EMPLOYMENT AGREEMENT
AGREEMENT made the 6th day of December, 1996 by and between
Telephone Access, Inc., a Delaware corporation (the "Company"), and Xxxx X.
Xxxxxx (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company wishes to assure itself of the services of the
Employee, and the Employee wishes to serve in the employ of the Company, upon
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Employment, Term.
1.1 The Company agrees to employ the Employee, and the
Employee agrees to serve in the employ of the Company, for the term set forth in
Section 1.2, in the position and with the responsibilities, duties and authority
set forth in Section 2 and on the other terms and conditions set forth in this
Agreement.
1.2 The term of the Employee's employment under this Agreement
shall be the period commencing on the date hereof and continuing through
December 5, 2001, unless sooner terminated in accordance with this Agreement.
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2. Position, Duties. The Employee shall serve as (i) President and
Chief Operating Officer of the Direct Marketing Group of the Company,
responsible for the Telac Division and certain other divisions of the Company
including all direct marketing and direct mailing divisions of the Company as
such position develops and evolves and (ii) as the President of the Telac
Division within the Direct Marketing Group of the Company until such time as a
successor is chosen for the President of the Telac Division upon the mutual
agreement of the Employee and the Company, and shall have such duties and
responsibilities consistent with such positions as are requested of him by the
President of the Company or his successor. The Employee shall report to the
President of the Company and to the designees or successors of such person. The
Employee shall devote his full business time and attention to the performance of
his duties and responsibilities hereunder; provided, however,
that the Employee may engage in personal investment activities that do not
unreasonably interfere with the Employee's obligations hereunder; and provided,
further, however, that the Employee agrees that he will cease engaging in his
personal Internet business activities during the term of his employment
hereunder and will take all steps to dissolve any corporation or other business
entity owned by him operating any Internet business activities. The Employee
hereby represents that he is not bound by any confidentiality agreements or
restrictive covenants which restrict or may restrict his ability to perform his
duties hereunder, and agrees that he will not enter into any such agreements or
covenants during the term of his employment hereunder, except such restrictive
covenants or confidentiality agreements which are required by the Company. The
Employee's home office shall be located in Arlington, Virginia.
The Company agrees that the Company shall not assign the Employee to
a position with scope and responsibility that is not substantially similar to
the positions and responsibilities set forth in this Section 2 without the
consent of the Employee.
3. Compensation.
3.1 Base Salary. During the term of this Agreement, in consideration
of the performance by the Employee of the services set forth in Section 2 and
his observance of the other covenants set forth herein, the Company shall pay
the Employee, and the Employee shall accept, a base salary at the rate of
$220,000 per annum, payable in accordance with the standard payroll practices of
the Company. In addition to the base salary payable hereunder, the Employee may
be entitled to receive merit increases in salary during the term hereof in
amounts and at such times as shall be determined by the President of the Company
in his sole discretion. In no event shall the failure to grant any such increase
(or the amount of any such increase) give rise to a claim by the Employee under
this Agreement.
3.2 Bonus. During the term of the Employee's employment by the
Company pursuant to this Agreement, the Employee shall be eligible to receive an
annual bonus (the "Bonus") of up
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to 35% of his annual salary based upon the achievement of certain operational,
financial and performance objectives and certain corporate growth objectives
established by the President of the Company or his successor. For the purposes
of determining the Bonus for the year ended December 31, 1997, the Bonus shall
be based upon the criteria set forth in Schedule I attached hereto. Bonuses, if
earned, shall be paid in accordance with the standard practices of the Company
for the payment of bonuses.
The Company shall deliver to the Employee a schedule supporting the
calculation of each Bonus (or calculation showing why no such Bonus is payable)
within thirty (30) days after the end of the fiscal year relating to such Bonus.
4. Expense Reimbursement. During the term of the Employee's
employment by the Company pursuant to this Agreement, consistent with the
Company's policies and procedures as may be in effect from time to time, the
Company shall reimburse the Employee for all reasonable and necessary
out-of-pocket expenses incurred by him in connection with the performance of his
duties hereunder, upon the presentation of proper receipts therefor in
accordance with the Company's policies.
