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EXHIBIT 10.15
DIRECT SALES INTERNATIONAL, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (this "AGREEMENT") is made and entered into
as of January 28, 2000, by and between Direct Sales International, Inc., a
Delaware corporation (the "COMPANY", and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("EMPLOYEE").
1. ENGAGEMENT AND RESPONSIBILITIES
1.1 Upon the terms and subject to the conditions set forth in this
Agreement, the Company hereby employs Employee as an officer of the Company.
Employee hereby accepts such employment. Employee shall have the title of Vice
President, but may have any executive officer title determined by the Board
provided that Employee always has a title which is no less senior than Vice
President. Subject to Employee's consent, Employee shall also have serve from
time to time as an officer and employee of such subsidiaries of the Company as
the Board or Chief Executive Officer of the Company may from time to time
request, provided that the subsidiary operates in Atlanta, Georgia.
1.2 Employee agrees to devote all of Employee's business time, energy
and efforts to the business of the Company and will use Employee's best efforts
and abilities faithfully and diligently to promote the Company's business
interests. Employee's duties and responsibilities shall be those incident to
those which are normally and customarily vested in such office(s) of a
corporation. In addition, Employee's duties shall include those duties and
services for the Company and its affiliates as the Board shall, in its sole and
absolute discretion, from time to time reasonably direct which are not
inconsistent with Employee's position described in Section 1.1. Notwithstanding
the foregoing, Employee may from time to time perform services for Publishers
Fullfillment Services, a business owned by his spouse, provided that the
performance does not interfere with the performance of his duties and
obligations under this Agreement. Employee's services shall be performed
primarily in Atlanta, Georgia.
1.3 For so long as Employee is employed by the Company, Employee shall
not, directly or indirectly, either as an employee, employer, consultant, agent,
investor, principal, partner, stockholder (except as the holder of less than 5%
of the issued and outstanding stock of a publicly held corporation), corporate
officer or director, or in any other individual or representative capacity,
engage or participate in any business that is in competition in any manner
whatsoever with the business of the Company Group, as such businesses are now or
hereafter conducted.
2. DEFINITIONS
"BOARD" shall mean the Board of Directors of the Company.
"COMPANY GROUP" shall mean the Company, Symposium Corporation, and each
Person that the Company directly or indirectly Controls or that Controls the
Company.
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"CONTROL" shall mean, with respect to any Person, (i) the beneficial
ownership of more than 50% of the outstanding voting securities of such Person,
or (ii) the power, directly or indirectly, by proxy, voting trust or otherwise,
to elect a majority of the outstanding directors, trustees or other managing
persons of such Person.
"DISABILITY," with respect to Employee, shall mean that, for physical
or mental seasons, Employee is unable to perform the essential functions of
Employee's duties under this Agreement for 90 days during any one six month
period. Employee agrees to submit to a reasonable number of examinations by a
medical doctor reasonably acceptable to Employee advising the Company as to
whether Employee shall have suffered a disability and be unable to return to
work for 90 days. Employee hereby authorizes the disclosure and release to the
Company and its agents and representatives medical records relating to the issue
of Employee's Disability. If Employee is not legally competent, Employee's legal
guardian or duly authorized attorney-in-fact will act in Employee's stead for
the purposes of submitting Employee to the examinations, and providing the
authorization of disclosure of Employee's ability or inability to return to
work.
"FOR CAUSE" shall mean, in the context of a basis for termination of
Employee's employment with the Company, that:
2.1 Employee breaches any obligation, duty or agreement under this
Agreement, which breach is not cured or corrected within 30 days of written
notice thereof from the Company (except for breaches of Sections 1.3, 7 or 8 of
this Agreement, which cannot be cured and for which the Company need not give
any opportunity to cure); or
2.2 Employee commits any act of fraud, embezzlement, breach of
fiduciary duty or trust against the Company Group; or
2.3 Employee is indicted for, or convicted of, or pleads guilty or nolo
contendere with respect to, theft, fraud, a crime involving moral turpitude, or
a felony (other than a felony arising out of the use of a motor vehicle) under
federal or applicable state law; or
2.4 Employee commits any act of personal conduct that, in the
reasonable opinion of the Board, gives rise to any member of the Company Group
of a material risk of liability under federal or applicable state law for
discrimination or sexual or other forms of harassment or other similar
liabilities to subordinate employees; or
2.5 Employee commits continued and repeated substantive violations of
specific written directions of the Board or Chief Executive Officer, which
directions are consistent with this Agreement.
