EXHIBIT 10 (s)
CONSULTING AGREEMENT
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AGREEMENT made this 1st day of December, 1998, by and between ADVO, Inc. a
Delaware corporation (the "Company"), and Xxxxxx X. Xxxxxxxxxx (the
"Consultant").
RECITAL
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The Company and the Consultant (together, the "Parties") desire to
supersede and replace an employment agreement between the Company and the
Consultant dated May 29, 1996, (the "Contract") by creating this new agreement
(the "Agreement") to define the future relationship between the Parties.
NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto hereby agree as follows:
1. Positions and Responsibilities.
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1.1 During the Agreement Period (as hereinafter defined), the Company
shall retain the Consultant in the capacity as internal consultant to the
Company. The role of 'internal consultant' shall mean the provision of advice,
counsel and assistance on a senior level to the Company on a reasonable basis,
as requested by the Company. Specifically, in addition to any other consulting,
during this Agreement Period the Consultant will fully cooperate with, and be
reasonably available to consult in any manner reasonably requested relative to,
including but not limited to, the full transition of his successor(s) as Chief
Executive Officer and Chairman of the Board of Directors of the Company, and the
Company's postal strategy. During the Agreement Period, and without additional
compensation, the Consultant shall serve in such office or offices (including as
a Director and Board Committee member) of the Company and its subsidiaries to
which he may be elected or appointed from time to time. The Consultant shall
report on his services on a regular basis to the Company.
1.2 The Consultant is currently Chairman of the Board of the Company.
He shall continue to serve as such solely at the discretion of the Board of
Directors, and nothing in the Agreement shall be taken to affect or guarantee
such tenure.
2. Agreement Period.
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2.1 The Agreement Period shall be the period commencing as of January
1, 1999 and continuing until December 31, 2008.
2.2 In the event of the death of the Consultant prior to any other
termination of this relationship hereunder or of the Agreement Period (i) his
employment hereunder and the Agreement Period shall terminate on the date of his
death (ii) except as expressly provided in Section 5.3 hereof, the Company shall
not have any obligation to pay any salary or provide any benefits under this
Agreement to the heirs, estate, executors, administrators or legal
representative of the Employee in respect of any period after the death of the
Employee.
3. Compensation.
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3.1 The Company shall pay to the Consultant for the services to be
rendered by the Consultant hereunder and as consideration for the termination of
the Contract, annual compensation in the amount of Three Hundred Fifty Thousand
Dollars ($350,000), payable in equal installments no less frequently than every
two weeks. Such compensation shall not be increased or decreased during the
Agreement Period. The Consultant shall not be entitled to participate in any
Incentive Compensation Plan (the "Compensation Plan") or its successors which
the Company has adopted. The Consultant shall not be entitled to any grants of
stock options, restricted stock, stock appreciation rights or any similar
benefit being given to senior executives of the Company, except as noted in
Section 3.6.
3.2 The Consultant shall be entitled to participate in, and receive
benefits from, any insurance, medical, disability, stock purchase or any other
employee benefit plan of the Company which may be in effect at any time during
the Agreement Period and which shall be generally available to senior executives
of the Company.
3.3 The Company shall reimburse the Consultant for all reasonable and
necessary business expenses incurred by him in the course of performing his
duties and services described in Section 1 hereof against the presentation by
the Consultant of appropriate vouchers therefore or other evidence as may be
reasonably requested by the Company.
3.4 As long as the Consultant maintains an office at the Company's
headquarters, but at the latest until January 1, 2000, the Consultant shall
receive a housing allowance of $3,346.19 per month as long as this Agreement is
in effect, which amount shall increase annually effective January 1 of each year
by the same percentage as the United States City Average Consumer Price Index
for all Urban Consumers for All Items increased in the previous year. Upon
termination of the Consultant's housing allowance, his auto allowance from the
Company shall also cease.
