Exhibit 10.24
EMPLOYMENT AGREEMENT
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THIS AGREEMENT, dated as of the 6/th/ day of January, 1999, by and
between Xxxxxxx Xxxxxxxx Xxxxxxxx, LLC, a Delaware limited liability company,
(the "Company") and Xxxxx X. Xxxxx (the "Executive").
WHEREAS, Xxxxxxx Xxxxxxxx Xxxxxxxx Co., a Massachusetts business trust
("BSH") of which the Company is a subsidiary, has entered into a
Recapitalization Agreement dated as of November 28, 1998, with Positano Partners
Ltd., Xxxxxxx & Xxxxxxxx Capital Partners III, L.P., H&F Orchard Partners III,
L.P., H&F International Partners III, L.P., Strategic Interactive Group Co., and
certain individuals listed on Annex A thereto (the "Recapitalization
Agreement"), pursuant to which BSH is being recapitalized (the "Transaction,"
and references herein to the "Company" refer to the Company both before and
after the Transaction, and terms which are capitalized but not defined herein
shall have the meaning set forth in the Recapitalization Agreement); and
WHEREAS, in connection with the Transaction, the Executive will become
a party to the Shareholders Agreement, as defined in the Recapitalization
Agreement (the "Shareholders Agreement"); and
WHEREAS, the Company and the Executive desire to set forth in a
written agreement the terms and conditions under which the Executive will
continue to render services to the Company after the consummation of the
Transaction;
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, agree as follows:
1. Effectiveness of Agreement.
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(a) Effective Date. This Agreement shall become effective upon
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the Closing, as defined in the Recapitalization Agreement, if, but only if, the
Transaction is consummated.
(b) Employment Period. The Company shall employ the Executive,
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and the Executive shall serve the Company, on the terms and conditions set forth
in this Agreement, for the period (the "Employment Period") beginning on the
Closing Date and ending on the second anniversary of the Closing Date; provided,
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however, that on the first anniversary of the Closing Date, and on each
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subsequent anniversary of such date (each such anniversary thereof being
hereinafter referred to as a "Renewal Date"), the Employment Period shall be
automatically extended by one year, unless at least 60 days before the Renewal
Date either party hereto shall give notice to the other that the Employment
Period shall not be so extended.
2. Position and Duties.
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(a) Position. During the Employment Period, the Executive shall
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serve as the Chief Executive Officer of the Company, with the duties and
responsibilities customarily assigned to such position.
(b) Duties. During the Employment Period, and excluding any
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periods of vacation and sick leave to which the Executive is entitled, the
Executive shall devote his full business attention and time to the business and
affairs of the Company and shall use his reasonable best efforts to carry out
such responsibilities faithfully and efficiently. It shall not be considered a
violation of the foregoing for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill speaking
engagements or teach at educational institutions and (C) manage personal
investments, so long as such activities do not materially interfere with the
performance of the Executive's responsibilities as an employee of the Company in
accordance with this Agreement.
3. Compensation.
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(a) Base Salary. As compensation for the Executive's services
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hereunder during the Employment Period, the Company shall pay to the Executive
an annual salary (the "Base Salary") of not less than $500,000 during the
Employment Period, payable at such times and intervals as the Company pays the
base salaries of its other executive employees. During the Employment Period,
the Base Salary shall be reviewed annually for possible increase. The Base
Salary shall not be reduced after any such increase, and the term "Base Salary"
shall thereafter refer to the Base Salary as so increased.
(b) Annual Bonus. In addition to the Base Salary, the Executive
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shall be eligible for an annual bonus (the "Annual Bonus") for each fiscal year
ending during the Employment Period in an amount determined by the Compensation
Committee of the Board of Directors (the "Board") of Vesuvio, Inc. (which is the
trustee of BSH); provided, that, Executive's target bonus for the fiscal year
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ending in 1999 (the "1999 Bonus") shall be $450,000 and, provided further, that
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Executive's 1999 Bonus shall not be less than $300,000 and shall not exceed
$600,000.
(c) Benefits. During the Employment Period, the Executive shall
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be entitled to receive employee benefits (including without limitation medical,
life insurance and other welfare benefits and benefits under retirement and
savings plans), Company-provided parking, and paid vacation, in each case to the
same extent as, and on the same terms and conditions as, other similarly
situated senior executives of the Company from time to time.
(d) Expenses. The Executive shall be entitled to receive prompt
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reimbursement for all reasonable expenses incurred by the Executive during the
Term in carrying out his duties under this Agreement, provided that the
Executive complies with the
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policies, practices and procedures of the Company for submission of expense
reports, receipts, or similar documentation of such expenses.