"MOCAP" shall mean Media Outsourcing Circulation Alliance Program.
"MOS" Media Outsourcing LLC, a Georgia LLC wholly owned by the Company.
"PERSON" shall mean an individual or a partnership, corporation, trust,
association, limited liability company, governmental authority or other entity.
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3. COMPENSATION AND BENEFITS
For so long as Employee shall be employed by the Company, Employee
shall receive the compensation and benefits set forth in this Section 3.
3.1 Salary. The Company shall pay Employee a salary at an annual rate
of $300,000. The Board may, but shall not be obligated to, increase Employee's
salary from time to time. The salary shall be payable in installments in the
same manner and at the same times the Company pays salaries to other executive
officers of the Company, but in no event less frequently than equal monthly
installments.
3.2 Bonus. Employee shall be entitled to a bonus each calendar year
(commencing the year 2000) based on the earnings before income taxes,
depreciation and amortization ("EBITDA") of the Company and its consolidated
subsidiaries as determined in accordance with generally accepted accounting
principles, consistently applied, as follows:
If EBITDA for year is Bonus is
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Less than $6,800,000 0
$6,800,000 - $7,000,000 $100,000
$7,000,000 - $7,999,999 $150,000
$8,000,000 - $8,999,999 $175,000
$9,000,000 or more $200,000
In no event shall the bonus exceed $200,000 for any calendar year. The
Company shall pay the bonus within 20 days following the completion of audit of
the financial statements of the Company (or its parent corporation) for the
year.
3.3 Magazine Bonus. For each calendar month commencing January 2000,
Employee shall be entitled to a magazine bonus (the "MAGAZINE BONUS") equal to
15% of the actual magazine bonus dollars received by the Company from publishers
during such month less Magazine Bonus Sales Costs incurred by the Company during
such month. "MAGAZINE BONUS SALES COSTS" includes remits to publishers relating
to the bonus programs, the cost of preparing mailing promotion pieces to
customers, the cost of getting subscriptions paid to clients and the payments of
bonus dollars to clients. The Magazine Bonus shall not be considered part of the
actual sales costs. The Company shall pay the Magazine Bonus for any month
within 30 days following the end of such month. If in any month the actual sales
costs exceed the actual magazine bonus dollars received from publishers, such
excess costs shall be carried over to following months and shall be applied
against actual magazine bonus dollars received from publishers in subsequent
months.
3.4 MOCAP Bonus. For each calendar month commencing January 2000,
Employee shall be entitled to a MOCAP Bonus equal to 15% of the actual magazine
bonus dollars received by the Company from publishers during such month with
respect to the MOCAP program less MOCAP Bonus Sales Costs incurred by the
Company during such month. "MOCAP BONUS SALES COSTS" includes remits to
publishers relating to the MOCAP programs, the cost of preparing mailing
promotion pieces to customers, the cost of getting subscriptions paid to
clients,
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the payment of bonus dollars to the clients and the expenses of the consultant
for MOCAP, including consulting fees, travel and entertainment expenses. The
MOCAP Bonus shall not be considered part of the MOCAP Bonus Sales Costs. The
Company shall pay the MOCAP Bonus for any month within 30 days following the end
of such month. If in any month the actual MOCAP Bonus Sales Costs exceed the
actual magazine bonus dollars received from publishers, such excess costs shall
be carried over to the following month(s) and shall be applied against actual
magazine bonus dollars received form publishers in subsequent months.
In addition, Employee shall be entitled to a one-time bonus of $25,000
payable within 90 days following the first (and only the first) calendar year in
which tine Company's actual magazine bonus dollars received by the Company from
publishers during such year with respect to the MOCAP program exceed $500,000
provided that such revenues are earned while Employee is employed pursuant to
this Agreement.
