EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of this 25th
day of August, 1997 by and between HAYDEN/XXXXXX, INC. a New York corporation
("Hayden/Xxxxxx" or the "Corporation"), having its principal offices at 0000
Xxxx Xxxx Xxxxxxx, Xxxxx 0000, Xxxxxxxx, Xxxxxxxx 00000; IDF INTERNATIONAL,
INC., a New York corporation ("IDF"), having its principal offices at 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; and LEMBIT KALD, an individual residing
at 00-00 00xx Xxxxxx, Xxxx Xxxxxxxx, Xxx Xxxx 00000 (the "Employee").
Hayden/Xxxxxx and IDF are hereinafter sometimes collectively referred to as the
"Corporations."
W I T N E S S E T H :
WHEREAS, the Employee is presently a senior executive officer of
Hayden/Xxxxxx and has extensive knowledge with respect to the business of
Hayden/Xxxxxx;
WHEREAS, the Corporations desire to have continued access to the
services of the Employee;
WHEREAS, the Employee is willing and able to render his services to the
Corporations on the terms and conditions of this Agreement; and
WHEREAS, it is understood that this Agreement shall become effective on
a date (the "Effective Date") which shall be the date of consummation of a
merger (the "Merger") of TechStar Communications, Inc. ("TechStar") into a
merger subsidiary of IDF ("Mergerco"), pursuant to the agreement and plan of
merger, dated July 31, 1997, among IDF, American United Global, Inc., TechStar
and Mergerco (the "Merger Agreement").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and intending to be legally bound thereby, the
parties hereby agree as follows:
1. Nature of Employment.
(a) Subject to the terms and conditions of this Agreement, IDF
shall, throughout the term of this Agreement, retain the Employee, and the
Employee shall render services to the Corporations, in the capacity and with the
title of Executive Vice President of IDF and President and Chief Executive
Officer of Hayden/Xxxxxx, and such additional titles as may be assigned to the
Employee from time to time by the Board of Directors of IDF (the "Board"), which
titles the Employee may be willing to accept. In such capacity, the Employee
shall have and exercise primary responsibility on behalf of Hayden/Xxxxxx for
the establishment of all operating plans and policies, and strategic goals for
such corporation and subsidiaries, together with such other similar or related
duties consistent with his offices as may be assigned to the Employee from time
to time by the Board.
(b) Throughout the period of his employment hereunder, the
Employee shall: (i) devote his full business time, attention, knowledge and
skills, faithfully, diligently and to the best of his ability, to the active
performance of his duties and responsibilities hereunder on behalf of
Hayden/Xxxxxx; (ii) observe and carry out such rules, regulations, policies,
directions and restrictions as may be established from time to time by the
Board, including but not limited to the standard policies and procedures of
Hayden/Xxxxxx as in effect from time to time; and (iii) do such traveling at
Hayden/Wegman's expense as may reasonably be required in connection with the
performance of such duties and responsibilities; provided, however, that the
Employee shall not be assigned to regular duties that would reasonably require
him to relocate his permanent residence from that first set forth above. The
Employee may engage in charitable, educational, religious, civic and similar
types of activities (all of which shall be deemed to benefit Hayden/Xxxxxx),
speaking engagements, membership on the board of directors of other
organizations, and similar activities to the extent that such activities do not
inhibit or prohibit the performance of his duties hereunder or inhibit or
conflict in any material way with the business of Hayden/Xxxxxx.
2. Term of Employment.
(a) Subject to prior termination in accordance with Section
2(b) below, the term of this Agreement and the Employee's employment hereunder
shall commence as of the Effective Date and shall continue through November 30,
2000, and shall thereafter automatically renew (except to the extent otherwise
provided in this Agreement) for additional terms of one (1) year each unless
either party gives written notice of termination to the other party not less
than ninety (90) days prior to the end of any term (in which event this
Agreement shall terminate effective as of the close of such term), as the same
may be renewed (the "Term").
(b) This Agreement may be terminated:
(i) upon mutual written agreement of IDF and the
Employee;
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(ii) at the option of the Employee, upon thirty (30)
days' prior written notice to IDF, in the event that (A) IDF shall (1) fail to
make any payment to the Employee required to be made under the terms of this
Agreement within thirty (30) days after payment is due after written notice and
opportunity to cure, or (2) fail to perform any other material covenant or
agreement to be performed by it hereunder (including the failure to re-appoint
or re-elect Employee to the offices described in Section 1(a) of this Agreement
or other material change in the duties of the Employee which reduces the scope
or importance of such position) or take any action prohibited by this Agreement,
and fail to cure or remedy same within thirty (30) days after written notice
thereof to IDF; provided, however, that if any periodic salary payment is not
paid within ten (10) days of its due date, the Employee shall only be required
to provide fifteen (15) days prior written notice of termination; or (B) IDF is
declared insolvent, liquidates, dissolves or discontinues Hayden/Xxxxxx Business
(as hereinafter defined).
