EXHIBIT 10.12
EMPLOYMENT AGREEMENT
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This Agreement is made as of this 28th day of August 1997 between
TeleSpectrum Worldwide Inc., a Delaware corporation (the "Company"), and
Xxxxxxxx X. Xxxxxxxx (the "Employee").
RECITALS
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The Company desires to employ the Employee, and the Employee desires to
provide services to the Company, upon the terms and conditions hereinafter set
forth.
WITNESSETH:
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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. Employment. During the term of the Employee's employment under this
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Agreement (the "Employment Term"), the Employee shall be the Chief Operating
Officer of the Company and shall perform such duties consistent with such office
and as are assigned by the Company's Chief Executive Officer or Board of
Directors. Except for periodic travel incident to Employee's duties hereunder,
Employee shall not be required to perform his duties hereunder outside a 35 mile
radius of the Company's current principal office.
(b) Employee 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 Employee from executing this Agreement and performing fully his
duties and responsibilities hereunder.
2. Term.
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The Employment Term shall begin on the date hereof and shall continue until
August 27, 1998 and shall automatically continue for subsequent one year terms
unless notice is given by either party within thirty days of the end of the then
existing term.
3. Compensation for Employment.
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(a) The basic annual rate of compensation of the Employee for his
employment services to the Company during the Employment Term shall be $200,000
(such amount is referred to herein as the "Salary"), which the Company shall pay
to the Employee in equal installments in accordance with the normal payroll
policies of the Company.
(b) The Employee shall be eligible to receive annual bonuses in such
amounts as approved by the Compensation Committee of the Board of Directors and
participate in such bonus programs as are established for executive officers of
the Company.
(c) Subject to the approval of the Compensation Committee of the Company's
Board of Directors, the Company shall grant Employee an incentive stock option
to purchase 50,000 shares of the Company's common stock, par value $.01 per
share (the "Common Stock") with an exercise price equal to the fair market value
on the date of grant. Such option will be granted under the Company's 1996
Equity Compensation Plan and will vest in four equal amounts (each representing
25% of the option) beginning on the date of grant and on the next three
successive annual anniversary dates of the date of grant; provided, however,
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that such option as well as an option for 50,000 shares granted in August 1996
and amended in September 1997 shall automatically become fully vested upon a
termination of the Employment Term pursuant to Sections 4(a), 4(b) or 5. In
addition, such options shall not expire upon termination of employment pursuant
to sections 4a, 4b or 4c, but may be exercised thereafter until the 10th
anniversary of the date of grant.
(d) During the Employment Term, the Company shall provide the Employee with
fringe benefits that are substantially equivalent to the fringe benefits
specified on Exhibit "A" (the "Fringe Benefits") at such levels that are
provided to the senior officers of the Company.
(e) All amounts payable by the Company under this Section 3 shall be
subject to proration based upon the number of days in each such year that the
Employee was employed by the Company hereunder. The Employee's Salary will be
reviewed from time to time for possible increases, taking into account
Employee's responsibilities, the profitability of the Company, compensation of
other executives of the Company, increases in cost of living and other pertinent
factors. In light of such review, the Company in its sole discretion, may
increase the Salary but not decrease the Salary during the Employment Term.
(f) The Company shall reimburse the Employee for those expenses that are
incurred by him in connection with the performance of his duties under this
Agreement, are reasonably related to the Company's business or that have been
approved in writing by the Company's Board of Directors.
4. Termination Without Compensation.
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(a) Total Disability. If the Employee becomes totally disabled (as defined
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below), the Company may terminate the Employment Term by notice to the Employee,
and as of the termination date, the Company shall have no further liability or
obligation to the Employee hereunder except as follows: the Employee shall
receive (i) unpaid Salary, Base Bonus and Fringe Benefits that have accrued
through the date of termination; and (ii) whatever benefits that he may be
entitled to receive under any then existing disability benefit plans of the
Company, including any such plans included in the Fringe Benefits. For the
purposes hereof, the Employee shall be deemed to be "totally disabled" if the
Employee is considered totally disabled under any group disability plan
maintained
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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 4(a), the Employee shall submit to a physical examination by a
licensed physician mutually satisfactory to the Company and the Employee, the
cost of such examination to be paid by the Company, and the determination of
such physician shall be determinative.
(b) Death. If the Employee dies, this Employment Agreement shall terminate
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on the date of death, and thereafter the Company shall not have any further
liability or obligation to the Employee, his executors, administrators, heirs,
assigns or any other person claiming under or through his except that the
Employee's estate shall receive any unpaid Salary, Base Bonus and Fringe
Benefits that have accrued through the date of termination.
