EXHIBIT 10.19
-------------
CONSULTING AGREEMENT
--------------------
This Agreement is made as of the 20th day of February, 1997 between
TeleSpectrum Worldwide Inc., a Delaware corporation (the "Company"), and Xxxxxxx
X. Xxxxxxxx (the "Senior Consultant").
RECITALS
--------
The Senior Consultant and the Company are currently parties to that certain
employment agreement dated as of August 13, 1996 (the "Employment Agreement").
The parties hereto desire to terminate all of their respective rights and
obligations under the Employment Agreement and enter into this Agreement with
such termination to be effective as of the date of this Agreement.
The Company desires to retain the Senior Consultant, and the Senior
Consultant desires to provide services to the Company, upon the terms and
conditions hereinafter set forth.
WITNESSETH:
----------
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. Consultancy.
-----------
(a) The Company hereby retains the Senior Consultant and the Senior
Consultant hereby accepts such retention as a senior business consultant to the
Company, reporting directly to the Chairman of the Board on such special
projects as may be mutually agreed, including but not limited to major account
relationships, acquisitions, and hiring and education of senior management
personnel.
(b) The Senior Consultant represents to the Company that he is not subject
or a party to any employment agreement, non-competition covenant, non-disclosure
agreement or any other agreement, covenant, understanding or restriction of any
nature which would prohibit the Senior Consultant from executing this Agreement
and performing fully his duties and responsibilities hereunder, or which would
in any manner, directly or indirectly, limit or affect the duties and
responsibilities which may now or in the future be assigned to the Senior
Consultant by the Company.
2. Performance.
-----------
The Senior Consultant's consulting duties as requested by the Company shall
not average more than 7 days per month during the term of the Agreement.
3. Term.
----
The term of this Agreement shall begin on the date hereof and shall
continue until December 31, 1999, unless terminated prior thereto in accordance
with Sections 5 or 6.
4. Compensation for Consultancy.
----------------------------
(a) The Senior Consultant shall be compensated at an annual rate of
$150,000 (such amount is referred to herein as the "Fees") for his services to
the Company during the Term, which the Company shall pay to the Senior
Consultant on a monthly basis, and reimbursement, in accordance with the
Company's policies, upon proper accounting, of reasonable expenses and
disbursements incurred by the Senior Consultant in the course of his duties
("Reimbursements"). During the term of this Agreement, the Senior Consultant
shall not be entitled to receive any directors' fees from the Company on account
of his service as a director of the Company other than reimbursement of
expenses.
(b) The Company shall provide the Senior Consultant with insurance coverage
as provided in Exhibit A attached hereto.
(c) Through December 31, 1997, the Company shall provide the Senior
Consultant the office space currently used by the Senior Consultant in
Cambridge, MA and allow the Senior Consultant to utilize the services of the
support staff of the Company located at such office as needed.
5. Termination Without Compensation.
--------------------------------
(a) Total Disability. If the Senior Consultant becomes totally disabled
----------------
(as defined below), the Company may terminate the Term by notice to the Senior
Consultant, and as of the termination date, the Company shall have no further
liability or obligation to the Senior Consultant hereunder, except that the
Senior Consultant shall receive any unpaid Fees and Reimbursements that have
accrued through the date of termination. For the purposes hereof, the Senior
Consultant shall be deemed to be "totally disabled" if the Senior Consultant is
considered totally disabled under any group disability plan maintained by the
Company and in effect at that time, or in the absence of any such plan, under
applicable Social Security regulations. In the event of any dispute under this
Section 5(a), the Senior Consultant shall submit to a physical examination by a
licensed physician mutually satisfactory to the Company and the Senior
Consultant, the cost of such examination to be paid by the Company, and the
determination of such physician shall be determinative.
(b) Death. If the Senior Consultant dies, this Agreement shall terminate
-----
on the date of death, and thereafter the Company shall not have any further
liability or obligation to the Senior Consultant, his executors, administrators,
heirs, assigns or any other person claiming under or
-2-
through his estate, except that the Senior Consultant's estate shall receive any
unpaid Fees and Reimbursements that have accrued through the date of
termination.
(d) Cause. The Company may terminate the Term for "cause" by giving the
-----
Senior Consultant 30 days notice of the termination date, and as of the
termination date, the Company shall not have any further liability or obligation
to the Senior Consultant, except that the Senior Consultant shall receive any
unpaid Fees and Reimbursements that have accrued through the date of
termination, net of any liabilities that the Senior Consultant may have to the
Company. For purposes of this Agreement, "cause" shall mean the failure of the
Senior Consultant to observe or perform (other than by reason of illness, injury
or incapacity) any of the material terms or provisions of this Agreement,
conviction of a felony or other crime involving moral turpitude, or habitual
insobriety.
6. Termination With Compensation. The Company shall have the right to
-----------------------------
terminate the Term without cause at any time by giving the Senior Consultant 30
days' notice of the termination date. Under such circumstances, the Company
shall continue to pay to the Senior Consultant the Fees and provide the Fringe
Benefits listed in paragraph (a) on Exhibit A through December 31, 1999, and as
of the termination date, the Company shall not have any further liability or
obligation to the Senior Consultant. The Fees to be paid and Fringe Benefits to
be provided under this Section 6 are referred to herein as the "Termination
Compensation." The Senior Consultant shall not be entitled to any Termination
Compensation unless the Senior Consultant executes and delivers to the Company
after a notice of termination a release in a form satisfactory to the Company in
its sole discretion by which the Senior Consultant releases the Company from any
obligations and liabilities of any type whatsoever, except for the Company's
obligations with respect to the Termination Compensation. The parties hereto
acknowledge that the Termination Compensation to be provided under this Section
6 is to be provided in consideration for the above-specified release.
7. Agreement Not to Compete.
------------------------
(a) The Senior Consultant covenants that for the period beginning on
the termination of Senior Consultant's engagement hereunder and ending on the
second anniversary of the date of such termination of the consultancy hereunder
(the "Restricted Period"), he will not, directly or indirectly, own, manage,
operate, join, control, finance or participate in the ownership, management,
operation, control or financing of, or be connected as a partner, principal,
agent, representative, consultant or otherwise with or use or permit his name to
be used in connection with, any business or enterprise engaged directly or
indirectly in competition with the business conducted by the Company prior to
the time the Senior Consultant assumed his consulting capacity hereunder with
any portion of the United States in the direct marketing business which includes
inbound and outbound telemarketing, fulfillment, direct mail, customer retention
and market research (the "Business"). Notwithstanding the foregoing, the Senior
Consultant may be involved in a business which performs such services internally
and which services are merely ancillary to the sale and marketing of the
products produced or services provided by such business. It is recognized by
the
-3-
Senior Consultant and the Company that the Business is and is expected to
continue to be conducted throughout the United States and that more narrow
geographical limitations of any nature on this non-competition covenant (and the
non-solicitation covenant set forth in Section 7(b)) are therefore not
appropriate. The foregoing restriction shall not be construed to prohibit the
ownership by Senior Consultant as a passive investment of not more than five
percent (5%) of any class of securities of any corporation which is engaged in
any of the foregoing businesses having a class of securities registered pursuant
to the Securities Exchange Act of 1934.
(b) The Senior Consultant further covenants that during the Restricted
Period, he will not, either directly or indirectly, (i) call on or solicit any
person who or which has been a customer of the Company with respect to the
activities prohibited by Section 7(a) or (ii) solicit the employment of any
person who is employed by the Company during such period on a full or part-time
basis.
(c) The Senior Consultant recognizes and acknowledges that by reason
of his ownership of and engagement by the Company he has had access to
Confidential Information relating to the Business. The Senior Consultant
acknowledges that such Confidential Information is a valuable and unique asset
and covenants that he will not disclose any such Confidential Information after
the date hereof to any person for any reason whatsoever, unless such information
(i) is in the public domain through no wrongful act of Senior Consultant, (ii)
has been rightfully received from a third party without restriction and without
breach of this Agreement or (iii) except as may be required by law.