(iii) at the option of IDF, upon written notice to
the Employee, "for cause" (as hereinafter defined);
(iv) at the option of IDF in the event of the
"permanent disability" (as hereinafter defined) of the Employee; or
(v) upon the death of the Employee, or as a result of
the voluntary resignation by the Employee for any reason other than as specified
in Section 2(b)(ii) above.
(c) As used herein, the term "for cause" shall mean and be
limited to:
(i) any breach of any of the material covenants and
agreements of the Employee (A) contained in this Agreement, or
(B) contained in Section 5 below, which, in any case, is not
corrected in all material respects (if so correctable) within
thirty (30) days after written notice of same from either of
IDF to the Employee;
(ii) any material breach by the Employee of his
fiduciary duties and obligations to IDF or its subsidiaries
which is not corrected in all material respects (if so
correctable) within thirty (30) days after written notice of
same IDF to the Employee;
(iii) the habitual (meaning more than two (2)
breaches of the same covenant or agreement) and material
breach by the Employee of a material provision of this
Agreement (regardless of any prior cure thereof, but provided
that Employee shall have received the notice and opportunity
to cure provided by clause (i) above); or
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(iv) conduct constituting fraud or embezzlement or
gross dishonesty by Employee in connection with the
performance of his duties under this Agreement, or a formal
charge or indictment of Employee for or conviction of Employee
of a felony or, if it shall materially and adversely damage or
bring into disrepute the business, reputation or goodwill of
either of IDF, any crime involving moral turpitude.
The notice pursuant to clause (i) above shall specify with
particularity the covenant or agreement alleged to have been breached by
Employee and action necessary to be taken by Employee to cure the breach to the
satisfaction of IDF. Termination for cause pursuant to clauses (ii), (iii) or
(iv) above shall be effective upon delivery of written notice to Employee
specifying the covenants or agreements alleged to have been breached by
Employee.
(d) As used herein, the term "permanent disability" shall
mean, and be limited to, any physical or mental illness, disability or
impairment that prevents the Employee from continuing the performance of his
normal duties and responsibilities hereunder for a period in excess of four (4)
consecutive months or one hundred eighty (180) non-consecutive days within any
period of three hundred sixty five (365) working days. For purposes of
determining whether a "permanent disability" has occurred under this Agreement,
the written determination thereof by two (2) qualified practicing physicians
selected and paid for by IDF (and reasonably acceptable to the Employee) shall
be conclusive.
(e) Upon any termination of this Agreement as hereinabove
provided, the Employee (or his estate or legal representatives, as the case may
be) shall be entitled to receive any and all earned but unpaid Base Salary (as
hereinafter defined) prorated through the effective date of termination, and any
other amounts and benefits then accrued or due and payable to the Employee
hereunder; provided, that the Employee's participation in any benefit or welfare
plans of IDF shall terminate upon the effective date of termination of
employment except to the extent otherwise required by law or provided under the
express terms of the applicable plan. All such payments shall be made on the
next applicable payment date therefor (as provided in Section 3 below) following
the effective date of termination. Except when termination is (x) by the
Employee pursuant to Section 2(b)(ii) above, or (y) by IDF other than "for
cause" (as defined in Section 2(c) hereof (any termination described in clauses
(x) or (y) being sometimes hereinafter referred to as a "Non-Cause
Termination"), the foregoing constitutes all amounts to which the Employee shall
be entitled upon termination of this Agreement.
(f) In the event that there shall be a dispute among the
parties hereto as to whether or not a termination shall constitute a Non-Cause
Termination, during the pendency of such dispute IDF will place in escrow with a
third party attorney or financial institution in an interest bearing escrow
account all such periodic Base Salary payments which shall be disbursed to the
appropriate party or parties upon the final resolution or settlement of such
dispute from which no appeal can or shall have been taken.
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3. Compensation and Benefits.
