Exhibit 10.18
EMPLOYMENT AGREEMENT
This Agreement is made as of the 13th day of August, 1996 between
Payco American Corporation, a Wisconsin corporation, with offices at 000 Xxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxx 00000-0000 (the "Company"), and Xxxx X.
Xxxxxx, an individual residing in the State of Wisconsin (the "Employee").
R E C I T A L S
WHEREAS, the Employee has been and is presently in the employ of the
Company and is presently serving as President and Chief Executive Officer of the
Company;
WHEREAS, the Employee possesses an intimate knowledge of the business
and affairs of the Company and its policies, procedures, methods and personnel;
WHEREAS, OSI Holdings Corp., Boxer Acquisition Corp. and the Company
have executed and delivered an Agreement and Plan of Merger, dated as of the
date hereof (the "Merger Agreement");
WHEREAS, the Company desires to secure the continued services and
employment of the Employee on behalf of the Company, and the Employee desires to
continue in the employment of the Company, upon the terms and conditions
hereinafter set forth.
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. The Company hereby employs the Employee as President
and Chief Executive Officer of the Company, and the Employee accepts such
employment for the term of the employment specified in Section 3 below. During
the Employment Term, the Employee shall serve as President and Chief Executive
Officer of the Company, performing such duties as shall be reasonably required
of an executive-level employee of the Company, and shall have such other powers
and perform such other additional executive duties as may from time to time be
assigned to him by the Company.
2. Performance. The Employee will serve the Company faithfully and to
the best of his ability and will devote substantially all of his time, energy,
experience and talents during regular business hours and as otherwise reasonably
necessary to such employment, to the exclusion of all other business activities.
3. Effectiveness; Employment Term. This Agreement shall become
effective at the Effective Time (as defined in the Merger Agreement) and
continue until the first anniversary date of the Effective Time, unless earlier
terminated pursuant to Section 7 below (the "Employment Term").
4. Compensation.
(a) Salary. During the Employment Term, the Company shall pay the
Employee a base salary, payable in equal monthly installments, subject to
withholding and other applicable taxes, at an annual rate of Two Hundred
Forty-Six Thousand Four Hundred Thirteen Dollars ($246,413). In addition, (i)
the Employee shall be entitled to receive such Employee's bonus compensation (or
portion thereof) for the Company's 1996 year in accordance with the past
practices of the Company and (ii) if applicable, the Employee shall be entitled
to receive such Employee's ratable percentage of bonus compensation, if any, for
the Company's 1997 year.
(b) Medical and Dental Health Benefits. During the Employment Term,
Employee shall be entitled to medical and dental heath benefits in accordance
with the Company's existing established policies for key employees.
(c) Vacation; Sick Leave. During the Employment Term, Employee shall
be entitled to vacation and sick leave in accordance with the Company's existing
established policies for key employees.
5. Expenses. During the term of this Agreement, the Employee shall be
reimbursed by the Company for all reasonable expenses incurred by him in
connection with the performance of his duties hereunder in accordance with
existing policies established by the Board from time to time and upon receipt of
appropriate documentation.
6. Secret Processes and Confidential Information. For the Employment
Term and thereafter, (a) the Employee will not divulge, transmit or otherwise
disclose (except as legally compelled by court order, and then only to the
extent
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required, after prompt notice to the Company of any such order), directly or
indirectly, other than in the regular and proper course of business of the
Company, any confidential knowledge or information with respect to the
operations or finances of the Company, such as, but not limited to, client
lists, system documentation, financial documentation, and proposal information,
or with respect to confidential or secret processes, services, techniques,
customers or plans with respect to the Company and (b) the Employee will not
use, directly or indirectly, any confidential information for the benefit of
anyone other than the Company; provided, however, that the Employee has no
obligation, express or implied, to refrain from using or disclosing to others
any such knowledge or information which is or hereafter shall become available
to the public other than through disclosure by the Employee. All new processes,
techniques, know-how, inventions, plans, products, patents and devices
developed, made or invented by the Employee, alone or with others, while an
employee of the Company, shall be and become the sole property of the Company,
unless released in writing by the Company, and the Employee hereby assigns any
and all rights therein or thereto to the Company.
During the term of this Agreement and thereafter, Employee shall not
willfully take any action to disparage or criticize to any third parties any of
the services of the Company or to commit any other action that injures or
hinders the business relationships of the Company.
All files, records, documents, memorandums, notes or other documents
relating to the business of Company, whether prepared by Employee or otherwise
coming into his possession in the course of the performance of his services
under this Agreement, shall be the exclusive property of Company and shall be
delivered to Company and not retained by Employee upon termination of this
Agreement for any reason whatsoever.
