EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of the _____ day of _____________ 1996,
between NCO FINANCIAL SYSTEMS, INC., a Pennsylvania corporation with its
principal offices at 0000 Xxxxxx Xxxx, Xxxx Xxxx, XX 00000 (the "Company") and
XXXXXXX XXXXXXX, an individual, residing at 000 Xxxxx Xxxx, Xxxx Xxxx, XX 00000,
(the "Executive").
In consideration of their mutual promises and covenants set forth
herein, and intending to be legally bound hereby, the Company and the Executive
agree as follows:
1. Employment. The Company hereby employs the Executive and
the Executive accepts such employment on the terms and conditions
hereinafter set forth.
2. Term. The term of this Agreement shall be for a period
of five (5) years commencing on the date hereof (the "Term").
3. Duties. The Executive is engaged hereunder as the
Company's President and Chief Executive Officer. During the Term
the Executive shall devote his full business time to the operations
of the Company and shall perform duties customarily incident to
such offices and all other duties the Board of Directors of the
Company may from time to time assign to him.
4. Compensation; Benefits; and Expenses.
(a) Compensation. In addition to the items set forth below,
the Executive's compensation for the services to be provided by him pursuant to
this Agreement is set forth on the attached Exhibit "A".
(b) Benefits. The Executive shall be entitled to participate
in all insurance, vacation and other fringe benefit programs of the Company to
the extent and on the same terms and conditions as are accorded to other
executive employees of the Company. In addition, the Executive shall be entitled
to such other benefits as may be commensurate with his status as President and
Chief Executive Officer of the Company. Furthermore, the Executive shall receive
a car leased by the Company, to the Executive's reasonable satisfaction and the
Company shall make available, from time-to-time and as needed, as the Executive,
in
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his sole discretion may determine, a four (4) wheel drive vehicle, selected by
the Executive.
(c) Business Expenses. The Company will pay, or reimburse the
Executive for, all ordinary and reasonable out-of-pocket business expenses
incurred by the Executive in connection with his performance of services
hereunder during the employment term in accordance with the Company's expense
authorization and approval procedures then in effect upon presentation to the
Company of an itemized account and written proof of such expenses. All expenses
related to the operation of the Executive's cars shall be covered by the
Company.
(d) Entire Compensation. The compensation provided for
in this Agreement is in full payment of the services to be rendered
by the Executive to the Company hereunder.
5. Insurance. The Company, in its sole discretion and at its own
expense, may apply for and procure in its own name and for its own benefit or
the benefit of the Executive key man or buy-sell life insurance on the life of
the Executive in any amount or amounts considered advisable by the Company, and
the Executive shall submit to any medical or other examination and execute and
deliver such application or other instrument as may be reasonably necessary to
effectuate such insurance. The Company shall also have the right to assume any
insurance policies of the Executive in existence at the time employment
hereunder commences. At such time as the Executive's employment is terminated or
if the Executive ceases to be a shareholder in the Company, the Executive shall
have the right to purchase from the Company any insurance policies at such
policy's cash surrender value, owned in whole or in part by the Company on the
life or health of the Executive.
6. Death or Total Disability of the Executive.
(a) Death. In the event of the death of the Executive during
the Term of this Agreement or any extension thereof, compensation payments shall
continue in accordance with the provisions of paragraph 8 of this Agreement.
(b) Total Disability. In the event of the Total Disability (as
that term is hereinafter defined) of the Executive, the Company shall have the
right to terminate the Executive's employment hereunder by giving the Executive
thirty (30) days'
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written notice thereof. The foregoing notwithstanding, compensation payments
shall continue in accordance with the provisions of paragraph 8 of this
Agreement, provided that if the Executive, during any period of disability,
including after termination of this Agreement, receives any periodic payments
representing lost compensation under any health and accident policy or under any
salary continuation insurance policy, the premiums for which have been paid by
the Company, the amount of the Base Salary that the Executive would be entitled
to receive from the Company shall be decreased by the amounts of such payments.
The term "Total Disability," when used herein, shall mean a
mental, emotional or physical condition which rendered the Executive for a
period of twelve (12) consecutive months, during the Term of this Agreement,
unable or incompetent to carry out, on a substantially full-time basis, the job
responsibilities he held or tasks that he was assigned at the time the
disability was incurred. The Executive agrees, in the event of any dispute as to
the determination made pursuant to this paragraph, to submit to a physical or
other examination by a licensed physician selected by the Company, the cost of
which examination shall be paid by the Company.