(a) Base Salary. As compensation for his services to be
rendered hereunder, IDF shall pay to the Employee a base salary at the rates per
annum set forth below (the "Base Salary"), payable in periodic installments in
accordance with the standard payroll practices of Hayden/Xxxxxx in effect from
time to time, but not less than twice each month:
From the Effective Date through November 30, 1997 $180,000
From December 1, 1997 through November 30, 1998 $180,000
From December 1, 1998 through November 30, 1999 $180,000
From December 1, 1999 through November 30, 2000 $180,000
(b) Fringe Benefits. IDF shall also make available to the
Employee, throughout the period of his employment hereunder, such benefits and
perquisites as are generally provided by Hayden/Xxxxxx to its other senior
management employees (which benefits shall, in the aggregate, be at least as
generous as those supplied by IDF to the senior executive officers of its
subsidiaries other than Hayden/Xxxxxx), including but not limited to eligibility
for participation in any group life, health, dental, disability or accident
insurance, pension plan, 401(k) plan, profit-sharing plan, or other such benefit
plan or policy, if any, which may presently be in effect or which may hereafter
be adopted by IDF for the benefit of its employees generally; provided, however,
that, except as specified on Exhibit "A" annexed hereto, nothing herein
contained may be deemed to require IDF to adopt or maintain any particular plan
or policy; and provided, further, that IDF shall not be obligated to permit the
Employee to participate in any stock option plans it may provide to its
employees from time to time. Participation in such benefit plans may be subject
to standard waiting periods following the commencement of full-time employment.
(c) Expenses. Throughout the period of the Employee's
employment hereunder, IDF shall also reimburse the Employee, reasonably promptly
after presentment by the Employee to IDF of appropriate receipts and vouchers
therefor and related information in such form and detail as IDF may reasonably
request, for any reasonable out-of-pocket business expenses incurred by the
Employee in connection with the performance of his duties and responsibilities
hereunder.
4. Vacation.
The Employee shall be entitled to take, from time to time,
normal and reasonable vacations with pay, consistent with Hayden/Wegman's
standard policies and procedures in effect from time to time, at such times as
shall be mutually convenient to the Employee and Hayden/Xxxxxx, and so as not to
interfere unduly with the conduct of the business of Hayden/Xxxxxx.
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5. Restrictive Covenants.
(a) The Employee hereby acknowledges and agrees that (i) the
business contacts, customers, suppliers, technology, product designs and
specifications, know-how, trade secrets, marketing techniques, promotional
methods and other aspects of the business of Hayden/Xxxxxx have been of value to
Hayden/Xxxxxx and will be of value to Hayden/Xxxxxx, and have provided
Hayden/Xxxxxx and will hereafter provide Hayden/Xxxxxx with substantial
competitive advantage in the operation of its business, and (ii) the Employee
has and will continue to have detailed knowledge and possesses and will possess
confidential information concerning the business and operations of
Hayden/Xxxxxx.
(b) Unless otherwise approved in writing by Hayden/Xxxxxx or
its Chairman of the Board after full disclosure by the Employee to
Hayden/Wegman's Board of Directors of all relevant facts and circumstances, the
Employee shall not, directly or indirectly, for the Employee or through or on
behalf of any other person or entity, at any time during the "Restrictive
Period" (as defined in clause (ii) below):
(i) divulge, transmit or otherwise disclose or cause
to be divulged, transmitted or otherwise disclosed, any clients or customer
lists, technology, know-how, trade secrets, marketing techniques, contracts or
other confidential or proprietary information of Hayden/Xxxxxx of whatever
nature, whether now existing or hereafter created or developed (provided,
however, that for purposes hereof, information shall not be considered to be
confidential or proprietary if (A) the information, and its relevance in the
applicable instance, is a matter of common knowledge or public record, (B) the
information, and its relevance in the applicable instance, is generally known in
the industry, or (C) the information is disclosed to Employee after termination
of his employment by another person not prohibited from making such disclosure,
(D) the information is required to be disclosed by law pursuant to court order
or subpoena, or (E) the Employee can demonstrate that such information, and its
relevance in the particular instance, was already known to the recipient thereof
other than by reason of any breach of any obligation under this Agreement or any
other confidentiality or non-disclosure agreement); and/or
(ii) unless the Employee's employment with
Hayden/Xxxxxx shall be terminated by reason of a Non-Cause Termination, at any
time during the period commencing on the date hereof through and including the
date which shall be three (3) years following the voluntary resignation by the
Employee of his employment with Hayden/Xxxxxx or his termination by
Hayden/Xxxxxx "for cause", but in no event longer than one (1) year following
the end of the Term (the "Restrictive Period"), invest, carry on, engage or
become involved, either as an employee, agent, advisor, officer, director,
stockholder (excluding ownership of not more than 5% of the outstanding shares
of a publicly held corporation if such ownership does not involve managerial or
operational responsibility), manager, partner, joint venturer, participant or
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consultant in any business enterprise (other than IDF or any of their respective
Subsidiaries, affiliates, successors or assigns) which derives any material
revenues from the TechStar Business or the Hayden/Xxxxxx Business (as those
terms are defined in the Merger Agreement), or which engages in any other
business substantially similar to and directly competitive with the TechStar
Business or the Hayden/Xxxxxx Business.