4. Employment Termination.
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(a) By the Company. The Executive's employment may be terminated
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by the Company under any of the following circumstances: (i) upon the
"Disability" of the Executive, defined as the inability of the Executive to
perform his duties hereunder on a full-time basis by reason of physical or
mental incapacity, sickness or infirmity that continues for more than 180 days
or for periods aggregating more than 180 days during any period of 365
consecutive days; (ii) for "Cause," as defined below; and (iii) for any other
reason (a termination without "Cause"). "Cause" means and shall be limited to:
(A) willful misappropriation of the funds or property of the Company or any of
its Affiliated Companies (as defined below); (B) use of alcohol or illegal drugs
interfering with the performance of an employee's obligations, continuing after
written warning of such actions; (C) admission, confession, indictment or plea
bargain to, or conviction of, a felony, or of any crime involving moral
turpitude, dishonesty, theft, unethical or unlawful conduct; (D) commission of
any willful or intentional act which could reasonably be expected to injure the
reputation, business or business relationships of the Company or any of its
Affiliated Companies or which may tend to bring the employee or the Company or
any of its Affiliated Companies into disrepute, or the willful commission of any
act which is a breach of an employee's fiduciary duties to the Company or any of
its Affiliated Companies; and (E) commission of any act which constitutes a
material breach of the policies of the Company, including but not limited to the
disclosure of any confidential information or trade secrets pertaining to the
Company or any of its Affiliated Companies, or any of their respective clients.
For purposes of this paragraph, any act or failure to act of the employee shall
not be considered "willful" unless done or omitted to be done by the employee
not in good faith and without reasonable belief that the employee's action or
omission was in the best interest of the Company or any of its Affiliated
Companies. Any determination of Cause shall be made by the Board in its sole
discretion. The Company shall give the Executive notice of termination
specifying which of the foregoing provisions is applicable and (in the case of
clause (A) or (B)) the factual basis therefor, and the termination shall be
effective upon the 30th business day after such notice is given (such day, the
"Date of Termination"). For purposes of this Agreement, the term "Affiliated
Companies" shall mean the Company, Positano Partners Ltd. and any of their
respective affiliates and their respective businesses.
(b) By the Executive. The Executive's employment may be terminated
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by the Executive for "Good Reason," defined as a termination within 30 days
after and as a result of (i) the assignment to the Executive of duties
inconsistent in any material respect with Section 2 of this Agreement, other
than actions that are not taken in bad faith and are remedied by the Company
within ten
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business days after receipt of notice thereof from the Executive; (ii) any
material failure by the Company to comply with any provision of Section 3 of
this Agreement, other than failures that are not taken in bad faith and are
remedied by the Company within ten business days after receipt of notice thereof
from the Executive; (iii) the removal of the Executive from the office of the
Chairman of the Board without the Executive's consent or (iv) a change, without
the Executive's consent, in the Executive's principal place of employment with
the Company to a location outside the greater metropolitan area in which such
principal place of employment was located as of the Closing. The Executive shall
give the Company notice of termination specifying which of the foregoing
provisions is applicable and the factual basis therefor, and the termination
shall be effective upon the 30th business day after such notice is given unless
the Company agrees to an earlier day (such day, the "Date of Termination").
(c) Severance Benefits. If, during the Employment Period, the
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Executive's employment is terminated by the Company without Cause or by the
Executive for Good Reason, the Executive shall not be entitled to any further
compensation provided for under this Agreement except as provided in the
following sentence. The Company shall (i) continue to pay the Executive the
Base Salary, at the rate in effect immediately before the Date of Termination
(but, in the case of a termination by the Executive for Good Reason,
disregarding any reduction thereof that was the basis for such termination), for
twenty-four months after the Date of Termination, (ii) continue to provide the
Executive with group health benefits on the terms and conditions applicable to
active employees of the Company ("Group Health Benefits") for twenty-four months
after the Date of Termination; provided, that during any period when the
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Executive is eligible to receive any such benefits under another employer-
provided plan or a government plan, the Group Health Benefits or substitute
benefits provided by the Company under this clause (ii) may be made secondary to
those provided under such other plan; and (iii) pay the Executive any amounts
that have been earned but not yet paid under Section 3 hereof.
(d) Other Employment Terminations. If, during the Employment Period,
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the Executive's employment is terminated by reason of the Executive's death or
for any other reason, other than by the Company without Cause or by the
Executive for Good Reason, the Executive shall not be entitled to any
compensation provided for under this Agreement, other than (i) Base Salary
through the 90/th/ day following the Date of Termination in the case of the
Executive's death, and through the Date of Termination in all other cases, (ii)
any unpaid Annual Bonus for a fiscal year that ended before the Date of
Termination, (iii) benefits under any long-term disability insurance coverage in
the case of termination because of Disability, and (iv) vested benefits, if any,
required to be paid or provided by law.