7. Termination of Employment. In addition to termination pursuant to
paragraph 6 above, the Company, following prior written notice to the Employee,
may discharge the Employee and thereby terminate his employment hereunder for
the following reasons: (a) ("for cause") (i) habitual intoxication; (ii) refusal
to submit to treatment of an existing drug addiction; (iii) conviction of a
felony; (iv) willful misconduct by the Employee in connection with the
performance of his duties; (v) dishonesty, fraud or misappropriation of funds
of the Company; (vi) insubordination or refusal to comply with a lawful
directive of the Chief Executive Officer of the Company or his designee; or
(vii) the Employee's breach of this Agreement in any manner or respect which is
committed in bad faith and without reasonable belief that such action is in the
best interest of the Company.
8. Payment Upon Termination. If the Employee dies during the Term, or
if this Agreement is terminated by the Company for any reason other than the
causes set forth in paragraph 7 hereof, the Company shall continue to pay the
Employee's full compensation, including bonuses, for the balance of the Term.
Such compensation shall be paid to the Employee, or his widow, or, if she is not
then living, to the Employee's estate. If the Employee is terminated for any
reason set forth in Section 7 hereof or if the Employee voluntarily terminates
his employment, he shall receive no further compensation except such amounts as
shall have accrued as of the date of termination.
9. Non-Disclosure. The Executive recognizes and acknowledges that he
will have access to certain confidential information of the Company and that
such information constitutes valuable, special and unique property of the
Company. The Executive agrees that he will not, for any reason or purpose
whatsoever, during or after the term of his employment, disclose any of such
confidential information to any party without express authorization of the
Company, except as necessary in the ordinary course of performing his duties
hereunder.
10. Noncompetition. The Executive agrees that during the
term of this Agreement and any extension thereof, and for a period
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of two (2) years after the Company ceases to pay the Executive any compensation
pursuant to the terms of this Agreement, the Executive shall not, unless acting
pursuant hereto or with the prior written consent of the Board of Directors of
the Company, directly or indirectly:
(a) solicit business from or perform services for, any person,
company or other entity which at any time during the Executive's employment by
the Company is a client or customer of the Company if such business or services
are of the same general character as those engaged in or performed by the
Company;
(b) solicit for employment or in any other fashion hire
any of the employees of the Company;
(c) own, manage, operate, finance, join, control or
participate in the ownership, management, operation, financing or control of, or
be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with any business or enterprise engaged
in the business of debt collection or any other business engaged in by the
Company or any of its affiliates in all those geographic areas in which the
Company or any of its affiliates does business;
(d) use or permit his name to be used in connection with any
business or enterprise engaged in the business of debt collection or any other
business engaged in by the Company or any of its affiliates in all those
geographic area in which the Company or any of its affiliates does business; or
(e) use the name of the Company or any name similar thereto,
but nothing in this clause shall be deemed, by implication, to authorize or
permit use of such name after expiration of the period covered by this
paragraph.
In the event that any provisions of this paragraph should ever be adjudicated to
exceed the time, geographic, service or product limitations permitted by
applicable law in any jurisdiction, then such provisions shall be deemed
reformed in such jurisdiction to the maximum time, geographic, service or
product limitations permitted to applicable law.
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11. Equitable Relief; Survival.
(a) The Executive acknowledges that the restrictions contained
in paragraphs 9 and 10 hereof are, in view of the nature of the business of the
Company, reasonable and necessary to protect the legitimate interests of the
Company, and that any violation of any provisions of those paragraph will result
in irreparable injury to the Company. The Executive also acknowledges that the
Company shall be entitled to temporary and permanent injunctive relief, without
the necessity of proving actual damages, and to an equitable accounting of all
earnings, profits and other benefits arising from any such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which the Company may be entitled. In the event of any such violation, the
Company shall be entitled to commence and action for temporary and permanent
injunctive relief and other equitable relief in any court of competent
jurisdictions and Executive further irrevocably submits to the jurisdiction of
any Pennsylvania court of Federal court sitting in the Eastern District of
Pennsylvania over any suit, action or proceeding arising out of or relating to
paragraphs 9 or 10. The Executive hereby waives, to the fullest extent permitted
by law, any objection that he may now or hereafter have to such jurisdiction or
to the venue of any such suit, action or proceeding brought in such a court and
any claim that such suit, action or proceeding has been brought in any
inconvenient forum. Effective service of process may be made upon the Executive
by mail under the notice provisions contained in paragraph 14 hereof.