5. Other Benefits. During the term of the Employee's employment by
the Company pursuant to this Agreement, the Employee shall be entitled to
receive four (4) weeks paid vacation time per annum and such other benefits and
customary medical and life insurance as are from time to time made available to
other similarly situated employees of the Company, on the same terms as are
available to such similarly situated employees, it being understood that the
Employee shall be required to make the same contributions and payments in order
to receive any of such benefits as may be required of such similarly situated
employees. The Company shall continue to pay premiums in a timely manner on that
certain life insurance policy issued by Mass Mutual on the life of the Employee
(Policy No. 8847337).
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6. Termination of Employment.
6.1 Death. In the event of the death of the Employee during
the term of this Agreement, the Company shall pay to the estate or other legal
representative of the Employee (x) the salary provided for in Section 3.1 (at
the annual rate then in effect) accrued to the Employee's date of death and not
theretofore paid, (y) the Bonus, if it has been determined and earned in
accordance with Section 3.2 but not yet paid, and (z) any expense reimbursement
due to the Employee pursuant to Section 4 but not yet paid, and the estate or
other legal representative of the Employee shall have no further rights under
this Agreement. Rights and benefits of the Employee, his estate or other legal
representative under the employee benefit plans and programs of the Company, if
any, will be determined in accordance with the terms and provisions of such
plans and programs.
6.2 Disability. If the Employee shall become incapacitated by
reason of sickness, accident or other physical or mental disability and shall
for a period of sixty (60) consecutive days be unable to materially perform his
duties hereunder, with reasonable accommodation, the employment of the Employee
hereunder may be terminated by the Company upon thirty (30) days' prior written
notice to the Employee. Within thirty (30) days after such termination, the
Company shall pay to the Employee (x) the salary provided for in Section 3.1 (at
the annual rate then in effect) accrued to the date of such termination and not
theretofore paid, (y) the Bonus, if it has been determined and earned in
accordance with Section 3.2 but not yet paid, and (z) any expense reimbursement
due to the Employee pursuant to Section 4 but not yet paid. Rights and benefits
of the Employee, his estate or other legal representative under the employee
benefit plans and programs of the Company, if any, will be determined in
accordance with the terms and provisions of such plans and programs. Neither the
Employee nor the Company shall have any further rights or obligations under this
Agreement, except as provided in Sections 7, 8 and 9.
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6.3 Due Cause. The employment of the Employee hereunder may be
terminated by the Company at any time during the term of this Agreement for Due
Cause (as hereinafter defined). In the event of such termination, the Company
shall pay to the Employee (x) the salary provided for in Section 3.1 (at the
annual rate then in effect) accrued to the date of such termination and not
theretofore paid to the Employee, (y) the Bonus, if it has been determined and
earned in accordance with Section 3.2 but not yet paid, and (z) any expense
reimbursement due to the Employee pursuant to Section 4 but not yet paid, and,
after the satisfaction of any claim of the Company against the Employee arising
as a direct and proximate result of such Due Cause, neither the Employee nor the
Company shall have any further rights or obligations under this Agreement,
except as provided in Sections 7, 8 and 9. Rights and benefits of the Employee,
his estate or other legal representative under the employee benefit plans and
programs of the Company, if any, will be determined in accordance with the terms
and provisions of such plans and programs. For purposes hereof, "Due Cause"
shall mean (a) a material breach of any of the Employee's material obligations
hereunder (it being understood that any breach of the provisions of Sections 2,
7 or 8 hereof shall be considered material) (b) that the Employee, in carrying
out his duties hereunder, has been guilty of (i) willful or gross neglect or
(ii) willful or gross misconduct, resulting in either case in material harm to
any member of the Company Group (as hereinafter defined); or (c) that the
Employee has been convicted with respect to (i) a felony or (ii) any offense
involving moral turpitude. In the event of an occurrence of an event
constituting Due Cause under this Section 6.3, the Employee shall be given
written notice by the Company that it intends to terminate the Employee's
employment for Due Cause under this Section, which written notice shall specify
in detail the act or acts upon the
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basis of which the Company intends so to terminate the Employee's employment. If
the basis for such written notice is an act or acts described in clause (a)
above and not involving moral turpitude, the Employee shall be given twenty (20)
days to cease or correct the performance (or nonperformance) giving rise to such
written notice and, upon failure of the Employee within such twenty (20) days to
cease or correct such performance (or nonperformance), the Employee's employment
by the Company shall automatically be terminated hereunder for Due Cause.
