EXHIBIT 10.4
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("this Agreement") is made effective as of the
1st day of April, 2003 (the "Effective Date") by and between GUIDELINE RESEARCH
CORP., a New York corporation with offices at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (the "Company") and a subsidiary of FIND/SVP, INC., a New York
corporation ("FIND"), and XXXXXX LA TERRA, an individual residing at 00 Xxxxxxxx
Xxxxxx, Xxxxxxxx, Xxx Xxxxxx 00000 (the "Executive").
PREMISES: The Executive has served the Company in an executive capacity
for a substantial period of time prior to the Effective Date. The Company
desires to continue to employ the Executive, and in the capacity described
herein, and the Executive desires to continue to be so employed by the Company.
The Company and the Executive also desire to set forth in writing their
understanding of the terms and conditions governing such employment. Unless the
context indicates otherwise, capitalized terms used herein but not defined
herein shall have the meanings given to such terms in the Stock Purchase
Agreement, dated as of April 1, 2003, by and among the Company, FIND, Xxx X.
Xxxxxxxxx and the Executive (the "Purchase Agreement").
NOW, THEREFORE, in consideration of the foregoing and of the following
mutual promises, the Company and the Executive, each intending legally to be
bound, agree as follows:
ss.1. CONTRACT OF EMPLOYMENT. Subject to the terms hereof, the Company
employs the Executive anD the Executive accepts his employment with the Company
for the Employment Period (as defined in Section 2 hereof). During the
Employment Period, the Executive shall serve in and shall occupy the position of
President of the Company. In that capacity the Executive shall have
responsibility for those duties that are customary to such office and perform,
for and on behalf of the Company, all of the duties of President as shall
reasonably be determined by the Chief Executive Officer ("CEO") of FIND from
time to time. In addition, Executive shall, to the extent appropriate, maintain
ongoing relationships with the Company's key existing and prospective clients.
Without limitation of any of the foregoing, Executive also shall assume and
carry out such duties or responsibilities as from time to time may be assigned
or delegated to the Executive by the CEO of FIND, provided that such additional
duties and responsibilities are fair and reasonable under the circumstances, do
not unreasonably increase the demands upon the Executive's time or energies, and
are not inconsistent with the Executive's position as President. In fulfilling
the responsibilities of his position, the Executive will observe all lawful
policies, procedures and directions that from time to time may be adopted and
communicated by the Company or the CEO of FIND to the executive or
administrative personnel of the Company generally, including through the
provisions of the personnel manuals of the Company and FIND (to the extent
applicable to the Company), as both may be amended and in effect from time to
time.
ss.2. EMPLOYMENT PERIOD. The term of the Executive's employment by the
Company (the "Employment Period") shall commence on the Effective Date and shall
continue until the earliest to occur of: (i) the second (2nd) anniversary of the
Effective Date; (ii) termination of the Executive's employment in accordance
with Sections 6(a), 6(b) or 6(c) hereof; or (iii) the date of the Executive's
death.
