Telephone Access, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
April 1, 1997
Xx. Xxxx Xxxxxxxxxx
00 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Dear Xxxx:
This letter sets forth our agreement on matters relating to
your employment with Telephone Access, Inc., a Delaware corporation doing
business under the name TelAc (the "Company"), as its President and Chief
Executive Officer and your service as a Director of the Company.
1. You (the "CEO") shall be employed by the Company as
President and Chief Executive Officer of the Company for an initial term of four
(4) years, commencing on April 1, 1997 (the "Effective Date"), unless sooner
terminated by you or the Company as provided herein. This Agreement shall be
automatically renewed for successive one (1) year terms upon the expiration of
the initial term of this Agreement, or any renewal term of this Agreement,
unless either the Company or the CEO gives the other party at least six (6)
months written notice prior to the scheduled expiration of the initial term of
this Agreement, or any renewal term of this Agreement, that such party does not
intend to renew the Agreement. As President and Chief Executive Officer of the
Company, the CEO shall have such responsibilities and perform such duties as set
forth in Exhibit A hereto and such other duties and responsibilities appropriate
to such position as shall be assigned to the CEO by the Board of Directors of
the Company. The CEO shall report to the Board of Directors of the Company. The
CEO shall devote all his working time and efforts to the business of the
Company. The CEO represents that the CEO is not bound by the provisions of any
non-competition, confidentiality or similar agreement not heretofore disclosed
by the CEO in writing to the Company. It is our intention that your service as
Director of the Company will commence at the first meeting of the Board of
Directors after the Effective Date.
2. The CEO's salary shall be at a rate per annum of $250,000,
payable in accordance with the normal payroll practices of the Company (the
"Base Salary"); provided, however, that the Base Salary shall be increased to
$300,000 per annum upon the occurrence of a Successful IPO (as hereinafter
defined). In
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addition, the CEO may be entitled to receive merit increases in salary during
the term hereof in amounts and at such times as shall be determined by the Board
of Directors of the Company in its sole discretion. In addition to the CEO's
salary, the CEO shall be entitled to payments pursuant to an annual bonus
program. Under the bonus program, the CEO shall have an annual bonus opportunity
of up to fifty (50%) percent of the Base Salary at the then current rate in
effect (the "Bonus"). The bonus program shall be apportioned as follows: (i)
sixty (60%) percent based upon the achievement of quantitative goals and (ii)
forty (40%) percent based upon the achievement of qualitative goals, in each
case, to be mutually agreed upon between the CEO and the Company for the first
year within ninety (90) days of the Effective Date. Bonus goals for years after
the first year shall be mutually agreed upon by the CEO and the Compensation
Committee of the Company prior to January 31 of the applicable year.
Except as otherwise provided herein, the CEO must continue in
the employment of the Company through the end of the applicable year in order to
be entitled to a bonus for such year. The bonus for 1997 shall be prorated based
on the portion of the year during which the CEO was employed by the Company
(i.e., 9/12 of a full bonus). The bonus award shall be paid in cash, not later
than two weeks following the completion of the annual audit of the Company by
the Company's independent accountants for the applicable year.
For the purposes hereof, a "Successful IPO" shall mean the
closing of the initial sale by the Company to the public through an underwritten
public offering of shares of common stock, $.01 par value ("Common Stock"), of
the Company, pursuant to a registration statement (the "Registration Statement")
filed under the Securities Act of 1933 (the "Securities Act"), as amended, other
than a registration statement covering securities of the Company to be issued
pursuant to an employee benefit plan.
3. In the event that the CEO is employed by the Company
pursuant to this Agreement on the date the Registration Statement has been
declared effective, the Company shall cause to be granted to the CEO on the date
of the effectiveness of such Registration Statement, fully vested options to
purchase 50,000 shares of Common Stock of the Company at an exercise price per
share equal to the initial public offering price of the Common Stock in
connection with the Successful IPO (the "Options"). The Options shall be
exercisable by the CEO any time within ten (10) years from the date of grant
thereof; provided, however, that the Options may not be exercised after the CEO
has ceased to be in the employ of the Company, except in the following
circumstances:
(i) If the CEO's employment is terminated
by action of the Company, or by reason of disability or
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retirement under any retirement plan maintained by the Company, the
Options may be exercised by the CEO within three months after such
termination, but only as to any shares exercisable on the date the
CEO's employment so terminates;
(ii) In the event of the death of the CEO during
the three month period after termination of employment covered by (i)
above, the person or persons to whom his rights are transferred by will
or the laws of descent and distribution shall have a period of one year
from the date of his death to exercise any Options which were
exercisable by the CEO at the time of his death; and
(iii) In the event of the death of the CEO while
employed, the Options shall thereupon become exercisable in full, and
the person or persons to whom the CEO's rights are transferred by will
or the laws of descent and distribution shall have a period of one year
from the date of the CEO's death to exercise such Options.