6.4 Other Termination by the Company. The Company may
terminate, upon thirty (30) days prior written notice to the Employee, the
Employee's employment prior to the expiration of the term of this Agreement for
whatever reason it deems appropriate; provided, however, that in the event that
such termination is not pursuant to Sections 6.1, 6.2 or 6.3, the Company shall
pay to the Employee (or his estate or other legal representative in the case of
the death of the Employee subsequent to such termination), (w) the salary
provided for in Section 3.1 (at the annual rate then in effect) accrued to the
date of such termination and not theretofore paid, (x) the sum of $300,000, (y)
the prorated portion of the Bonus provided for in Section 3.2 only with respect
to the year during which such termination under this Section 6.4 occurs and
payable when such Bonus would have been paid to the Employee, determined by
annualizing the Bonus objectives and criteria achieved by the Company and the
Employee on the date of termination, pro-rated for the applicable period and (z)
any expense reimbursement due to the Employee pursuant to Section 4 but not yet
paid. Rights and benefits of the Employee, his estate or other legal
representative under the employee benefit plans and programs of the Company, if
any, will be determined in accordance with the terms and provisions of such
plans and programs. Neither the Employee nor the Company shall have any further
rights or obligations under this Agreement, except as provided in Sections 7, 8
and 9.
7. Confidential Information.
7.1 (a) The Employee shall, during the Employee's employment
with the Company and for a period of two (2) years thereafter, treat all
confidential material (as hereinafter defined) of the Company or any of the
Company's subsidiaries, affiliates or parent entities (the Company and the
Company's subsidiaries, affiliates and parent entities operating in the same
lines of business
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being hereinafter collectively referred to as the "Company Group")
confidentially. The Employee shall not, without the prior written consent of the
President of the Company, disclose such confidential material, directly or
indirectly, to any party, who at the time of such disclosure is not an employee
or agent of any member of the Company Group, or remove from the Company's
premises any notes or records relating thereto, copies or facsimiles thereof
(whether made by electronic, electrical, magnetic, optical, laser, acoustic or
other means), or any other property of any member of the Company Group. The
Employee agrees that all confidential material, together with all notes and
records of the Employee relating thereto, and all copies or facsimiles thereof
in the possession of the Employee (whether made by the foregoing or other means)
are the exclusive property of the Company. The Employee shall not in any manner
use any confidential material of the Company Group, or any other property of any
member of the Company Group, in any manner not specifically directed by the
Company.
(b) For the purposes hereof, the term "confidential material"
shall mean all information in any way concerning the activities, business or
affairs of any member of the Company Group or any of the customers of any member
of the Company Group, including, without limitation, information concerning
trade secrets, together with all sales and financial information concerning any
member of the Company Group and any and all information concerning projects in
research and development or marketing plans for any products or projects of the
Company Group, and all information concerning the practices and customers of any
member of the Company Group, and all information in any way concerning the
activities, business or affairs of any of such customers, as such, which is
furnished to the Employee by any member of the Company Group or any of its
agents or customers, as such, or otherwise acquired by the Employee in the
course of the Employee's employment with the Company; provided, however, that
the term "confidential material" shall not include information which (i) becomes
generally available to the public other than as a result of a disclosure by the
Employee in violation of this Agreement, (ii) was available to the
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Employee on a non-confidential basis prior to his employment with any member of
the Company Group, (iii) becomes available to the Employee on a non-confidential
basis from a source other than any member of the Company Group or any of its
agents or customers, as such, provided that such source is not known by the
Employee to be bound by a confidentiality agreement with any member of the
Company Group or any of such agents or customers; or (iv) which is required to
be disclosed by a law, rule or regulation.