7. Termination. The employment of the Employee hereunder shall
automatically terminate at the end of the Employment Term, as provided in
Section 3. The employment of the Employee hereunder may also be terminated at
any time by the Company with or without "cause". For purposes of this Agreement,
"cause" shall mean: (i) embezzlement, theft or other misappropriation of any
property of the Company or any subsidiary, (ii) gross or willful misconduct
resulting in substantial loss to the Company or any subsidiary or substantial
damage to the reputation of the Company or any subsidiary, (iii) any act
involving moral turpitude which if
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the subject of a criminal proceeding could reasonably result in a conviction for
a felony involving moral turpitude, fraud or misrepresentation, (iv) gross
breach of his fiduciary obligations to the Company or any subsidiary, (v) a
breach of his covenant not to compete, or (vi) any chemical dependence which
materially affects the performance of his duties and responsibilities to the
Company or any subsidiary.
8. Severance.
(a) Termination Without "Cause". If the Employee's employment is
terminated by the Company without "cause", the Employee shall be entitled to
receive his base salary and any unpaid bonus as provided in Section 4(a), for
the period from the date of termination until the first anniversary of the
Effective Time (the "Severance Period"), provided that if at any time during the
Severance Period the Employee shall obtain other employment, the Company's
obligation to pay severance under this Section 8(a) shall automatically be
reduced from the date of commencement of such other employment until the
termination of the Severance Period to an amount equal to the ratable difference
between the Employee's base salary and any unpaid bonus under Section 4(a) and
the base salary and any unpaid bonus earned by Employee in such other
employment. The Employee shall not be an employee of the Company during the
Severance Period, and except for such severance payment or as otherwise required
by law, shall not be entitled to any compensation or benefits under Section
4(a), 4(b) or 4(c) with respect to the Severance Period.
(b) Termination "For Cause". If the Employee's employment is
terminated by the Company "for cause", the Employee shall not be entitled to
severance compensation.
9. Notice. Any notices required or permitted hereunder shall be in
writing and shall be deemed to have been given when personally delivered or when
mailed, certified or registered mail, postage prepaid, to the following
addresses:
If to the Employee:
c/o Payco American Corporation
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
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If to the Company:
Payco American Corporation
000 Xxxxx Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
With a copy to:
XxXxxx De Leeuw & Co.
000 Xxxx 00xx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxx
10. General.
(a) Governing Law; Jurisdiction. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of New York applicable to contracts executed and to be performed
entirely within said State. Any judicial proceeding brought against any of the
parties to this Agreement or any dispute arising out of this Agreement or any
matter related hereto may be brought in the courts of the State of New York or
in the United States District Court for the Southern District of New York, and,
by execution and delivery of this Agreement, each of the parties to this
Agreement accepts the jurisdiction of said courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement. The
foregoing consent to jurisdiction shall not be deemed to confer rights on any
person other than the respective parties to this Agreement.
(b) Assignability. The Employee may not assign his interest in or
delegate his duties under this Agreement. Notwithstanding anything else in this
Agreement to the contrary, the Company may assign this Agreement to and all
rights hereunder shall inure to the benefit of any person, firm or corporation
succeeding to all or substantially all of the business or assets of the Company
by purchase, merger or consolidation.
(c) Enforcement Costs. In the event that either the Company or the
Employee initiates an action or claim to enforce any provision or term of this
Agreement, the costs and expenses (including attorney's fees) of the prevailing
party shall be paid by the other party, such party to be deemed to have
prevailed if such action or claim is concluded pursuant to a court order or
final judgment which is not
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subject to appeal, a settlement agreement or dismissal of the
principle claims.
(d) Binding Effect. This Agreement is for the employment of Employee,
personally, and for the services to be rendered by him must be rendered by him
and no other person. This Agreement shall be binding upon and inure to the
benefit of the Company and its successors and assigns.
(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 term of employment hereunder, this
Agreement shall continue for so long as any obligations remain under this
Agreement.
(g) Survival. The covenants set forth in Section 6 of this Agreement
shall survive and shall continue to be binding upon Employee as set forth in
such Sections notwithstanding the termination of this Agreement for any reason
whatsoever. The covenants set forth in Section 6 of this Agreement shall be
deemed and construed as separate agreements independent of any other provision
of this Agreement. The existence of any claim or cause of action by Employee
against Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Company of any or all covenants.
(h) Remedies. The parties recognize that the performance of the
obligations under Section 6 of this Agreement by the Employee is special, unique
and extraordinary in character, and that in the event of the breach by the
Employee of the terms and conditions of Section 6 of this Agreement, the Company
or any of its Affiliates shall be entitled to (a) institute and prosecute
proceedings in any court of competent jurisdiction to enforce the specific
performance hereof by the Employee or to enjoin the Employee from engaging in
any activities prohibited hereunder or (b) pursue any other remedy available at
law or in equity.
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IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto executed this Agreement the day and year first written above.
PAYCO AMERICAN CORPORATION]
By: /s/ Xxxxxx X. Punches
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Name: Xxxxxx X. Punches
Title: Chairman
EMPLOYEE
/s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx
