Exhibit 10.8
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made this 3rd day of
September, 1996, by Xxxxxx Communications, L. P., a Delaware limited partnership
with its principal place of business at 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx
00000 (the "Partnership"); Xxxxxx Communications, Inc., a Delaware corporation,
having the same principal place of business and having been formed to succeed to
the businesses of the Partnership by becoming a holding company of the
Partnership (the "Corporation"); and Xxxx Xxxxxxx residing at 0000 Xxxxx 00xx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000 (the "Employee"). The Partnership and the
Corporation shall be referred to herein as the "Employer."
WHEREAS, the parties wish to set forth the terms and conditions upon which
the Employer will employ the Employee;
NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
agree as follows:
1. Term of Employment -- Severance.
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The Employer hereby employs the Employee, and the Employee hereby accepts
employment with the Employer, upon the terms set forth in this Agreement. The
Employee is an employee "at will" and may be terminated by the Employer at any
time with or without cause.
If the Employee is terminated by the Employer with or without cause prior
to the fourth anniversary of the consummation of the initial public offering of
shares of common stock of Xxxxxx Communications, Inc. (the "IPO"), the Employee
shall receive from the Employer within ten (10) business days of the date of his
termination a severance payment equal to $350,000.00. If the Employee
voluntarily terminates his employment with the Employer, no such severance
payment shall be paid.
2. Title; Duties.
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The Employee shall serve as the Chief Financial Officer during the term
of his employment under this Agreement. The Employee shall report to the Chief
Executive Officer of the Employer, the most senior executive of the Employer,
who shall have the authority to direct, control and supervise the activities of
the Employee. The Employee shall perform such services consistent with his
position as may be assigned to him from time to time by such person. Promptly
following the execution of this Employment Agreement, the Employee shall be
elected as a director of the Board of Directors of the Corporation.
3. Extent of Services.
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The Employee agrees to devote his entire business time and attention to
the performance of his duties under this Agreement. He shall perform his duties
to the best of his ability and shall use his best efforts to further the
interests of the Employer. The Employee shall work at the principal office of
the Employer located in the Washington, D.C. metropolitan area. The Employee
represents and
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warrants to the Employer that he is able to enter into this Agreement and that
his ability to enter into this Agreement is not limited to or restricted by any
agreements or understandings between the Employee and any other person,
including, but not limited to, Xxxxxx Xxxxxxxx LLP. For the purposes of this
Agreement, the term "person" means any natural person, corporation, partnership,
limited liability partnership, limited liability company, or any other entity of
any nature.
4. Base Salary.
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The Employer shall pay the Employee a base annual salary of $300,000.00.
The salary shall be payable in biweekly installments of $11,546.15, minus such
deductions as may be required by law or reasonably requested by the Employee.
The Employer will review the Employee's base salary no less often than annually
in conjunction with its regular review of executive salaries.
5. Bonus.
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The Employee shall be eligible for an annual bonus of $50,000.00 based on
the Employee's success in reaching or exceeding certain performance objectives
as established in advance by the Compensation Committee.
6. Stock Options.
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On the date that the IPO of the Corporation is consummated, the Employee
shall be granted by the Corporation two nonqualified stock options for the
purchase of 200,000 shares and 200,000 shares, respectively, for an aggregate
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of 400,000 shares of the common stock of the Corporation each with an exercise
price equal to the initial public offering price of the common stock of the
Corporation. The stock option agreement for an award of 200,000 shares shall
provide that the option is fully vested from the date of grant, shall become
exercisable six (6) months from the date of grant, and shall provide that the
option shall remain exercisable through the fourth anniversary of the date of
grant, whether or not Employee's employment with the Employer continues.
Accordingly, such option shall remain exercisable through such fourth
anniversary even if Employee voluntarily terminates his employment with the
Employer or is terminated by the Employer with or without cause. Following such
fourth anniversary, if the Employee continues to be employed by the Employer,
such stock option shall remain exercisable through, and shall terminate on, the
earlier of ninety (90) days following the Employee's termination of employment
or the tenth anniversary of the date of grant.
The stock option agreement for the grant of the second 200,000 shares
shall provide that the option shall vest at the rate of twenty-five percent
(25%) per year on each anniversary date of the consummation of the IPO of the
Corporation such that the stock option shall be fully vested on the fourth
anniversary of such date, provided that the Employee continues to be employed by
the Employer. Such stock option shall terminate on the earlier of ninety (90)
days following the Employee's termination of employment or the tenth anniversary
of the date of grant.