(c) Cause. The Company may terminate the Employment Term for "cause" by
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giving the Employee 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 Employee, except that the Employee shall receive any unpaid Salary, Base
Bonus and Fringe Benefits that have accrued through the date of termination.
For purposes of this Agreement, "cause" shall mean the Employee's (i) breach of
(other than by reason of illness, injury or incapacity) of any of the material
terms or provisions of this Agreement, (ii) the willful and substantial failure
to comply fully with the lawful directives of the Board, (iii) substantial and
willful misconduct, (iv) material neglect of the Company's business, (v)
conviction of a felony or other crime involving moral turpitude, (vi)
misappropriation of funds or (vii) habitual abuse of alcohol, narcotics or other
controlled substances. In the case of a termination for "cause," the notice of
termination shall specify the basis for the Company's determination of "cause";
provided, however, that in the case of conduct described in clauses (i), (ii),
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(iii) and (iv) above, such conduct shall not constitute "cause" for the purposes
of this paragraph (c) unless (A) the Board shall have given the Employee notice
setting forth with specificity (1) the conduct deemed to constitute "cause," (2)
reasonable action that would remedy the objectionable conduct, and (3) a
reasonable time (not less than 5 days) within which the Employee may take such
remedial action, and (B) the Employee shall not have taken such specified
remedial action within such specified reasonable time.
5. Termination With Compensation. The Company shall have the right to
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terminate the Employment Term without cause at any time by giving the Employee
30 days' notice of the termination date. In addition, the Employee may
terminate his services under this Agreement "for good reason" by giving the
Board of Directors of the Company twenty (20) business days prior written notice
of such intent, which notice shall set forth in reasonable detail the facts and
circumstances which constitute "for good reason". In the event of a termination
of the Employment Term pursuant to this Section 5, the Company shall continue to
pay to the Employee the Salary and continue to provide the Fringe Benefits
listed in paragraph (a) of Exhibit A hereto for a period ending nine months
after the date of any such termination. The Salary to be paid and the Fringe
Benefits to be provided under this Section 5 are referred to herein as the
"Termination Compensation." The Employee shall not be entitled to any
Termination Compensation unless the Employee executes and delivers to the
Company after a notice of termination a release in a form
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satisfactory to the Company in its sole discretion by which the Employee
releases the Company from any obligations and liabilities of any type whatsoever
under this Agreement, 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 5 is to be provided in
consideration for the above-specified release. The Company's obligations under
this Section 5 shall be reduced by and to the extent of any income earned by the
Employee through employment with an employer other than the Company that is
received by or accrued for the benefit of the Employee during the remainder of
the Employment Term; provided, however, that such obligations shall only be so
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reduced by any such earnings if the Company, upon written request from the
Employee, grants a waiver of its rights under Section 6 hereunder. For purposes
hereof, the term "for good reason" shall mean (i) any material breach by the
Company of any provision of this Agreement which is not fully addressed within
thirty (30) days after written receipt of notice of a breach or (ii) (A) on or
after the date any "person" (as defined in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") is or becomes a
"beneficial owner" (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Company representing 50% or
more of the voting power of the then outstanding securities of the Company (such
event is referred to as a "change in control") and (B) without Employee's
express written consent, any of the following shall occur: (1) the assignment to
Employee of any duties inconsistent with Employee's positions, duties,
responsibilities and status with Employee immediately prior to a change in
control; (2) a change in Employee's reporting responsibilities, titles or
offices as in effect immediately prior to a change in control; (3) any removal
of Employee from, or any failure to re-elect Employee to the office of Chief
Operating Officer, except in connection with a termination of employment
pursuant to this Agreement.
6. Agreement Not to Compete.
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(a) The Employee covenants that for the period beginning on the
termination of Employee's employment hereunder and ending on the second
anniversary of the date of such termination of employment 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 at any time
during such period within any portion of the United States in the direct
marketing business which includes inbound and outbound telemarketing,
fulfillment, direct mail, customer retention, market research and interactive
voice response (the "Business"). It is recognized by the Employee 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 6(b)) are therefore not appropriate. The foregoing
restriction shall not be construed to prohibit the ownership by Employee 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.
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(b) The Employee 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 6(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 Employee recognizes and acknowledges that by reason of his
employment by the Company he has had access to Confidential Information relating
to the Business. The Employee 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 Employee, (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 Employee acknowledges that the restrictions contained in this
Section 6 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 Employee 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 6, 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 6 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) The covenants set forth in this Section 6 shall be in addition to
not in limitation of any similar covenants set forth in the Purchase Agreement.
