EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of June 1, 1999, between
GIRGENTI, HUGHES, XXXXXX & XxXXXXXX, INC., a New York corporation with offices
at 000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and
XXXXXXX XXXXXXXXX, an individual residing at 000 Xxxx 00xx Xxxxxx Xxx 00X, Xxx
Xxxx, Xxx Xxxx 00000 ("Employee").
W I T N E S S E T H:
WHEREAS, the Company is a wholly-owned subsidiary of
Healthworld Corporation, a Delaware corporation (the "Parent"); and
WHEREAS, the Company desires to engage Employee to perform
services for the Company, the Parent, Black Cat Graphics, Inc., a New York
corporation and a wholly-owned subsidiary of the Parent ("Black Cat"), Brand
Research Corporation, a New York corporation and a wholly-owned subsidiary of
the Parent ("Brand Research"), and Food Com (a division of the Company
("FoodCom"), and their successors and assigns, and Employee desires to perform
such services, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the representations,
warranties and mutual covenants set forth herein, the parties agree as follows:
1. Term.
The Company agrees to employ Employee, and Employee agrees to
serve, on the terms and conditions of this Agreement, for a period commencing on
June 1, 1999 (the "Commencement Date") and ending on May 31, 2001 (the
"Termination Date"), or such shorter period as may be provided for herein;
provided, however, that the term of this Agreement may be extended (subject to
earlier termination as provided herein), at the option of Employee, for an
additional one year period by means of written notice made no later than
[February 15, 2001] by Employee to the Company informing the Company of his
election to exercise his option to extend the Employment Period by one year. The
period during which Employee is employed hereunder is hereinafter referred to as
the "Employment Period." As used herein, the term "Employment Year" shall mean a
one-year period of Employee's employment hereunder commencing on each January 1
during the Employment Period, provided that the first Employment Year shall be
the period commencing on January 1, 1999 and ending on December 31, 1999. For
the avoidance of doubt, with respect to any calculations made under this
Agreement by reference to the first Employment Year, the terms of this Agreement
shall be deemed to supersede the terms of that certain Employment Agreement
between the Company and Employee dated as of November 1997.
2. Duties and Services.
During the Employment Period, Employee shall be employed as the
President and Chief Operating Officer--Global Communications Services of the
Company, and shall perform the duties incident to that position which shall
include responsibility for global communications services for the Companies (as
defined below). In the performance of his duties, Employee shall be subject to
the direction of the Chief Executive Officer of the Parent and the Board of
Directors of the Company. In addition, during the Employment Period, Employee
shall be elected to and shall serve, if so elected, as a member of the Board of
Directors of the Parent and any of the Companies as may from time to time be
prescribed by the Chief Executive Officer of the Parent or the Board of
Directors of the Company. Employee agrees to his employment as described in this
Section 2. Employee agrees to devote all of his business time and efforts to the
performance of his duties under this Agreement. Employee shall perform his
duties from the Company's principal offices located in New York City and
Employee shall be available to travel as the needs of the business require. As
used herein the term "Companies" shall mean and include the Company, the Parent,
Black Cat, Brand Research and FoodCom, but shall specifically exclude
Syberactive, Inc., Medical Education Technologies, Inc./Strategic Solutions, Rx
Click, Headcount LLC and any other companies or divisions acquired or formed
directly or indirectly by the Parent or the Company after the date hereof.
3. Compensation.
(a) The Company shall pay Employee, during the Employment Period, a
base salary at the annual rate of $350,000 (prorated for periods that are less
than one year) payable at such intervals as salaries are paid by the Company to
other executives of the Company.