(d) The Senior Consultant acknowledges that the restrictions contained
in this Section 7 are reasonable and necessary to protect the legitimate
interests of the Company, and that any violation will result in irreparable
injury to the Company.
(e) The Senior Consultant agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as an equitable accounting of all earnings, profits and
other benefits arising from any violation of this Section 7, which rights shall
be cumulative and in addition to any other rights or remedies to which the
Company may be entitled. In the event that any of the provisions of this
Section 7 should ever be adjudicated to exceed the time, geographic, product or
service, or other limitations permitted by applicable law in any jurisdiction,
then such provisions shall be deemed reformed in such jurisdiction to the
maximum time, geographic, product or service, or other limitations permitted by
applicable law.
(f) Except for the second sentence of Section 7(a) above, the
covenants set forth in this Section 7 shall be in addition to and not in
limitation of any similar covenants set forth in the Asset Purchase Agreement by
and among the Company, CRW Financial, Inc., NBG Services, Inc., Xxxxxxx X.
Xxxxxxx and the Senior Consultant dated as of May 3, 1996 and amended and
restated on
-4-
May 21, 1996. The second sentence of Section 7(a) above shall be deemed to
modify the covenant set forth in Section 8.7(a) of the Purchase Agreement.
8. Inventions, Designs and Product Developments.
--------------------------------------------
All inventions, innovations, designs, ideas and product developments,
developed or conceived by the Senior Consultant, solely or jointly with others,
whether or not patentable or copyrightable, at any time during the Term or
during his employment by NBG Services, Inc. and RG Associates, Inc. prior to the
commencement of the Term and that relate to the actual or planned business
activities of the Company (collectively, the "Developments") and all of the
Senior Consultant's right, title and interest therein, shall be the exclusive
property of the Company. The Senior Consultant hereby assigns, transfers and
conveys to the Company all of his right, title and interest in and to any and
all such Developments. The Senior Consultant shall disclose fully, as soon as
practicable and in writing, all Developments to the Board. At any time and from
time to time, upon the request of the Company, the Senior Consultant shall
execute and deliver to the Company any and all instruments, documents and
papers, give evidence and do any and all other acts that, in the opinion of
counsel for the Company, are or may be necessary or desirable to document such
transfer or to enable the Company to file and prosecute applications for and to
acquire, maintain and enforce any and all patents, trademark registrations or
copyrights under United States or foreign law with respect to any such
Developments or to obtain any extension, validation, re-issue, continuance or
renewal of any such patent, trademark or copyright. The Company will be
responsible for the preparation of any such instruments, documents and papers
and for the prosecution of any such proceedings and will reimburse the Senior
Consultant for all reasonable expenses incurred by his in compliance with the
provisions of this Section 8.
9. Confidential Information.
------------------------
(a) The Senior Consultant has had and will have possession of or
access to confidential information relating to the business of the Company,
including writings, equipment, processes, drawings, reports, manuals, invention
records, financial information, business plans, customer lists, the identity of
or other facts relating to prospective customers, inventory lists, arrangements
with suppliers and customers, computer programs, or other material embodying
trade secrets, customer or product information or technical or business
information of the Company. All such information, other than any information
that is in the public domain through no act or omission of the Senior Consultant
or which he is authorized to disclose, is referred to collectively as the
"Company Information." During and after the Term, the Senior Consultant shall
not (i) use or exploit in any manner the Company Information for himself or any
person, partnership, association, corporation or other entity other than the
Company, (ii) remove any Company Information, or any reproduction thereof, from
the possession or control of the Company or (iii) treat Company Information
otherwise than in a confidential manner.
-5-
(b) All Company Information developed, created or maintained by the
Senior Consultant, alone or with others while employed by the Company, and all
Company Information maintained by the Senior Consultant thereafter, shall remain
at all times the exclusive property of the Company. The Senior Consultant shall
return to the Company all Company Information, and reproductions thereof,
whether prepared by his or others, that are in his possession immediately upon
request and in any event upon the completion of his engagement by the Company.