ss.3. TIME AND EFFORT; DISCLOSURE AND FAIR DEALING. During the Employment
Period, the Executive shall devote his entire business time, best efforts,
attention, energies, skill and abilities, during usual business hours and at
such other times as are reasonably required by his position as President, by the
CEO of FIND, or by the Company's Board of Directors, to (a) diligently and
faithfully carry out his responsibilities and duties hereunder; (b) use his best
efforts to promote the success and expansion of the Company's business, and (c)
cooperate fully with the Board of Directors and the CEO of FIND in the
advancement of the best interests of the Company and FIND. During the Employment
Period, the Executive shall carry out his responsibilities and duties at the
offices of the Company, which, for the first two years of the Employment Period,
shall remain at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx; provided, that Executive
may be required to travel from time to time in connection with his duties
hereunder and the demands of the business of the Company. Notwithstanding the
proviso set forth in the preceding sentence, the CEO of FIND shall give
Executive advance verbal notice of any required travel to the extent that such
travel is reasonably foreseeable, and such travel requirements shall be at
reasonable frequencies and for reasonable duration taking into account the
nature of the business of the Company and its past practice. Executive shall
not, without the prior written consent of the CEO of FIND (x) do anything or
permit anything to be done at his direction inconsistent with his duties to the
Company or its Affiliates or opposed to their best interests, or (y) become an
officer, director, employee or consultant of, or otherwise become associated
with or engaged in, any business other than that of the Company; provided, that
the CEO of FIND shall not unreasonably withhold such consent as a result of (y)
above, so long as such activity (i) shall occur entirely on Executive's own time
and does not materially interrupt, interfere with, or otherwise detract from the
Executive's performance of the duties and responsibilities of the Executive to
the Company, and (ii) does not benefit, directly or indirectly, any organization
or activity that in any manner competes or is known to have planned to compete,
directly or indirectly, with the Company or FIND or any of their respective
Affiliates. Any consent granted by the CEO of FIND pursuant to the preceding
sentence may be limited from time to time or revoked by the CEO of FIND. Nothing
in this Section 3 shall prevent the Executive from engaging in additional
activities in connection with personal investments (including passive real
estate and securities investments) and community affairs that are not
inconsistent with the Executive's duties under this Agreement. The Executive
will promptly disclose to the Company's Board of Directors and the CEO of FIND
all information, opportunities, developments and other matters coming to the
Executive's attention that pertain or are relevant to the operations of the
Company or any of its Affiliates or to the conduct of their respective
businesses. The Executive will promptly communicate, fully cooperate and deal
fairly and openly with the Company's directors, other officers or key personnel,
and, in general, to the best of his abilities, the Executive will work to
achieve efficient and profitable operation of the Company's business and the
orderly conduct of the Company's affairs. For purpose of this Agreement
"Affiliate" shall mean (i) as to Executive or any of the Consolidated Companies,
any party, which directly or indirectly, whether alone or through one or more
intermediaries, controls, is controlled by, or is under common control with
Executive or such Consolidated Company, as the case may be, and (ii) as to FIND,
the
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subsidiaries and related entities of FIND set forth in its filings with the U.S.
Securities and Exchange Commission pursuant to the Securities Exchange Act of
1934.
ss.4. CONFIDENTIALITY, NON-COMPETITION AND NON-INTERFERENCE.
(a) PROTECTION OF NONPUBLIC INFORMATION. The Executive hereby
acknowledges that (a) during the course of the Executive's employment by the
Company the Executive has obtained or will obtain knowledge of and use
Confidential Information, as hereinafter defined, (b) public disclosure of such
Confidential Information could have an adverse effect on the Consolidated
Companies, FIND or its Affiliates and their respective businesses; and (c) the
provisions of this Section are reasonable and necessary to prevent the improper
use or disclosure of Confidential Information. Both during the Employment Period
and at all times thereafter, the Executive (i) shall treat as confidential all
Confidential Information, (ii) without the prior written consent of the CEO of
FIND, shall not use for any personal purposes, publish, reveal, divulge,
transfer or otherwise disclose, or directly or indirectly make available to any
party any of such Confidential Information except to such parties that either
(a) are employed by, or (b) have signed a confidentiality agreement with respect
to such Confidential Information with, the Consolidated Company(ies) which
own(s) or has the right to use such Confidential Information, and such parties
have a need for such information for purposes that are in the best interest of
such Consolidated Company(ies), and (iii) shall not use Confidential Information
in any way that is detrimental to the interests of the Consolidated Companies,
FIND or its Affiliates. The term "Consolidated Companies" shall mean the
Company, Advanced Analytics, Inc., Guideline/Chicago, Inc., Guideline Consulting
Corporation and Tabline Data Services, Inc., and their respective subsidiaries
and Affiliates as may exist from time to time. The term "Confidential
Information" shall mean any and all knowledge relating to the business and
affairs of the Consolidated Companies, FIND or its Affiliates, and their