3.5 Starting January 1, 2000, the Consultant shall be given $75,000
annually, before withholding, to be used for the Consultant to have an
appropriate operating budget from which to secure an office and related
services, including secretarial services, from which to work. This will remain
in effect for two years, until December 31, 2001. If the Consultant vacates his
office at the Company's headquarters prior to January 1, 2000, he will be given
prorated office-related compensation for the part of the year 1999 in which he
is out
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of his Company office. The Consultant shall vacate his Company office no later
than January 1, 2000. If the Consultant obtains full-time employment prior to
December 31, 2001, this allowance will be terminated immediately, on a pro rata
basis.
3.6 Effective no later than January 21, 1999, and to the degree
practicable as of today's date, the Consultant shall receive a grant of 150,000
stock options of the Company, subject to the terms and conditions of the
appropriate plans. Those options shall vest one-quarter annually, starting from
the first anniversary of the grant date.
4. Other Activities During and After the Agreement Period.
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4.1 The Consultant shall not at any time during or after the
Agreement Period (regardless of the reason for the termination thereof),
directly or indirectly divulge, furnish, use, publish or make accessible to any
person or entity any Confidential Information (as hereinafter defined) except as
properly required in the conduct of the Company's business. Any records of
Confidential Information prepared by the Consultant or which comes into the
Consultant's possession are and remain the property of the Company and upon
termination shall be either left with or returned to the Company. The term
"Confidential Information" shall mean information disclosed to the Consultant or
known, learned, created or observed by him as a consequence of or through his
employment by the Company or any subsidiary of the Company which is
confidential, secret or otherwise not generally known in the relevant trade or
industry, and pertains directly or indirectly to the business activities,
products, services or processes of the Company, any subsidiary of the Company or
any of their clients, customers or suppliers, including but not limited to
information concerning mailing lists, advertising, sales promotion, publicity,
sales data, research, copy, other printed matter, tear sheets, artwork,
photographs, films, reproductions, layout, finances, accounting, methods,
processes, trade secrets, business plans, client lists and records, potential
client lists, and client billing.
4.2 During the Agreement Period, and the period of one year
thereafter, the Consultant shall not directly or indirectly engage in any
business (whether as a consultant, officer, director, owner, employee, agent,
partner or other participant) with or for, be financially interested in (whether
as a lender, guarantor or otherwise), represent or otherwise render assistance
to: any person or entity who or which competes or intends to compete, or who or
which is affiliated (by reason of common control, ownership or otherwise) with
the business then conducted by the Company provided, however, that the foregoing
shall not be deemed to prevent the Employee from investing in securities if such
class of securities in which the investment is so made is listed on a national
securities exchange or is issued by a company registered under Section 12(g) of
the Securities Exchange Act of 1934 or subject to the obligations of Section
15(d) of that Act, so long as such investment holdings do not, in the aggregate,
constitute more than 1% of the voting stock of any company's securities. This
paragraph does not include the Consultant's current board memberships.
4.3 The Consultant will not, during the Agreement Period and one year
thereafter, hire or offer to hire or entice away or in any other manner persuade
or attempt to persuade, either in the Consultant's individual capacity or as
agent for another, any officers,
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employees, or agents of the Company or any subsidiary to discontinue their
relationship with the Company or any subsidiary, nor divert or attempt to divert
from the company or any subsidiary any business whatsoever by influencing or
attempting to influence any customer or supplier of the Company or any
subsidiary.
4.4 The Consultant acknowledges that he has been employed for his
special talents and that his termination of this relationship with the Company
would seriously hamper the business of the Company. The Consultant agrees that
the Company shall be entitled to injunctive relief, in addition to all remedies
permitted by law, to enforce the provisions of this Section 4. The Consultant
further acknowledges that his training, experience and technical skills are of
such breadth that they can be employed to advantage in other areas which are not
competitive with the present business of the Company and consequently the
foregoing obligation will not unreasonably impair his ability to engage in
business activity after the termination of this Agreement.
4.5 Other than the obligations contained in this Section 4, and his
duties under Section 1.1, nothing in this Agreement shall preclude the
Consultant from engaging in any activity.
