AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This Agreement, dated as of the 4th day of June, 1999 amends and
restates the Employment Agreement dated as of the 27th day of August, 1996,
as amended on May 14, 1997 and August 27, 1997, between Outsourcing
Solutions Inc. (formerly known as OSI Holdings Corp.), a Delaware corporation,
with offices at 000 Xxxxx Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxxxxxxx, Xxxxxxxx
00000 (the "Company"), and Xxxxxxx X. Xxxxx, an individual residing in the State
of Missouri (the "Employee").
R E C I T A L S
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
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 (as defined below), the Employee shall serve as the Chief Executive 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. During the Employment Term, the Employee
shall serve as a member of the Board of Directors of the Company. The Employee's
primary place of employment shall be St. Louis, Missouri. The Company and the
Employee each acknowledge that the Employee shall be required to travel
extensively in connection with the performance of his duties hereunder,
particularly during the first year of employment. The Company and the Employee
further acknowledge that the Company's headquarters shall be relocated to St.
Louis.
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; provided, however, that the Employee may continue to serve on
outside boards of directors of which he is a member as of the date hereof.
3. Employment Term. The employment term shall begin on the date of
this Agreement and continue until December 31, 1999, unless earlier terminated
pursuant to Section 7 below (the "Employment Term"); provided, that on December
31, 1999 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 no less than Three
Hundred Seventy Five Thousand Dollars ($375,000.00).
(b) Bonus. Commencing on January 1, 1999, the Employee shall be
eligible for an annual bonus of up to 150% of his base salary. Annual bonuses
shall be based on the satisfaction of performance targets established by the
Board of Directors on or before March 31 of each year for such year.
(c) 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.
(d) 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.
(e) Automobile. The Company shall assume the Employee's lease
obligations with respect to his current automobile and pay for all gas, oil,
maintenance and insurance for such automobile.
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.
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.
(a) If (i) Employee's employment is terminated by the Company
without "cause," (ii) the Company does not agree to extend the Employment Term
upon the expiration thereof, (iii) Employee terminates his employment because
the Company reduces his responsibilities or compensation in a manner which is
tantamount to termination of Employee's employment, or (iv) within two years
following a Sale of the Company (as defined in Section 8(c) of this Agreement),
the Employee gives notice to the Company of his resignation for "Good Reason"
(as defined in Section 8(b) hereof) setting forth in reasonable detail the
circumstances claimed to constitute Good Reason and stating that it constitutes
notice pursuant to this Section 8(a), and the stated basis for Good Reason has
not been fully corrected within sixty (60) days from the date of such notice,
the Employee shall be entitled to (x) 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 in a lump sum on the date of termination
or the date on which the Employment Term expires, as the case may be, and (y)
continue to receive the benefits referred to in Section 4(c) during the one year
period following the date of termination or expiration (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
Agreement, 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.
(b) For purposes of this Agreement, "Good Reason" shall mean the
occurrence, without the Employee's consent, of any of the following events
during the Employment Term within two years following a Sale of the Company: (A)
a relocation of the principal location of the performance of work by the
Employee beyond a thirty mile radius of such location as of the time of the Sale
of the Company; (B) an assignment to the Employee of duties that result in a
material diminution of the Employee's duties and responsibilities under this
Agreement, (C) a reduction of the Employee's base salary in effect as of the
time of the Sale of the Company, (D) a material breach of the Company's
obligations set forth in this Agreement, or (E) the failure of any acquiror of,
or successor to, all or substantially all of the assets or business of the
Company to expressly assume this Agreement and agree to perform all of the
obligations of the Company hereunder.
(c) For the purposes of this Agreement, "Sale of the Company" shall
mean (i) a stock sale, merger, consolidation, combination, reorganization or
other transaction resulting in less than fifty percent (50%) of the combined
voting power of the surviving or resulting entity being owned by the
shareholders of the Company immediately prior to such transaction or (ii) the
sale or other disposition of all or substantially all of the assets or business
of the Company (other than, in the case of either clause (i) or (ii) above, in
connection with any employee benefit plan of the Company or an Affiliate);
provided, however, that a public offering of the capital stock of the Company
shall not be a "Sale of the Company."
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:
Xxxxxxx X. Xxxxx
0000 Xxxxx Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
If to the Company:
Outsourcing Solutions Inc.
000 Xxxxx Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxxx 00000
Attention: Vice President and General Counsel
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, or in the event of any dispute or controversy arising out of or
relating to this Agreement, the costs and expenses (including attorney's fees
and disbursements) 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 principal claims. Notwithstanding the
foregoing, following a Sale of the Company, all reasonable costs and expenses
(including attorney's fees and disbursements) incurred by the Employee in an
action or claim to enforce any provision or term of this Agreement, and all
costs and expenses of any court proceeding or arbitration in connection with any
dispute or controversy arising out of or relating to this Agreement, shall be
promptly paid or reimbursed by the Company or its successor; provided, however,
that no payment or reimbursement shall be made of such costs or expenses if and
to the extent that the court or arbitrator adjudicating or deciding the matter
determines that any of the Employee's litigation assertions or defenses were in
bad faith or frivolous. Pending the resolution of any court proceeding or
arbitration described in this Section 10(c), the Company or its successor shall
continue payment of all amounts and benefits due the Employee under this
Agreement.
(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 8 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/ Xxxx X. Xxxxx
-----------------------
Name: Xxxx X. Xxxxx
Title: Vice President & General Counsel
EMPLOYEE
/s/ Xxxxxxx X. Xxxxx
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XXXXXXX X. XXXXX
