EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made as of the 25th
day of August 1999, by and between PLATINUM EXECUTIVE SEARCH, INC., a New York
corporation with an office for the conduct of its business at 342 Madison
Avenue, .York Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and XXXXX
XXXX, an individual residing at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(the "Executive").
WHEREAS, the Company desires to employ the Executive as the
President of a human resource practice group to do business under a name
mutually acceptable to the parties, and which will be formed and established as
a separate, wholly-owned subsidiary of the Company (such subsidiary, or any
other set of discrete areas of business over which Executive is given direct
responsibility as agreed between Executive and Company, herein referred to as
the "HRG"), and as a Vice President of the Company, and the Executive desires to
be employed by HRG and the Company in such capacity; and
WHEREAS, the parties hereto desire to enter into an agreement
of employment mutually beneficial to said parties, and for the purpose of
defining the rights, duties and obligations of each of the parties hereto;
NOW, THEREFORE, for good and valuable consideration, the
sufficiency and receipt of which is hereby acknowledged, the Company and the
Executive agree as follows:
1. Employment. Upon the terms and subject to the conditions of this
Agreement, the Company hereby employs the Executive and the Executive hereby
accepts employment by the Company on the terms and conditions hereinafter set
forth. Executive will, either before or promptly upon commencing employment with
the Company, dissolve and liquidate the Corporation and cease conducting
business therein except insofar as necessary to wind up and liquidate the
Corporation's affairs; provided, however, that he shall do so in a manner that
does not materially interfere with the performance of his duties for the Company
or HRG.
2. Subject Term. to the provisions of Section 10 of this Agreement,
Executive's employment shall be for a period of five (5) years commencing on
October 1, 1999 and terminating on September 30, 2004.
3. Executive's Position, Duties and Authority.
3.1 Position. The Company shall employ the Executive, and the
Executive shall serve as the President of HRG and a Vice President of the
Company.
3.2 Description. The Executive shall perform such duties and
responsibilities on a full time basis as shall be reasonably assigned to the
Executive by the President and Chief Executive Officer of the Company, and which
are customarily incident to the day-to-day management and operation of HRG and
the Company or the offices of President and a Vice-President, respectively,
including, but not limited to performing various administrative duties as shall
be reasonably assigned to the Executive by the President and Chief Executive
Officer of the Company.
3.3 Authority. At all times during the Term, the Executive shall
report directly to the Chairman and Chief Executive Officer of the Company, or
to such other senior executive as the Chairman and Chief Executive Officer of
the Company may designate.
4. Full-Time Services.
4.1 General. The Executive shall devote substantially all of his
business time, labor, skill and energy to the business and affairs of the
Company and to the duties and responsibilities referred to in Section 3.2 of
this Agreement
4.2 Opportunities; Investments. The Executive covenants and agrees
that, during the Term, he shall inform the Company of each business opportunity
related to the business of the Company or any of the Company's subsidiaries or
affiliates of which he becomes aware and that he will not, directly or
indirectly, exploit any such opportunity for his own account, nor will he render
any services to any other person or business, or acquire any interest of any
type in any other business, that competes with any business of the Company or
any of the Company's subsidiaries or affiliates.
5. Location of Employment. Unless the Executive consents otherwise in
writing, the principal location for the performance of his duties hereunder
shall be at the Company's offices in New York City or at 000 Xxxx Xxxxxx Xxxxx,
Xxx Xxxx, Xxx Xxxx.
6. Base Salary/Bonuses.
6.1 Base Salary. The Company shall, commencing October 1, 1999 and
during the continuance of the Executive's employment hereunder, pay to the
Executive, and the Executive agrees to accept, in consideration of his services,
a salary (the "Base Salary") (i) from the Effective Date through the remainder
of the contract, at a rate of TEN THOUSAND AND NO/l00THS DOLLARS ($10,000.00)
per month. All Base Salary shall be payable in accordance with the Company's
normal payroll practices, so long as the Executive's employment continues as
provided by this Agreement.
