EXHIBIT 10.1
Employment Agreement of Xxxxx X. D'Xxxx
JDR HOLDINGS, INC.
000 Xxxxx Xxxxxxxx Xxxxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000-0000
May 29, 1997
Xx. Xxxxx X. D'Xxxx
c/o JDR Holdings, Inc.
000 Xxxxx Xxxxxxxx Xxxxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000-0000
Dear Mr. D'Xxxx:
We write to set forth our agreement with respect to your employment as an
executive of JDR Holdings, Inc., a Delaware corporation (the "Company").
1. The Company hereby agrees to employ you, and you hereby agree to be
employed by the Company, on the terms and conditions hereinafter set forth. Your
services will be conducted at the Company's headquarters and at such other
places as your duties may require. You will serve as the Company's President and
Chief Executive Officer and will be responsible for and provide senior
management services relating to all aspects of the company's and each
subsidiary's business, related marketing of the services of the company and
ongoing senior management services relating to all aspects of the Company's
general administration. In addition, you will render such other executive
services and perform such other executive duties for the company and its direct
and indirect wholly-owned subsidiaries thereof (collectively, with the Company,
the "JDR Group") as the Boards of Directors of the members of the JDR Group may
from time to time reasonably request of you. You may, in addition, hold such
offices with the JDR Group which may from time to time be offered to you. Your
authority shall be subject at all times to the direction and control of the
Chief Executive Officer of the Company and the Boards of Directors of the
Company and the other members of the JDR Group and to the Boards' discretion to
determine the policies of the JDR Group. You agree to devote substantially your
entire working time energy, skill and attention to the business and affairs of
the Company and the JDR Group and the performance of your duties hereunder, on a
full time basis, and you agree to perform your duties honestly, faithfully,
diligently, and to the best of your ability. During the term of this Agreement,
you agree not to serve as an employee, officer, director or agent of any other
entity without the prior written consent of the Company, which consent will not
be unreasonably withheld.
2. As full compensation for all of your services (including services as
an officer within the JDR Group) during your employment hereunder, you shall
receive:
(a) Salary. You shall receive an initial base salary at the
rate of Three Hundred Fifty Thousand Dollars ($350,000.00) per annum, payable in
accordance with the Company's normal payroll practices. Your base salary shall
increase on each anniversary of the date hereof by the sum of five percent (5%)
and by such other amounts as may be determined in the discretion of the
Company's Board of Directors. The terms of this paragraph 2(a) shall survive the
expiration of the term of this
Agreement and shall be effective until your employment with the Company is
terminated.
(b) In addition to your salary as set forth in paragraph 2.a.,
during the term of this agreement, so long as you are employed by the Company,
you will also be entitled to a bonus pursuant to the terms set forth in Schedule
A attached hereto.
3. During the term of this Agreement, so long as you are employed by
the Company, the Company shall provide you with insurance and other reasonable
benefits and perquisites consistent with its regular policy, from time to time
in effect as determined by the Board of Directors including one Company leased
automobile, automobile insurance on that Company leased auto, a cellular
telephone, a reserved parking space (at the Ramsey, New Jersey office)and an
office reasonably appropriate to your position with the Company. In no event
shall the allowed amounts for the Company leased automobile be less than the
amounts set forth in Schedule B attached hereto.
4. During your employment hereunder, the Company will reimburse you for
reasonable travel and other expenses incident to your rendering of services
hereunder, in conformity with its regular policies from time to time in effect
regarding reimbursement of expenses. Payments to you for such expenses will be
made upon presentation of expense vouchers in such detail as the Company may
from time to time reasonably require.
5. (a) Your employment hereunder will commence on the date hereof and
shall end, unless renewed pursuant to paragraph 5(g), on the earliest of the
following dates: 1) June 1, 2001 (the Termination Date), 2) the date of your
death, 3) if you shall be unable to perform any substantial duties hereunder by
reason of physical or mental disability for a period of 120 consecutive days, or
a period of more than 180 days in the aggregate in any eighteen-month period,
the date on which the Company shall elect to terminate your employment, or 4)
the date on which the Company shall otherwise elect to terminate your
employment, which the Company may do with or without "cause". For purposes of
this paragraph 5, the Company shall have "cause" to terminate your employment on
the basis of: A) your breach or violation of paragraph 7 of this Agreement or
your material breach or violation of any other paragraph of this Agreement or
material breach of any other agreement between you and any member of the JDR
Group which could reasonably be expected to have a material adverse effect on
the Company or any other member of the JDR Group; B) your willful misconduct or
gross negligence in connection with the performance of your duties as an
employee, director, or officer of the JDR Group; C) an act by you of fraud or
misrepresentation or an act of misappropriation which results or is intended to
result in your personal enrichment at the expense of the JDR Group; D) your
conviction for any felony involving moral turpitude; or E) conduct by you having
or which could reasonably be expected to have a substantial and materially
adverse effect on the Company. If the Company decides to terminate your
employment due to your refusal to accept a relocation to an office more than 50
miles distant from your present office location, such termination shall not
constitute a termination for cause.