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Both stock options also shall provide that the option shall become fully
vested and exercisable in the event of the Employee's death or disability while
employed by the Employer.
The Employer shall register the common stock that may be acquired upon
exercise of the options on Form S-8 no later than thirty (30) days following the
initial public offering of the common stock of the Employer. The stock options
shall be issued under a stock option plan that complies with the provisions of
Rule 16b-3 of the Securities and Exchange Commission. The stock option
agreements may contain such other and further terms as are not inconsistent with
this Agreement or the stock option plan. If for any reason the initial public
offering of shares of the common stock of Xxxxxx Communications, Inc. is not
consummated, the Employer shall not be obligated to grant, and the Employee
shall not be entitled to receive, any stock options.
7. Fringe Benefits.
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The Employee shall be entitled to all benefits generally available to
employees of the Employer. The Employer shall pay for one parking space permit
for the Employee.
The Employee shall be entitled to three (3) weeks of vacation during each
year of employment. Such vacation shall be taken at such times as the Employee
and the Chief Executive Officer of the Employer shall agree. The
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Employee shall be entitled to sick leave and holidays in accordance with the
policy of the Employer as to its executive employees.
8. Reimbursement of Business Expenses.
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The Employer shall reimburse the Employee for all reasonable out-of-
pocket costs incurred or paid by the Employee in connection with, or related to,
the performance of his duties, responsibilities or services under this
Agreement, upon presentation by the Employee of documentation, expense
statements, vouchers, and/or such other supporting information as the Employer
may reasonably request
9. Automobile Allowance.
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The Employee shall receive an automobile allowance of $450.00 per month
which shall be paid with and in addition to the Employee's base salary. The
Employee shall not be required to account for the Employee's use of such
allowance.
10. Non-Solicitation and Non-Competition.
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(a) Except as provided in paragraph (e) below, the Employee agrees that
while the Employee is employed pursuant to this Agreement and for a period of
eighteen (18) months following termination of the Employee's employment by the
Employer for any reason (the "Non-Competition Period"), whether by action of the
Employee or the Employer, the Employee will not, except as otherwise provided
herein, engage or participate, directly or indirectly, as principal, agent,
employee,
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employer, consultant, stockholder, partner or in any other individual capacity
whatsoever, in the conduct or management of, or own any stock or any other
equity investment in or debt of, any business which is competitive with any
business conducted by the Employer.
For the purpose of this Agreement, a business shall be considered to be
competitive with the business of the Employer if such business is engaged in
providing outsourced marketing services for clients utilizing a range of
complementary marketing resources including field sales, teleservices
capabilities, sponsored wallboard information displays and product sampling (or
any other business in which the Employer is engaged at the time of termination
of the Employee's employment).
(b) Non-Solicitation of Employees. During the Non-Competition Period, the
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Employee will not (for his/her own benefit or for the benefit of any person or
entity other than the Employer) solicit, or assist any person or entity other
than the Employer to solicit, any officer, director, executive or employee of
the Employer to leave his/her employment.
c) Non-Solicitation of Customers. During the Non-Competition Period, the
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Employee will not solicit, or assist any person or entity other than the
Employer to solicit, any person or entity that is a client of the Employer, or
has been a client of the Employer during the prior twelve months, to purchase
outsourced
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marketing services (or any other products or services the Employer provides to a
client).
(d) Reasonableness. The Employee acknowledges that (i) the markets served
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by the Employer are national in scope and are not dependent on the geographic
location of the executive personnel or the businesses by which they are
employed; and (ii) the above covenants are manifestly reasonable on their face,
and the parties expressly agree that such restrictions have been designed to be
reasonable and no greater than is required for the protection of the Employer.
(e) Investment. Nothing in this Agreement shall be deemed to prohibit the
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Employee from owning equity or debt investments in any corporation, partnership
or other entity which is competitive with the Employer, provided that such
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investments (i) are passive investments and constitute five percent (5%)
or less of the outstanding equity securities of such an entity the equity
securities of which are traded on a national securities exchange or other public
market, or (ii) are approved by the Employer.
11. Confidential Information.
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(a) The Employee shall not (for his own benefit or the benefit of any
person or entity other than the Employer) use or disclose any of the Employer's
trade secrets or other confidential information. The term "trade secrets or
other confidential information" includes, by way of example, matters of a
technical nature, "know-how", computer programs (including documentation of such
programs),
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research projects, and matters of a business nature, such as proprietary
information about costs, profits, markets, sales, lists of customers, and other
information of a similar nature to the extent not available to the public, and
plans for future development. After termination of this Agreement, the Employee
shall not use or disclose trade secrets or other confidential information unless
such information becomes a part of the public domain other than through a breach
of this Agreement or is disclosed to the Employee by a third party who is
entitled to receive and disclose such information.