(b) During the Employment Period, Employee shall receive an annual
incentive bonus (the "Annual Incentive Bonus") for each Employment Year, payable
not later than 110 days after the end of the applicable Employment Year, in an
amount to be determined as follows:
(i) if EBIT (as defined below) for the fiscal year
corresponding to the applicable Employment Year does not exceed the
Base EBIT (as defined below), Employee shall not be entitled to an
Annual Incentive Bonus with respect to such Employment Year;
(ii) if EBIT for the fiscal year corresponding to the
applicable Employment Year exceeds the Base EBIT by an amount equal to
or less than 10%, Employee shall receive an Annual Incentive Bonus with
respect to such Employment Year in an amount equal to 12.5% of
Employee's annual base salary for such Employment Year, subject to
reduction pursuant to Section 3(c) below;
(iii) if EBIT for the fiscal year corresponding to the
applicable Employment Year exceeds the Base EBIT by an amount in excess
of 10% but less than or equal to 15%, Employee shall receive an Annual
Incentive Bonus with respect to such Employment Year in an amount equal
to 18.5% of Employee's
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annual base salary for such Employment Year, subject to reduction
pursuant to Section 3(c) below;
(iv) if EBIT for the fiscal year corresponding to the
applicable Employment Year exceeds the Base EBIT by an amount in excess
of 15% but less than or equal to 20%, Employee shall receive an Annual
Incentive Bonus with respect to such Employment Year in an amount equal
to 26% of Employee's annual base salary for such Employment Year,
subject to reduction pursuant to Section 3(c) below; and
(v) if EBIT for the fiscal year corresponding to the
applicable Employment Year exceeds the Base EBIT by an amount in excess
of 20%, Employee shall receive an Annual Incentive Bonus with respect
to such Employment Year in an amount equal to 35% of Employee's annual
base salary for such Employment Year, subject to reduction pursuant to
Section 3(c) below.
(c) The amount of the Annual Incentive Bonus which Employee may be
entitled to receive for each Employment Year as calculated above shall be
subject to the following reductions:
(i) if Revenues (as defined below) for the fiscal year
corresponding to the applicable Employment Year do not exceed the Base
Revenues (as defined below), Employee shall only be entitled to an
Annual Incentive Bonus with respect to such Employment Year in an
amount equal to 25% of the amount calculated in Section 3(b) above;
(ii) if Revenues for the fiscal year corresponding to the
applicable Employment Year exceed the Base Revenues by an amount equal
to or less than 4.0%, Employee shall receive an Annual Incentive Bonus
with respect to such Employment Year in an amount equal to 40% of the
amount calculated in Section 3(b) above;
(iii) if Revenues for the fiscal year corresponding to the
applicable Employment Year exceed the Base Revenues by an amount in
excess of 4.0% but less than or equal to 7.5%, Employee shall receive
an Annual Incentive Bonus with respect to such Employment Year in an
amount equal to 50% of the amount calculated in Section 3(b) above;
(iv) if Revenues for the fiscal year corresponding to the
applicable Employment Year exceed the Base Revenues by an amount in
excess of 7.5% but less than or equal to 10.0%, Employee shall receive
an Annual Incentive Bonus with respect to such Employment Year in an
amount equal to 60% of the amount calculated in Section 3(b) above;
(v) if Revenues for the fiscal year corresponding to the
applicable Employment Year exceed the Base Revenues by an amount in
excess of 10.0%, but less than or equal to 12.5%, Employee shall
receive an Annual Incentive
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Bonus with respect to such Employment Year in an amount equal to 70%
of the amount calculated in Section 3(b) above;
(vi) if Revenues for the fiscal year corresponding to the
applicable Employment Year exceed the Base Revenues by an amount in
excess of 12.5%, but less than or equal to 15.0%, Employee shall
receive an Annual Incentive Bonus with respect to such Employment Year
in an amount equal to 85% of the amount calculated in Section 3(b)
above; and
(vii) if Revenues for the fiscal year corresponding to the
applicable Employment Year exceed the Base Revenues by an amount in
excess of 15.0%, Employee shall receive an Annual Incentive Bonus in an
amount calculated in Section 3(b) above.
The Company shall deliver to Employee a calculation of the Annual
Incentive Bonus together with its payment thereof.