6.2 Bonuses. During the Term of this Agreement, the Executive shall
be eligible to receive the following bonus payments (each a "Bonus," and
collectively, the "Bonuses"):
(a) An annual (calendar year) bonus, payable at the discretion of
the Board of Directors, of no less than 15 percent of the increase,
if any, in pre-tax profits of HRG; and
(b) A bonus equal to 3 percent of the purchase price of any
acquisition of another human resource company made by the Company or
one of its affiliates that was originated or introduced by the
Executive, payable at the time of the closing of the acquisition.
(c) Calculation of pre-tax profits shall be made in good faith by
the Company's Chief Financial Officer consistent with the Company's
usual and customary practice.
6.3 Signing Bonus. Upon commencement of employment under this
Agreement, the Company shall issue to Executive 180,000 shares of its common
stock (the "Shares"). The Shares shall be subject to the following keepwell
arrangements:
(a) Initial Keepwell. During the one hundred eighty (180) day period
commencing on the date that the Form S-4 registration statement of
the Company is declared effective by the Securities Exchange
Commission (" Market Date"), 18,000 of the Shares shall be subject
to an initial keepwell feature (the "Initial Keepwell Guarantee").
The Initial Keepwell Guarantee shall require that in the event that
the mean of the last asked price quoted by the primary market maker
for the Company on the date that Executive sells any of his Shares
to which the Initial Keepwell Guarantee applies (an "Initial Sale
Date") does not at least equal $2.00, Executive shall receive
additional shares so that the total number of the Shares subject to
the Initial Keepwell Guarantee owned by Executive plus the
additional shares so issued to Executive multiplied by the actual
mean price on such Initial Sale Date would have been equal to
$36,000. Notwithstanding the foregoing, Executive hereby agrees and
acknowledges that in the event that he attempts to sell an aggregate
of more than 9,000 of the Shares during any thirty (30) day period
during the term that the Initial Keepwell is in effect, the Initial
Keepwell shall only apply to the first 9,000 Shares sold during such
thirty (30) day period, and that in no event shall the Initial
Keepwell Guarantee apply to more than 18,000 of the Shares.
Executive further acknowledges that the Initial Keepwell shall
terminate on the date that is one hundred eighty (180) days after
the Market Date.
(b) Anniversary Keepwell. On the one year anniversary of the Market
Date (the "Anniversary Date"), 162,000 of the Shares, being the
remainder of the Shares not originally subject to the Initial
Keepwell Guarantee, or so many thereof that Executive then owns
("Residual Shares"), shall be subject to a keepwell feature (the
"Anniversary Keepwell Guarantee"). The Anniversary Keepwell
Guarantee shall require that in the event that the mean of the last
asked price quoted by the primary market maker for the Merged Entity
on each of the five (5) business days preceding the Anniversary Date
(the "Average Mean Price") does not at least equal $2.00 per share,
Executive shall receive additional shares so that on the Anniversary
Date the total number of shares owned in the aggregate by Executive
multiplied by the Average Mean Price shall be equal to the amount
determined by multiplying $2.00 by the number of Residual Shares. In
the event that the total number of Shares owned in the aggregate by
Executive multiplied by the Average Price is equal to or greater
than $324,000 minus the aggregate consideration the Executive has
received for sales of Shares (excluding from this determination the
Shares originally subject to the Initial Keepwell Guarantee), the
Anniversary Keepwell Guaranty shall not apply.
(c) Termination of Keepwells. The parties hereto hereby agree and
acknowledge that in the event that the mean of the last asked price
quoted by the primary market maker for the Company on each business
day during any period consisting of at least twenty (20) consecutive
business days exceeds $3.00, the Initial Keepwell Guarantee and the
Anniversary Keepwell Guarantee shall become void and Executive shall
retain no rights to any keepwell features or guarantees.
7. Stock Options. Commencing with the Term of this Agreement, the
Executive shall be eligible to receive the following options (collectively, the
"Stock Options") to purchase shares of the Company's Common Stock as provided
below:
Stock Options, to be issued January 5,2000, to acquire 25,000
shares, as adjusted for any stock splits, stock dividends or similar
events occurring after the date hereof, of the Common Stock of the
Company, at a price equal to the market value of the Company's
Common Stock as of twenty (20) days after becoming a public company
with registered Common Stock.
