TELESPECTRUM WORLDWIDE INC
EX-10.08
<DOCUMENT>
<TYPE>EX-10.08
<SEQUENCE>3
<FILENAME>p64756ex10-08.txt
<DESCRIPTION>EX-10.08
<TEXT>

<PAGE>   1
                                                                  EXHIBIT 10.08

                              EMPLOYMENT AGREEMENT


         This Agreement is made as of this 2nd day of January 2001 (the
"Starting Date") between TeleSpectrum Worldwide Inc., a Delaware corporation
(the "Company"), and J. Peter Pierce (the "Employee").


                                    RECITALS

         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:

         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.

         (a) During the term of the Employee's employment under this Agreement
(the "Employment Term"), the Employee shall be the Chief Executive Officer of
the Company and shall perform such duties consistent with such office as
described in the Company's Bylaws (a copy of which has been furnished to the
Employee) and as are assigned by the Company's Board of Directors (the "Board").
In addition, the Company shall appoint the Employee to the Board and the
Employee shall become the Chairman of the Board. Except for periodic travel
incident to Employee's duties hereunder, Employee shall not be required to
perform his duties hereunder outside a 50 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. The "Employment Term" shall begin on the Starting Date and,
unless terminated earlier pursuant to the terms of this Agreement, continue
until January 2, 2003.

3.       Compensation for Employment.

         (a) The Employee shall not be entitled to receive a salary or other
base pay for his employment services to the Company during the Employment Term.


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         (b) The Employee shall be eligible to receive annual performance
bonuses (such amounts are referred to herein as the "Bonus") in accordance with
the following schedule:

                  (i)      If the Company earns $45 million or more of EBITDA
                           (as defined below) in 2001, the Company shall pay the
                           Employee a Bonus for 2001 of $750,000.

                  (ii)     If the Company earns between $40 million and $45
                           million of EBITDA (as defined below) in 2001, the
                           Compensation Committee of the Board, in its
                           discretion, may award the Employee a Bonus for 2001
                           of up to one-half (1/2) of the Bonus described in
                           paragraph (i) above.

                  (iii)    If the Company earns less than $40 million of EBITDA
                           (as defined below) in 2001, the Employee shall not be
                           paid a Bonus for 2001.

                  (iv)     After 2001, the Employee shall be eligible to receive
                           annual performance Bonuses in such amounts as
                           approved by the Compensation Committee of the Board
                           and participate in such bonus programs as are
                           established for executive officers of the Company.

         For purposes of this Agreement, "EBITDA" means income or loss from the
Company's continuing operations before income taxes, net interest expense,
depreciation and amortization, as determined by the Company in preparing the
Company's financial statements, but excluding non-recurring items such as
out-of-period charges, merger and restructuring-related charges and one-time
gains or losses.

         (c) On the Starting Date, the Company shall grant Employee nonqualified
stock options (the "Options") to purchase 1,000,000 shares of the Company's
common stock, par value $.01 per share (the "Common Stock"). Except as provided
in this Section 3(c), the Options shall include those terms that are contained
in the form of Grant Letter attached hereto. The Options shall include the
following terms: (i) that the stock options shall be exercisable at a price per
share equal to the greater of $0.60 or the fair market value of a share of
Common Stock on the Starting Date, (ii) that, if, within twelve (12) months of
the Starting Date, there is a dilution of equity interests in the Company solely
as a result of a refinancing, the Employee shall be granted additional stock
options, if necessary, such that, immediately following the refinancing, the
shares subject to the Employee's then outstanding Options shall represent the
same percentage of equity interests in the Company as immediately before the
refinancing, and (iii) that the Options shall vest in accordance with the
following schedule:

                  (A) if the Company earns $45 million or more of EBITDA in
                  2001, one-half (1/2) of the Options shall become exercisable
                  on January 2, 2002, an additional one-quarter (1/4) of the
                  Options shall become exercisable on January 2, 2003 and the
                  remaining one-quarter (1/4) of the Options shall become
                  exercisable on January 2, 2004, or

                  (B) if the Company does not earn at least $45 million of
                  EBITDA in 2001, one-third (1/3) of the Options shall become
                  exercisable on January 2, 2002, an additional one-third (1/3)
                  of the Options shall become exercisable on January 2, 2003,
                  and the


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                  remaining one-third (1/3) of the Options shall become
                  exercisable on January 2, 2004.

         (d) During the Employment Term, the Company shall provide the Employee
with fringe benefits that are substantially equivalent to the fringe benefits
provided to the senior officers of the Company (the "Fringe Benefits");
provided, however, that the Employee shall not be entitled to those Fringe
Benefits that require the Employee to be paid a salary or other base pay (for
example, life insurance determined by multiples of salary, benefits under the
Company's 401(k) savings plan, benefits under the Company's flexible spending
accounts).

         (e) All amounts payable by the Company under Sections 3(a) and (b) and
the Fringe Benefits allowed under Section 3(d) shall be subject to proration
based upon the number of days in each such year that the Employee was employed
by the Company hereunder.