(d) During the Employment Period, Employee shall receive
deferred compensation ("Deferred Compensation") for each Employment Year, 50%
of which shall be payable six months after the end of the applicable
Employment Year and the other 50% of which shall be payable one year after the
end of the applicable Employment Year, in an amount to be determined as follows:
(i) if (A) EBIT for the fiscal year corresponding to the
applicable Employment Year does not exceed the Base EBIT by at least
15%, or (B) Revenues for the fiscal year corresponding to the
applicable Employment Year do not exceed the Base Revenues by at least
15%, Employee shall not be entitled to Deferred Compensation with
respect to such Employment Year;
(ii) if (A) EBIT for the fiscal year corresponding to the
applicable Employment Year exceeds the Base EBIT by an amount equal to
at least 15%, (B) Revenues for the fiscal year corresponding to the
applicable Employment Year exceeds the Base Revenues by an amount equal
to at least 15%, and (C) EBIT for the fiscal year corresponding to the
applicable Employment Year exceeds the Base EBIT by an amount less than
20% or Revenues for the fiscal year corresponding to the applicable
Employment Year exceeds the Base Revenues by an amount less than 20%,
Employee shall receive Deferred Compensation with respect to such
Employment Year in an aggregate amount equal to $25,000;
(iii) if (A) EBIT for the fiscal year corresponding to the
applicable Employment Year exceeds the Base EBIT by an amount equal to
or in excess of 20%, and (B) Revenues for the fiscal year corresponding
to the applicable Employment Year exceed the Base Revenues by an amount
equal to or in excess of 20%, Employee shall receive Deferred
Compensation with respect to such Employment Year in an aggregate
amount equal to $50,000.
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In calculating Deferred Compensation for any Employment Year
during which Employee is employed by the Company hereunder for part of such
Employment Year, the Deferred Compensation payable with respect to such partial
Employment Year shall be reduced pro rata to reflect the portion of the
Employment Year worked, and EBIT and Revenues for the fiscal period within the
applicable partial Employment Year shall be compared to the Base EBIT and the
Base Revenues as calculated for the same fiscal period within the base year.
The Company shall deliver to Employee a calculation of the Deferred
Compensation together with its payment thereof.
(e) As used herein, the term "EBIT" shall mean the earnings from
operations of the Companies before interest, taxes and extraordinary items,
determined in accordance with generally accepted accounting principles ("GAAP").
As used herein, the term "Revenues" shall mean the net commissions and fees of
the Companies, determined in accordance with GAAP.
(f) As used herein, the term "Base EBIT" shall mean (i) with
respect to calculating the Annual Incentive Bonus and Deferred Compensation for
the first Employment Year, the EBIT for the fiscal year ending December 31,
1998, and (ii) the "Base EBIT" used to calculate the Annual Incentive Bonus and
Deferred Compensation for each successive Employment Year shall be determined by
increasing the Base EBIT used for calculating the Annual Incentive Bonus for the
prior Employment Year by 7%, compounded annually. As used herein, the term "Base
Revenues", shall mean (x) with respect to calculating the Annual Incentive Bonus
and Deferred Compensation for the first Employment Year, the Revenues for the
fiscal year ending December 31, 1998, and (y) the "Base Revenues" used to
calculate the Annual Incentive Bonus and Deferred Compensation for each
successive Employment Year shall be determined by increasing the Base Revenues
used for calculating the Annual Incentive Bonus for the prior Employment Year by
7%, compounded annually.
(g) In addition, Employee may be entitled to receive an additional
annual bonus at the sole discretion of the Board of Directors of the Parent and
the Company.
(h) All compensation hereunder (whether in the form of base salary,
incentive compensation or Deferred Compensation) shall be subject to payroll
deductions as may be necessary or customary in respect of salaried personnel of
the Company.
(i) Employee will be granted access to the financial information
used to calculate Employee's bonus and Deferred Compensation hereunder.
(j) To the extent Employee ceases to be employed by the Company
during any Employment Year, calculations of EBIT and Revenues shall be prorated
for periods of less than such Employment Year up to the date of Employee's
termination.
(k) On July 26, 1999, Employee will be granted pursuant to the
Company's 1997 Stock Option Plan, as amended (the "Stock Option Plan"), stock
options to purchase 50,000 shares of the Parent's common stock, par value $.01
per share (the "Common Stock"), at a price equal to the then fair market value
of the Common Stock (as determined under the Stock Option Plan), which options
shall vest one-third after one year from the date of grant, two-thirds after two
years from the date of grant, and in their entirety after three years from the
date of
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grant. On July 26, 2000, provided that Employee is still in the employ of the
Company pursuant to this Agreement, Employee will be granted pursuant to
the Stock Option Plan stock options to purchase an additional 50,000 shares of
Common Stock at a price equal to the then fair market value of the Common Stock
(as determined under the Stock Option Plan), which options shall vest one-third
after one year from the date of grant, two-thirds after two years from the date
of grant, and in their entirety after three years from the date of grant.
