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Exhibit
10.2
EMPLOYMENT AGREEMENT
(this “ Agreement ”) dated as of June 1, 2007,
between AFFINION GROUP, INC., a Delaware corporation, (the
“ Company ”) and THOMAS RUSIN (“
Executive ”).
WHEREAS, the Company
is a wholly owned subsidiary of Affinion Group Holdings, Inc., a
Delaware corporation (the “ Parent ”);
and
WHEREAS, the Company
desires to employ Executive and Executive desires to be employed by
the Company; and
NOW THEREFORE, in
consideration of the mutual covenants contained herein and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
Section 1. Employment
Period .
The initial term of
Executive’s employment hereunder shall be for a period of
three (3) years (the “ Initial Term ”)
commencing on June 1, 2007 (the “ Effective Date
”) and ending on the third anniversary of the Effective Date,
unless terminated earlier pursuant to Section 3 (the “
Employment Period ”); provided, however, that the
Employment Period shall automatically be renewed for successive one
(1) year terms upon the expiration of the Initial Term unless
either party gives at least ninety (90) days’ written
notice of its intention not to renew the Employment Period. Upon
Executive’s termination of employment with the Company for
any reason, he shall immediately resign all positions with the
Company or any of its subsidiaries or affiliates.
Section 2. Terms of
Employment .
(a) Position . During
the term of Executive’s employment, Executive shall serve as
President and Chief Executive Officer of the Company’s North
American businesses and will perform such duties and exercise such
supervision with regard to the business of the Company as are
associated with such position, and perform such other duties as may
be prescribed from time to time by the Chief Executive Officer of
the Company. Executive shall report directly to the Chief Executive
Officer of the Company.
(b) Duties . During
the term of Executive’s employment, Executive agrees to
devote all of his business time to the business and affairs of the
Company and to use Executive’s reasonable best efforts to
perform faithfully, effectively and efficiently his
responsibilities and obligations hereunder. Notwithstanding the
foregoing, nothing herein shall prohibit Executive from
(i) serving on civic or charitable boards or committees and
(ii) managing personal investments, so long as such activities
do not materially interfere with the performance of
Executive’s responsibilities hereunder.
(c) Compensation
.
(i) Base Salary .
During the term of Executive’s employment, Executive shall
receive an initial annual base salary in an amount equal to Two
Hundred and Ninety Thousand Dollars ($290,000), less all applicable
withholdings, which shall be paid in accordance with the customary
payroll practices of the Company (as in effect from time to time,
the “ Annual Base Salary ”). The Annual Base
Salary shall be subject to annual review and increases, and the
Annual Base Salary shall not be reduced without Executive’s
consent, unless the reduction is related to a broader compensation
reduction that is not limited to Executive and does not exceed 10%
of his Annual Base Salary.
(ii) Bonuses .
Beginning with fiscal year 2007, during the Employment Period, the
Company shall establish a bonus plan for each fiscal year (the
“ Plan ”) pursuant to which Executive will be
eligible to receive an annual bonus (the “ Bonus
”). The Board or the Compensation Committee of the Board will
administer the Plan and establish performance objectives for each
year. In the event that the Company achieves target based on actual
performance, Executive shall be entitled to receive a Bonus in an
amount equal to 100% of Executive’s Annual Base Salary
(“ Target Bonus ”). Subject to Section 4,
Executive will be entitled to receive the Bonus only upon the
Company’s achievement of the specified performance objectives
and if Executive is employed on the last day of the applicable
fiscal year. The Bonus shall become payable on or before
March 15 following the end of the applicable fiscal year
provided that the Board or Compensation Committee finally
determines (x) that the Company has achieved the applicable
performance objectives and (y) the amount of the bonus that
shall be paid to each executive entitled to receive a bonus for the
applicable fiscal year. If the Board or Compensation Committee has
not made such final determination by March 15, the Bonus (if
any) shall instead be paid as soon as practicable
thereafter.
(iii) Benefits .
During the term of Executive’s employment hereunder, he shall
be entitled to participate in all incentive, savings and retirement
plans, practices, policies and programs applicable generally to
other senior executives of the Company and shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company to the extent applicable generally to other senior
executives of the Company. Notwithstanding anything in this
Section 2(c)(iii) to the contrary, all benefit obligations are
subject to guidance issued by the U.S. Department of Treasury under
Section 409A of the Code. To the extent required, the Company
may modify the benefits provided under this Section 2(c)(iii)
to comply with such guidance.
(iv) Expenses . During
the term of Executive’s employment, Executive shall be
entitled to receive reimbursement for all reasonable business
expenses incurred by Executive in performance of his duties
hereunder provided that Executive provides all necessary
documentation in accordance with Company policy.
