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EXHIBIT 10.09
EMPLOYMENT AGREEMENT
This Agreement is made as of this 2nd day of January 2001 (the
"Starting Date") between TeleSpectrum Worldwide Inc., a Delaware corporation
(the "Company"), and Xxxxxxxxxxx Xxxxxxxx (the "Employee").
RECITALS
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 Chief Operating Officer 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 Board of Directors (the "Board").
Except for periodic travel incident to Employee's duties hereunder, Employee
shall not be required to perform his duties hereunder outside a 50 mile radius
of the Company's current principal office.
(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 Starting Date and,
unless terminated earlier pursuant to the terms of this Agreement, continue
until January 2, 2003.
3. Compensation for Employment.
(a) The basic annual rate of compensation of the Employee for his
employment services to the Company during the Employment Term shall be $200,000
(such amount is referred to herein as the "Salary"), which the Company shall pay
to the Employee in equal installments in accordance with the normal payroll
policies of the Company. The Salary shall be reviewed at least one time each
calendar year by the Compensation Committee of the Board for possible increases,
taking into account such matters as the Employee's responsibilities, the
profitability of the Company, the compensation
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of other executives of the Company, increases in cost of living and other
factors deemed pertinent by the Compensation Committee. In light of such review,
the Company, in its sole discretion, may increase the Salary but shall not
decrease the Salary during the Employment Term.
(b) The Employee shall be eligible to receive annual performance
bonuses (such amounts are referred to herein as the "Bonus") in accordance with
the following schedule:
(i) If the Company earns $45 million or more of EBITDA
(as defined below) in 2001, the Company shall pay the
Employee a Bonus for 2001 of $200,000.
(ii) If the Company earns between $40 million and $45
million of EBITDA (as defined below) in 2001, the
Compensation Committee of the Board, in its
discretion, may award the Employee a Bonus for 2001
of up to one-half (1/2) of the Bonus described in
paragraph (i) above.
(iii) If the Company earns less than $40 million of EBITDA
(as defined below) in 2001, the Employee shall not be
paid a Bonus for 2001.
(iv) After 2001, the Employee shall be eligible to receive
annual performance Bonuses in such amounts as
approved by the Compensation Committee of the Board
and participate in such bonus programs as are
established for executive officers of the Company.
For purposes of this Agreement, "EBITDA" means the sum of income or
loss from the Company's continuing operations, income taxes, net interest
expense, depreciation and amortization, as determined by the Company in
preparing the Company's financial statements, but excluding non-recurring items
such as out-of-period charges, merger and restructuring-related charges and
one-time gains or losses.
(c) On the Starting Date, the Company shall grant Employee stock
options (the "Options") to purchase 400,000 shares of the Company's common
stock, par value $.01 per share (the "Common Stock"). The Options shall be
granted pursuant to the terms of the TeleSpectrum Worldwide Inc. 1996 Equity
Compensation Plan (the "Stock Option Plan") and, except as provided in this
Section 3(c), the Options shall include those terms that are contained in the
form of Grant Letter attached hereto. The Options shall include the following
terms: (i) that a maximum number of shares be qualified as "incentive stock
options" under applicable law and the regulations of the U.S. Internal Revenue
Service to the extent permissible, (ii) that the stock options shall be
exercisable at a price per share equal to the greater of $0.60 or the fair
market value of a share of Common Stock on the Starting Date, (iii) that, if,
within twelve (12) months of the Starting Date, there is a dilution of equity
interests in the Company solely as a result of a refinancing, the Employee shall
be granted additional stock options, if necessary, such that, immediately
following the refinancing, the shares subject to the Employee's then outstanding
Options shall represent the same percentage of equity interests in the Company
as immediately before the refinancing, and (iv) that the Options shall vest in
accordance with the following schedule:
(A) if the Company earns $45 million or more of
EBITDA in 2001, one-half (1/2) of the Options shall
become exercisable on January 2, 2002, an additional
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one-quarter (1/4) of the Options shall become
exercisable on January 2, 2003 and the remaining
one-quarter (1/4) of the Options shall become
exercisable on January 2, 2004, or
(B) if the Company does not earn at least $45 million
of EBITDA in 2001, one-third (1/3) of the Options
shall become exercisable on January 2, 2002, an
additional one-third (1/3) of the Options shall
become exercisable on January 2, 2003, and the
remaining one-third (1/3) of the Options shall become
exercisable on January 2, 2004.
