Exhibit 10.23
EMPLOYMENT AGREEMENT
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THIS AGREEMENT, dated as of the 6/th/ day of January, 1999, by and between
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLC, a Delaware limited liability company, (the
"Company") and ▇▇▇▇▇▇▇▇ ▇▇▇▇ (the "Executive").
WHEREAS, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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., ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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 the
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Closing, as defined in the Recapitalization Agreement, if, but only if, the
Transaction is consummated.
(b) Employment Period. The Company shall employ the Executive, and
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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 serve
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as Chief Executive Officer and President of the Strategic Interactive Group,
with the duties and responsibilities customarily assigned to such position and
such other duties and responsibilities as the Board of Directors (the "Board")
of Vesuvio, Inc. (which is the trustee of BSH) or the Chief Executive Officer of
the Company shall from time to time assign to the Executive.
(b) Duties. During the Employment Period, and excluding any periods
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of vacation and sick leave to which the Executive is entitled, the Executive
shall devote her full business attention and time to the business and affairs of
the Company and shall use her 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 $400,000 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 shall
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be eligible for an annual bonus (the "Annual Bonus") for each fiscal year ending
during the Employment Period, in an amount recommended by the Chief Executive
Officer, subject to approval by the Compensation Committee of the Board.
(c) Deferred Compensation. In addition to the other compensation to
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be paid to the Executive hereunder, the Executive shall be entitled to receive
deferred compensation in the amount of $872,333.00 (the "Deferred
Compensation"), subject to the following terms: (a) $15,000 will be paid to the
Executive on or before ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) $643,000.00 will be paid to the
Executive on or before May 15, 1999, and (c) $214,333.00 will be paid to the
Executive on or before May 30, 2000; provided, however, that the Company shall
not make such payments if and to the extent they would otherwise be due after
the termination of the Executive's employment with the Company, voluntarily by
the Executive (other than for Good Reason) or by the Company for Cause.
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(d) Benefits. During the Employment Period, the Executive shall be
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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.
(e) 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 her duties under this Agreement, provided that the
Executive complies with the 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 by
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the Company under any of the following circumstances: (i) upon the "Disability"
of the Executive, defined as the inability of the Executive to perform her
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.
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(b) By the Executive. The Executive's employment may be terminated by
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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 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; or (iii) 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
twelve 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 twelve 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; (iii) pay the Executive, in accordance
with Section 3(c), any Deferred Compensation that has not yet been paid; and
(iv) pay the Executive any other 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 90th 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, (iv) any Deferred Compensation
that has not yet been paid, in accordance with Section 3(c), in the case of
termination because of death or disability, and (v) vested benefits, if any,
required to be paid or provided by law.
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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 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 principal competitor of the Company or any of its
Affiliated Companies in a substantially similar corporate function as
the Executive held with the Company or any of its Affiliated Companies
during the two-year period prior to termination of employment;
(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 her 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 her
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
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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 she
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 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 prevent or
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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.
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7. No Mitigation. In no event shall the Executive be obligated to seek
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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 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: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLC
Prudential Tower
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Executive: At her residence address
▇▇▇▇▇▇▇▇ ▇▇▇▇: most recently filed with the Company.
In each case, with a copy to HFCP Investor
If to HFCP Investor: ▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(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.
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9. Entire Agreement; Effect if No Transaction. As of the Effective Time,
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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 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 hereto. Notwithstanding
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anything to the contrary contained herein, this Agreement shall not supersede
the agreements and plans set forth on Schedule B hereto, which agrements and
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plans shall remain in full force and effect except as provided in Schedule B.
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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
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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.
(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 her 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/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLC
By /s/ ▇▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
Schedule A
▇▇▇▇▇▇▇▇ ▇▇▇▇
(Employment and Release Agreements)
Amended and Restated Employment Agreement by and between
Strategic Interactive Group, Inc. (predecessor in interest to
Strategic Interactive Group, LLC) and ▇▇▇▇▇▇▇▇ ▇▇▇▇, dated June
18, 1997, effective as of January 1, 1997, as amended by
amendment dated December 1, 1997.
Deferred Compensation Agreement by and between Strategic
Interactive Group, Inc. (predecessor in interest to Strategic
Interactive Group, LLC) and ▇▇▇▇▇▇▇▇ ▇▇▇▇, dated June 18, 1997.
Employment Agreement, by and between Strategic Interactive
Group, Inc. (predecessor in interest to Strategic Interactive
Group, LLC) and ▇▇▇▇▇▇▇▇ ▇▇▇▇, dated March 31, 1995.
Employee Incentive Stock Option Agreement by and between
Strategic Interactive Group, Inc. (predecessor in interest to
Strategic Interactive Group Co.) and ▇▇▇▇▇▇▇▇ ▇▇▇▇, dated March
31, 1995.
Memorandum of Understanding between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Inc. (predecessor in interest to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
LLC) and ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ Pinchanski, and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
dated February 23, 1995.
Schedule B
▇▇▇▇▇▇▇▇ ▇▇▇▇
(Employment and Release Agreements)
Non-Qualified Stock Option Agreement by and between Strategic
Interactive Group, Inc. (predecessor in interest to Strategic
Interactive Group Co.) and ▇▇▇▇▇▇▇▇ ▇▇▇▇, dated June 18, 1997.
The Strategic Interactive Group, Inc. (predecessor in interest
to Strategic Interactive Group Co.) 1995 Equity Incentive Plan.