5. Non-Competition; Non-Solicitation; Confidentiality and Termination
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Notices.
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(a) The Executive hereby covenants and agrees that:
(i) for one (1) year after termination of employment with the
Company and its Affiliated Companies for any reason, the Executive
shall not work for any competitor of the Company or any of its
Affiliated Companies on
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the account of any client of the Company or any of its Affiliated
Companies with whom the Executive had a direct relationship or as to
which the Executive had a significant supervisory responsibility or
otherwise was significantly involved at any time during the two years
prior to such termination;
(ii) for six (6) months after termination of employment with the
Company and its Affiliated Companies for any reason, the Executive
shall not work for a competitor of the Company or any of its
Affiliated Companies on the account of any substantial competitor of
any client of the Company for which the Executive had substantial
responsibility during the two-year period prior to termination of
employment and shall not work directly for such a competitor of such a
client;
(iii) for one (1) year after termination of employment with the
Company and its Affiliated Companies for any reason, the Executive
shall not directly or indirectly solicit or hire, or assist any other
person in soliciting or hiring, any employee of the Company or any of
its Affiliated Companies (as of the date of termination) or any person
who, as of the date of termination, was in the process of being
recruited by the Company or any of its Affiliated Companies or induce
any such employee to terminate his or her employment with the Company
or any of its Affiliated Companies; and
(iv) the Executive shall retain in strictest confidence all
confidential information of the Company and its Affiliated Companies
and their respective clients learned by the Executive during the
period of his employment by the Company and its Affiliated Companies,
and shall not disclose any of such information to anyone outside the
Company and its Affiliated Companies, except in the course of his
duties for the Company and its Affiliated Companies or with the
Company's express written consent.
(b) The covenants contained in Section 5(a) are for the benefit of
the Company and its Affiliated Companies and shall survive any termination of
this Agreement.
(c) The Executive acknowledges and agrees that: (i) the purpose of
the foregoing covenants is to protect the goodwill, trade secrets and other
confidential information of the Company; (ii) because of the nature of the
business in which the Company and its Affiliated Companies are engaged and
because of the nature of the confidential information to which the Executive has
access, it would be impractical and excessively difficult to determine the
actual damages of the Company in the event the Executive breached any of the
covenants of this Section 5; and (iii) remedies at law (such as monetary
damages) for any breach of the Executive's obligations under this Section 5
might be inadequate. The Executive therefore agrees and consents that if he
commits any breach of a covenant under this Section 5 or threatens to commit any
such breach, the Company shall have the right (in addition to, and not
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in lieu of, any other right or remedy that may be available to it) to temporary
and permanent injunctive relief from a court of competent jurisdiction, without
posting any bond or other security and without the necessity of proof of actual
damage. In addition, and without limiting the remedies available to the Company
in the event of a breach by the Executive of any of the provisions of this
Section 5, to the extent permitted by applicable law and notwithstanding any
other provisions of this Agreement or of the Shareholders Agreement (as defined
in the Recapitalization Agreement), if the Executive violates any provision of
this Section 5, (i) the Executive shall cease to be entitled to receive any
payment or benefit pursuant to Section 4 of this Agreement, and (ii) the Company
may offset against any payment to be made by it in respect of any Shares (as
defined in the Shareholders Agreement) purchased by it pursuant to the
Shareholders Agreement (including purchase price, installment payments and
interest payments) any damages (including consequential damages), expenses,
fees, losses or costs of any kind or nature whatsoever incurred by the Company
or and of its Affiliated Companies arising out of such violation.
(d) With respect to any provision of this Section 5 finally
determined by a court of competent jurisdiction to be unenforceable, the
Executive and the Company hereby agree that such court shall have jurisdiction
to reform this Agreement or any provision hereof so that it is enforceable to
the maximum extent permitted by law, and the parties agree to abide by such
court's determination. If any of the covenants of this Section 5 are determined
to be wholly or partially unenforceable in any jurisdiction, such determination
shall not be a bar to or in any way diminish the Company's right to enforce any
such covenant in any other jurisdiction.