The Stock Options shall fully vest on the date of their issuance to the
Executive, shall not be transferable except upon the optionee's death, shall,
unless terminated, be exercisable for 10 years from the date of issuance, shall
be subject to early termination upon cessation of employment with the Company as
set forth in greater detail in Exhibit A hereto, and shall be subject to such
other terms and conditions applicable to stock options of the Company pursuant
to the Company's stock option plan.
8. Expenses; Vacation. The Company shall reimburse the Executive in
accordance with the Company's regular procedures in effect from time to time and
in form suitable to establish the validity of such expenses for tax purposes,
all ordinary, reasonable and necessary
travel, entertainment and other business expenses as shall be incurred by him in
the performance of his duties hereunder. During the Term of this Agreement, the
Executive shall be entitled to twenty (20) days vacation annually with pay.
9. Benefits. During the Term, the Executive shall be eligible to
participate in any pension or profit-sharing plan or program of the Company now
existing or hereafter established, on terms no less favorable than those made
available to other senior executives of the Company. Upon meeting all applicable
eligibility requirements, the Executive shall be entitled to receive such other
benefits or rights as may be provided under any employment benefit plan provided
by the Company that is now or hereafter will be reflected, including
participation in life, medical, disability and dental insurance plans.
10. Termination.
10.1 Notwithstanding the provisions of Sections 1 and 2 hereof, this
Agreement may be terminated prior to the expiration of the Term by the President
and Chief Executive Officer of the Company upon the occurrence of any of the
following events:
10.1.1 Upon the death of the Executive;
10.1.2 Upon the inability of the Executive to perform his
duties in any material respects on account of illness or other incapacity for
the longer of (i) three (3) months in any period of 12 consecutive months or
(ii) any longer period prescribed by any applicable law;
10.1.3 For Cause, which shall be defined as:
(a) the Executive is convicted of a felony criminal offense, or of a
criminal offense involving any act or acts of moral turpitude;
(b) The Executive is found guilty of any act of dishonesty, fraud or
theft from the Company, or any of the Company's subsidiaries or
affiliates;
(c) In the event of willful malfeasance, gross negligence, or gross
or willful material misconduct in the performance of his duties
hereunder; or
(d) Upon the failure or refusal by the Executive to perform
according to or to comply with the reasonable policies and
directions established by the Company after written notice of such
non-compliance stating what is required of the Executive to cure
such non-compliance and a reasonable opportunity to cure such
non-compliance within ten (10) business days of delivery of such
notice.
11. Confidential Information; Noncompetition.
11.1 The Executive shall be prohibited from disclosing to anyone
(except to the extent reasonably necessary to perform the Executive's duties
hereunder) any confidential information concerning the business or affairs of
the Company or the Company's subsidiaries or affiliates which the Executive may
have acquired in the course of and as incident to his employment or prior
dealings with the Company or the Company's subsidiaries or affiliates,
including, without limitation, client lists, business or trade secrets, or
methods or techniques used by the Company or the Company's subsidiaries or
affiliates in or about its business. The obligation in this Section 11.1
survives the expiration or earlier termination of this Agreement.
11.2 During the Term of this Agreement and for a period of twenty
four (24) months after the expiration or earlier termination hereof, the
Executive will not:
(a) compete with the Company for business with customers and/or
clients that are or have been clients or customers of the Company or
its subsidiaries within the four (4) months preceding the date the
Executive leaves the Company; or
(b) influence or attempt to influence any employee of the Company or
the Company's subsidiaries or affiliates to terminate his or her
employment with the Company or the Company's subsidiaries or
affiliates.
The obligation in this subsection 11.2 survives the expiration or earlier
termination of this Agreement. In the event that the restrictive period provided
in this Section 11.2 is determined to be too long by any court or other body
having jurisdiction over any dispute between the parties over such issue whose
decision is binding on the parties hereto, this Section 11.2 shall be valid and
enforceable for the period determined to be so enforceable.
