EMPLOYMENT AGREEMENT
This Agreement is made as of the 1st day of September, 1998
between Outsourcing Solutions Inc., a Delaware corporation, with offices at 390
South Woods Mill Road, Suite 350, Chesterfield, Missouri 63017 (the "Company"),
and Michael A. DiMarco, an individual residing in the State of Missouri (the
"Employee").
RECITALS
WHEREAS, the Company desires to secure the services and
employment of the Employee on behalf of the Company, and the Employee desires to
enter into employment with the Company, upon the terms and conditions
hereinafter set forth.
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. The Company hereby employs the Employee as
Executive Vice President--President of Fee Services of the Company, and the
Employee accepts such employment for the term of the employment specified in
Section 3 below. During the Employment Term (as defined below), the Employee
shall serve as the Executive Vice President--President of Fee Services of the
Company, performing such duties as shall be reasonably required of such an
employee of the Company, and shall have such other powers and perform such other
additional executive duties as may from time to time be assigned to him by the
Board of Directors of the Company. The Employee's primary place of employment
shall be St. Louis, Missouri.
2. Performance. The Employee will serve the Company faithfully
and to the best of his ability and will devote substantially all of his time,
energy, experience and talents during regular business hours and as otherwise
reasonably necessary to such employment, to the exclusion of all other business
activities.
3. Employment Term. The employment term shall begin on the date
of this Agreement and continue until December 31, 1999, unless earlier
terminated pursuant to Section 7 below (the "Employment Term"); provided, that
on December 31, 1999 and on each anniversary thereafter, the Employment Term
shall be automatically extended for an additional twelve month period unless 30
days prior to such anniversary date either the Company or the Employee shall
give written notice of termination of the Agreement, in which case the Agreement
will terminate at the end of the then existing Employment Term.
4. Compensation.
(a) Salary. During the Employment Term, the Company shall pay the
Employee a base salary, payable in equal semimonthly installments, subject to
withholding and other applicable taxes, at an annual rate of Three Hundred
Twenty Five Thousand Dollars ($325,000.00).
(b) Bonus. For the period commencing on the date of this
Agreement and ending on December 31, 1998, the Employee shall receive a bonus of
no less than $220,000 and the Company shall pay the Employee such guaranteed
amount, subject to withholding and other applicable taxes, on or before March
15, 1999. Commencing on January 1, 1999, the Employee shall be eligible for a
target annual bonus of 67% of his base salary. Annual bonuses (other than the
guaranteed portion of the 1998 bonus) shall be based on the satisfaction of
performance targets established by the Board of Directors on or before December
31 of each year for the next succeeding year.
(c) Medical and Dental Health, Life and Disability Insurance
Benefits. During the Employment Term, the Employee shall be entitled to medical
and dental health, life insurance and disability insurance benefits in
accordance with the Company's established practices with respect to its key
employees.
(d) Vacation; Sick Leave. During the Employment Term, the
Employee shall be entitled to vacation and sick leave in accordance with the
Company's established practices with respect to its key employees.
5. Expenses.
(a) The Employee shall be reimbursed by the Company for all
reasonable expenses incurred by him in connection with the performance of his
duties hereunder in accordance with policies established by the Board from time
to time and upon receipt of appropriate documentation.
(b) The Employee shall be reimbursed by the Company for
normal moving and relocation expenses incurred by Employee to move his residence
to the St. Louis metropolitan area, including reasonable and customary real
estate commission, closing costs and discount points and reasonable expenses for
temporary living, return home travel and family travel to St. Louis for house
purchasing purposes. If requested by Employee, Company shall provide an advance
of $115,000 to facilitate Employee's relocation, to be repaid to the Company no
later than 48 hours following the closing of the sale of Employee's current
residence in Fairview, Texas.