(b) Survival of Covenants. The provisions of paragraphs
8, 9 and 10 shall survive the termination of this Agreement.
12. Remedies Cumulative; No Waiver. No remedy conferred upon the
Company by this Employment Agreement is intended to be exclusive of any other
remedy, and each and every such remedy shall be cumulative and shall be in
addition to any other remedy given hereunder or now or hereafter existing at law
or in equity. No delay or omission by the Company in exercising any right,
remedy or power hereunder or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by the
Company from time to time and as often as may be deemed expedient or necessary
by the Company in its sole discretion.
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13. Enforceability. If any provision of this Agreement shall be invalid
or unenforceable, in whole or in part, then such provision shall be deemed to be
modified or restricted to the extent and in the manner necessary to render the
same valid and enforceable, or shall be deemed excised from this Agreement, as
the case may require, and this Agreement shall be construed and enforced to the
maximum extent permitted by law, as if such provision had been originally
incorporated herein as so modified or restricted, or as if such provision had
not been originally incorporated herein, as the case may be.
14. Notices. All notices, request, demands, claims and other
communications hereunder will be in writing. Any notices, requests, demands,
claims or communications hereunder shall be deemed fully given if such are sent
by registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to the Company: 0000 Xxxxxx Xxxx
Xxxx Xxxx, XX 00000
with copy to: Xxxxxx Xxxxxx, Esquire
000 X. Xxxxx Xx., 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000
If to the Executive: 000 Xxxxx Xxxx
Xxxx Xxxx, XX 00000
Any party hereto may give any notice, request, demand, claim or other
communication hereunder using any other means (including personal delivery,
expedited courier, messenger service, telecopy, facsimile, telex, ordinary mail,
or electronic mail), but no such notice, request, demand, claim, or other
communication shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party hereto
may change the address to which notices, requests, demands, claims, and other
communications hereunder are to be delivered by giving the other parties hereto
notice in the manner herein set forth.
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15. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws (and not the law of
conflicts) of the Commonwealth of Pennsylvania.
16. Indemnification: The Company shall indemnify the Executive and hold
him harmless for all acts or decisions made by him in good faith while
performing services for the Company. The Company shall pay all expenses
including attorney's fees, actually and necessarily incurred by the Executive in
connection with the defense of any act, suit or proceeding and in connection
with any related appeal including the cost of court settlements.
17. Contents of Agreement; Amendment and Assignment. This Agreement
sets forth the entire understanding between the parties hereto with respect to
the subject matter hereof and supersedes and is instead of all other employment
arrangement between the Executive and the Company. This agreement cannot be
changed, modified or terminated except upon written amendment duly executed by
the parties hereto. All of the terms and provisions of this Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
heirs, representatives, successors and assigns of the parties hereto, except
that the duties and
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responsibilities of the Executive hereunder are of a personal nature and shall
not be assignable in whole or in part by the Executive.
IN WITNESS WHEREOF, this Agreement has been executed by the parties on
the date first above written.
Attest: NCO Financial Systems, Inc.
______________________[SEAL] BY:
-----------------------------
Xxxxxxx X. Xxxxx, Xx.
Executive Vice President
Witness: The Executive:
--------------------------- -----------------------------
Xxxxxxx Xxxxxxx
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EXHIBIT "A"
COMPENSATION
A. Base Salary: The Executive shall be paid a base salary of Two
Hundred Seventy Five Thousand Dollars ($275,000) per year (the
"Base Salary"), to be adjusted each year in accordance with
the Consumer Price Index ("CPI") in effect for such year,
payable in installments, in arrears, in accordance with the
Company's regular payroll practices, but not less often than
monthly.
B. Bonus: In addition to the Base Salary, the Executive shall be
entitled to receive an annual bonus as follows:
(a) $50,000 if the Company reaches it performance goals
as reasonably determined by its Board of Directors; or
(b) $100,000 if the Company achieves a twenty percent (20%)
growth in its "net income" (adjusted for dilution) (as
indicated in the Company's annual financial statements) over
the previous year; and
(c) An amount equal to five percent (5%) of the increased net
income of the Company, in excess of twenty percent (20%) as
determined in (b) above.
C. Stock Option Plan: The Executive shall participate in such
Stock Option Plan or Plans as shall be determined by the
Company's Board of Directors.
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