12. Notices. Any notice, direction or instruction required or permitted
to be given hereunder shall be given in writing and may be given by telex,
telegram, facsimile transmission or similar method if confirmed by mail as
herein provided; by mail if sent postage prepaid by registered mail, return
receipt requested; or by hand delivery to any party at the address of the party
set forth below. If notice, direction or instruction is given by telex, telegram
or facsimile transmission or similar method or by hand delivery, it shall be
deemed to have been given or made on the day on which it was given, and if
mailed, shall be deemed to have been given or made on the third business day
following the day after which it was mailed. Any party may, from time to time,
by like notice give notice of any change of address and in such event, the
address of such party shall be deemed to be changed accordingly.
(a) If to the Company:
Platinum Executive Search, Inc.
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 10 173
Attention: Xxxx Mazutto
Attention:
With a copy to:
Xxxxxx Xxxxxxxxx, Esq.
Xxxxxx &James LLP
000 Xxxxx Xxx, 00xx Xxxxx
Xxx Xxxx, X. Y. 10022
(b) If to the Executive:
Xxxxx Xxxx
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
13. General.
13.1 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of laws.
13.2 Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements and understandings,
written or oral, between or among the parties, except as specifically provided
herein.
13.3 Successors and Assigns. This Agreement, and the Executive's
rights and obligations hereunder, may not be assigned by the Executive, except
that the Executive may designate one or more beneficiaries to receive any
amounts that would otherwise be payable hereunder to the Executive's estate.
This Agreement shall be binding on any successor to the Company whether by
merger, consolidation, acquisition of all or substantially all of the Company's
assets or business or otherwise, as fully as if such successor were a signatory
hereto; and the Company shall cause such successor to, and such successor shall,
expressly assume the Company's obligations hereunder.
and the Company shall cause such successor to, and such successor shall,
expressly assume the Company's obligations hereunder.
13.4 Amendments; Waivers. This Agreement cannot he changed, modified
or amended, and no provision or requirement hereof may be waived, without
consent in writing of the parties hereto. However, in the event that the
Company-issues an Employee Manual which amends or modifies any policy
specifically identified and incorporated into this Agreement, such policy
automatically shall be deemed included (1st part of this Agreement without
further consideration other than the continued performance of this Agreement's
material terms by the Company.
13.5 Ability to Fulfill Obligations. Neither the Company nor the
Executive is a party to or bound by any agreement which would be violated by the
terms of this Agreement.
13.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original. It shall not be
necessary when making proof of this Agreement to account for more than one
counterpart.
IN WITNESS WHEREOF. the parties have duly executed this Agreement as
of the date first above written.
PLATINUM EXECUTIVE SEARCH, INC.
By: /s/ Xxxx Xxxxxxx
------------------------------
Name: Xxxx Xxxxxxx
Title: President
EXECUTIVE:
/s/ Xxxxx Xxxx
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XXXXX XXXX
EXHIBIT A
Early Termination of Stock Options
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1. Should Optionee cease service for any reason other than death or
permanent disability while the option remains outstanding, then Optionee will
have a three (3) month period measured from the date of such cessation of
Service in which to exercise the option for any or all of the option shares for
which the option is exercisable at the time of such cessation of Service. In no
event, however, may the option be exercised at any time after the specified
expiration date of the option term. Upon the expiration of such three (3) month
period or (if earlier) upon the specified expiration date of the option term,
the option will terminate and cease to be outstanding.
2. Should Optionee die while in service or within the three (3) month
period following his or her cessation of service, then the personal
representative of Optionee's estate or the person or persons to whom the option
is transferred pursuant to Optionee's will or in accordance with the laws of
descent and distribution will have the right to exercise the option for any or
all of the option shares for which the option is exercisable at the time of
Optionee's cessation of service, less any option shares subsequently purchased
by Optionee prior to death. Such right will lapse, and the option will terminate
and cease to remain outstanding, upon the earlier of (i) the expiration of the
twelve (12) month period measured from the date of Optionee's death or (ii) the
expiration date.
3. Should (i) Optionee's service be terminated for misconduct
(including, but not limited to, any act of dishonesty, willful misconduct, fraud
or embezzlement) or (ii) Optionee make any unauthorized use or disclosure of
confidential information or trade secrets of the Company or any parent or
subsidiary, then in any such event the option will terminate immediately and
cease to be outstanding.