10. Remedies.
--------
The Senior Consultant expressly acknowledges that the remedy at law for any
breach of Sections 7, 8 and 9 will be inadequate and that upon any such breach
or threatened breach, the Company shall be entitled as a matter of right to
injunctive relief in any court of competent jurisdiction, in equity or
otherwise, and to enforce the specific performance of the Senior Consultant's
obligations under these provisions without the necessity of proving the actual
damage to the Company or the inadequacy of a legal remedy. Subject to the
remainder of this Section 10, the rights conferred upon the Company by the
preceding sentence shall not be exclusive of, but shall be in addition to, any
other rights or remedies which the Company may have at law, in equity or
otherwise.
11. General.
-------
(a) Governing Law. The terms of this Agreement shall be governed by
-------------
the laws of the Commonwealth of Pennsylvania.
(b) Company. For purposes of Sections 7, 8, 9 and 10, the term
-------
"Company" shall be deemed to include any incorporated or unincorporated entities
that are controlled, directly or indirectly, by the Company through ownership,
agreement or otherwise.
(c) Binding Effect. All of the terms and provisions of this Agreement
--------------
shall be binding upon and inure to the benefit and be enforceable by the
respective heirs, representatives, successors (including any successor as a
result of a merger or similar reorganization) and assigns of the parties hereto,
except that the duties and responsibilities of the Senior Consultant hereunder
are of a personal nature and shall not be assignable in whole or in part by the
Senior Consultant.
(d) Notices. All notices required to be given under this Agreement
-------
shall be in writing and shall be deemed to have been given when personally
delivered or when mailed by registered or certified mail, postage prepaid,
return receipt requested, or when sent by Federal Express or other overnight
delivery service, addressed as follows:
-6-
TO SENIOR CONSULTANT:
Xx. Xxxxxxx X. Xxxxxxxx
00 Xxxxxxxx Xxxxx
Xxxxx, XX 00000
with a copy to:
Abrams, Roberts, Klickstein & Levy LLP
Counsellors at Law
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxxxx, Esq.
TO THE COMPANY:
TeleSpectrum Worldwide Inc.
000 X. Xxxxx Xxxx
Xxxx xx Xxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Chairman of the Board
With a copy to:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Fax: 000-000-0000
Attn: Xxxxxxx X. Xxxxxxx, Esquire
(e) Entire Agreement; Modification; Termination of Employment
---------------------------------------------------------
Agreement 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. The Employment Agreement is
hereby terminated as of the date of this Agreement without the necessity of any
further action by any party thereto.
(f) Status of Stock Options. Notwithstanding the Senior Consultant
-----------------------
retirement from employment with the Company and the termination of the
Employment Agreement, the Company hereby confirms that the term Employee, as
used in that certain Grant Letter dated as February 1997, also includes
consultants and directors of the Company. Accordingly, Section 2(e)
-7-
of such Grant Letter has not been triggered by the Senior Consultant's
retirement from employment with the Company.
(g) Duration. Notwithstanding the termination of the Term and of the
--------
Senior Consultant's engagement by the Company, this Agreement shall continue to
bind the parties for so long as any obligations remain under the terms of this
Agreement.
(h) Waiver. No waiver of any breach of this Agreement shall be
------
construed to be a waiver as to succeeding breaches.
(i) Severability. If any provision of this Agreement or application
-------------
thereof to anyone under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provisions or applications of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto duly executed this Agreement as of the day and year first written
above.
TELESPECTRUM WORLDWIDE INC.
By:__________________________
President
_____________________________
XXXXXXX X. XXXXXXXX
-8-
EXHIBIT A
FRINGE BENEFITS
---------------
At the Company's expense health insurance for the Senior Consultant and the
Senior Consultant's spouse, with the same benefits generally provided to the
Company's most senior executive employees from time to time during the Term.