3.5 Expense Reimbursement. Employee shall be entitled to reimbursement
from the Company for the reasonable out-of-pocket costs and expenses which
Employee incurs in connection with the performance of Employee's duties and
obligations under his Agreement in a manner consistent with the Company's
practices and policies therefor.
3.6 Employee Benefit Plans. Employee shall be entitled to participate
in any pension, savings and group term medical, dental, and other group benefit
plans that the Company makes available to its executive officers generally
except for life insurance and disability insurance. The Company shall provide to
Employee term life and disability insurance comparable to the insurance provided
by Direct Sales International L.P. (Employee's former employer) to Employee as
of January 1, 2000.
3.7 Vacation. Employee shall be entitled to paid vacation which accrues
at a rate of six weeks per year. Vacation shall accrue in accordance with the
Company's standard vacation accrual policy.
3.8 Disability. In the event of any Disability, if Employee shall
receive payments as a result of such Disability under any disability plan
maintained by the Company or from any government agency, the Company shall be
entitled to deduct the amount of such payments received from base salary payable
to Employee during the period of such Disability.
3.9 Withholding. The Company may deduct from any compensation payable
to Employee (including payments made pursuant to Section 5 of this Agreement in
connection with or following termination of employment) amounts it believes are
required to be withheld under federal and state law, including applicable
federal, state and/or local income tax withholding, old-age and survivors' and
other social security payments, state disability and other insurance premiums
and payments.
3.10 Company Car. The Company shall provide to Employee use of a car
(Lexus 400, Infiniti Q45, Jaguar XJ8L or equivalent). When the lease on the
current car expires, Employee shall have the right to select the make and model
of the car the Company must provide to him, within the price range of the cars
identified above. If Employee's employment terminates on or after December 31,
2002, for any reason other than for cause by the Company under Section 4.4
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of this Agreement, or is terminated without cause by the Company at any time,
the Company shall transfer title to such car to Employee, free and clear of all
liens, as a retirement/termination bonus and shall make a payment to Employee of
an amount equal to 40% multiplied by the Company's reasonable estimate of the
fair market value of the car.
3.11 Country Club Membership. The Company shall purchase a membership
in a country club in a location of Employee's choice, up to a maximum purchase
price of $25,000, for Employee's use. Employee shall be responsible for any
monthly dues and other fees of such country club. If Employee's employment
terminates on or after December 31, 2002, for any reason other than for cause by
the Company under Section 4.4 of this Agreement, or is terminated without cause
by the Company at any time, the Company shall transfer the membership to
Employee.
3.12 Masters Golf Tournament. The Company shall provide to Employee two
Sunday tickets to the Masters Golf Tournament each year.
4. TERM OF EMPLOYMENT
Employee's term of employment pursuant to this Agreement shall commence
as of the date hereof and shall terminate on the earliest to occur of the
following (the "DATE OF TERMINATION"):
4.1 December 31, 2002;
4.2 upon the death of Employee;
4.3 upon delivery to Employee of written notice of termination by the
Company if Employee shall suffer a Disability;
4.4 upon delivery to Employee of written notice of termination by the
Company For Cause; or
4.5 upon delivery to Employee of written notice of termination by the
Company without cause.
5. SEVERANCE COMPENSATION
5.1 If Employee's employment is terminated pursuant to Section 4.5 (by the
Company without cause), prior to December 31, 2002, the Company shall: (a) until
the earlier to occur of December 31, 2002 or one year from the Date of
Termination, continue to (i) pay to Employee salary at the rate in effect on the
Date of Termination; and (ii) pay for Employee's (and his immediate family's)
participation in all the Company's medical, life, dental, disability and similar
plans in which he was participating to the extent permitted by the plan; and (b)
pay to Employee a pro-rated share of any bonus which would have been earned by
Employee pursuant to Section 3.2 of this Agreement had Employee been employed
the entire year in which the Date of Termination occurs. Notwithstanding the
foregoing, the Company may terminate any payments pursuant to this Section 5.1
upon any breach by Employee of any provision of Section
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7 or 8 of this Agreement. The calculation of the pro rata share of any bonus
shall be based upon the number of days in such calendar year during which
Employee shall have been employed.