7.2 Promptly upon the request of the Company, the Employee
shall deliver to the Company all confidential material relating to any member of
the Company Group in the possession of the Employee without retaining a copy
thereof (provided, however, that the Employee shall be entitled to retain a list
of such confidential material so long as the form of such list is reasonably
acceptable to the Company), unless, in the written opinion of counsel for the
Company delivered to the Employee, either returning such confidential material
or failing to retain a copy thereof would violate any applicable Federal, state,
local or foreign law, in which event such confidential material shall be
returned without retaining any copies thereof as soon as practicable after such
counsel advises in writing to the Employee that the same may be lawfully done.
7.3 In the event that the Employee is required, by oral
questions, interrogatories, requests for information or documents, subpoena,
civil investigative demand or similar process, to disclose any confidential
material relating to any member of the Company Group, the Employee shall provide
the Company with reasonably prompt notice thereof so that the Company may seek
an appropriate protective order and/or waive compliance by the Employee with the
provisions hereof; provided, however, that if in the absence of a protective
order or the receipt of such a waiver, the Employee is, in the opinion of
counsel reasonably acceptable to the Company, compelled to disclose confidential
material not otherwise disclosable hereunder to any legislative, judicial or
regulatory body, agency or authority, or else be exposed to liability for
contempt, fine or penalty or to other censure, such confidential material may be
so disclosed.
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8. Non-Competition.
8.1 (i) The Employee acknowledges that the services to be
rendered by him to the Company are of a special and unique character. The
Employee agrees that, in consideration of his employment hereunder, the Employee
will not, (a) (A) during the term of this Agreement and (B) prior to two years
from the date of termination of the Employee's employment by the Company or any
other member of the Company Group, directly or indirectly, (w) engage, whether
as principal, agent, investor (except as an owner of less than a 5% interest in
a publicly traded company), distributor, representative, stockholder, employee,
consultant, volunteer or otherwise, with or without pay, in any activity or
business venture anywhere in the United States which is competitive with the
Business (as defined in the Recapitalization Agreement (as hereinafter defined))
or the business of the Company or any other member of the Company Group of
providing multilingual inbound and outbound teleservices, except as hereinafter
set forth, and related activities, (x) solicit or endeavor to solicit away from
any member of the Company Group any person who was or is during the six (6)
months prior to solicitation, a director, officer, employee, agent or consultant
of such member of the Company Group, on the Employee's own account or for any
person, firm, corporation or other organization, whether or not such person
would commit any breach of such person's contract of employment by reason of
leaving the service of such member of the Company Group, (y) solicit or entice
or endeavor to solicit or entice away any of the clients or customers of any
member of the Company Group, either on the Employee's own account or for any
other person, firm, corporation or organization, or (z) employ any person who
was or is during the six (6) months prior to employment, a director, officer or
employee of any
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member of the Company Group or any person who is or may be likely to be in
possession of any confidential information or trade secrets relating to the
business of any member of the Company Group, or (b) at any time take any action
or make any statement the effect of which would be, directly or indirectly, to
impair the goodwill of any member of the Company Group or the business
reputation or good name of any member of the Company Group, or be otherwise
detrimental to the Company, including any action or statement intended, directly
or indirectly, to benefit a competitor of any member of the Company Group.
(ii) Notwithstanding the foregoing, the Employee shall not be
deemed to be in breach of the provisions of Section 8.1.(i)(a)(w) above
following termination of his employment by the Company by reason of the
Employee's employment by or association with an entity, the business of which is
shareholder communications, proxy solicitation, political polling, surveying or
public opinion polling, surveying or English language political advocacy
communications.