respective trade secrets, business methodologies, financial information,
customer and personnel information and data, creditors, shareholders, directors,
contractors, agents, consultants, employees, terms of contracts, and other
confidential or nonpublic information pertaining to the business practices,
properties, services, products, ideas, know-how, improvements and developments
of the Consolidated Companies, FIND or its Affiliates, conceived, developed or
devised by or for the Consolidated Companies, FIND or its Affiliates, that is or
is intended by any of them to be of a confidential nature, including, but not
limited to, any and all knowledge relating to products, research, development,
inventions, manufacture, purchasing, accounting, finances, costs, profit
margins, marketing, merchandising, selling, customer lists, customer
requirements and personnel, pricing, pricing methods, computer programs and
software, databases and data processing and any and all other such knowledge,
information and materials, heretofore or hereafter during the term of this
Agreement, conceived, designed. created, used or developed by or relating to the
Consolidated Companies, FIND or its Affiliates. The term "Confidential
Information" shall include the aforementioned items notwithstanding the fact
that such information may or may not be explicitly marked as confidential and
notwithstanding the fact that such information could be independently developed
by third parties. Nothing contained in this Section 4(a), however, shall be
construed as imposing restraints upon the Executive's use of any information
which is or becomes made publicly available by the Consolidated Companies, FIND
or its Affiliates or is or has been rightfully obtained by the Executive from
persons other than the Consolidated Companies, FIND or its Affiliates where such
persons are under no obligation of
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trust or confidence to the Consolidated Companies, FIND or its Affiliates. In
the event that the Executive is requested or required by subpoena, civil
investigative demand or other process to disclose any Confidential Information,
the Executive shall promptly notify the Company so that the Company may seek an
appropriate protective order or waive compliance with this Agreement. If,
failing the entry of a protective order, the Executive is, in the opinion of his
counsel, compelled to disclose Confidential Information, the Executive may
disclose that portion of the Confidential Information which counsel for the
Company advises in writing he is required to disclose.
(b) COMPETITIVE RESTRICTIONS. During the Employment Period and
during the two (2) year period that begins on termination of the Employment
Period, the Executive shall not, whether for his account or for the account of
any other party other than the Consolidated Companies, FIND or its Affiliates
directly or indirectly engage or have any financial interest in, own, manage,
operate, finance, control or participate in the ownership, management,
operation, financing or control of, be employed by, associated with or in any
manner connected with, lend the Executive's name to or any similar name to, lend
the Executive's credit to or render services or advice to, any organization or
activity which in any manner competes with the Consolidated Companies, FIND or
its Affiliates with respect to Business or Purchaser's Business. For purposes of
this Section 4(b), the term "compete" shall mean with respect to the
Consolidated Companies, FIND and its Affiliates: (i) with respect to or in
connection with conducting any Business or Purchaser's Business, calling on,
soliciting, taking away, or accepting as a client or customer or attempting to
call on, solicit, take away or accept as a client or customer, any individual,
person, partnership, corporation, association or other entity or enterprise that
was a client or customer of the Consolidated Companies, FIND or its Affiliates
during the Employment Period or known by the Executive to be a customer of the
Consolidated Companies, FIND or its Affiliates before or after the Employment
Period but prior to the expiration of the one (1) year period that begins on
termination of the Employment Period; (ii) with respect to any business reason
other than in connection with the Business or Purchaser's Business, calling on,
soliciting, taking away, or accepting as a client or customer or attempting to
call on, solicit, take away or accept as a client or customer, any individual,
person, partnership, corporation, association or other entity or enterprise that
was a client or customer of the Consolidated Companies, FIND or its Affiliates
during the Employment Period or known by the Executive to be a customer of the
Consolidated Companies, FIND or its Affiliates before or after the Employment
Period but prior to the expiration of the one (1) year period that begins on
termination of the Employment Period without the prior written consent of the
CEO of the Purchaser in each instance, which consent will not be unreasonably
delayed or withheld; (iii) soliciting, taking away or attempting to solicit or
take away, employ or otherwise engage as an employee, independent contractor or
otherwise, any person who is an employee of the Consolidated Companies, FIND or
its Affiliates or was an employee of the Consolidated Companies, FIND or its
Affiliates during the Employment Period, on behalf of any individual, person,
partnership, corporation, association or other entity or enterprise conducting a
business which is substantially similar to the Business or Purchaser's Business;
(iv) inducing or attempting to induce any employee of the Consolidated
Companies, FIND or its Affiliates to terminate employment with the Consolidated
Companies; (v) entering into or attempting to enter into any business
substantially similar to or competing in any way with the business engaged in or
reasonably planned to be engaged in by the Consolidated Companies, FIND or its
Affiliates at the time of the termination of the Executive's employment
hereunder.
