his 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. In the event of a Change of
Control (as defined in the "Plan"), if the Employee's position is eliminated or
significantly diminished, the Employee will be entitled to the Termination
Compensation provided under this Section 5.
6. Agreement Not to Compete.
(a) The Employee covenants that for the period beginning on the
termination of Employee's employment hereunder and ending on the first
anniversary of the date of such termination of employment hereunder (the
"Restricted Period"), 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,
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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 direct
marketing business which includes inbound and outbound telemarketing, customer
retention, interactive voice response and any other business engaged in by the
Company that Employee is directly involved with at the end of the Employment
Term (the "Business"). It is recognized by the Employee 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 Employee as a passive investment of not
more than five percent 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 Employee further covenants that during the Restricted Period,
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 Employee 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.
(d) The Employee 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 Employee, solely or jointly with others, whether or not patentable or
copyrightable, at any time during the Employment Term or during his employment
by the Company prior to the commencement of the Employment Term and that relate
to the actual or planned business activities of the Company (collectively, the
"Developments") and all of the Employee's right, title and interest therein,
shall be the exclusive property of the Company. The Employee hereby assigns,
transfers and conveys to the Company all of his right, title and interest in and
to any and all such Developments. The Employee 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
Employee shall execute and deliver to the Company any and all instruments,
documents and papers, give
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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 Employee
for all reasonable expenses incurred by his in compliance with the provisions of
this Section 7.
8. Confidential Information.
(a) The Employee 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 Employee or which he is
authorized to disclose, is referred to collectively as the "Company
Information." During and after the Employment Term, the Employee 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.
(b) All Company Information developed, created or maintained by the
Employee, alone or with others while employed by the Company, and all Company
Information maintained by the Employee thereafter, shall remain at all times the
exclusive property of the Company. The Employee 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 Employee 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 Employee's obligations
under these provisions without the necessity of proving the actual damage to the
Company or the inadequacy of a legal remedy. In addition, the Company shall be
entitled to cease paying Employee any Termination Compensation if the Employee
engages in any activities restricted by Section 6 hereof regardless of the
enforceability of Section 6 under applicable law.
10. General.
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(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 Employee hereunder are of a
personal nature and shall not be assignable in whole or in part by the Employee.
(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 Employee 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
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 the Employment Term
and of the Employee'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 to be a waiver as to succeeding breaches.
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(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:___________________________________
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Xxxx Xxxxxxxxxxx
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EXHIBIT A
FRINGE BENEFITS
(a) Health insurance and short-term and long-term disability insurance
for the Employee, with the same benefits generally provided to the Company's
most senior executive employees from time to time during the Employment Term.
(b) Eligibility to participate in any 401(k) savings plans maintained
by the Company during the Employment 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 Employment 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.
(h) Tuition Reimbursement of up to $35,000 payable on January 1, 2001.
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EXHIBIT B
FORM OF RELEASE
