EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT dated as of August 8, 1996, between Audits
& Surveys Worldwide, Inc., a Delaware corporation having an address at 000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "COMPANY"), and Xxxxxx X.
Xxxxxxx, an individual residing at Cedar Street, X.X. Xxx 000, Xxxx Xxxxxx, Xxx
Xxxx 00000 ("EMPLOYEE").
W I T N E S S E T H :
WHEREAS, the Company desires to employ Employee, and Employee is
willing to enter into the employ of, and to render services to the Company, all
upon the terms and subject to the conditions contained herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. EMPLOYMENT. Subject to and upon the terms and conditions contained
in this Agreement, the Company hereby agrees to employ Employee and Employee
agrees to enter into the employ of the Company, for the period set forth in
Paragraph 2 hereof and to render to the Company, its affiliates and/or
subsidiaries the services described in Paragraph 3 hereof.
2. TERM. Employee's term of employment under this Agreement shall be
two (2) years, commencing on August 8, 1996 and shall continue for a period
through and including August 8, 1998, unless extended in writing as hereinbelow
provided or earlier terminated pursuant to the terms and conditions set forth
herein (the "EMPLOYMENT TERM"). Such term shall be extended for successive one
(1) year terms unless either party hereto gives written notice to the other of
its desire to terminate this Agreement at least six (6) months prior to the
commencement of any such extension.
3. DUTIES. (a) Employee shall serve as Vice Chairman of the Company
subject to the authority of the Board of Directors and Chief Executive Officer
of the Company. The Employee shall have supervisory responsibility for all
research groups and divisions including but not limited to the Audit Division,
Groups 1, 3, 4, 6 and 7, the Customer Satisfaction Division, the International
Division, the Media and Communications Division, the San Francisco Division and
the Mid-West Division. The Employee will be responsible for the maintenance of
high quality research standards for the existing businesses of the Company and
for the development of new business including the development of new products
and services and new clients. He will also have
responsibility for the direction and development of the Company's research
business, including but not limited to supervision of all research groups and
divisions, major client presentations, analytical solutions and study designs
and new products and services. The Employee will represent the Company at
industry functions, including membership in industry associations, speaking
before industry conferences and submission of white papers to industry groups.
Employee shall perform all duties and services incident to the position held by
him and to the responsibilities described above.
(b) Employee agrees to abide by all By-laws and policies
of the Company promulgated from time to time by the Company.
4. EXCLUSIVE SERVICES AND BEST EFFORTS. Employee agrees to devote his
best efforts, energies and skill to the discharge of the duties and
responsibilities attributable to his position, and to this end he will devote
his full time and attention during regular business hours to the business and
affairs of the Company, subject to the provisions of the last sentence of
subparagraph 11(b) hereof.
5. COMPENSATION. As compensation for his services and covenants
hereunder, Employee shall receive a salary ("SALARY"), payable pursuant to the
Company's normal payroll procedures in place from time to time, at the rate of
$325,000 per annum, additional compensation determined as hereinafter provided,
and such bonuses as may be determined from time to time by the Board of
Directors of the Company, in each case less all necessary and required federal,
state and local payroll deductions. The Employee shall be entitled to receive
annual additional compensation in an amount equal to 50% of the Company's
profits arising out of sales to new customers and/or sales of new products
and/or services to existing customers directly attributable to Employee's
efforts; provided, however, that the maximum annual amount of additional
compensation that Employee shall be entitled to receive shall be $100,000. For
purposes of this Agreement, profits shall be determined by the Company on the
same basis as it determines profits for research groups/divisions and any
additional compensation shall be paid at the same time as payments of additional
compensation are payable to other executives of the Company.
6. BUSINESS EXPENSES. Employee shall be reimbursed for, and entitled
to advances (subject to repayment to the Company if not actually incurred by
Employee) with respect to, only those business expenses incurred by him (a)
which are reasonable and necessary for Employee to perform his duties under this
Agreement and (b) for which Employee has submitted vouchers and/or receipts in
accordance with policies established from time to time by the Company.
7. EMPLOYEE BENEFITS. (a) During the Employment Term, Employee shall
be entitled to such insurance, disability and health and medical benefits and be
entitled to participate
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in such retirement plans or programs as are from time to time generally made
available to executive employees of the Company pursuant to the policies of the
Company; PROVIDED THAT Employee shall be required to comply with the conditions
attendant to coverage by such plans and shall comply with and be entitled to
benefits only in accordance with the terms and conditions of such plans. The
Company may withhold from any benefits payable to Employee all federal, state,
local and other taxes and amounts as shall be permitted or required to be
withheld pursuant to any applicable law, rule or regulation.