5.2 If Employee's employment is terminated for any reason other than by
the Company without cause prior to December 31, 2002 pursuant to Section 4.5 of
this Agreement, the Company shall pay to Employee (or Employee's estate or
beneficiary, as the case may be), any unpaid base salary through the Date of
Termination and, if termination was pursuant to Section 4.3 (Disability of
Employee), the Company shall pay to Employee a pro-rated share of any bonus
which would have been earned by Employee pursuant to Section 3.2 of this
Agreement had Employee been employed the entire year in which the Date of
Termination occurs. Employee shall not be entitled to any bonus (other than as
set forth in the preceding sentence) for the year in which the Date of
Termination occurs. All rights and benefits which Employee or his estate may
have under employee benefit plans in which Employee shall be participating at
the Date of Termination shall be determined in accordance with such plans.
5.3 Employee acknowledges that the Company has the right to terminate
Employee's employment without cause and that such termination shall not be a
breach of this Agreement or any other express or implied agreement between the
Company and Employee. Accordingly, in the event of such termination, Employee
shall be entitled only to those benefits specifically provided in this Section
5, and shall not have any other rights to any compensation or damages from the
Company for breach of contract.
5.4 Employee acknowledges that in the event of termination of
Employee's employment for any reason, Employee (nor Employee's estate, heirs,
beneficiaries or others claiming through Employee) shall not be entitled to any
severance or other compensation from the Company except as specifically provided
in this Section 5. Without limitation on the generality of the foregoing, this
Section supersedes any plan or policy of the Company which provides for
severance to its officers or employees, and Employee shall not be entitled to
any benefits under any such plan or policy.
5.5 In the event of any termination of Employee's employment, including
the expiration of this Agreement, other than For Cause by the Company or
termination by Employee prior to December 31, 2002 (which termination would be
in breach of this Agreement), the Company shall continue to pay to Employee the
Magazine Bonus and the MOCAP Bonus with respect to binding agreements with
publishers entered into prior to termination of employment and automatic
renewals of those agreements (renewals that do not require any approval, action
or consent of either the Company or the publisher in order to be continued).
Employee acknowledges that he will not be entitled to a Magazine Bonus or a
MOCAP Bonus based on actual magazine bonus dollars received by the Company from
publishers based on agreements entered into or not automatically renewed after
termination of his employment, even if the publisher had previously entered into
such agreements with the Company.
6. OPTIONS. Employee has concurrently herewith been granted options to
purchase 150,000 shares of Common Stock under the 1998 Stock Option Plan of
Symposium Corporation.
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7. COVENANT NOT TO SOLICIT
From the date hereof until two years from the Date of Termination:
7.1 Employee will not, directly or indirectly, influence or attempt to
influence any customer of the Company Group to reduce or discontinue its
purchases of any products or services from the Company Group or to divert such
purchases to any Person other than the Company Group; provided, however, that if
the Company terminates Employee's employment without cause pursuant to Section
4.5 of this Agreement, this covenant will expire at the earlier to occur of two
years from the Date of Termination or such time as Employee shall no longer be
receiving any salary, severance or Magazine Bonus payments of at least $10,000
per month under this Agreement;
7.2 Employee will not, directly or indirectly, interfere with, disrupt
or attempt to disrupt the relationship, contractual or otherwise, between the
Company Group and any of its respective suppliers, principals, distributors,
lessors or licensors; and
7.3 Employee will not, directly or indirectly, solicit any employee of
the Company Group to work for any Person.