6. Secret Processes and Confidential Information. For the
Employment Term and thereafter, (a) the Employee will not divulge, transmit or
otherwise disclose (except as legally compelled by court order, and then only to
the extent required, after prompt notice to the Company of any such order),
directly or indirectly, other than in the regular and proper course of business
of the Company, any confidential knowledge or information with respect to the
operations or finances of the Company or with respect to confidential or secret
processes, services, techniques, customers or plans with respect to the Company
and (b) the Employee will not use, directly or indirectly, any confidential
information for the benefit of anyone other than the Company; provided, however,
that the Employee has no obligation, express or implied, to refrain from using
or disclosing to others any such knowledge or information which is or hereafter
shall become available to the public other than through disclosure by the
Employee. All new processes, techniques, know-how, inventions, plans, products,
patents and devices developed, made or invented by the Employee, alone or with
others, while an employee of the Company, shall be and become the sole property
of the Company, unless released in writing by the Company, and the Employee
hereby assigns any and all rights therein or thereto to the Company.
During the term of this Agreement and thereafter, Employee shall
not take any action to disparage or criticize to any third parties any of the
services of the Company or to commit any other action that injures or hinders
the business relationships of the Company.
During the term of this Agreement and for two years thereafter,
Employee shall not employ, solicit for employment or otherwise contract for the
services of any employee of the Company or any of its Affiliates (as defined
below) at the time of this Agreement or who shall subsequently become an
employee of the Company or any of its Affiliates, provided that Employee shall
not be prohibited from such solicitation or employment if such employee (a)
initiated discussions with Employee without any direct or indirect solicitation
from Employee, (b) responded to a general public solicitation, or (c) has
terminated employment with the Company prior to commencement of discussions with
Employee.
All files, records, documents, memorandums, notes or other
documents relating to the business of Company, whether prepared by Employee or
otherwise coming into his possession in the course of the performance of his
services under this Agreement, shall be the exclusive property of Company and
shall be delivered to Company and not retained by Employee upon termination of
this Agreement for any reason whatsoever.
7. Termination. The employment of the Employee hereunder may be
terminated at any time by the Company with or without "cause". For purposes of
this Agreement, "cause" shall mean: (i) embezzlement, theft or other
misappropriation of any property of the Company or any subsidiary, (ii) gross or
willful misconduct resulting in substantial loss to the Company or any
subsidiary or substantial damage to the reputation of the Company or any
subsidiary, (iii) any act involving moral turpitude which results in a
conviction for a felony involving moral turpitude, fraud or misrepresentation,
(iv) gross neglect of his assigned duties to the Company or any subsidiary, (v)
gross breach of his fiduciary obligations to the Company or any subsidiary, or
(vi) any chemical dependence which materially affects the performance of his
duties and responsibilities to the Company or any subsidiary; provided that in
the case of the misconduct set forth in clauses (iv) and (vi) above, such
misconduct shall continue for a period of 30 days following written notice
thereof by the Company to the Employee.
8. Severance. If (a) the Employee's employment is terminated by
the Company without "cause" or (b) the Company does not agree to extend the
Employment Term upon the expiration thereof, the Employee shall be entitled to
(i) receive an amount equal to his base salary for the year preceding the
Employee's termination, payable, at the Company's option, in a lump sum on the
date of termination or ratably over the one year period following the date of
termination (the "Severance Period"), and (ii) continue to receive the medical
and dental health benefits referred to in Section 4(c) during the Severance
Period; provided, however, if either such event occurs prior to the extension of
the initial Employment Term, Employee shall be entitled to (i) $325,000, payable
in a lump sum on the date of termination, and (ii) continue to receive the
medical and dental health benefits referred to in Section 4(c) during the
Severance Period. If the Employee's employment is terminated by the Company "for
cause", the Employee shall not be entitled to severance compensation. The
Employee covenants and agrees that he will not, during the one year period
following the termination of the Employee's employment by the Company, within
any jurisdiction or marketing area in which the Company or any of its Affiliates
(as defined below) is doing business or is qualified to do business, directly or
indirectly own, manage, operate, control, be employed by or participate in the
ownership, management, operation or control of, or be connected in any manner
with, any business of the type and character engaged in and competitive with
that conducted by the Company or any of its Affiliates at the time of such
termination; provided, however, that ownership of securities of 2% or less of
any class of securities of a public company shall not be considered to be
competition with the Company or any of its Affiliates. For the purposes of this
Section 8, the term "Affiliate" shall mean, with respect to the Company, any
person or entity which, directly or indirectly, owns or is owned by, or is under
common ownership with, the Company. The term "own" (including, with correlative
meanings, "owned by" and "under common ownership with") shall mean the ownership
of 50% or more of the voting securities (or their equivalent) of a particular
entity.