(b) Upon the effective date of notice of the Employee's or the Employer's
election to terminate this Agreement, or at any time upon the request of the
Employer, the Executive (or his heirs or personal representatives) shall deliver
to the Employer all documents and materials containing trade secrets and
confidential information relating to the Employer's business and all documents,
materials and other property belonging to the Employer, which in either case are
in the possession or under the control of the Employee (or his heirs or personal
representatives).
(c) All discoveries and works made or conceived by the Employee during
his employment by the Employer, jointly or with others, that relate to the
Employer's activities shall be owned by the Employer. The terms "discoveries and
works" include, by way of example, inventions, computer programs (including
documentation of such programs), technical improvements, processes, drawings,
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and works of authorship, including sales materials which relate to wall media
products, sampling/comparing or services. The Employee shall promptly notify and
make full disclosure to, and execute and deliver any documents requested by, the
Employer to evidence or better assure title to such discoveries and works by the
Employer, assist the Employer in obtaining or maintaining for itself at its own
expense United States and foreign patents, copyrights, trade secret protection
and other protection of any and all such discoveries and works, and promptly
execute, whether during his employment or thereafter, all applications or other
endorsements necessary or appropriate to maintain patents and other rights for
the Employer and to protect its title thereto. Any discoveries and works which,
within six months after the termination of the Employee's employment by the
Employer, are made, disclosed, reduced to a tangible or written form or
description, or are reduced to practice by the Employee and which pertain to
work performed by the Employee while with the Employer shall, as between the
Employee and the Employer, be presumed to have been made during the Employee's
employment by the Employer.
12. Enforcement. The Employee agrees that the Employer's remedies at law
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for any breach or threat of breach by him/her of the provisions of Section 10
and 11 hereof will be inadequate, and that the Employer shall be entitled to an
injunction or injunctions to prevent breaches of the provisions of Section 10
and 11 hereof and to enforce specifically the terms and provisions thereof, in
addition to any other remedy to which the Employer may be entitled at law or
equity.
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13. Miscellaneous.
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(a) Notices. All notices required or permitted under this Agreement
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shall be in writing and shall be deemed effective upon personal delivery or upon
deposit with the United States Postal Service, by registered or certified mail,
postage prepaid, addressed to the other party at the address shown above, or at
such other address or addresses as either party shall designate to the other in
writing from time to time.
(b) Pronouns. Whenever the context may require, any pronouns used in
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this Agreement shall include the corresponding masculine, feminine or neuter
forms, and the singular forms of nouns and pronouns shall include the plural,
and vice versa.
(c) Entire Agreement. This Agreement constitutes the entire agreement
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between the parties and supersedes all prior agreements and understandings,
whether written or oral, relating to the subject matter of this Agreement,
including, but not limited to, all prior agreements and understandings relating
to stock options or stock ownership in Xxxxxx Marketing Services, Inc. (formerly
known as Xxxxxx Communications, Inc.) and Xxxxxx Communications, Inc.
(d) Amendment. This Agreement may be amended or modified only by a
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written instrument executed by both the Employer and the Employee.
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(e) Governing Law. This Agreement shall be construed, interpreted and
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enforced in accordance with the laws of the State of Maryland, without regard to
its conflicts of laws principles.
(f) Successors and Assigns. This Agreement shall be binding upon and
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inure to the benefit of both parties and their respective successors and
assigns; provided, however, that the obligations of the Employee are personal
and shall not be assigned or delegated by him.
(g) Waiver. No delays or omission by the Employer or the Employee in
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exercising any right under this Agreement shall operate as a waiver of that or
any other right. A waiver or consent given by the Employer or the Employee on
any one occasion shall be effective only in that instance and shall not be
construed as a bar or waiver of any right on any other occasion.
(h) Captions. The captions appearing in this Agreement are for
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convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
(i) Severability. In case any provision of this Agreement shall be held
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by a court with jurisdiction over the parties to this Agreement to be invalid,
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illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
EMPLOYER EMPLOYEE
XXXXXX COMMUNICATIONS, L. P.
By: Xxxxxx Marketing Communications,
Inc., Its General Partner
By: /s/ Xxxxxx X. Xxxxxx /s/ Xxxx Xxxxxxx
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Xxxxxx X. Xxxxxx, President and Xxxx Xxxxxxx
Chief Executive Officer
XXXXXX COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Chairman,
President and Chief Executive Officer
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