4.       Termination Without Compensation.

         (a) Total Disability. If the Employee becomes totally disabled (as
defined 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) any earned but unpaid Bonus and any 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 purposes of this Section 4, a Bonus shall not be deemed to have been
"earned" until the last day of the calendar year to which it relates. 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 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 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 him except that the
Employee's estate shall receive any earned but unpaid Bonus and any Fringe
Benefits that have accrued through the date of termination.

         (c) Cause. The Company may terminate the Employment Term for "cause" by
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 earned but unpaid
Bonus and any Fringe Benefits that have accrued through the date of termination.
For purposes of this Agreement, "cause" shall mean the Employee's (i) breach
(other than by reason of illness, injury or incapacity) of any of the material
terms or provisions of this


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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), (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 20
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.

         (d) Resignation. The Employee shall have the right to terminate the
Employment Term at any time by giving the Company 60 days' notice of the
termination date. Under such circumstances, the Company shall not have any
further liability or obligation to the Employee, except that the Employee shall
receive any earned but unpaid Bonus and any Fringe Benefits that have accrued
through the date of termination, net of any liabilities that the Employee may
have to the Company.

5.       Termination With Compensation. The Company shall have the right to
terminate the Employment Term without cause at any time by giving the Employee
30 days' notice of the termination date. In addition, notwithstanding Section
4(d), the Employee may voluntarily terminate his employment with the Company for
any reason during the one-year period following a Change of Control by giving
the Company at least 60 days' notice of the termination date. If the Company
terminates the Employment Term pursuant to this Section 5 prior to the
occurrence of a Change of Control or after the one-year period following the
occurrence of a Change of Control, the Company shall continue to pay to the
Employee an amount equal to one-half (1/2) of the targeted Bonus for the year in
which the termination date occurs, payable in equal installments over the
twelve-month period following the termination date. If the Company or the
Employee terminates the Employment Term pursuant to this Section 5 during the
one-year period following the occurrence of a Change of Control, the Company
shall continue to pay to the Employee an amount equal to the targeted Bonus for
the year in which the termination date occurs, payable in equal installments
over the twelve-month period following the termination date. For purposes of
this Section 5, "Change of Control" shall have the same meaning as in The
TeleSpectrum Worldwide Inc. 1996 Equity Compensation Plan.

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           The amount to be paid under this Section 5 is 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 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.



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6.       Agreement Not to Compete.

         (a) The Employee covenants that for the period beginning on the
termination of Employee's employment hereunder and ending on the first
anniversary of the date of such termination of employment hereunder (the
"Restricted Period"), he shall 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, customer
retention 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.

         (b) The Employee further covenants that during the Restricted Period,
he shall 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 shall have access to Company Information (as
defined in Section 8(a)) relating to the Business. The Employee acknowledges
that such Company Information is a valuable and unique asset and covenants that
he shall not disclose any such Company 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 shall 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


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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.

7.       Inventions, Designs and Product Developments. 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 of 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 shall be responsible for the preparation of any such
instruments, documents and papers and for the prosecution of any such
proceedings and shall reimburse the Employee for all reasonable expenses
incurred by his in compliance with the provisions of this Section 7.

8.       Company Information.

         (a) The Employee has had and shall 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


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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. The Employee expressly acknowledges that the remedy at law
for any breach of Sections 6, 7 and 8 shall 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.

10.      Conditions. This Agreement and the obligations of the parties hereunder
are subject to the satisfaction of the conditions set forth at the end of Fenton
R. Talbot's letter to J. Peter Pierce dated December 22, 2000.

11.      General.

         (a) Governing Law. This Agreement is made and entered into in the
Commonwealth of Pennsylvania, and shall in all respects be interpreted, enforced
and governed by and under the laws of the Commonwealth.

         (b) Company. For purposes of Sections 6, 7, 8 and 9, the term "Company"
shall be deemed to include any incorporated or unincorporated entities that are
controlled, directly or indirectly, by the Company through ownership, agreement
or otherwise, and any such entity to which the Company assigns its rights
hereunder.

         (c) Binding Effect. All of the terms and provisions of this Agreement
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 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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<PAGE>   9
                     TO EMPLOYEE:

                               J. Peter Pierce
                               269 Hilldale Road
                               Villanova,  PA  19085


                     TO THE COMPANY:

                               443 S. Gulph Road
                               King of Prussia, PA  19406
                               Fax:  610.962.5109
                               Attn:  Francis J. Pennella
                                        Executive Vice President and Secretary

                               With a copy to:

                                          Morgan, Lewis & Bockius LLP
                                          1701 Market Street
                                          Philadelphia, PA  19103
                                          Fax:  215.963.5299
                                          Attn:   Richard A. Silfen, Esquire

         (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 termination of the Employment Term
and 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 to be a waiver as to succeeding breaches.

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         (h) Severability. If any provision of this Agreement or application
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 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:___________________________________



                                        --------------------------------------
                                        J. PETER PIERCE




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