(d) During the Employment Term, the Company shall provide the Employee
with fringe benefits that are substantially equivalent to the fringe benefits
provided to the senior officers of the Company (the "Fringe Benefits").
(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 proration
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) any earned but unpaid Salary and Bonus and any 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 purposes of this Section 4, a Bonus shall not be deemed to have
been "earned" until the last day of the calendar year to which it relates. 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 Employment 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 earned but unpaid Salary and Bonus and any
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 earned but unpaid
Salary and Bonus and any Fringe Benefits that have accrued through
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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 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
(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
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 20 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 earned but unpaid Salary and Bonus and any 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 at any time by giving the Employee
30 days' notice of the termination date. In addition, notwithstanding Section
4(d), the Employee may voluntarily terminate his employment with the Company for
"good reason" during the one-year period following a Change of Control by giving
the Company at least 60 days' notice of the termination date. If the Company
terminates the Employment Term pursuant to this Section 5 prior to the
occurrence of a Change of Control or after the one-year period following the
occurrence of a Change of Control, the Company shall continue to pay to the
Employee an amount equal to his Salary, payable in equal installments over the
twelve-month period following the termination date. If the Company or the
Employee terminates the Employment Term pursuant to this Section 5 during the
one-year period following the occurrence of a Change of Control, the Company
shall continue to pay to the Employee an amount equal to the sum of his Salary
and the targeted Bonus for the year in which the termination date occurs,
payable in equal installments over the twelve-month period following the
termination date. For purposes of this Section 5, "good reason" shall mean that
the Employee experiences a substantial reduction in his total compensation
(i.e., the sum of his Salary and potential Bonus) and/or a major change in his
reporting relationship. For purposes of this Section 5, "Change of Control"
shall have the same meaning as in the Stock Option Plan.
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The amount to be paid under this Section 5 is 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 a form satisfactory to the
Company in its sole discretion 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. 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.
(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 shall 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 direct
marketing business which includes inbound and outbound telemarketing, customer
retention and interactive voice response (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 (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 Employee further covenants that during the Restricted Period,
he shall 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 recognizes and acknowledges that by reason of his
employment by the Company he shall have access to Company Information (as
defined in Section 8(a)) relating to the Business. The Employee acknowledges
that such Company Information is a valuable and unique asset and covenants that
he shall 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 Employee, (ii) has been rightfully received
from a third party without restriction and without breach of this Agreement or
(iii) except as may be required by law.
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(d) 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 shall result in irreparable injury to the
Company.
(e) 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 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 shall be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and shall reimburse the Employee for all reasonable expenses
incurred by his in compliance with the provisions of this Section 7.
8. Company Information.
(a) The Employee has had and shall 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."
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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 shall 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.
10. Conditions. This Agreement and the obligations of the parties hereunder
are subject to the satisfaction of the conditions set forth at the end of Xxxxxx
X. Xxxxxx'x letter to J. Xxxxx Xxxxxx dated December 22, 2000.
11. General.
(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
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certified mail, postage prepaid, return receipt requested, or when sent by
Federal Express or other overnight delivery service, addressed as follows:
TO EMPLOYEE:
Xxxxxxxxxxx Xxxxxxxx
00 X. Xxxxxxxx Xxxxx #000
Xxxxxxx, XX 00000
TO THE COMPANY:
000 X. Xxxxx Xxxx
Xxxx xx Xxxxxxx, XX 00000
Fax: 000.000.0000
Attn: Xxxxxxx X. Xxxxxxxx
Executive Vice President and Secretary
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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XXXXXXXXXXX XXXXXXXX
