EXHIBIT 10.1
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 1st day of February, 1996, between WORLD OF
SCIENCE, INC., a New York corporation with offices located at 000 Xxxxxxxxx
Xxxx, Xxxxxxxx 0, Xxxxxxxxx, Xxx Xxxx ("Employer") and XXXX X. XXXXXXX, residing
at 000 Xxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000 ("Employee") as follows:
W I T N E S S E T H:
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1. TERM OF EMPLOYMENT. Employer hereby employs Employee and Employee hereby
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agrees to perform services for Employer for a two year term commencing February
1, 1996 and terminating on January 31, 1998. This Employment Agreement shall
automatically renew for successive two year terms thereafter, unless either the
Employer or Employee shall have notified the other in writing at least sixty
(60) days prior to the expiration of the term of the Employment Agreement that
the Employment Agreement shall not be renewed. The terms and conditions of the
Employment Agreement for each renewal term shall contain the same terms and
conditions, except that the amount of compensation payable to Employee shall be
renegotiated each term.
2. NATURE OF EMPLOYMENT. Employee shall be the Chairman of the Board of
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Directors and chief Executive Officer of the Employer and in such capacity shall
be responsible for the overall operations of Employer. Employee agrees to
perform such specific duties as may be assigned to Employee from time to time by
Employer. Employee agrees to devote Employee's full time and attention to the
performance of Employee's duties, and shall not perform services for any other
person or party without the written consent of Employer.
3. COMPENSATION. Employee shall receive as compensation for services
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rendered to Employer the following:
A. A base annual salary of $175,000.00, payable in equal weekly
installments, or such other installments as shall be consistent with Employer's
payroll practices. The base salary of
Employee may be increased during the term of this Employment Agreement at the
discretion of the Board of Directors.
B. Employee shall receive as additional compensation for each year
of this Agreement an incentive bonus calculated on the Corporation's operating
profit (as hereinafter defined), as follows:
AMOUNT OF
OPERATING PROFIT BONUS PAYABLE
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An amount equal to or greater $25,000.00, plus an additional
than the prior year's amount equal to $25,000.00
operating profit, but less divided by a fraction. The
than the current year's fraction numerator shall be
budgeted operating profit the amount by which the actual
current year-end operating
profit exceeds the prior
year's operating profit, and
the denominator shall be the
difference between the prior
year's operating profit and
the current year's budgeted
operating profit.
An amount equal to or greater $50,000.00, plus an additional
than the current year's amount equal to $25,000.00
budgeted operating profit, but divided by a fraction. The
less than 115% of the current numerator shall be the amount
year's budgeted operating by which the actual current
profit year-end operating profit
exceeds the current year
budgeted operating profit, and
the denominator shall be the
difference between the current
year budgeted operating profit
and 115% of the current year
budgeted operating profit.
An amount equal to or greater $75,000.00
than 115% of the current
year's budgeted operating
profit.
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1. Operating Profit Defined. The term "operating profit" shall
mean the combined gross income from the operations of the Company, and its
subsidiaries, if any, other than capital gains, less the Company's and
subsidiaries' combined expenses, deductions and credits attributable to such
operations. The operating profit shall be determined on a consolidated basis by
the annual audit prepared in accordance with generally accepted principles of
accounting by the certified public accountants regularly employed by the Company
and their determination shall be binding and conclusive on the parties hereto.
In computing the operating profit, no deduction shall be taken or allowance made
for (i) federal or state income taxes; (ii) for the payments required by this or
other bonus or incentive plans; (iii) interest income or expense.
2. Apportionment. For those periods of Employees' employment
that do not coincide with the Company's fiscal year, the amount of the bonus
shall be based upon the proportion of operating profit that the number of months
Employee is in the employ of Employer during such fiscal year bears the fiscal
year.
3. Payment. Payment of the bonus shall be made no later than
90 days after the fiscal year end of the Employer for the fiscal year for which
the calculation is made and shall be accompanied by a copy of the annual audit
on which the bonus is based.
4. Modification of Incentive Bonus Calculation. Employer
reserves the right to abolish or modify the incentive bonus or incentive bonus
calculation at any time during the term of the Employment Agreement. Any such
abolition or modification shall only be effective for the following year of the
Employment Agreement.
C. The Employer may provide Employee with life insurance, disability
insurance, medical/hospital insurance, reimbursement of uncovered medical
expenses, and such other fringe benefits as Employer shall determine. Employee
shall also
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receive such other Employer paid fringe benefits as shall be made generally
available to other employees of the Employer. Employer reserves the right,
however, to terminate any employee fringe benefit or employee benefit plan
currently available to employees, and Employer makes no representation that such
employee benefits shall continue during the term of Employee's employment.
4. TERMINATION OF EMPLOYMENT AGREEMENT BY EMPLOYEE FOR GOOD REASON.
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Employee may terminate this Employment Agreement for "Good Reason" which shall
be defined as follows:
A. Without Employee's written consent, the removal of Employee as an
officer, or the assignment to Employee of any duties inconsistent with
Employee's current position, duty or responsibility with Employer.