(b) If your employment is terminated by the Company without
cause (as defined in paragraph 5(a)) during the term of this Agreement, the
Company may elect to pay you, in consideration of the provisions of paragraph
7(a), three-quarters of your monthly salary each month for the shorter of (i)
one year (ii) the term remaining under this Agreement, at the rate in effect at
such time of termination, payable over such period in accordance with the
Company's normal payroll practices.
(c) If you elect to terminate your employment with the Company
after the expiration of the term of this Agreement, and you are not then a party
to any other written contract of employment with any member of the JDR Group,
the Company may elect to pay you, in consideration of the provisions of
paragraph 7(a) one-half of your then salary for up to one year from the date of
termination. Such payments would be made at 50% of your salary in effect at the
date of termination, payable for a period not to exceed up to one year in
accordance with the Company's normal payroll practices.
(d) If you elect to terminate your employment with the Company
prior to the third anniversary of the date of this Agreement, the Company may
elect to extend the eighteen (18) month period of restrictions set forth in
paragraph 7(a) by paying you one-half of your then salary for the number of
months (rounded to the closest whole month) in excess of 18 months, between the
date of your termination and June 1, 2001. Such payments would be made at 50% of
your salary in effect at the date of termination, payable in accordance with the
Company's normal payroll practices.
(e) If your employment is terminated by the Company without
cause or by reason of disability or death you shall be entitled to severance pay
equal to one-twelfth of your salary in effect at that time for each year or part
thereof of your employment with the Company after the date of this Agreement,
payable in accordance with the Company's normal payroll practices. Such
severance pay shall be in addition to any other compensation you may be entitled
to.
(f) If your employment is terminated by the Company for cause
(as defined in paragraph 5(a)), you shall not be entitled to any further
compensation under this Agreement, except for any accrued but unpaid salary.
(g) You and the Company shall have the right to request a
renewal of this Agreement on a year to year basis by notifying the other party
in writing of that request between January 1, 2001 and March 1, 2001. The party
receiving the notice shall have sixty (60) days in which to indicate their
written acceptance of a renewal. Each such extended term shall expire on June 1
of the following year unless a renewal for another one (1) year term is provided
to you between January 1 and March 1 of that following year.
6. The Company may in its discretion and for its benefit, insure you
against disability or death under policies which are payable to such persons as
the Company shall designate. You agree to cooperate in such physical
examinations and to supply such information as the Company may reasonably
require in connection with obtaining and continuing such insurance.
7. (a) During your employment with the Company or any other member of
the JDR Group and, in addition to the extent the Company elects to compensate
you pursuant to paragraphs 5(b), 5(c) or 5(d) as the case may be, for a period
of one year following the termination of your employment with the Company and
any other member of the JDR Group, you shall not, directly or indirectly, engage
or be interested (whether as owner, partner, consultant, employee, agent or
otherwise) in any business, activity, or enterprise which is competitive with
any aspect of the business being carried on by the Company or any other member
of the JDR Group, including without limitation, any business in the debt
collection services, telemarketing services, telecommunication brokerage and
telecommunication consulting businesses. In the event you elect to terminate
your employment prior to the third anniversary of the date of this Agreement the
restrictions of this paragraph shall continue for a period of eighteen (18)
months from the date of termination of your employment with the Company and any
other member of the JDR Group, plus the number of months that payments are made
to you by the Company in respect of salary pursuant to paragraph 5(d).
(b) In addition for a period of one year following the
termination of your employment with the Company and any other member of the JDR
Group or one year following the last payment to you pursuant to paragraphs 5(b)
or 5(c), whichever is later, you shall not, directly or indirectly: (i) employ
or otherwise engage or offer to employ or otherwise engage or solicit the
employment of any person who has been an employee, sales representative or agent
of the Company or any other member of the JDR Group at any time within the two
year period prior to such employment, engagement, offer, or solicitation; or
(ii) except on behalf of the Company, solicit any business related to the
business of the Company or any other member of the JDR Group from any person or
entity that has been a customer of the Company or any other member of the JDR
Group at any time during your employment by the
Company or any other member of the JDR Group.
(c) Unless required by law, you shall never use, divulge,
furnish or make accessible to any third person or organization, other than in
the regular course of the Company's business, any confidential or proprietary
information concerning the JDR Group or its businesses, including, without
limitation, confidential methods of operation and organization, marketing
techniques and plans, customer lists, computer software or financial
information.
