EMPLOYMENT AGREEMENT
This Agreement is made as of the 16th day of October, 1997 between
Outsourcing Solutions Inc., a Delaware corporation, with offices at 000 Xxxxx
Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxx 00000 (the "Company"), and
Xxxxxx X. Xxxxx, an individual residing in the State of Missouri (the
"Employee").
RECITALS
WHEREAS, the Company desires to secure the services and employment of
the Employee on behalf of the Company, and the Employee desires to enter into
employment with 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 Chief
Financial 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 (as defined below), the Employee shall serve as the Chief Financial Officer
of the Company, performing such duties as shall be reasonably required of such
an 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 Board of Directors of the Company. The Employee's primary place of
employment shall be St. Louis, Missouri.
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. Employment Term. The employment term shall begin on the date of
this Agreement and continue until December 31, 1998, unless earlier terminated
pursuant to Section 7 below (the "Employment Term"); provided, that on December
31, 1998 and on each anniversary thereafter, the Employment Term shall be
automatically extended for an additional twelve month period unless 30 days
prior to such anniversary date either the Company or the Employee shall give
written notice of termination of the Agreement, in which case the Agreement will
terminate at the end of the then existing Employment Term..
4. Compensation.
(a) Salary. During the Employment Term, the Company shall pay the
Employee a base salary, payable in equal semimonthly installments, subject to
withholding and other applicable taxes, at an annual rate of Two Hundred Sixty
Thousand Dollars ($260,000.00).
(b) Bonus. For the period commencing on the date of this Agreement and
ending on December 31, 1997, the Company shall pay the Employee a guaranteed
bonus, subject to withholding and other applicable taxes, of $130,000, payable
on or before January 15, 1998. Commencing on January 1, 1998, the Employee shall
be eligible for an annual bonus of up to 67% of his base salary and, with
respect to the 12 months ended December 31, 1998, the Company shall pay the
Employee a guaranteed bonus, subject to withholding and other applicable taxes,
of $70,000, payable on or before March 15, 1999. The non-guaranteed portion of
such annual bonus shall be based on the satisfaction of performance targets
established by the Board of Directors on or before December 31 of each year for
the next succeeding year.
(c) Stock Options. The Company shall grant to the Employee options to
purchase 75,000 shares of the Company's common stock at an exercise price of
$25.00 per share pursuant to the Company's 1995 Stock Option and Stock Award
Plan (the "Plan"). Such options shall vest upon the satisfaction of performance
and liquidity targets as set forth in the Plan and any award agreement pursuant
to which such options are granted.
(d) Medical and Dental Health, Life and Disability Insurance Benefits.
During the Employment Term, the Employee shall be entitled to medical and dental
health, life insurance and disability insurance benefits in accordance with the
Company's established practices with respect to its key employees.
(e) Vacation; Sick Leave. During the Employment Term, the Employee
shall be entitled to vacation and sick leave in accordance with the Company's
established practices with respect to its key employees.
(f) Car Allowance. During the Employment Term, the Employee shall be
entitled to a $500 per month automobile allowance, payable on the 15th of each
month. In addition, parking at the Company's office shall be provided and the
Company will pay any parking fees charged by any landlord at the Company's
offices.
(g) Club Dues. During the Employment Term, the Company shall pay the
monthly dues and assessment for the Fox Run Golf Club and the St. Louis Club;
provided, however, the Company may terminate payment for the St. Louis Club at
any time upon 60 days notice. In addition, the Company shall pay the $7,500
corporate transfer fee with regard to the Fox Run Golf Club.
5. Expenses. 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 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 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 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
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.
During the term of this Agreement and thereafter, Employee shall not
employ, solicit for employment or otherwise contract for the services of any
employee of the Company or any of its Affiliates (as defined below) at the time
of this Agreement or who shall subsequently become an employee of the Company or
any of its Affiliates.
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 may 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 results in a
conviction for a felony involving moral turpitude, fraud or misrepresentation,
(iv) gross neglect of his assigned duties to the Company or any subsidiary, (v)
gross breach of his fiduciary obligations to the Company or any subsidiary, or
(vi) any chemical dependence which materially affects the performance of his
duties and responsibilities to the Company or any subsidiary; provided that in
the case of the misconduct set forth in clauses (iv) and (vi) above, such
misconduct shall continue for a period of 30 days following written notice
thereof by the Company to the Employee.
8. Severance. If (a) the Employee's employment is terminated by the
Company without "cause" or (b) the Company does not agree to extend the
Employment Term upon the expiration thereof, the Employee shall be entitled to
(i) receive an amount equal to his total cash compensation (base salary plus
bonus) for the year preceding the date of the Employee's termination or the date
on which the Employment Term expires, as the case may be, such amount to be
payable, at the Company's option, in a lump sum on the date of termination or
the date on which the Employment Term expires, as the case may be, or ratably
over the one year period following the date of termination or expiration (the
"Severance Period") and (ii) continue to receive the medical and dental health
benefits referred to in Section 4(d) during the Severance Period; provided,
however, if either such event occurs prior to the extension of the initial
Employment Term, Employee shall be entitled to (i) $260,000, payable in a lump
sum on the date of termination, (ii) the guaranteed bonus payments for 1997 and
1998 referred to in Section 4(b) to the extent not previously paid to Employee,
payable in a lump sum on the date of termination, and (iii) continue to receive
the medical and dental health benefits referred to in Section 4(d) during the
Severance Period. If the Employee's employment is terminated by the Company "for
cause", the Employee shall not be entitled to severance compensation. The
Employee covenants and agrees that he will not, during the one year period
following the termination of the Employee's employment by the Company, within
any jurisdiction or marketing area in which the Company or any of its Affiliates
(as defined below) is doing business or is qualified to do business, directly or
indirectly own, manage, operate, control, be employed by or participate in the
ownership, management, operation or control of, or be connected in any manner
with, any business of the type and character engaged in and competitive with
that conducted by the Company or any of its Affiliates at the time of such
termination; provided, however, that ownership of securities of 2% or less of
any class of securities of a public company shall not be considered to be
competition with the Company or any of its Affiliates. For the purposes of this
Section 8, the term "Affiliate" shall mean, with respect to the Company, any
person or entity which, directly or indirectly, owns or is owned by, or is under
common ownership with, the Company. The term "own" (including, with correlative
meanings, "owned by" and "under common ownership with") shall mean the ownership
of 50% or more of the voting securities (or their equivalent) of a particular
entity.
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:
Xxxxxx X. Xxxxx
If to the Company:
Outsourcing Solutions Inc.
000 Xxxxx Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attn: President
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 Missouri 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 Missouri or
in the United States District Court for the Eastern District of Missouri, 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 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 Sections 6 and 7 of this
Agreement shall survive and shall continue to be binding upon Employee
notwithstanding the termination of this Agreement for any reason whatsoever. The
covenants set forth in Sections 6 and 8 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. It is expressly
agreed that the remedy at law for the breach or any such covenant is inadequate
and that injunctive relief shall be available to prevent the breach or any
threatened breach thereof.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto executed this Agreement the day and year first written above.
OUTSOURCING SOLUTIONS INC.
By /s/ Xxxxxxx X. Xxxxx
--------------------------------------
Xxxxxxx X. Xxxxx, President and
Chief Executive Officer
EMPLOYEE
/s/ Xxxxxx X. Xxxxx
-----------------------------------------
Xxxxxx X. Xxxxx