(b) Employee shall be entitled to vacation in accordance
with the Company's policy in effect for executive staff, which shall be taken at
such time or times as shall be mutually agreed upon with the Company.
8. STOCK OPTIONS. Subject to approval by the Compensation and Stock
Option Committee of the Board of Directors of the Company (the "STOCK OPTION
COMMITTEE"), the Employee will be granted an option to purchase 50,000 shares of
Common Stock of the Company at the market price of the Common Stock of the
Company on the date of grant, which option will vest at the rate of 50% on each
of the first and second anniversary dates of his employment. In addition,
subject to the approval of the Stock Option Committee and its evaluation of
Employee's performance, Employee shall be entitled to receive options to
purchase up to 50,000 additional shares of Common Stock of the Company at the
market price of the Common Stock of the Company on the date of grant on each of
the second, third and fourth anniversary dates of Employee's employment. Such
options, if granted, will vest at the rate of 50% on each of the first and
second anniversaries of the respective dates of grant. All options referred to
in this paragraph will be granted under the Company's 1995 Stock Option Plan (or
any subsequent plan adopted by the Company) and will be subject to all of the
terms and conditions of such plan.
9. DEATH AND DISABILITY. (a) The Employment Term shall terminate on
the date of Employee's death, in which event Employee's Salary, additional
compensation, reimbursable expenses and benefits owing to Employee through the
date of Employee's death shall be paid to his estate. Employee's estate will not
be entitled to any other compensation upon termination of this Agreement
pursuant to this subparagraph 9(a).
(b) If, during the Employment Term, in the opinion of a
duly licensed physician selected by the Company, Employee, because of physical
or mental illness or incapacity, shall become substantially unable to perform
the duties and services required of him under this Agreement for a period of 120
consecutive days or 180 days in the aggregate during any nine-month period, the
Company may, upon at least ten (10) days' prior written notice given at any time
after the expiration of such 120 or 180-day period, as the case may be, to
Employee of its intention to do so, terminate his employment as of such date as
may be set forth in the notice. In case of such
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termination, Employee shall be entitled to receive his Salary, additional
compensation, reimbursable expenses and benefits owing to Employee through the
date of termination. Employee will not be entitled to any other compensation
upon termination of his employment pursuant to this subparagraph 9(b).
10. TERMINATION. The Company may terminate the employment of Employee
for cause, as such term is interpreted by the courts of New York. Upon such
termination, the Company shall be released from any and all further obligations
under this Agreement, except that the Company shall be obligated to pay Employee
his Salary, additional compensation, reimbursable expenses and benefits owing to
Employee through the day on which Employee is terminated. Employee will not be
entitled to any other compensation upon termination of this Agreement pursuant
to this Paragraph 10.
11. DISCLOSURE OF INFORMATION AND RESTRICTIVE COVENANT. Employee
acknowledges that, by his employment, he will be in a confidential relationship
with the Company and will have access to confidential information and trade
secrets of the Company, its subsidiaries and affiliates. Confidential
information and trade secrets include, but are not limited to, customer,
supplier and client lists, panels and interviewers, price lists, marketing,
strategies and procedures, operational techniques, business plans and systems,
quality control procedures and systems, special projects and survey and market
research, including projects, research and reports for any entity or client, and
any other records, files, drawings, discoveries, applications, data and
information concerning the business of the Company and its customers and clients
which are not in the public domain. Employee agrees that in consideration of the
execution of this Agreement by the Company:
(a) Employee will not, during the term of this Agreement
or at any time thereafter, use or disclose to any third party, trade secrets or
confidential information of the Company, including, but not limited to,
confidential information or trade secrets belonging or relating to the Company,
its subsidiaries, affiliates, customers and clients or proprietary procedures of
the Company, its subsidiaries, affiliates, customers and clients. Proprietary
procedures shall include, but shall not be limited to, all information which is
known or intended to be known only by employees of the Company, its subsidiaries
and affiliates or others in a confidential relationship with the Company or its
subsidiaries and affiliates which relates to business matters.