(c) The Employee and the Corporations hereby acknowledge and
agree that, in the event of any breach by the Employee, directly or indirectly,
of the foregoing restrictive covenants, it will be difficult to ascertain the
precise amount of damages that may be suffered by Hayden/Xxxxxx by reason of
such breach; and accordingly, the parties hereby agree that, as liquidated
damages (and not as a penalty) in respect of any such breach, the breaching
party or parties shall be required to pay to the Corporations on demand from
time to time, cash amounts equal to any and all gross revenues derived by the
Employee or his affiliate, directly or indirectly, from any and all violative
acts or activities. The parties hereby agree that the foregoing constitutes a
fair and reasonable estimate of the actual damages that might be suffered by
reason of any breach of this Section 5 by the Employee, and the parties hereby
agree to such liquidated damages in lieu of any and all other measures of
damages that might be asserted in respect of any subject breach.
(d) The Employee and the Corporations hereby further
acknowledge and agree that any breach by the Employee, directly or indirectly,
of the foregoing restrictive covenants will cause Hayden/Xxxxxx irreparable
injury for which there is no adequate remedy at law. Accordingly, the Employee
expressly agrees that, in the event of any such breach or any threatened breach
hereunder by the Employee, directly or indirectly, Hayden/Xxxxxx shall be
entitled, in addition to the liquidated damages provided for in Section 5(c)
above, to seek and obtain injunctive and/or other equitable relief to require
specific performance of or prevent, restrain and/or enjoin a breach under the
provisions of this Section 5, in any such case without the necessity of proving
actual damages or posting bond.
(e) In the event of any dispute under or arising out of this
Section 5, the prevailing party in such dispute shall be entitled to recover
from the non-prevailing party or parties, in addition to any damages and/or
other relief that may be awarded, its reasonable costs and expenses (including
reasonable attorneys' fees) incurred in connection with prosecuting or defending
the subject dispute.
(f) Upon the termination of the Employee's employment
hereunder, the Employee shall immediately surrender and deliver to Hayden/Xxxxxx
all notes, drawings, diagrams, models, prototypes, lists, books, records,
documents and data of every kind or description, in whatever written or other
media (including, without limitation, electronic, tape, or other form of
storage) relating to or connected with the business contacts, client or customer
lists, technology, know-how, trade secrets, marketing techniques, contracts or
other confidential or
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proprietary information of Hayden/Xxxxxx, its business, its properties, or its
customers referred to in Section 5(b)(i) above.
6. Inventions; Intellectual Property.
(a) The Employee shall promptly communicate to Hayden/Xxxxxx
and disclose to Hayden/Xxxxxx in such form as Hayden/Xxxxxx requests from time
to time, all drawings, sketches, models, records, information, details and data
(in whatever media the same may be created or recorded including, without
limitation, print, tape, electronic, or otherwise) pertaining to all ideas,
processes, trademarks, inventions, improvements, discoveries and improvements,
product designs and specifications, and other intellectual property, whether
patented or unpatented, and copyrightable or uncopyrightable, made, conceived,
developed, acquired or implemented by the Employee, solely or jointly, during
the term of this Agreement (the "Development Term"), whether or not conceived
during regular working hours through the use of Corporation time, material or
facilities or otherwise (each of the foregoing hereinafter referred to,
individually and collectively, as a "Development"). The Employee hereby assigns,
transfers, conveys and sells to Hayden/Xxxxxx all right, title and interest in
and to all Developments, whether now existing or hereafter existing during the
Development Term, and acknowledges that the same, whether now existing or
hereafter existing during the Development Term, are the sole and exclusive
property of Hayden/Xxxxxx for which the Employee is being adequately compensated
hereunder. At any time and from time to time, upon the request of Hayden/Xxxxxx
and at its expense, the Employee will execute and deliver to Hayden/Xxxxxx any
and all applications, assignments, instruments, documents and papers, give
evidence and do any and all other acts which, in the opinion of Hayden/Xxxxxx,
are or may be necessary or desirable to document such transfer or to enable
Hayden/Xxxxxx to file and prosecute applications for and to acquire, maintain
and enforce any and all patents, trademark or tradename registrations,
copyrights or other rights under United States, foreign, state or local law with
respect to any such Developments or to obtain any extension, validation,
reissue, continuance, division or renewal of any of the same, in whole or in
part, and otherwise to establish, protect and enforce Hayden/Wegman's rights in
and to such intellectual property.