8. CONFIDENTIALITY
Employee agrees not to disclose or use at any time (whether during or
after Employee's employment with the Company) for Employee's own benefit or
purposes or the benefit or purposes of any other Person any trade secrets,
information, data, or other confidential information relating to customers,
development programs, costs, marketing, trading, investment, sales activities,
promotion, credit and financial data, financial methods, plans, or the business
and affairs of the Company Group generally, provided that the foregoing shall
not apply to information which is not unique to the Company Group or which is
generally known to the industry or the public other than as a result of
Employee's breach of this covenant. Employee agrees that upon termination of his
employment with the Company for any reason, he will return to the Company
immediately all memoranda, books, papers, plans, information, letters and other
data, and all copies thereof or therefrom, in any way relating to the business
of the Company Group except that he may retain personal notes, notebooks,
diaries, rolodexes and addresses and phone numbers. Employee further agrees that
he will not retain or use for his account at any time any trade names, trademark
or other proprietary business designation used or owned in connection with the
business of any member of the Company Group.
9. EMPLOYMENT FOLLOWING DECEMBER 31, 2002. If Employee's employment
continues following December 31, 2002: (a) such employment shall be "at will,"
and may be terminated either by the Employee upon 30 days written notice to the
Company or by the Company at any time; and (b) except as otherwise provided in
writing, all of the provisions of this Agreement shall be applicable to such
continued employment, except: (i) Employee's compensation shall consist only of
salary at the rate in effect at December 31, 2002, (ii) Employee shall not be
entitled to any bonus compensation except for the Magazine Bonus and the MOCAP
Bonus; and (iii) the provisions of Section 4 shall be superseded to the extent
discussed in this Section 9.
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10. MISCELLANEOUS
10.1 Notices. All notices, requests, demands and other communications
(collectively, "NOTICES") given pursuant to this Agreement shall be in writing,
and shall be delivered by personal service, courier, facsimile transmission or
by United States first class, registered or certified mail, addressed to the
following addresses:
If to the Company, to:
Direct Sales International, Inc.
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Attn: President
With a copy to:
Symposium Corporation
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Attn: Chief Executive Officer
If to Employee, to:
Employee's address as set forth on the books
and records of the Company
Any Notice, other than a Notice sent by registered or certified mail, shall be
effective when received; a Notice sent by registered or certified mail, postage
prepaid return receipt requested, shall be effective on the earlier of when
received or the third day following deposit in the United States mails. Any
party may from time to time change its address for further Notices hereunder by
giving notice to the other party in the manner prescribed in this Section.
10.2 Entire Agreement. This Agreement contains the sole and entire
agreement and understanding of the parties with respect to the entire subject
matter of this Agreement, and any and all prior discussions, negotiations,
commitments and understandings, whether oral or otherwise, related to the
subject matter of this Agreement are hereby merged herein. No representations,
oral or otherwise, express or implied, other than those contained in this
Agreement have been relied upon by any party to this Agreement.
10.3 Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be unaffected
thereby and shall remain in full force and effect to the fullest extent
permitted by law.
10.4 Governing Law. This Agreement has been made and entered into in
the State of Georgia and shall be construed in accordance with the laws of the
State of Georgia.
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10.5 Captions. The various captions of this Agreement are for reference
only and shall not be considered or referred to in resolving questions of
interpretation of this Agreement.
10.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
10.7 Attorneys' Fees. If any action or proceeding is brought to enforce
or interpret any provision of this Agreement, the prevailing party shall be
entitled to recover as an element of its costs, and not its damages, its
reasonable attorneys' fees, costs and expenses. The prevailing party is the
party who is entitled to recover its costs in the action or proceeding. A party
not entitled to recover its costs may not recover attorneys' fees. No sum for
attorneys' fees shall be counted in calculating the amount of a judgment for
purposes of determining whether a party is entitled to recover its costs or
attorneys' fees.
10.8 Effectiveness. This Agreement becomes effective if and only if the
Company acquires the substantially all of the assets of Direct Sales
International L.P. ("DSI"). If such acquisition does not occur by January 31,
2000, this Agreement shall be never become effective and shall be void. Employee
agrees that under no circumstance is the Company assuming any obligation or
liability of DSI or any subsidiary of DSI to Employee.
In Witness Whereof, the parties have executed this Agreement as of the
date first above written.
Direct Sales International, Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Executive Officer
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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