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For purposes of this Section 4(b), the words "directly or indirectly" as they
modify the word "compete" shall mean (i) acting as an agent, representative,
consultant, officer, director, manager, independent contractor or employee of
any individual, person, partnership, corporation, association, limited liability
corporation, limited liability partnership or other entity or enterprise which
competes with the Consolidated Companies, FIND or its Affiliates, the Business
or Purchaser's Business, (ii) participating in any such competing entity or
enterprise as an owner, member, partner, limited partner, joint venturer,
creditor or stockholder (except as a stockholder holding less than a one percent
(1 %) interest in a corporation whose shares are actively traded on a regional
or national securities exchange or have been registered under Section 12(g) of
the Securities and Exchange Act of 1934, as amended); and (iii) communicating to
any such competing entity or enterprise the names or addresses or any other
information concerning any past, present or identified prospective client or
customer.
(c) NON-INTERFERENCE. At any time during the Employment Period or
the two (2) year period immediately thereafter, the Executive shall not
interfere with any of the Consolidated Companies', FIND's or FIND's Affiliates'
relationships with any party, including any party who, at any time during the
Employment Period, was an employee, contractor, supplier or customer of any of
the Consolidated Companies, FIND or its Affiliates. At any time during or after
the Employment Period, the Executive shall not make public statements which may
negatively impact any of the Consolidated Companies, FIND or its Affiliates or
any of their respective shareholders, directors, officers, employees or agents
with respect to the customers, suppliers, products, personnel or business of any
of the Consolidated Companies, FIND or its Affiliates. For purposes of this
Section 4(c), "interfere" shall mean intentional or grossly negligent acts or
conduct that is reasonably likely to hamper, hinder or disturb the relationships
between the Consolidated Companies, FIND or its Affiliates and any applicable
party.
(d) EMPLOYMENT BY CUSTOMERS AFTER THE EMPLOYMENT PERIOD. The parties
acknowledge and agree that employment of Executive by a current or former
customer or client of the Consolidated Companies, FIND or its Affiliates (a
"Restricted Customer") after the Employment Period will not, in and of itself,
result in a breach of this Agreement, provided that, Executive does not conduct
any work for such customer or client, except as may be allowed pursuant to
Section 4(d)(ii) hereof, in any field relating to market research and analysis
or market data collection ("Market Research") and further provided that all of
the following conditions are met:
(i) Executive's employment with a Restricted Customer is not, at
the time of the commencement of such employment, reasonably
likely to negatively impact the Consolidated Companies',
FIND's or any of its Affiliates' relationship with such
Restricted Customer, including its business with such
Restricted Customer;
(ii) Executive's Market Research activities relate only to the
internal requirements of such Restricted Customer, and are not
provided in connection with a Restricted Customer's sale of
Market Research to third parties;
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(iii) The Consolidated Companies, FIND's and any of its Affiliates'
aggregate sales to such Restricted Customer and its Affiliates
were less than $250,000 during the last twelve months of the
Employment Period, unless the Company and the CEO of FIND
shall have waived such requirement in writing;
(iv) Executive provides such Restricted Customer with a written
copy of this Section 4 of the Agreement in its entirety, and
such Restricted Customer acknowledges to Company receipt
thereof in writing prior to Executive's employment with such
Restricted Customer; and
(v) Executive is otherwise in compliance with each of the
covenants and agreements set forth in this Section 4.