4. Benefits.
(a) During the Employment Period, Employee may participate, to the
extent eligible, in each insurance (including, without limitation, any life,
travel and accident and medical and other health insurance), pension, disability
and other employee benefit plans maintained by the Company for its senior
management or employees generally (and, in particular, those employee benefit
plans in which the Chairman of the Board and Chief Executive Officer of the
Company is eligible to participate) in accordance with the terms thereof.
(b) Employee shall be entitled to such number of sick days every
year during the Employment Period as are generally provided from time to time by
the Company to its senior management. Any unused sick days at the end of the
calendar year shall not accrue or cumulate from year to year.
(c) During the Employment Period, Employee shall be entitled to
reimbursement for all lease payments, gasoline, maintenance and other costs and
expenses for his automobile in the aggregate amount not to exceed $12,000 per
year, upon submission and approval of written statements and bills in accordance
with the then regular procedures of the Company.
(d) During the Employment Period, Employee shall be entitled to
reimbursement for all reasonable travel, entertainment and other out-of-pocket
expenses necessarily incurred in the performance of his duties hereunder
(excluding automobile expenses as described in subsections (c) above), upon
submission and approval of written statements and bills in accordance with the
then regular procedures of the Company.
(e) During the Employment Period, Employee shall receive a country
club allowance of $10,000 per year, payable semi-annually, and Employee shall be
responsible for all dues, fees and expenses associated with his club membership.
(f) During the Employment Period, Employee shall receive an expense
allowance of $40,000 per year, payable monthly, which shall be in addition to
any reimbursement of reasonable expenses by the Company pursuant to Section
4(d).
5. Vacation.
Employee shall be entitled to such number of weeks of paid vacation
every year during the Employment Period as are generally provided from time to
time by the Company to its senior management. The time during which vacation
will be taken shall be coordinated with other senior management of the Company.
Any unused vacation time at the end of a calendar
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year shall not accrue or cumulate from year to year and Employee shall not be
entitled to compensation for unused vacation time.
6. Representations, Warranties
and Covenants of Employee.
Employee represents and warrants to the Company that (a) Employee
is under no contractual or other restriction or obligation which is inconsistent
with the execution of this Agreement, the performance of his duties hereunder,
or the other rights of the Company hereunder and (b) Employee is, to the best of
his knowledge, under no physical or mental disability that would hinder his
performance of his duties under this Agreement.
7. Non-Competition; Nonsolicitation.
(a) In view of the unique and valuable services it is expected
Employee will render to the Company, and in consideration of the compensation to
be received hereunder, Employee agrees (i) that he will not, during the period
he is employed by the Company under this Agreement, Participate In (as defined
below) any other business or organization, whether or not such business or
organization now is or shall then be competing with or of a nature similar to
the business or profession of the Company or any Companies, and (ii) for a
period of one year after he ceases to be employed by the Company under this
Agreement, he will not compete with or be engaged in the same business as or
Participate In any other business or organization which during such one year
period competes with or is engaged in the same business as the Company or any of
the Companies with respect to any product or service sold or proposed to be sold
or activity engaged in or proposed to be engaged in up to the time of such
cessation within a 100-mile radius of the location of the Company's executive
offices on the date on which Employee ceases to be employed by the Company under
this Agreement, except that in each case the provisions of this Section 7(a)
will not be deemed breached merely because Employee owns not more than 1% of the
outstanding common stock of a corporation, if, at the time of its acquisition by
Employee, such stock is listed on a national securities exchange, is reported on
Nasdaq, or is regularly traded in the over-the-counter market by a member of a
national securities exchange.
As used in this Agreement, the term "Participate In" shall mean:
"directly or indirectly, for his own benefit or for, with, or through any other
person, firm, or corporation, own, manage, operate, control, loan money to, or
participate in the ownership, management, operation, or control of, or be
connected as a director, officer, employee, partner, consultant, agent,
independent contractor, or otherwise with, or acquiesce in the use of his name
in."
(b) Employee will not directly or indirectly reveal the name of,
solicit or interfere with, or endeavor to entice away from the Company, the
Parent, any of the Companies or any of the Parent's other direct or indirect
subsidiaries or any of their respective employees for a period of one year after
Employee leaves the employment of the Company. Employee will not directly or
indirectly employ any person who is an employee of the Company, the Parent, any
of the Companies or any of the Parent's other direct or indirect subsidiaries
for a period of one year after the Employee leaves the employ of the Company.