(b) Notwithstanding anything to the contrary contained in this
Agreement, the foregoing Section 6(a) shall only apply and be effective to the
extent permitted under applicable law. In this regard, the provisions of Section
6(a) of this Agreement which provide that the Employee shall assign or offer to
assign any of the Employee's rights in an invention to Hayden/Xxxxxx shall not
apply to any invention for which no equipment, supplies, facility, or trade
secret information of Hayden/Xxxxxx was used and which was developed entirely on
the Employee's own time, unless (a) the invention relates (i) directly to the
business of Hayden/Xxxxxx, or (ii) to Hayden/Wegman's actual or demonstrably
anticipated research or development, or (b) the invention results from any work
performed by the Employee for Hayden/Xxxxxx.
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7. Non-Assignability.
In light of the unique personal services to be performed by
the Employee hereunder, it is acknowledged and agreed that any purported or
attempted assignment or transfer by the Employee of this Agreement or any of his
duties, responsibilities or obligations hereunder shall be void.
8. Notices.
Any notices, requests, demands or other communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been given when delivered personally, one (1) day after being
sent by recognized overnight courier service with all charges prepaid or charged
to the sender's account, or three (3) days after being mailed by certified mail,
return receipt requested, addressed to the party being notified at the address
of such party first set forth above, or at such other address as such party may
hereafter have designated by notice; provided, however, that any notice of
change of address shall not be effective until its receipt by the party to be
charged therewith. Copies of any notices or other communications to
Hayden/Xxxxxx shall simultaneously be sent by first class mail to Hayden/Xxxxxx,
Inc., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X.
Xxxxx, Chairman.
9. General.
(a) Neither this Agreement nor any of the terms or conditions
hereof may be waived, amended or modified except by means of a written
instrument duly executed by the party to be charged therewith. Any waiver or
amendment shall only be applicable in the specific instance, and shall not
constitute or be construed as a waiver or amendment in any other or subsequent
instance. No failure or delay on the part of either party in respect of any
enforcement of obligations hereunder shall in any manner affect such party's
right to seek or effect enforcement at any other time or in respect of any other
required performance.
(b) The captions and Section headings used in this Agreement
are for convenience of reference only, and shall not affect the construction or
interpretation of this Agreement or any of the provisions hereof.
(c) This Agreement, and all matters or disputes relating to
the validity, construction, performance or enforcement hereof, shall be
governed, construed and controlled by and under the laws of the State of
Delaware applicable to contracts entered into and performed wholly within
Delaware.
(d) This Agreement shall be binding upon and shall inure to
the sole and exclusive benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives, successors and permitted
assigns, and no other person or entity shall
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have any right to rely on this Agreement or to claim or derive any benefit
herefrom absent the express written consent of the party to be charged with such
reliance or benefit; provided, that neither this Agreement nor any rights or
obligations hereunder may be assigned by either party without the express prior
written consent of the other party.
(e) This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original hereof, but all of
which together shall constitute one and the same instrument.
(f) Except for any legal or judicial proceeding which may be
brought for injunctive and/or any other equitable relief as contemplated by
Section 5(d) above, any dispute involving the interpretation or application of
this Agreement shall be resolved by final and binding arbitration in accordance
with the terms, conditions and procedures set forth in the Merger Agreement.
(g) This Agreement constitutes the sole and entire agreement
and understanding between the parties hereto as to the subject matter hereof,
and supersedes all prior discussions, agreements and understandings of every
kind and nature between them as to such subject matter.
(h) If any provision of this Agreement is held invalid or
unenforceable, either in its entirety or by virtue of its scope or application
to given circumstances, such provision shall thereupon be deemed modified only
to the extent necessary to render same valid, or not applicable to given
circumstances, or excised from this Agreement, as the situation may require; and
this Agreement shall be construed and enforced as if such provision had been
included herein as so modified in scope or application, or had not been included
herein, as the case may be.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
and as of the date first set forth above.
HAYDEN/XXXXXX, INC. IDF INTERNATIONAL, INC.
BY:________________________ By: ___________________________
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Chairman Title: Chairman
THE EMPLOYEE:
________________________________
LEMBIT KALD
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