(e) INVENTIONS, ETC. Executive will promptly disclose to the Company
and the CEO of FIND all designs, processes, inventions, improvements,
discoveries and other information related to the business of the Company
(collectively "developments") conceived, developed or acquired by him alone or
with others during the Employment Period. All such developments shall be the
sole and exclusive property of the Company, and upon request the Executive shall
deliver to the Company all drawings, models and other data and records relating
to such developments. In the event any such developments shall be deemed by the
Company or the CEO of FIND to be patentable or copyrightable, the Executive
shall, while employed, at the expense of the Company, assist the Company in
obtaining any patents or copyrights thereon and execute all documents and do all
other things necessary or proper to obtain letters patent and copyrights and to
vest the Company with full title thereto.
(f) ACKNOWLEDGMENTS BY EXECUTIVE. The Executive acknowledges that:
(a) the services to be performed by him under this Agreement are for a special,
unique, unusual, extraordinary and intellectual character; (b) the business of
the Consolidated Companies, FIND and FIND's Affiliates is national and
international in scope and its products are marketed throughout the United
States and in other countries, territories and possessions; (c) the Consolidated
Companies and FIND and its Affiliates compete with other businesses that are or
could be located in any part of the United States and in other countries,
territories and possessions; and (d) the provisions of this Section 4 are
reasonable and necessary to protect the business of the Consolidated Companies
and FIND and its Affiliates and will not restrict Executive from earning a
livelihood.
(g) FAILURE TO MAKE PAYMENTS. In the event that either (i) the
Company fails to make payments to the Executive required under the terms of this
Agreement or (ii) FIND fails to make payments to the Executive required under
the terms of the Purchase Agreement (other than a failure of FIND to fulfill its
obligations to repurchase the Consideration Shares pursuant to Section 2.6 of
the Purchase Agreement so long as Xxxxx Xxxxx purchases or arranges for the
purchase of the Exercise Shares in accordance with Section 2.6 thereof and such
Consideration Shares are so repurchased), in either case which failure continues
for more than twenty (20) business days after written notice thereof to the CEO
of FIND (except that if two such prior notices have been received by the CEO of
FIND within the past twelve month period, no further notice shall be required)
and either (a) Executive terminates this Agreement for Good Reason or
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(b) the Board of Directors of the Company terminates this Agreement other than
For Cause, the restrictions imposed by Sections 4(a), 4(b), 4(c) and 4(d) hereof
shall no longer be in force or effect; provided, that in the event that the
Executive, the Company or FIND shall have a dispute as to whether such
termination was effected (a) other than "For Cause" or (b) for "Good Reason", as
the case may be, if the Company and/or FIND pays to the Escrow Agent when due
such amounts as may be due to Executive on the assumption that such termination
was effected (a) other than For Cause or (b) for Good Reason under this
Agreement (which amounts shall be held by the Escrow Agent, in an interest
bearing account or XXXX account, subject to the final determination of an
arbitrator or court pursuant to the terms of Section 13 of this Agreement), the
restrictions imposed by Section 4 of this Agreement shall remain in full force
and effect until the final determination of an arbitrator or order of a court
pursuant to the terms of Section 13 of this Agreement. Any party or parties
awarded a final determination or order in their favor by an arbitrator or court
pursuant to Section 4 hereof shall be entitled to recover from the party or
parties against whom such final determination or order is given all reasonable
costs and expenses, including reasonable attorneys' fees, incurred by the
prevailing party or parties with respect to such arbitration or court
proceeding, such award of costs and expenses to be determined by such arbitrator
or court.
