EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of ___________, 1997, between
HEALTHWORLD CORPORATION, a Delaware corporation with offices at 000 Xxxxxx xx
xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "Company"), and XXXXXX XXXXXXXX,
residing at 0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000 ("Employee").
W I T N E S S E T H:
WHEREAS, as of the Effective date (as defined in Section 1),
the Company desires to engage Employee to perform services for the Company, and
any present or future parent, subsidiary or affiliate of the Company, and their
successors and assigns (the "Companies"), 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
the effective date (the "Effective Date") of the Parent's Registration Statement
on Form S-1 (Registration No. 333-34751), filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and ending on December
31, 2000 (the "Termination Date"), or such shorter period as may be provided for
herein; provided, however, that the term of this Agreement shall be extended
(subject to earlier termination as provided herein) for successive one year
periods unless at least 90 days prior to the end of the then current term
hereof, the Company or Employee has notified the other party in writing that
Employee's employment hereunder shall terminate at the end of the then current
term. 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, 1998 and ending on
December 31, 1998.
2. Duties and Services.
During the Employment Period, Employee shall be employed as
the Chairman of the Board and Chief Executive Officer of the Company, and shall
perform the duties incident to that position. In the performance of his duties,
Employee shall be subject to the direction of 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
Company and may be elected to and shall serve, if so elected, as a member of the
Board of Directors of any of the other Companies as may from time to time be
prescribed by 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
time and efforts to the performance of his duties under this Agreement. Employee
shall be available to travel as the needs of the business require.
3. Compensation.
(a) As full compensation for his full-time services hereunder,
the Company shall pay Employee, during the Employment Period, a base salary at
the annual rate of $360,000 (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. Employee's base salary shall be subject to increase
at the sole discretion of the Board of Directors 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
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Bonus with respect to such Employment Year in an amount equal
to 18.5% of Employee's 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 7.5%, 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 7.5% but less than or equal to 12.5%,
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;
(iv) 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 18.5%,
Employee shall receive an Annual Incentive Bonus with respect
to such Employment Year in an amount equal to 80% of the
amount calculated in Section 3(b) above; and
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(v) if Revenues for the fiscal year corresponding to
the applicable Employment Year exceed the Base Revenues by an
amount in excess of 18.5%, Employee shall receive an Annual
Incentive Bonus in an amount equal to the 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) As used herein, the term "EBIT" shall mean the earnings
from operations of the Company and its subsidiaries on a consolidated basis
before interest, taxes and extraordinary items, determined in accordance with
generally accepted accounting principles ("GAAP"). As used herein, the term
"Revenues" shall mean the revenues of the Company and its subsidiaries on a
consolidated basis, determined in accordance with GAAP.
(e) As used herein, the term "Base EBIT" shall mean (i) with
respect to calculating the Annual Incentive Bonus for the first Employment Year,
EBIT for the fiscal year ending December 31, 1997, and (ii) the "Base EBIT" used
to calculate the Annual Incentive Bonus 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 10%, compounded annually. As
used herein, the term "Base Revenues", shall mean (x) with respect to
calculating the Annual Incentive Bonus for the first Employment Year, the
Revenues for the fiscal year ending December 31, 1997, and (y) the "Base
Revenues" used to calculate the Annual Incentive Bonus 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 10%,
compounded annually.
(f) In addition, Employee may be entitled to receive an
additional annual bonus at the sole discretion of the Board of Directors of the
Company.
(g) All compensation hereunder (whether in the form of base
salary or incentive compensation) shall be subject to payroll deductions as may
be necessary or customary in respect of salaried personnel of the Company.
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 in accordance with the terms thereof.
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(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 $10,000
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 subsection (c) above),
upon submission and approval of written statements and bills in accordance with
the then regular procedures of the Company.
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 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
under no physical or mental disability that would hinder his performance of
duties under this Agreement.
7. Non-Competition.
(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 or otherwise, Participate In
(as defined below) any other
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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 of the Companies, and (ii) for a period of two
years after he ceases to be employed by the Company under this Agreement as a
result of Employee's voluntary action or pursuant to Section 11(a) hereof, he
will not compete with or be engaged in the same business as or Participate In
any other business or organization which during such two 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 or any of the Companies'
principal 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 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 or
any of the Companies any of its respective employees. Employee will not directly
or indirectly employ any person who is an employee of the Company or any of the
Companies for a period of two years after the Employee leaves the employ of the
Company.
(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 or any of
the Companies in the conduct of its 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.
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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 one year 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.
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 or otherwise
relating to the business of the Company or any of the Companies 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.
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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, (iv) Employee shall fail or refuse to perform his duties as
required hereunder or shall refuse to follow direct instructions from the Board
of Directors of the Company or shall materially violate his duty of loyalty to
the Company, 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 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) 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) 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) 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) for the Employment
Year prior to the Employment Year in which Employee is terminated to the extent
accrued but not yet paid, and (ii) for obligations or covenants contained herein
that extend beyond the term of this Agreement.
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(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 twice his current annual base salary, 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, without limitation, the Annual Incentive
Bonus) 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) 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 later
of (A) 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 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.
12. Survival.
The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement shall survive Employee's
termination of employment.
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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. 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.
16. 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.
17. No Third Party Beneficiaries.
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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 16).
18. 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.
19. 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 instrument. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
0effect to conflict of laws.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first above written.
HEALTHWORLD CORPORATION
By:____________________________________
Name:
Title:
_______________________________________
Xxxxxx Xxxxxxxx
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