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(c) Since a breach of the provisions of this Section 7 could not
adequately be compensated by money damages, the Company shall be entitled, in
addition to any other right and remedy available to it, to an injunction
restraining such breach or a threatened breach, and in either case no bond or
other security shall be required in connection therewith, and Employee hereby
consents to the issuance of such injunction. Employee agrees that the provisions
of this Section 7 are necessary and reasonable to protect the Company, the
Parent or any of the Companies in the conduct of their respective business. If
any restriction contained in this Section 7 shall be deemed to be invalid,
illegal, or unenforceable by reason of the extent, duration, or geographical
scope thereof, or otherwise, then the court making such determination shall have
the right to reduce such extent, duration, geographical scope, or other
provisions hereof, and in its reduced form such restriction shall then be
enforceable in the manner contemplated hereby.
(d) In view of the unique and valuable services it is expected
Employee will render to the Company and in consideration of the compensation to
be received hereunder, Employee agrees that for a period of one year after
Employee ceases to be employed by the Company under this Agreement, Employee
will not, directly or indirectly, solicit or provide services for any accounts,
clients or customers of the Company, the Parent, any of the Companies or any of
the Parent's other direct or indirect subsidiaries existing on the date of
termination of employment hereunder or during the period of one year prior to
such termination of employment.
8. Copyrights, Patents, Etc.
Any interest in patents, patent applications, inventions,
technological innovations, copyrights, copyrightable works, developments,
discoveries, designs, and processes ("Such Inventions") which Employee now or
hereafter during the period he is employed by the Company under this Agreement
or otherwise and for ninety (90) days thereafter may own, conceive of, or
develop and either relating to the fields in which the Company or any of the
Companies may then be engaged or contemplates being engaged or conceived of or
developed utilizing the time, material, facilities, or information of the
Company or any of the Companies, shall belong to the Company or any of the
Companies, as the case may be. As soon as Employee owns, conceives of, or
develops any Such Invention, he agrees immediately to communicate such fact in
writing to the Company, and without further compensation, but at the Company's
expense (except as noted in clause (a) of this Section 8), forthwith upon
request of the Company, Employee shall execute all such assignments and other
documents (including applications for patents, copyrights, trademarks, and
assignments thereof) and take all such other action as the Company may
reasonably request in order (a) to vest in the Company all Employee's right,
title, and interest in and to Such Inventions, free and clear of liens,
mortgages, security interests, pledges, charges, and encumbrances ("Liens")
(Employee to take such action, at his expense as is necessary to remove all such
Liens) and (b), if patentable or copyrightable, to obtain patents or copyrights
(including extensions and renewals) therefor in any and all countries in such
name as the Company shall determine.
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9. Confidential Information.
All confidential information which Employee may now possess, may
obtain during or after the Employment Period, or may create prior to the end of
the period he is employed by the Company under this Agreement relating to the
business of the Parent, the Company, any of the Companies or any of the Parent's
other direct or indirect subsidiaries shall not be published, disclosed, or made
accessible by him to any other person, firm, or corporation either during or
after the termination of his employment or used by him except during the
Employment Period in the business and for the benefit of the Company and the
Companies, in each case without prior written permission of the Company.
Employee shall return all tangible evidence of such confidential information to
the Company prior to or at the termination of his employment.
10. Life Insurance.
If requested by the Company, Employee shall submit to such physical
examinations and otherwise take such actions and execute and deliver such
documents as may be reasonably necessary to enable the Company, at its expense
and for its own benefit, to obtain life insurance on the life of Employee.
11. Termination.
Notwithstanding anything herein contained, if, prior to the end of
the Employment Period:
(a) either (i) Employee shall be physically or mentally
incapacitated or disabled (as determined by an independent physician selected by
the Board of Directors of the Company) or otherwise unable fully to discharge
his duties hereunder for a period of 13 consecutive weeks or an aggregate of 13
weeks in any six-month period, (ii) Employee shall be convicted by, or shall
have entered a plea of guilty or nolo contendere in, a court of competent and
final jurisdiction for any crime involving moral turpitude, fraud, embezzlement,
misappropriation, or any other felony or crime punishable by imprisonment, (iii)
Employee shall commit any act of fraud, embezzlement or other act of
misappropriation affecting the Company, (iv) Employee shall fail or refuse to
perform his material duties as required hereunder or shall refuse to follow
direct instructions from the Chairman of the Board and Chief Executive Officer
of the Parent or the Board of Directors of the Company or the Parent or shall
materially violate his duty of loyalty to the Company, the Parent or any of the
other Companies or otherwise shall breach any term of this Agreement and fail to
correct such breach within 20 days after notice of commission thereof, then, in
each such case, the Company shall have the right to give notice of termination
of Employee's services hereunder as of a date (not earlier than ten days from
such notice) to be specified in such notice, and this Agreement shall terminate
on the date so specified; or
(b) Employee shall die, then this Agreement shall terminate on the
date of Employee's death.