7. Inventions, Designs and Product Developments.
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All inventions, innovations, designs, ideas and product developments,
developed or conceived by the Employee, solely or jointly with others, whether
or not patentable or copyrightable, at any time during the Employment Term or
during his employment by the Company prior to the commencement of the Employment
Term and that relate to the actual or planned business activities of the Company
(collectively, the "Developments") and all of the Employee's right, title and
interest therein, shall be the exclusive property of the Company. The Employee
hereby assigns, transfers and conveys to the Company all of his right, title and
interest in and to any and all such Developments. The Employee shall disclose
fully, as soon as practicable and in writing, all material and substantial
Developments to the Board. At any time and from time to time, upon the request
of the Company, the Employee shall execute and deliver to the Company any and
all instruments, documents and papers, give evidence and do any and all other
reasonable acts that, in the opinion
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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 Employee
for all reasonable expenses incurred by his in compliance with the provisions of
this Section 7.
8. Confidential Information.
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(a) The Employee 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 Employee or which he is
authorized to disclose, is referred to collectively as the "Company
Information." During and after the Employment Term, the Employee 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.
(b) All Company Information developed, created or maintained by the
Employee, alone or with others while employed by the Company, and all Company
Information maintained by the Employee thereafter, shall remain at all times the
exclusive property of the Company. The Employee 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 employment by the Company.
9. Remedies.
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The Employee expressly acknowledges that the remedy at law for any breach
of Sections 6, 7 and 8 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 Employee'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 9, 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.
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10. General.
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(a) Governing Law. This Agreement is made and entered into in the
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Commonwealth of Pennsylvania, and shall in all respects be interpreted, enforced
and governed by and under the laws of the Commonwealth. Any dispute,
controversy or claim which relates in any way to this Agreement and which has
not been resolved by the parties shall be determined and settled in Pennsylvania
in accordance with Arbitration rules of the American Arbitration Association.
The arbitration hearing shall be held in Pennsylvania unless the Company and
Employee mutually agree to another location. The arbitration shall be heard by
a panel of three arbitrators, each of whom shall be experienced in the
resolution of disputes, controversies or claims relating to employment issues.
One such arbitrator shall be selected by Employee, one such arbitrator shall be
selected by the Company, and one such arbitrator shall be selected by the
arbitrators selected by the Company and Employee. Resolution of disputes,
controversies or claims shall be determined by a majority vote of the
arbitration panel. The Company shall bear all fees, costs and expenses of the
arbitration, and the legal expenses and attorneys' fees of each party, and costs
of all experts and witnesses, unless the arbitration award is granted to the
Company, in which event, the Company and Employee shall share equally all fees,
costs and expenses of the arbitration, including reasonable attorney's fees. Any
award rendered shall be final and conclusive upon the parties and any judgment
thereon may be enforced in any court having jurisdiction, unless otherwise
provided by Pennsylvania law. The party submitting such dispute shall request
the American Arbitration Association to allow the parties (i) to request
reasonable discovery pursuant to the rules then in effect under the Federal
Rules of Civil Procedure (as used in the United States District Court in the
Eastern District of Pennsylvania) for a period not to exceed 60 days prior to
such arbitration and (ii) to require the testimony to be transcribed. The fact
that arbitration has commenced shall not impair the exercise of any termination
rights in accordance with the provisions of this Agreement.
(b) Company. For purposes of Sections 6, 7, 8 and 9, the term "Company"
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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
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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 Employee hereunder are of a
personal nature and shall not be assignable in whole or in part by the Employee.
(d) Notices. All notices required to be given under this Agreement shall
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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:
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TO EMPLOYEE:
Xx. Xxxxxxxx X. Xxxxxxxx
TO THE COMPANY:
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. This Agreement constitutes the entire
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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.
(f) Duration. Notwithstanding the termination of the Employment Term and
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of the Employee's employment by the Company, this Agreement shall continue to
bind the parties for so long as any obligations remain under the terms of this
Agreement.
(g) Waiver. No waiver of any breach of this Agreement shall be construed
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to be a waiver as to succeeding breaches.
(h) Severability. If any provision of this Agreement or application
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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
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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:__________________________
Chairman of the Board
_____________________________
XXXXXXXX X. XXXXXXXX
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EXHIBIT A
FRINGE BENEFITS
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(a) Health insurance and short-term and long-term disability insurance for
the Employee, with the same benefits generally provided to the Company's most
senior executive employees from time to time during the Employment Term.
(b) Eligibility to participate in any 401(k) savings plans maintained by
the Company during the Employment Term.
(c) Term life insurance.
(d) Eligibility to participate in any employee stock option plan maintained
by the Company during the Employment Term.
(e) Reimbursement, in accordance with the Company's policies, upon proper
accounting, of the monthly fee of a mobile telephone and charges for any
business telephone calls made on the Employee's personal telephone.
(f) Paid holidays in accordance with the Company's policies.
(g) Paid vacation of four weeks per year.