(d) For purposes of this Agreement, confidential and
proprietary information concerning the JDR Group or its businesses, shall not
include information that can be shown to have been (i) in the public domain
through no act or fault of you or any other employee of the Company, or (ii)
acquired by you after the termination of your employment with the Company and
all other members of the JDR Group from other persons not under any
confidentiality obligation to the Company or any other member of the JDR Group
with respect thereto.
(e) You agree that inasmuch as your breach or attempted or
threatened breach of any material provision contained in this paragraph 7 would
result in immediate and irreparable injury to the Company or another member of
the JDR Group for which the Company and other members of the JDR Group will not
have an adequate remedy at law, the Company and the members of the JDR Group
shall be entitled, in addition to all other remedies, to a temporary and
permanent injunction and/or a decree for specific performance of the terms of
this paragraph 7, without the necessity of showing any actual damage or posting
bond or furnishing any other security.
(f) The provisions of this paragraph 7 shall survive the
termination or expiration of this Agreement or your employment, and are in
addition to and independent of any agreements or covenants contained in any
other agreement; provided, however, that if your employment is terminated by the
Company other than for cause or your disability (both as defined in paragraph
5(a)), the provisions of paragraph 7(a) shall terminate on the date of the last
payment made to you by the Company in respect of salary pursuant to paragraph
5(b). In the event you elect to terminate your employment with the Company,
after the expiration of the term of this Agreement and you are not then a party
to any other written contract of employment with any member of the JDR Group,
the provisions of paragraph 7(a) terminate on the date of the last payment to
you by the Company in respect of salary pursuant to paragraph 5(c).
8. You agree that all right, title and interest in and to (i) any
invention, design or development, whether patentable or not, (ii) all
copyrightable material and works of authorship and (iii) all proprietary
know-how, trade secrets information and related material or information, which
you first conceive or originate, either individually or jointly with others, and
which relate to and arose during your employment with the Company or any other
member of the JDR Group will be the property of the Company or the other member
of the JDR Group, as the case may be. You will promptly disclose all such
inventions, designs or developments to the Company and execute all papers
necessary to assist the Company in obtaining patents or any other form of
protection on such inventions, designs or developments, patentable or not, and
for assigning same to the Company. You further agree to assign and hereby do
assign to the Company all rights, title and interest in and to all inventions,
designs, and developments, patentable or not, copyrightable material, legally
protectable know-how, trade secrets and any works of authorship which relate to
and arose during your employment with the Company or any other member of the JDR
Group.
9. All notices, requests, demands and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given, made and received when delivered (personally, by courier
service such as FedEx, or by other messenger, by mail or by electronic facsimile
transmission), or three (3) days following the day when deposited in the United
States mails,
registered or certified mail, postage prepaid, return receipt requested,
addressed as set forth below:
If to the Company:
JDR Holdings, Inc.
Attn: CEO of JDR
000 Xxxxx Xxxxxxxx Xxxxxxxx
X.X. Xxx 000
Xxxxxx, XX 00000-0000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
with copies to:
Xxxx X. Xxxxxxxx, Esq.
Xxxxxxx, Xxxxxx & Xxxxx
00-00 Xxxxx Xxxx Xxxxxx
X.X. Xxx 000
Xxxxxxx, XX 00000-0000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
If to you:
Xx. Xxxxx X. D'Xxxx
Either party may change its or his address for the purpose of this paragraph by
written notice similarly given.
10. If any clause or provision of this Agreement shall be held to be
invalid or unenforceable, such clause or provision shall be construed or
enforced as if it had been more narrowly drawn so as not to be invalid or
unenforceable, and such invalidity or unenforceability shall not affect or
render invalid or unenforceable any other provisions of this Agreement.
11. This Agreement sets forth the parties' final and entire
understanding and supersedes and replaces any and all prior understandings, with
respect to your employment by the Company . This Agreement shall inure to the
benefit of and be binding upon the Company, its successors and assigns, and upon
you, your heirs, administrators and legal representatives, but no right or
obligation hereunder may be assigned or delegated, except by the Company to an
entity that succeeds to or acquires all or substantially all of the Company's
assets or business, whether by purchase, purchase of stock, merger,
consolidation or otherwise. No failure or delay by either party in exercising
any right, option, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise thereof preclude any other or
further exercise thereof, or the exercise of any other right, option, power or
privilege. This Agreement can only be changed, waived or terminated by a writing
signed by both you and the Company.
12. This Agreement shall be governed by the laws of the State of New
Jersey (excluding its rules as to conflicts of law).