(c) Upon termination of this Agreement pursuant to subsection
(a)(i) or (b) of this Section 11, neither party shall have any further
obligations hereunder except that (i)
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Employee (or his estate in the event of his death) shall be entitled to receive
his salary which shall not have previously been paid to the date of termination,
any bonus (including, without limitation, the Annual Incentive Bonus and
Deferred Compensation) for the Employment Year prior to the Employment Year in
which Employee is terminated to the extent accrued but not yet paid, and any
bonus (including, without limitation, the Annual Incentive Bonus and Deferred
Compensation) for the Employment Year in which Employee is terminated pro rata
to the date of termination, and (ii) for obligations or covenants contained
herein that extend beyond the term of this Agreement.
(d) Upon termination of this Agreement as a result of Employee's
voluntary action or pursuant to subsections (a)(ii), (a)(iii) or (a)(iv) of this
Section 11, neither party shall have any further obligations hereunder except
(i) Employee shall be entitled to receive his salary which shall not have
previously been paid to the date of termination, and any bonus (including,
without limitation, the Annual Incentive Bonus and Deferred Compensation) for
the Employment Year prior to the Employment Year in which Employee is terminated
to the extent accrued but not yet paid, and solely in the event upon termination
of this Agreement as a result of Employee's voluntary action, Employee shall be
entitled to receive any bonus (including, without limitation, the Annual
Incentive Bonus and Deferred Compensation) for the Employment Year in which
Employee is terminated pro rata to the date of termination, and (ii) for
obligations or covenants contained herein that extend beyond the term of this
Agreement.
(e) In the event Employee's employment is terminated during the
term of this Agreement other than by Employee's voluntary action or pursuant to
subsection (a) or (b) of this Section 11, Employee shall be entitled to receive
(i) an amount equal to his current base salary for the period from the date of
termination through the later of (A) the balance of the scheduled term of this
Agreement, less any compensation received or receivable by Employee as a result
of any other employment obtained by Employee during such period, which amounts
shall be payable in accordance with the Company's normal payroll practices then
in effect, (ii) any bonus (including, with limitation, the Annual Incentive
Bonus and Deferred Compensation) for the Employment Year prior to the Employment
Year in which Employee is terminated, to the extent accrued but not yet paid,
and any bonus (including, with limitation, the Annual Incentive Bonus and
Deferred Compensation) for the Employment Year in which Employee is terminated
pro rata to the date of termination; (iii) any benefits then vested under any
benefit plans and otherwise payable in accordance with the provisions of the
applicable benefit plan and applicable laws, (iv) continued coverage (net of any
Employee contributions) to the extent any such coverage was provided immediately
prior to the termination of Employee for medical, health, hospital and
disability insurance from the date of termination through the balance of the
scheduled term of the Agreement or (B) eighteen months, under the benefit plans
maintained by the Company for its senior management or employees generally in
accordance with the terms thereof or, if the Company is unable to provide such
coverage under its benefits plans as they may from time to time be in effect,
the Company will provide or pay (without gross-up for taxes), at the Company's
sole discretion, for coverage (net of any Employee contributions) having
substantially the same aggregate value as the coverage provided under such
plans, and (v) continued coverage (net of any Employee contributions) from the
date of termination through the balance of the scheduled term of this Agreement
under any life insurance policies maintained for Employee immediately prior to
the termination of Employee (other than any policy under which the Company is
the beneficiary) or, if the Company is unable to provide such coverage, the
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Company will pay (net of any Employee contributions) to Employee (without
gross-up for taxes) an amount sufficient for Employee to purchase such life
insurance policy and pay the premiums thereon through the balance of the
scheduled term of this Agreement. Employee shall promptly notify the Company in
writing of any other employment obtained or undertaken by Employee, and the
salary, compensation or other amounts received or to be received by Employee
therefrom. In the event Employee's employment is terminated during the term of
this Agreement other than by Employee's voluntary action or pursuant to
subsection (a) or (b) of this Section 11, this subsection (e) of this Section 11
will apply in place of any Company severance policies that might otherwise be
applicable, and the Company will have no obligation to make any payments to
Employee except those expressly set forth in this subsection (e) of this Section
11.