4. The CEO shall be entitled to participate in the employee
benefit plans and programs offered by the Company from time to time applicable
to executives of the Company, including group insurance plans, subject to the
provisions of such plans and programs from time to time in effect. The CEO shall
be entitled to three weeks vacation per year, to accrue and to be taken in
accordance with Company policy. In addition, the CEO shall be entitled to
receive a car allowance of $700 per month plus reimbursement for gasoline, tolls
and parking in connection with business related travel upon the presentation of
proper accounts therefor in accordance with the Company's policies.
5. (a) In the event the Board of Directors determines that the
CEO is required to relocate his personal residence to carry out the CEO's duties
hereunder (a "Relocation"), the Company shall reimburse the CEO for the
following moving expenses: (i) a brokerage commission at the standard rate
prevailing in Westport, Connecticut incurred by the CEO in connection with the
sale of the CEO's current residence, (ii) the travel and lodging expenses
associated with ten (10) trips to the business location where the CEO is to be
relocated (provided that such location is one hundred (100) miles or more from
the CEO's current residence) incurred by the CEO's spouse to look for a new
personal residence, (iii) any mortgage points paid by the CEO in connection with
the purchase of a new personal residence resulting from such Relocation, (iv)
the expenses associated with transportation of the CEO's personal belongings
from the CEO's current residence to the CEO's new personal residence, (v) any
closing costs incurred in connection with the purchase of the CEO's personal
residence resulting from such Relocation, and (vi) any other identifiable
miscellaneous
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Relocation costs not to exceed $5,000 upon the presentation of proper accounts
therefor. In the event of a Relocation, the Company shall pay directly or
reimburse the CEO for club dues for one country club in the vicinity of the
CEO's new personal residence in such reasonable amount as shall be approved by
the Company in advance on an annual basis. At the CEO's request, the Company
shall advance to the CEO up to $75,000 for a club membership deposit, such
advance to be refunded by the CEO (i) if the CEO resigns his employment with the
Company less than two (2) years from the date of any Relocation, or (ii) in the
event that such amount for a club membership deposit is refunded to the CEO from
the country club at any time.
(b) During the term of this Agreement and prior
to a Relocation, the Company shall reimburse the CEO for the reasonable and
necessary out-of-pocket costs incurred by the CEO in connection with his living
accommodations in the vicinity of his principal office. In the event that the
Company determines that the CEO should rent an apartment, the Company shall
provide the CEO with an apartment for the CEO in the vicinity of his principal
office and shall reimburse him for his reasonable rental expenses. The Company
shall reimburse the CEO for all of the expenses set forth in this paragraph 5
upon the presentation of proper receipts therefor in accordance with the
Company's policies.
6. The CEO agrees that the CEO shall not, at any time, use any
Confidential Information (as hereinafter defined) except in the regular course
of the CEO's employment hereunder, or disclose any Confidential Information to
any person or entity other than an employee or professional adviser of the
Company. "Confidential Information" means any information of a confidential or
proprietary nature relating to the business of the Company and its clients;
provided, however, that Confidential Information shall not include information
which (i) becomes generally available to the public other than as a result of an
unauthorized disclosure by the CEO, (ii) was available to the CEO on a
non-confidential basis prior to the CEO's employment with the Company or (iii)
becomes available to the CEO on a non-confidential basis from a source other
than the Company or any of its affiliates, provided that such source is not
bound by a confidentiality agreement with the Company.
7. The CEO agrees that the CEO shall not, during the period of
the CEO's employment, and for a period of eighteen (18) months (the "Section 7
Period") following termination of the CEO's employment, whether by the CEO or by
the Company, (a) engage, whether as principal, agent, investor (except as an
owner of less than a 5% interest in a publicly held company), distributor,
representative, stockholder, employee, consultant, volunteer or otherwise, with
or without pay, in any activity or business venture anywhere in the United
States which is directly
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competitive with the business of the Company or any other member of the Company
Group (as hereinafter defined) of providing telemarketing and ethnic marketing
services, including ethnic advertising and ethnic direct marketing, and related
activities, (b) solicit or entice or endeavor to solicit or entice away from the
Company any person who was or is at the time of solicitation an employee of the
Company, either for the CEO's own account or for any individual, firm or
corporation, whether or not such person would commit any breach of his contract
of employment by reason of leaving the service of the Company, (c) employ,
directly or indirectly, any person who was an employee of the Company at the
date of termination of the CEO's employment or within six (6) months prior to
such date of termination, or (d) solicit or entice or endeavor to solicit or
entice away from the Company (i) any client or customer of the Company or (ii)
any corporation, individual or firm with which the Company is, or has been
during the last six (6) months of the CEO's employment with the Company, in
active negotiations in connection with becoming a client, customer, acquisition
candidate, vendor, supplier or joint venture partner of the Company, either for
the CEO's own account or for any individual, firm or corporation.