5. Termination.
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5.1 This Agreement can be terminated by the Company prior to the end
of the Agreement Period only for Cause.
5.2 For purposes of this Agreement, the term "Cause' shall mean: (i)
willful failure by the Consultant to comply with any of the material terms of
this Agreement; (ii) willful engagement by the Consultant in his capacity as a
consultant to the Company or any subsidiary, in gross misconduct injurious to
the Company or any subsidiary; (iii) intentional misappropriation of substantial
property of the Company or any subsidiary to the Employee's own use; (iv) the
commission by the Employee of an act of fraud or embezzlement from the Company,
or (v) conviction of the Employee for a crime (excluding minor traffic offenses)
the public knowledge of which would bring harm to the Company because of the
Consultant's relationship to the Company.
5.3 If the Consultant should die prior to the end of the Agreement
Period, his widow shall be paid at the annual rate of $175,000 until the earlier
of the end of the Agreement Period or her death. She shall not be entitled to
any other rights or benefits under this Agreement, but she shall be entitled to
all relevant rights then currently available pursuant to COBRA, stock plans,
etc.
6. Change of Control.
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6.1 The Consultant hereby fully renounces any and all rights that
might have become available to him under his Executive Severance Agreement, and
agrees that said agreement is hereafter null and void.
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6.2 The Company agrees that this Agreement shall be fully binding on
any successor and assign of the Company, for the full Agreement Period. If that
is for some reason not possible, the Company shall create a fund adequate to
fully cover the Company's financial obligations under this Agreement.
7. Restricted Shares and Options. In the event of Change of Control of
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the Company (as defined by the Plans), or the demise of the Consultant, the
Consultant or his estate shall immediately become fully vested in his Restricted
Shares and Stock Options pursuant to the term of those Plans.
8. Assignments. This Agreement shall inure to the benefit of and be
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binding upon the Consultant and his heirs, estate, executors, administrators and
legal representatives. No rights or obligations under this Agreement shall be
assignable by the Consultant, except those which survive his death or disability
which may be assigned upon that occurrence.
9. No Third Party Beneficiaries. This Agreement does not create, and
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shall not be construed as creating, any rights enforceable by any person to a
party to this Agreement, except with respect to salary or other payments or
benefits required to be paid after the death of the Consultant pursuant to
Section 5.3.
10. Headings. The headings of the sections hereof are inserted for
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convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
11. Interpretation. In case any one or more of the provisions contained
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in this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. If, moreover, any one or more of the provisions
contained in this Agreement shall for any reason be held to be excessively broad
as to duration, geographical scope, activity or subject, it shall be construed
by limiting and reducing it, so as to be enforceable to the extent compatible
with the applicable law as it shall then appear.
12. Notices. All notices under this Agreement shall be in writing and
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shall be deemed to have been given at the time when mailed by registered or
certified mail, addressed to the address below stated of the party to which
notice is given, or to such changed address as such party may have fixed by
notice:
To the Company: ADVO, Inc.
Xxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: General Counsel
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To the Consultant: Xx. Xxxxxx Xxxxxxxxxx
000 Xxxxxx Xxxx Xxxx
Xxx Xxxxxx, XX 00000
provided, however, that any notice of change of address shall be effective only
upon receipt.
13. Waivers. If either party should waive any breach of any provision of
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this Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement.
14. Complete Agreement; Amendments. The foregoing is the entire agreement
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of the parties with respect to the subject matter hereof and may not be amended,
supplemented, canceled or discharged except by written instrument executed by
both Parties hereto. Upon the commencement of the Agreement Period, this
Agreement specifically supersedes and replaces the Contract between the Parties
dated May 29, 1996, as well as the Executive Severance Agreement between the
Parties.
15. Governing Law. This Agreement is to be governed by and construed in
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accordance with the laws of the State of Connecticut, without giving effect to
principles of conflicts of law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
ADVO, INC.
By: XXXX XXXXXX /s/
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Xxxx Xxxxxx, President
XXXXXX XXXXXXXXXX /s/
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Xxxxxx Xxxxxxxxxx
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