6. Non-exclusivity of Rights. Nothing in this Agreement shall
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prevent or limit the Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its Affiliated
Companies for which the Executive may qualify, nor, subject to Section 9 below,
shall anything in this Agreement limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its Affiliated Companies. Vested benefits and other amounts that the Executive
is otherwise entitled to receive under any plan, policy, practice or program of,
or any contract or agreement with, the Company or any of its Affiliated
Companies on or after the Date of Termination shall be payable in accordance
with such plan, policy, practice, program, contract or agreement, as the case
may be, except as explicitly modified by this Agreement, and except that the
Executive shall not be entitled to receive severance pay or benefits under any
severance plan, program or policy of the Company or any of its Affiliated
Companies if and to the extent they would duplicate the compensation and
benefits provided under Section 4 of this Agreement.
7. No Mitigation. In no event shall the Executive be obligated to
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seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and, except as specifically provided in
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clause (ii) of Section 4(c) above, such amounts shall not be reduced, regardless
of whether the Executive obtains other employment.
8. Notices.
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(a) Each notice, demand, request, consent, report, approval or
communication (hereinafter "Notice") which is or may be required to be given by
any party to any other party in connection with this Agreement and the
transactions contemplated hereby, shall be in writing, and given by facsimile,
personal delivery, receipted delivery services, or by certified mail, return
receipt requested, prepaid and properly addressed to the party to be served as
shown in Section 8(b) below.
(b) Notices shall be effective on the date sent via facsimile, the
date delivered personally or by receipted delivery service, or three (3) days
after the date mailed:
If to the Company: Xxxxxxx Xxxxxxxx Xxxxxxxx LLC
Prudential Tower
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxxxxx
Facsimile: (000) 000-0000
If to the Executive: At his residence address
Xxxxx Xxxxx: most recently filed with the Company.
In each case, with a copy to HFCP Investor
If to HFCP Investor: 0 Xxxxxxxx Xxxxx
00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxxxxx
Facsimile: (000) 000-0000
(c) Each party may designate by Notice to the other in writing, given
in the foregoing manner, a new address to which any Notice may thereafter be so
given, served or sent.
9. Entire Agreement; Effect if No Transaction. As of the Effective
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Time, this Agreement shall constitute the entire agreement of the parties with
respect to the subject matter hereof and, except for the Shareholders Agreement,
the Stock Option Plan and the Option
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Agreement, shall supersede all prior agreements, whether oral or written with
the Company or any of its Affiliated Companies and their respective predecessor
entities with respect to employment, ownership of Equity-Related Interests, or
otherwise, including without limitation, the documents set forth on Schedule A
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attached hereto.
Notwithstanding any other provision of this Agreement, this Agreement
shall be null and void and of no force or effect if the Transaction is not
consummated.
10. Successors.
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(a) This Agreement is personal to the Executive and, without the
prior written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive's legal
representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company may assign this Agreement to any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company that expressly
agrees to assume and perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
assignment had taken place. As used in this Agreement, "Company" shall mean
both the Company as defined above and any such successor that assumes and agrees
to perform this Agreement, by operation of law or otherwise.
11. Miscellaneous.
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(a) This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Massachusetts, without reference to
principles of conflict of laws. This Agreement may not be amended or modified
except by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
(b) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
(c) Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.
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(d) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
(e) The Section headings contained in this Agreement are for
convenience only and in no manner shall be construed as part of this Agreement.
(f) This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant
to the authorization of its Board of Directors, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
XXXXXXX XXXXXXXX XXXXXXXX, LLC
By __________________________________
Name: Xxxxx Xxxxxxxxxx
Title: Chief Financial Officer
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant
to the authorization of its Board of Directors, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
XXXXXXX XXXXXXXX XXXXXXXX, LLC
By /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Chief Financial Officer
Schedule A
Xxxxx Xxxxx
Employment Agreement by and between Xxxxx Xxxxx and Xxxxxxx Xxxxxxxx
Xxxxxxxx Inc. (predecessor in interest to Xxxxxxx Xxxxxxxx Xxxxxxxx,
LLC), dated November 22, 1996.
Exchange Agreement by and between Xxxxx Xxxxx and Xxxxxxx Xxxxxxxx
Xxxxxxxx Inc. (predecessor in interest to Xxxxxxx Xxxxxxxx Xxxxxxxx
Co.), dated July 1997, effective as of April 1, 1997.
Stock Appreciation Unit Agreement by and between Xxxxxxx Xxxxxxxx
Xxxxxxxx Inc. (predecessor in interest to Xxxxxxx Xxxxxxxx Xxxxxxxx
Co.) and Xxxxx Xxxxx relating to issuance of 100,000 SAR Units on
April 1, 1997.
The Xxxxxxx Xxxxxxxx Xxxxxxxx Inc. (predecessor in interest to Xxxxxxx
Xxxxxxxx Xxxxxxxx Co.) Stock Appreciation Rights Plan.
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