9. Notice. Any notices required or permitted hereunder shall be
in writing and shall be deemed to have been given when personally delivered or
when mailed, certified or registered mail, postage prepaid, to the following
addresses:
If to the Employee:
Michael A. DiMarco
247 Doulton Place
Town and Country, Missouri 63141
If to the Company:
Outsourcing Solutions Inc.
390 South Woods Mill Road, Suite 350
Chesterfield, Missouri 63017
Attn: President
With a copy to:
McCown De Leeuw & Co.
101 East 52nd Street
31st Floor
New York, New York 10022
Attention: David E. King
10. General.
(a) Governing Law; Jurisdiction. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Missouri applicable to contracts executed and to be performed
entirely within said State. Any judicial proceeding brought against any of the
parties to this Agreement or any dispute arising out of this Agreement or any
matter related hereto may be brought in the courts of the State of Missouri or
in the United States District Court for the Eastern District of Missouri, and,
by execution and delivery of this Agreement, each of the parties to this
Agreement accepts the jurisdiction of said courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement. The
foregoing consent to jurisdiction shall not be deemed to confer rights on any
person other than the respective parties to this Agreement.
(b) Assignability. The Employee may not assign his interest in or
delegate his duties under this Agreement. Notwithstanding anything else in this
Agreement to the contrary, the Company may assign this Agreement to and all
rights hereunder shall inure to the benefit of any person, firm or corporation
succeeding to all or substantially all of the business or assets of the Company
by purchase, merger or consolidation.
(c) Enforcement Costs. In the event that either the Company or
the Employee initiates an action or claim to enforce any provision or term of
this Agreement, the costs and expenses (including attorney's fees) of the
prevailing party shall be paid by the other party, such party to be deemed to
have prevailed if such action or claim is concluded pursuant to a court order or
final judgment which is not subject to appeal, a settlement agreement or
dismissal of the principle claims.
(d) Binding Effect. This Agreement is for the employment of
Employee, personally, and for the services to be rendered by him must be
rendered by him and no other person. This Agreement shall be binding upon and
inure to the benefit of the Company and its successors and assigns.
(e) Entire Agreement; Modification. This Agreement constitutes
the entire 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 term of employment hereunder,
this Agreement shall continue for so long as any obligations remain under this
Agreement.
(g) Survival. The covenants set forth in Sections 6 and 8 of this
Agreement shall survive and shall continue to be binding upon Employee
notwithstanding the termination of this Agreement for any reason whatsoever. The
covenants set forth in Sections 6 and 8 of this Agreement shall be deemed and
construed as separate agreements independent of any other provision of this
Agreement. The existence of any claim or cause of action by Employee against
Company, whether predicated on this Agreement or otherwise, shall not constitute
a defense to the enforcement by Company of any or all covenants. It is expressly
agreed that the remedy at law for the breach or any such covenant is inadequate
and that injunctive relief shall be available to prevent the breach or any
threatened breach thereof.
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have hereunto executed this Agreement the day and year first written
above.
OUTSOURCING SOLUTIONS INC.
By
/s/Timothy G. Beffa
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Timothy G. Beffa, President and
Chief Executive Officer
EMPLOYEE
/s/Michael A. DiMarco
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Michael A. DiMarco