(f) If the Employee accepts other employment all compensation
payable to the Employee from services as an officer, consultant or employee of
any other business after the termination of the Employee's employment hereunder
with respect to the balance of the Employment Period whether paid during or
after such period shall be offset against and used to reduce any payments (but
not below zero) or benefits required to be paid to or received by Employee under
this Agreement, other than pursuant to Section 15 hereof.
12. Survival.
The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive Employee's
termination of employment.
13. Modification.
This Agreement sets forth the entire understanding of the parties
with respect to the subject matter hereof, supersedes all existing agreements
between them concerning such subject matter, and may be modified only by a
written instrument duly executed by each party.
14. Notices.
Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be mailed by certified mail, return
receipt requested, or delivered against receipt to the party to whom it is to be
given at the address of such party set forth in the preamble to this Agreement
(or to such other address as the party shall have furnished in writing in
accordance with the provisions of this Section 14). Notice to the estate of
Employee shall be sufficient if addressed to Employee as provided in this
Section 14. Any notice or other communication given by certified mail (or such
comparable method) shall be deemed given at the time of certification thereof
(or comparable act), except for a notice changing a party's address which shall
be deemed given at the time of receipt thereof.
15. Consulting Agreement
Upon expiration of the full Employment Period or if Employee is
terminated for any reason other than as a result of the termination of Employee
pursuant to Sections 11(a) or (b) hereof, the Company and Employee shall enter
into a consulting agreement (the "Consulting Agreement"), pursuant to which
Employee will serve as a consultant to the Company for a term
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of two years for a consulting fee equal to $325,000 per year for the first
year of such consulting arrangement and $175,000 per year for the second year
of such consulting arrangement and under which Employee will provide
consulting services to the Company for minimum of five full days per month
during the term thereof. The Consulting Agreement shall contain such terms and
provisions as shall be mutually agreed upon after good faith negotiation by
the Company and Employee provided however that if Employee's employment is
terminated during the term of this Agreement, other than pursuant to Section
11(a) or (b) hereof, or the term of this Agreement is not extended after the
Termination Date, Employee shall be entitled to receive the consulting fees
provided for in this Section 15 regardless of whether or not a Consulting
Agreement has been executed after good faith negotiation by Employee. Solely
for the purposes of Sections 7, 8 and 9 hereof, during the term of the
Consulting Agreement or during the two-year period during which Employee is
entitled to receive consulting fees pursuant to the preceding sentence,
Employee shall be deemed to be "employed" by the Company and in the "employ"
and "employment" of the Company.
16. Waiver.
Any waiver by either party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or of any breach of any other provision of this
Agreement. The failure of a party to insist upon strict adherence to any term of
this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
17. Binding Effect.
Employee's rights and obligations under this Agreement shall not be
transferable by assignment or otherwise, such rights shall not be subject to
commutation, encumbrance, or the claims of Employee's creditors, and any attempt
to do any of the foregoing shall be void. The provisions of this Agreement shall
be binding upon and inure to the benefit of Employee and his heirs and personal
representatives, and shall be binding upon and inure to the benefit of the
Company and its successors and assigns.
18. No Third Party Beneficiaries.
This Agreement does not create, and shall not be construed as
creating, any rights enforceable by any person not a party to this Agreement
(except as provided in Section 17).
19. Headings.
The headings in this Agreement are solely for the convenience of
reference and shall be given no effect in the construction or interpretation of
this Agreement.
20. Counterparts; Governing Law.
This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same
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instrument. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to conflict of
laws.
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as of the date first above written.
GIRGENTI, HUGHES, XXXXXX & XxXXXXXX, INC.
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------------
Name: XXXXXX XXXXXXXX
Title: Chief Executive Officer
/s/ Xxxxxxx Xxxxxxxxx
--------------------------------------------
Xxxxxxx Xxxxxxxxx
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