(h) REMEDIES. The Executive hereby acknowledges that a breach by the
Executive of the provisions of this Section 4 cannot reasonably or adequately be
compensated in damages in an action at law; and that a breach of any of the
provisions contained in this Section 4 will cause the Consolidated Companies,
FIND and FIND's Affiliates irreparable injury and damage. By reason thereof, the
Executive hereby agrees that the Consolidated Companies, FIND and FIND's
Affiliates shall be entitled, in addition to any other remedies it may have
under this Agreement or otherwise, to preliminary, temporary and permanent
injunctive and other equitable relief to prevent or curtail any actual or
threatened breach of this Section 4 by the Executive; provided, however, that no
specification in this Agreement of a specific legal or equitable remedy shall be
construed as a waiver or prohibition against the pursuing of other legal or
equitable remedies in the event of such a breach. None of the Consolidated
Companies, FIND and FIND's Affiliates shall be required to post bond in
connection with seeking any such equitable remedies.
ss.5. COMPENSATION AND BENEFITS. The Executive and the Company agree to
the following compensation arrangements:
(a) SALARY. For the services to be rendered by the Executive and in
consideration of the Executive's other undertakings in this Agreement, the
Company shall pay to the Executive a salary at the rate of One Hundred Fifty
Thousand Dollars ($150,000.00) per year, which shall be payable in equal
periodic installments according to the Company's normal payroll practices, but
no less frequently than monthly. The salary of Executive may be (but is not
required to be) increased from time to time in the discretion of the CEO of FIND
based upon such factors as each of the CEO of FIND and the Company's Board of
Directors may consider relevant. If the Employment Period ends on a day that
precedes the last accounting day of a fiscal or compensation period, any amounts
payable to the Executive for that period shall be reduced in accordance with a
fraction of which the numerator shall be the number of days of the period during
which the Employment Period was in effect and the denominator shall be the
number of days comprising the entirety of such fiscal or compensation period.
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(b) OMG BONUS PROGRAM. In addition to the Salary and benefits
provided hereunder, Executive shall be entitled to participate in the OMG bonus
incentive plan pursuant to the terms thereof, as may be amended from time to
time.
(c) EXPENSE REIMBURSEMENT. The Company shall reimburse the Executive
for ordinary, necessary and reasonable expenses incurred by him in the
performance of the Executive's duties hereunder substantiated with proper
invoices, receipts, or other supporting documentation, including expenses of
travel, lodging and sustenance while away from home on business of the Company,
provided that such expenses are incurred and accounted for in accordance with
the reasonable policies and procedures established by the Board of Directors of
the Company and the CEO of FIND from time to time. Executive shall file expense
reports with respect to such expenses. Except such expenses that will be
reimbursed by a client or customer of the Consolidated Companies, Executive
shall not incur expenses in excess of $3,000 in connection with (i) a business
trip or (ii) any other individual or series of related personal expenditures
without the prior written authorization of the CEO of FIND.
(d) BENEFIT PLANS. During the Employment Period, subject to the
eligibility and other conditions thereof and payment of any required
contributions, the Executive and his immediate family shall be entitled to
participate in all employee pension or welfare benefit plans and arrangements
generally maintained for executive employees of FIND (presently or in the
future, and subject to termination or amendment) and in which the Executive is
or may become eligible to participate (including, without limitation, any
defined benefit pension plan currently maintained by FIND, group life insurance,
accidental death and dismemberment plans, and medical plans) or, if during the
Employment Period the Executive cannot be covered by the Company's medical plan
or such medical plans are terminated or amended, he and his family will be
provided with coverage comparable to the medical plan of the Company on the date
hereof. The Company and FIND retains the right to terminate, alter, replace or
modify benefits under any medical plans or policies on a non-discriminatory
basis from time to time.