13. Consent to Jurisdiction/Arbitration. (a) The parties irrevocably
submit to the
non-exclusive jurisdiction of any state or federal court sitting in New Jersey
over any suit, action or proceeding arising out of or relating to this
Agreement. To the fullest extent you may effectively do so under applicable law,
you irrevocably waive and agree not to assert, by way of motion, as a defense or
otherwise, any claim that you are not subject to the jurisdiction of any such
court, any objection that you may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such court and any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
(b) With the exception of the Company's right to injunctive or
equitable relief described in paragraph 7(e) above, any dispute, controversy or
claim arising out of or relating to this Agreement or the breach or alleged
breach of this Agreement shall be settled by arbitration in Bergen County, New
Jersey in accordance with the commercial arbitration rules, then obtaining, of
the American Arbitration Association, and judgment upon any such arbitration
award rendered by the arbitrators may be entered in any state or federal court
sitting in New Jersey. If the parties to any such dispute, controversy or claim
are unable to agree upon an arbitrator or arbitrators, then three arbitrators
shall be appointed by the American Arbitration Association, as it may determine,
in accordance with the commercial arbitration rules and practices, then
obtaining, of such Association. If the parties to any such dispute, controversy
or claim shall agree upon two arbitrators, but such parties or such arbitrators
shall be unable to agree upon a third arbitrator, then such third arbitrator
shall be appointed as aforesaid by the American Arbitration Association. Each of
the parties and the arbitrators shall use its best efforts to keep confidential
the existence of any dispute and arbitration proceedings and all information
relating thereto or submitted in connection therewith and, in the event of
judicial proceedings for the enforcement of this paragraph or any award pursuant
thereto, shall cooperate to seal the record of any such arbitration or judicial
proceedings.
(c) In the event judicial proceedings or arbitration proceedings are
commenced, the prevailing party shall be entitled to an award for its reasonable
legal fees and costs incurred in relation to such proceedings.
If the foregoing correctly sets forth your understanding of our agreement,
please so indicate by signing and returning to us a copy of this letter.
JDR HOLDINGS, INC.,
a Delaware Corporation
By: ___________________________________
Xxxxxx X. Xxxxx, Vice President
ACCEPTED AND AGREED TO:
------------------------------
Xxxxx X. D'Xxxx
SCHEDULE A
TO
EMPLOYMENT AGREEMENT BETWEEN
JDR HOLDINGS, INC.
AND
XXXXX X. D'XXXX
For each year of your employment hereunder in which the Company's
audited Adjusted EBITDA exceeds the amount from the prior year by ten percent
(10%), you will received a cash bonus of $150,000.00 for such year, payable
within thirty (30) days of the receipt by the Company of audited financial
statements for such year. In addition, for each year of your employment
hereunder in which the audited, Adjusted EBITDA exceeds the amount of the prior
year by fifty percent (50%), you will be entitled to an extraordinary bonus of
$75,000.00 or if the EBITDA growth is 60% in excess of the prior year you will
be entitled to an extraordinary bonus of $150,000.00.
Provided, however, that should your employment terminate during any
such year, your bonus for such year shall be calculated by multiplying the bonus
you would have received if this Agreement had not terminated during such year by
the ratio of the number of days in such year before this Agreement terminated to
the total number of days in such year; provided, further that should your
employment be terminated by you or terminated by the Company for cause (as
defined in paragraph 5(a)), you shall not receive a bonus for such year.
For the purposes of this Agreement, "Adjusted EBITDA" shall mean the
net income and all of its present subsidiaries, for the year determined in
accordance with generally accepted accounting principles but excluding (i)
interest on all debt, including capital leases; (ii) depreciation; (iii)
amortization: (iv) income taxes; (v) fees related to the Advanta Transaction;
(vi) the bonuses payable to you under this Agreement and Xxxx X. Xxxxxx, Xxxxxxx
X. Xxxxx, Xxxxxx X. Xxxxxxxx, Xxxxx X. Xxxxx, Xxxx X. Xxxxx, Xxxxxx X. Xxxxx,
Xxxxxx X. Xxxxx, and any other presently unallocated bonuses which may be
granted by the Board of Directors to you and other individuals listed above, and
any discretionary bonuses that the Board may elect, in its sole discretion, to
award you and the other individuals listed above; (vii) premiums on key man life
insurance policies for ________________; and (viii) excluding the affects of
extraordinary items and changes in accounting principles. It is understood and
agreed that the calculation of growth in Adjusted EBITDA may be further revised
to appropriately reflect the effects of non-operating non-reoccurring income and
acquisitions.
SCHEDULE B
TO
EMPLOYMENT AGREEMENT BETWEEN
JDR HOLDINGS, INC.
AND
XXXXX X. D'XXXX
The allowed amounts for an automobile leased for your use, by the
Company, or any subsidiary, will not be less than $2,107.00 monthly.