For purposes hereof, "Company Group" shall mean, collectively,
the Company and its subsidiaries, affiliates and parent entities operating from
time to time in the same lines of business for which the CEO has been
responsible for.
8. In the event of a breach or threatened breach by the CEO of
any of the provisions of Paragraphs 6 or 7 of this Agreement, the CEO hereby
consents and agrees that the Company shall be entitled to an injunction or
similar equitable relief from any court of competent jurisdiction restraining
the CEO from committing or continuing any such breach or threatened breach or
granting specific performance of any act required to be performed by the CEO
under any of such provisions, without the necessity of showing any actual damage
or that money damages would not afford an adequate remedy and without the
necessity of posting any bond or other security. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies at law or
in equity which it may have.
9. (a) Upon the CEO's death, the Company will pay the CEO's
estate or other legal representative the (i) CEO's salary accrued to the date of
death and not theretofore paid to the CEO and (ii) 100% of the CEO's bonus
opportunity for the year of death, prorated through the date of death. The
rights and benefits of the CEO's estate or other legal representative under the
benefit plans and programs of the Company shall be determined by reference to
the provisions of such plans and programs of the Company at the time in effect.
The estate or other legal representative of the CEO and the Company shall have
no further rights or obligations under this Agreement.
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(b) If the CEO shall become incapacitated
by reason of sickness, accident or other physical or mental disability and shall
for a period of sixty (60) consecutive days be unable to materially perform his
duties hereunder, with reasonable accommodation, the employment of the CEO
hereunder may be terminated by the Company upon thirty (30) days' (the "Notice
Period") notice to the CEO; provided, however, that the CEO's employment by the
Company shall not be terminated pursuant to this Paragraph 9(b) if the CEO
returns to work and is able to materially perform his duties hereunder during
the Notice Period. In the event of such termination, the Company shall pay the
CEO his salary (at the annual rate then in effect) accrued to the effective date
of such termination and not theretofore paid to the CEO. The CEO's rights under
the benefit plans and programs of the Company shall be determined by reference
to the provisions of such plans and programs at the time in effect. In the event
of such termination, neither the CEO nor the Company shall have any further
rights or obligations under this Agreement, except as set forth in Paragraphs 6,
7 and 8.
(c) The employment of the CEO hereunder may be
terminated by the Company at any time during the term of this Agreement for
Cause (as hereinafter defined). In the event of such termination, the Company
shall pay to the CEO his salary (at the annual rate then in effect) accrued to
the date of such termination and not theretofore paid to the CEO, and, after the
satisfaction of any claim of the Company against the CEO arising as a direct and
proximate result of such Cause, neither the CEO nor the Company shall have any
further rights or obligations under this Agreement, except as provided in
Paragraphs 6, 7 and 8. Rights and benefits of the CEO under the benefit plans
and programs of the Company will be determined in accordance with the terms and
provisions of such plans and programs. For purposes hereof, "Cause" shall mean
(i) a material breach of any of the CEO's material obligations hereunder, (ii)
that the CEO, in carrying out his duties hereunder, has been guilty of (A)
willful or gross neglect or (B) willful or gross misconduct, resulting in either
case in material harm to any member of the Company Group (as hereinafter
defined); or (iii) that the CEO has been convicted of (A) a felony or (B) any
offense involving moral turpitude. In the event of an occurrence of an event
constituting Cause under this Paragraph 9(c), the CEO shall be given written
notice by the Company that it intends to terminate the CEO's employment for
Cause under this Paragraph 9(c), which written notice shall specify in detail
the act or acts upon the basis of which the Company intends so to terminate the
CEO's employment. If the basis for such written notice is an act or acts
described in clause (i) above and not involving moral turpitude, the CEO shall
be given fourteen (14) days to cease or correct the performance (or
nonperformance) giving rise to such written notice and, upon failure of the CEO
within such fourteen (14) days to cease or correct such performance (or
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nonperformance), the CEO's employment by the Company shall
automatically be terminated hereunder for Cause.