(b) Employee will not, during the term of this Agreement,
directly or indirectly, under any circumstance other than at the direction and
for the benefit of the Company, engage in or participate in any business
activity, including, but not limited to, acting as a director, officer,
employee, agent, independent contractor, partner, consultant, licensor or
licensee, franchisor or franchisee, proprietor, syndicate member, shareholder or
creditor or with a person having any other relationship with any other business,
company, firm, occupation or business activity, that is,
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directly or indirectly, competitive with any business carried on by the Company
or any of its subsidiaries or affiliates during the term of this Agreement. The
ownership by Employee of 1% or less of the issued and outstanding shares of a
class of securities which is traded on a national securities exchange or in the
over-the-counter market, shall not cause Employee to be deemed a shareholder
under this subparagraph 11(b) or constitute a breach of Paragraph 4 hereof.
(c) Employee will not, during the term of this Agreement
and for a period of three (3) years thereafter, on his behalf or on behalf of
any other business enterprise, directly or indirectly, under any circumstance
other than at the direction and for the benefit of the Company, solicit or
induce any creditor, customer, client, supplier, officer, employee or agent of
the Company or any of its subsidiaries or affiliates to sever his or its
relationship with or leave the employ of any of such entities.
(d) Nothing contained in this Paragraph 11 shall be
construed as prohibiting Employee from being engaged by a client or customer of
the Company upon his termination of employment by the Company.
(e) It is expressly agreed by Employee that the nature and
scope of each of the provisions set forth above in this Paragraph 11 are
reasonable and necessary. If, for any reason, any aspect of the above provisions
as it applies to Employee is determined by a court of competent jurisdiction to
be unreasonable or unenforceable, the provisions shall only be modified to the
minimum extent required to make the provisions reasonable and/or enforceable, as
the case may be. Employee acknowledges and agrees that his services are of
unique character and expressly grants to the Company or any subsidiary or
affiliate of the Company or any successor of any of them, the right to enforce
the above provisions through the use of all remedies available at law or in
equity, including, but not limited to, injunctive relief.
(f) This Paragraph 11 and Paragraphs 12, 13 and 14 hereof
shall survive the expiration or termination of this Agreement for any reason.
12. COMPANY PROPERTY. (a) Any patents, inventions, discoveries,
applications or processes designed, devised, planned, applied, created,
discovered or invented by Employee in the course of Employee's employment under
this Agreement and which pertain to any aspect of the Company's or its
subsidiaries' or affiliates' business shall be the sole and absolute property of
the Company, and Employee shall promptly report the same to the Company and
promptly execute any and all documents reasonably requested to assure the
Company the full and complete ownership thereof.
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(b) All records, files, lists, including computer
generated lists, drawings, documents, equipment and similar items relating to
the Company's business which Employee shall prepare or receive from the Company
shall remain the Company's sole and exclusive property. Upon termination of this
Agreement, Employee shall promptly return to the Company all property of the
Company in his possession. Employee further represents that he will not copy or
cause to be copied, print out or cause to be printed out any software, documents
or other materials originating with or belonging to the Company. Employee
additionally represents that, upon termination of his employment with the
Company, he will not retain in his possession any such software, documents or
other materials.
13. REMEDY. It is mutually understood and agreed that Employee's
services are special, unique, unusual, extraordinary and of an intellectual
character giving them a peculiar value, the loss of which cannot be reasonably
or adequately compensated in damages in an action at law. Accordingly, in the
event of any breach of this Agreement by Employee, including, but not limited
to, the breach of the non-disclosure, non-solicitation and non-compete clauses
under Paragraph 11 hereof, the Company shall be entitled to equitable relief by
way of injunction or otherwise in addition to any damages which the Company may
be entitled to recover. In addition, the Company shall be entitled to
reimbursement from Employee, upon request, of any and all reasonable attorneys'
fees and expenses incurred by it in enforcing any term or provision of this
Agreement.
14. REPRESENTATIONS AND WARRANTIES OF EMPLOYEE. (a) In order to
induce the Company to enter into this Agreement, Employee hereby represents and
warrants to the Company as follows: (i) Employee has the legal capacity and
unrestricted right to execute and deliver this Agreement and to perform all of
his obligations hereunder; (ii) the execution and delivery of this Agreement by
Employee and the performance of his obligations hereunder will not violate or be
in conflict with any fiduciary or other duty, instrument, agreement, document,
arrangement or other understanding to which Employee is a party or by which he
is or may be bound or subject; and (iii) Employee is not a party to any
instrument, agreement, document, arrangement or other understanding with any
person requiring or restricting the use or disclosure of any confidential
information or the provision of any employment, consulting or other services.
(b) Employee hereby agrees to indemnify and hold harmless
the Company from and against any and all losses, costs, damages and expenses
(including, without limitation, its reasonable attorneys' fees) incurred or
suffered by the Company resulting from any breach by Employee of any of his
representations or warranties set forth in subparagraph 14(a) hereof.