8.2 The Employee and the Company agree that if, in any
proceeding, the court or authority shall refuse to enforce the covenants herein
set forth because such covenants cover too extensive a geographic area or too
long a period of time, any such covenant shall be deemed appropriately amended
and modified in keeping with the intention of the parties to the maximum extent
permitted by law.
8.3 The Employee expressly acknowledges and agrees that the
covenants and agreements set forth in this Section 8 are reasonable in all
respects, and necessary in order to protect, maintain and preserve the value and
goodwill of the Company Group, as well as the proprietary and other legitimate
business interests of the members of the Company Group. The Employee
acknowledges and agrees that the covenants and agreements of the Employee set
forth in this Section 8 constitute a significant part of the
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consideration given by the Employee to the Company in exchange for the salary
and benefits provided for in this Agreement, and are a material reason for such
payment.
9. Equitable Relief. In the event of a breach or threatened breach
by the Employee of any of the provisions of Sections 7 or 8 of this Agreement,
the Employee hereby consents and agrees that the Company shall be entitled to
pre-judgment injunctive relief or similar equitable relief restraining the
Employee from committing or continuing any such breach or threatened breach or
granting specific performance of any act required to be performed by the
Employee under any of such provisions, without the necessity of showing any
actual damage or that money damages would not afford an adequate remedy and
without the necessity of posting any bond or other security. The parties hereto
hereby consent to the jurisdiction of the federal courts located in the Eastern
District of Virginia and the state courts located in such District for any
proceedings under this Section 9. Nothing herein shall be construed as
prohibiting the Company from pursuing any other remedies at law or in equity
which it may have.
10. Successors and Assigns.
10.1 Assignment by the Company. The Company may assign this
Agreement to any member of the Company Group or to any entity which acquires
substantially all the assets and business of the Company, and the Employee
hereby consents to such assignment. As used in this Section, the "Company" shall
mean
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the Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law and this Agreement shall be
binding upon, and inure to the benefit of, the Company, as so defined.
10.2 Assignment by the Employee. The Employee may not assign
this Agreement or any part hereof without the prior written consent of the
President of the Company; provided, however, that nothing herein shall preclude
one or more beneficiaries of the Employee from receiving any amount that may be
payable following the occurrence of his legal incompetency or his death and
shall not preclude the legal representative of his estate from receiving such
amount or from assigning any right hereunder to the person or persons entitled
thereto under his will or, in the case of intestacy, to the person or persons
entitled thereto under the laws of intestacy applicable to his estate.
11. Governing Law. This Agreement shall be deemed a contract made
under, and for all purposes shall be construed in accordance with, the laws of
the District of Columbia applicable to contracts to be performed entirely within
such District.
12. Entire Agreement. This Agreement is entered into pursuant to a
recapitalization and investment agreement dated December 5, 1996 by and among
the Company, the Employee and the other parties thereto (the "Recapitalization
Agreement"). This Agreement and the other agreements executed contemporaneously
herewith and therewith contain all the understandings and representations
between the parties hereto pertaining to the subject matter hereof and supersede
all undertakings and agreements, whether oral or in writing, if there be any,
previously entered into by them with respect thereto; provided, however, that
Section 8 shall not serve as a limitation of the terms of any other
non-competition agreement between the Employee and any member of the Company
Group. No modification of this Agreement shall be effective unless in writing
and signed by the party against which enforcement is sought to be enforced. Any
oral agreements or representations respecting the transactions contemplated by
the Recapitalization Agreement, not reduced to writing in the Recapitalization
Agreement or in any of the documents referred to therein (including this
Agreement), are null and void.