(d) The Company may terminate the CEO's
employment at any time for whatever reason it deems appropriate; provided,
however, that in the event that such termination is not pursuant to Paragraphs
9(a), 9(b) or 9(c), the Company shall pay to the CEO (i) severance pay in the
form of salary continuation (at the annual rate then in effect) until (the
"Severance Period") the expiration of a period of twelve (12) months beginning
on the date of termination of employment hereunder, (ii) 100% of the CEO's bonus
opportunity for the year of termination, prorated through the date of
termination, (iii) health and medical insurance coverage through the end of the
Severance Period, and (iv) the car allowance set forth in Paragraph 4 of this
Agreement if, and only if, the CEO informs the Company that he is forced to
dispose of his work related automobile after such termination until the earlier
to occur of the disposition of the automobile or three months after the date of
termination. In addition, in the event of termination hereunder, the Shares (as
defined in the Stockholders Agreement by and between the CEO and the Company
dated the date hereof (the "Stockholders Agreement")), shall continue to vest
during the Severance Period to the extent provided in Section 5(d) of the
Stockholders Agreement. The CEO's rights and benefits under the benefit plans
and programs shall be determined by reference to the provisions of such plans
and programs at the time in effect. In the event of such termination, neither
the CEO nor the Company shall have any further rights or obligations under this
Agreement, except as set forth in Paragraphs 6, 7 and 8. An election by the
Company not to renew this Agreement made in accordance with the second sentence
of Paragraph 1 shall not be treated as a termination pursuant to this Paragraph
9(d).
(e) In the event of a reorganization or merger of
the Company with or into TLM Holdings Corp., a Delaware corporation, which is in
the business of providing healthcare teleservices, which results in the CEO no
longer being the Chief Executive Officer of the surviving or resulting company,
then the CEO shall be entitled to terminate this Agreement. Upon such
termination, the Company shall pay to the CEO (i) severance pay in the form of
salary continuation (at the annual rate then in effect), until the expiration of
a period of twelve (12) months beginning on the date of termination of
employment hereunder, (ii) 100% of the CEO's bonus opportunity for the year of
termination, prorated through the date of termination, (iii) health and medical
insurance coverage through the end of the Severance Period, and (iv) the car
allowance set forth in Paragraph 4 of this Agreement if, and only if, the CEO
informs the Company he is forced to dispose of his work related automobile after
such termination until the earlier to occur of the disposition of the automobile
or three months after the date
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of termination. The CEO's rights and benefits under the benefit plans and
programs of the Company shall be determined by reference to the provisions of
such plans and programs at the time in effect. In the event of such termination,
neither the CEO nor the Company shall have any further rights or obligations
under this Agreement, except as set forth in Paragraphs 6, 7 and 8.
10. This Agreement contains all the understandings and
representations between the CEO and the Company pertaining to the subject matter
hereof and supersedes all undertakings and agreements, whether oral or written,
if any there be, previously entered into by the CEO and the Company with respect
thereto.
11. No provision of this Agreement may be amended or modified
unless such amendment or modification is agreed to in writing and signed by the
CEO and by a duly authorized representative of the Company.
12. Any notice to be given hereunder shall be in writing and
delivered personally or sent by certified mail, return receipt requested,
addressed to the party concerned at the address indicated below or at such other
address as such party may subsequently designate by like notice:
If to the Company:
Telephone Access, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Chairman of the Board
If to the CEO:
Xx. Xxxx Xxxxxxxxxx
00 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
13. Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the CEO shall be subject to
withholding of such amounts relating to taxes as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
14. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania applicable in the case of agreements made and entirely performed in
such Commonwealth.
15. Any controversy or claim arising out of or relating to
this Agreement, or any breach hereof, shall, except as provided in Paragraph 8
hereof, be settled by arbitration in
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accordance with the rules of the American Arbitration Association then in effect
and judgment upon such award rendered by the arbitrator may be entered in any
court having jurisdiction thereof. The arbitration award shall include an award
of attorneys' fees to the prevailing party. The arbitration shall be held in the
Philadelphia, Pennsylvania metropolitan area.
If the foregoing accurately sets forth our agreement, please
indicate the CEO's acceptance hereof on the enclosed counterpart of this letter
and return such counterpart to the Company.
Very truly yours,
TELEPHONE ACCESS, INC.
By /s/ Xxxxxxx X. Xxxx
_____________________________
Name: Xxxxxxx X. Xxxx
Title: Chairman of the Board
Accepted:
/s/ Xxxx Xxxxxxxxxx
----------------------
Xxxx Xxxxxxxxxx