15. WAIVER OF JURY TRIAL AND CONSENT TO NEW YORK JURISDICTION AND
VENUE. In any action, suit or proceeding in any jurisdiction brought against the
Employee by the Company, or vice versa, the Employee and the Company each waive
trial by jury. The Employee hereby
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consents and agrees that the Supreme Court of the State of New York for the
County of New York and the United States District Court for the Southern
District of New York each shall have personal jurisdiction and proper venue with
respect to any dispute between the Employee and the Company. In any dispute with
the Company, the Employee will not raise, and hereby expressly waives, any
objection or defense to any such jurisdiction as an inconvenient forum.
16. NOTICE. Except as otherwise expressly provided, any notice,
request, demand or other communication permitted or required to be given under
this Agreement shall be in writing, shall be sent by one of the following means
to the Employee at his address set forth on the first page of this Agreement and
to the Company at its address set forth on the first page of this Agreement,
Attention: Xx. Xxxxxxx Xxxxx, Chief Executive Officer, with a copy to Xxxxxx
Xxxxxx Flattau & Klimpl, LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xxxxx Xxxxxxxxx, Esq. (or to such other address as shall be
designated hereunder by notice to the other parties and persons receiving
copies, effective upon actual receipt) and shall be deemed conclusively to have
been given: (i) on the first business day following the day timely deposited
with Federal Express (or other equivalent national overnight courier) or United
States Express Mail, with the cost of delivery prepaid or for the account of the
sender; (ii) on the fifth business day following the day duly sent by certified
or registered United States mail, postage prepaid and return receipt requested;
or (iii) when otherwise actually received by the addressee on a business day (or
on the next business day if received after the close of normal business hours or
on any non-business day).
17. INTERPRETATION, HEADINGS. The parties acknowledge and agree that
the terms and provisions of this Agreement have been negotiated, shall be
construed fairly as to all parties hereto, and shall not be construed in favor
of or against any party. The section headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or interpretation
of this Agreement.
18. SUCCESSORS AND ASSIGNS; ASSIGNMENT; INTENDED BENEFICIARIES.
Neither this Agreement, nor any of Employee's rights, powers, duties or
obligations hereunder, may be assigned by Employee. This Agreement shall be
binding upon and inure to the benefit of Employee and his heirs and legal
representatives and the Company and its successors. Successors of the Company
shall include, without limitation, any corporation or corporations acquiring,
directly or indirectly, all or substantially all of the assets of the Company,
whether by merger, consolidation, purchase, lease or otherwise, and such
successor shall thereafter be deemed "the Company" for the purpose hereof.
19. NO WAIVER BY ACTION, CUMULATIVE RIGHTS, ETC. Any waiver or
consent from the Company respecting any term or provision of this Agreement or
any other aspect of the Employee's conduct or employment shall be effective only
in the specific instance and for the
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specific purpose for which given and shall not be deemed, regardless of
frequency given, to be a further or continuing waiver or consent. The failure or
delay of the Company at any time or times to require performance of, or to
exercise any of its powers, rights or remedies with respect to, any term or
provision of this Agreement or any other aspect of the Employee's conduct or
employment in no manner (except as otherwise expressly provided herein) shall
affect the Company's right at a later time to enforce any such term or
provision.
20. COUNTERPARTS; NEW YORK GOVERNING LAW; AMENDMENTS, ENTIRE
AGREEMENT. This Agreement may be executed in two counterpart copies, each of
which may be executed by one of the parties hereto, but all of which, when taken
together, shall constitute a single agreement binding upon all of the parties
hereto. This Agreement and all other aspects of the Employee's employment shall
be governed by and construed in accordance with the applicable laws pertaining
in the State of New York (other than those that would defer to the substantive
laws of another juris diction). Each and every modification and amendment of
this Agreement shall be in writing and signed by the parties hereto, and any
waiver of, or consent to any departure from, any term or provision of this
Agreement shall be in writing and signed by each affected party hereto. This
Agreement contains the entire agreement of the parties and supersedes all prior
representations, agreements and understandings, oral or otherwise, between the
parties with respect to the matters contained herein.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
AUDITS & SURVEYS WORLDWIDE, INC.
By: /s/ Xxxxxxx Xxxxx
--------------------------------
Name: Xxxxxxx Xxxxx
Title: Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxx
--------------------------------
XXXXXX X. XXXXXXX
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