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13. Modification and Amendment; Waiver. The provisions of this
Agreement may be modified, amended or waived, but only upon the written consent
of the party against whom enforcement of such modification, amendment or waiver
is sought and then such modification, amendment or waiver shall be effective
only to the extent set forth in such writing. No delay or failure on the part of
any party hereto in exercising any right, power or remedy hereunder shall effect
or operate as a waiver thereof, nor shall any single or partial exercise thereof
or any abandonment or discontinuance of steps to enforce such right, power or
remedy preclude any further exercise thereof or of any other right, power or
remedy.
14. Notices. All notices, requests or instructions hereunder shall
be in writing and delivered personally, sent by Federal Express or sent by
registered or certified mail, postage prepaid, as follows:
If to the Company:
0000 Xxxx Xxxxx Xxxxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: President
Telecopy No. (000) 000-0000
Telephone No. (000) 000-0000
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with a copy to:
Xxxxxx & Xxxxxx
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopy No. (000) 000-0000
Telephone No. (000) 000-0000
If to the Employee:
0000 Xxxxxxxxx Xxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Telephone No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxx & Xxxxxxxxxxx
L.L.P.
000 Xxxxxx Xxxxxx
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered or sent by Federal Express and five business days after the
date of mailing, if mailed.
15. Severability. Should any provision of this Agreement be held by
a court of competent jurisdiction to be enforceable only if modified, such
holding shall not affect the validity of the remainder of this Agreement, the
balance of which shall continue to be binding upon the parties hereto with any
such modification to become a part hereof and treated as though originally set
forth in this
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Agreement. The parties further agree that any such court is expressly
authorized to modify any such unenforceable provision of this Agreement in lieu
of severing such unenforceable provision from this Agreement in its entirety,
whether by rewriting the offending provision, deleting any or all of the
offending provision, adding additional language to this Agreement, or by making
such other modifications as it deems warranted to carry out the intent and
agreement of the parties as embodied herein to the maximum extent permitted by
law. The parties expressly agree that this Agreement as so modified by the
court shall be binding upon and enforceable against each of them.
In any event, should one or more of the provisions of this Agreement be held to
be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions hereof,
and if such provision or provisions are not modified as provided above, this
Agreement shall be construed as if such invalid, illegal or unenforceable
provisions had never been set forth herein.
16. Withholding. Anything to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the Employee or his
beneficiaries, including his estate, shall be subject to withholding of such
amounts relating to taxes as the Company may reasonably determine it should
withhold pursuant to any applicable law or regulation. In lieu of withholding
such amounts, in whole or in part, the Company may, in its sole discretion,
accept other provision for payment of taxes as permitted by law, provided it is
satisfied in its sole discretion that all requirements of law affecting its
responsibilities to withhold such taxes have been satisfied.
17. Survivorship. The respective rights and obligations of the
parties hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
18. Expenses. Each of the parties hereto shall bear his or its own
costs and expenses, including attorneys' fees and disbursements, incurred in
connection with this Agreement and the transactions contemplated hereby.
19. Titles. Titles of the sections of this Agreement are intended
solely for convenience and no provision of this Agreement is to be construed by
reference to the title of any section.
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20. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument.
21. Termination by the Employee. In the event that the Company (a)
breaches its obligations to make the salary payments pursuant to Section 3.1
hereunder, or (b) breaches its obligations to provide the payments provided for
in Section 6.4, the Employee shall have the right to terminate this Agreement
upon thirty (30) days prior written notice to the Company, provided, that, the
Company has not corrected such breaches during such thirty day period. Upon
termination of this Agreement by the Employee, the provisions of this Agreement
with respect to restrictions on the Employee's activities as provided in Section
8.1 shall also terminate and shall no longer be applicable and neither the
Employee nor the Company shall have any further rights or obligations under this
Agreement, except as provided in Sections 7 and 9 and Employee's right to
receive any payments due under this Agreement.
* * *
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first above written.
TELEPHONE ACCESS, INC.
By /s/ Xxxx X. Xxxxxx
-----------------------------
Name: Xxxx X. Xxxxxx
Title: President
/s/ Xxxx X. Xxxxxx
-------------------------------
Xxxx X. Xxxxxx