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Section 3. Termination of
Employment .
(a) Death or
Disability . Executive’s employment shall terminate
automatically upon Executive’s death. If Executive becomes
subject to a Disability during the Term of Employment (pursuant to
the definition of Disability set forth below), the Company may give
Executive written notice in accordance with Sections 3(e) and 10(h)
of its intention to terminate Executive’s employment. For
purposes of this Agreement, “ Disability ” means
(i) Executive’s inability to engage in any substantial
gainful activity by reason of any medically determinable physical
or mental impairment that can be expected to result in death or can
be expected to last for a continuous period of not less than 12
months, or (ii) Executive is, by reason of any medically
determinable physical of mental impairment that can be expected to
result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits
for a period of not less than three months under an accident or
health plan covering employees of the Company.
(b) Cause .
Executive’s employment may be terminated at any time by the
Company for Cause. For purposes of this Agreement, “
Cause ” shall mean Executive’s
(i) conviction of a felony or a crime of moral turpitude;
(ii) conduct that constitutes fraud or embezzlement;
(iii) willful misconduct or willful gross neglect;
(iv) continued willful failure to substantially perform his
duties as President and Chief Executive Officer of the
Company’s North American businesses or (v) a material
breach by Executive of this Agreement; provided that in the event
of a termination pursuant to clause (iv) or (v), to the extent
such failure to perform duties or material breach is subject to
cure, the Company shall have notified Executive in writing
describing such failure to perform duties or material breach and
Executive shall have failed to cure such failure to perform or
breach within 30 days after his receipt of such written
notice.
(c) Termination Without
Cause . The Company may terminate Executive’s employment
hereunder without Cause at any time.
(d) Good Reason .
Executive’s employment may be terminated at any time by
Executive for Good Reason or without Good Reason upon 90
days’ prior written notice, provided, in the case of a
termination for Good Reason, that Executive provides such notice
within 60 days after the occurrence of the event giving rise to the
termination for Good Reason. For purposes of this Agreement,
“ Good Reason ” means voluntary resignation
after any of the following actions taken by the Company or any of
its subsidiaries without Executive’s consent: (i) any
material failure of the Company to fulfill its obligations under
this Agreement, (ii) a material and adverse change to, or a
material reduction of, Executive’s duties and
responsibilities to the Company, (iii) a reduction in
Executive’s Annual Base Salary and Target Bonus (not
including any diminution related to a broader compensation
reduction that is not limited to Executive specifically and that is
not more than 10% in the aggregate) or (iv) the relocation of
Executive’s primary office to a location more than 35 miles
from the prior location; provided that in the event of a
termination pursuant to clause (i) or (ii), to the extent such
failure, change or reduction is subject to cure, the Company shall
have failed to cure such failure, change or reduction within 30
days after its receipt of Executive’s written
notice.
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(e) Notice of
Termination . Any termination by the Company for Cause or
without Cause, or by Executive for Good Reason or without Good
Reason, shall be communicated by Notice of Termination to the other
party hereto given in accordance with Section 10(h). For
purposes of this Agreement, a “ Notice of Termination
” means a written notice that (i) indicates the specific
termination provision in this Agreement relied upon, (ii) to
the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of
Executive’s employment under the provision so indicated and
(iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination
date. The failure by Executive or the Company to set forth in the
Notice of Termination any fact or circumstance that contributes to
a showing of Good Reason or Cause shall not waive any right of
Executive or the Company hereunder or preclude Executive or the
Company from asserting such fact or circumstance in enforcing
Executive’s or the Company’s rights
hereunder.
(f) Date of
Termination . “ Date of Termination ” means
(i) if Executive’s employment is terminated by the
Company for Cause, without Cause or by reason of Disability, or by
Executive for Good Reason or without Good Reason, the date of
receipt of the Notice of Termination (in the case of a termination
with or without Good Reason, provided such notice is in accordance
with Section 3(d)) or any later date specified therein
pursuant to Section 3(e), as the case may be and (ii) if
Executive’s employment is terminated by reason of death, the
date of death.
Section 4. Obligations of
the Company upon Termination; Repurchase Rights .
(a) With Good Reason;
Without Cause . If during the Employment Period, the Company
shall terminate Executive’s employment without Cause or
Executive shall terminate his employment for Good Reason, then the
Company will provide Executive with the following severance
payments and/or benefits:
(i) The Company shall pay to
Executive in a lump sum, to the extent not previously paid,
(i) the Annual Base Salary through the Date of Termination,
and (ii) the Bonus earned for any fiscal year ended prior to
the year in which the Date of Termination occurs, provided that
Executive was employed on the last day of such year (“
Accrued Obligations ”)
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