B. A reduction by the Employer in Employee's base salary as in
effect on the date hereof or as the same may be increased from time to time.
C. The Employer requiring Employee to be based anywhere other than
the Rochester, New York area.
D. The failure of the Employer to obtain the assumption of this
Agreement by any successor to the Employer, whether direct or indirect, by
purchase, merger, consolidation or otherwise, to all or substantially all of the
business and/or assets of the Employer.
5. TERMINATION OF EMPLOYMENT AGREEMENT BY EMPLOYEE FOLLOWING CHANGE IN
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CONTROL. Employee may terminate this Employment Agreement within one year
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following the occurrence of a "change in control of the Employer", as defined in
this Paragraph. For purposes of this Agreement, a "change in control of the
Employer" shall be deemed to have occurred on the date on which any of the
following shall have occurred:
A. Any one person or entity, or more than one person or entity acting
as a group, acquires beneficial ownership (as such term is defined in Rule 13d-3
under the Securities Exchange
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Act of 1934, as Amended) of securities of the Employer, that, together with all
prior securities owned by such person, entity, or group, possess greater than
25% of the total combined voting power of the Employer's then outstanding
securities, or greater than 25% of the total fair market value of the Employer's
then outstanding securities; or
B. The sale of all or substantially all or the assets of the
Employer to a person or entity other than a parent, subsidiary or affiliate of
the Employer; or
C. During any period of two consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the Employer
cease for any reason to constitute at least a majority thereof, unless the
election or the nomination for election by the Employer's shareholders of each
new director was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period. The
designation by either Xxxxxx Xxxxx or M & T Capital Corp. of a successor
director to any director previously designated by them shall not be considered
in determining whether a change of control has occurred.
6. SEVERANCE BENEFITS PAYABLE IN THE EVENT OF TERMINATION BY EMPLOYEE FOR
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GOOD REASON OR UPON CHANGE OF CONTROL OF EMPLOYER. In the event the Employee
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shall elect to terminate employment for "Good Reason" or "change in control of
the Employer", the Employer shall pay the Employee the following severance
benefits:
A. Employee's full base salary through the date of Employee's
termination at the rate then in effect immediately prior to the date of
termination, plus any bonus to which Employee is entitled pursuant to Paragraph
3(B) of this Agreement.
B. A lump sum payment equal to the greater of (i) the amount of
salary that would have been paid to Employee from the date of termination of
Employee to the end of the term of this
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Employment Agreement had termination not occurred, or (ii) $250,000.00. This
lump sum payment as well as any salary due under Subparagraph (A) above shall be
paid within thirty days of the date or termination.
C. The Employer shall also pay all legal fees and expenses incurred
by Employee as a result of such termination (including all such fees and
expenses, if any, incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement).
D. In lieu of shares of common stock of the Employer issuable
upon exercise of any outstanding stock option granted to Employee under any
Employer's stock option plan which is exercisable on the date of termination of
employment, Employee shall receive an amount in cash equal to the product of (i)
the difference obtained by subtracting the per share exercise price of each
option held by Employee then exercisable from the closing price of the
Employer's shares as reported on any organized stock exchange on the date of
termination, and (ii) the number of Employer's shares covered by each such
option.
E. The Employer shall maintain in effect for the benefit of the
Employee for a two year period after the date of termination all Employee
benefit plans and programs in which the Employee was entitled to participate
immediately prior to the date of termination provided that continued
participation is possible under the general terms and provisions of such plan or
program. In the event that such participation in any such plan or program is
prohibited, the Employer shall arrange to provide Employee with benefits
substantially similar to those which Employee was entitled to receive under such
plan or program.
F. In addition to all other amounts payable to Employee under this
Paragraph 6, Employee shall be entitled to receive all benefits which may be
payable under any Employer retirement plan, deferred compensation plan, or any
other plan or agreement relating to retirement benefits.
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7. NON-DISCLOSURE OF TRADE SECRETS AND CONFIDENTIAL INFORMATION.
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Employee acknowledges that knowledge of the Employer's formulas, products,
pricing, methods of manufacture and distribution, and vendor and customer lists,
is of a confidential and secret nature and of great value to the Employer. The
Employee agrees not to divulge to any person, either during or after the
termination of his employment, any information acquired by him concerning such
formulas, products, pricing, methods of manufacture and distribution, vendor and
customer lists, or any other trade secrets of the Employer. Upon termination of
his employment, the Employee agrees to deliver forthwith to the Employer all
records, memoranda, and other written data relating to such formulas, products,
pricing, methods of manufacture and distribution, and vendor and customer lists.
8. MISCELLANEOUS. This Agreement supersedes all prior agreements and
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understandings between the parties and may not be changed unless in writing,
executed by the parties hereto; shall be interpreted under and pursuant to the
laws of the State of New York; shall inure to the benefit of and shall be
binding upon the parties hereto, their legal representatives, successors and
assigns. This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
9. ARBITRATION. Any dispute or controversy arising under or in connection
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with this Agreement shall be settled exclusively by arbitration in the City of
Rochester, New York in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any Court having jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
WORLD OF SCIENCE, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx, CFO
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Authorized Officer
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
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