(e) OTHER FRINGE BENEFITS. Executive shall be entitled to an
aggregate maximum of fringe and other benefits equaling up to $37,500 per year
on a cost basis to the Company and FIND (the "Benefit Maximum Amount"),
excluding all benefits provided to him and his family under Section 5(d) hereof.
The Benefit Maximum Amount may be expended on benefits (other than additional
vacation time) as he shall reasonably request, including, without limitation,
life, medical and disability insurance of his choosing, and one leased
automobile of his choosing and insurance, parking and maintenance therefor. To
the extent that Executive does not ask for or receive the Benefit Maximum
Amount, within forty-five (45) days following the end of such year, the Company
shall pay to Executive the difference between Benefit Maximum Amount and the
amount actually expended on such benefits. To the extent that Executive receives
benefits equaling more than the Benefit Maximum Amount, Executive shall promptly
reimburse the Company for all such amounts exceeding the Benefit Maximum Amount,
which amounts the Company may setoff against any amounts it owes to Executive
hereunder or otherwise.
(f) VACATIONS. During the Employment Period, the Executive shall be
entitled to vacation in accordance with the Company's established accrual and
other vacation policies for executive employees (which are subject to change
from time to time and provided that in no event shall such vacation time accrue
at less than five (5) weeks per annum).
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Executive and the Company acknowledge that on the date hereof Executive has
accrued thirteen (13) vacation days, which are in addition to the vacation time
set forth above.. The Executive shall also be entitled to all paid holidays
afforded by the Company to its employees. Unused parts of any vacation and
unused holidays will not be separately compensable or otherwise form the basis
for additional compensation and shall not be accumulated so as to be available
in respect of any subsequent 12-month period.
(G) STOCK OPTIONS.
(i) On the date hereof, Executive shall receive options to purchase
150,000 shares of Common Stock of FIND (the "Common Stock") pursuant to
the terms and conditions of a stock option agreement dated the date hereof
between FIND and Executive. FIND shall file a Registration Statement on
Form S-8 thereby registering the shares issuable upon exercise of this
option on or before December 31, 2003.
(ii) Pursuant to the terms of the FIND/SVP, INC. Stock Incentive
Plan of 1996, as amended, or such other stock incentive plan of FIND as
may be in effect from time to time (the "Plan") the Executive shall be
granted options to purchase up to 100,000 shares of Common Stock per year
at the end of each calendar year of the term with such number of shares
granted based upon the performance criteria set forth on Schedule 5(g)
hereof. The terms and provisions of the options and any other compensation
paid pursuant to this Section shall be more fully set forth in stock
option agreements and other appropriate agreements to be entered into by
the Executive and FIND. The grant thereof shall be subject to the terms of
the Plan and the execution of such agreements. If an amount of shares or
options under the Plan are not immediately available for issuance pursuant
to the terms hereof, such shares and options will be issued promptly upon
becoming available.
(h) TAX AND OTHER WITHHOLDINGS. The amounts payable under this
Section 5 or Section 6(d) hereof are subject to all applicable federal and state
income tax, social security and other governmentally mandated withholdings, and
any contributions the Executive may authorize to be withheld from his
compensation. In addition, Executive's salary shall be reduced by the annual and
other expenses of the Letter of Credit provided to him on behalf of Xxxxx Xxxxx
pursuant to the Purchase Agreement and the Company shall pay over such amounts
to Xxxxx Xxxxx when incurred.
ss.6. TERMINATION OF EMPLOYMENT.
(a) FOR CAUSE. The Company may terminate the Executive's employment
and all of the Company's obligations hereunder at any time for Cause, as defined
below. Such termination shall be evidenced by written notice delivered to the
Executive, unequivocally stating the Company's decision to terminate the
Executive's employment under this Section 6(a) and specifying the Cause for such
termination. Such termination shall be effective on the date stated in such
notice; provided, that in no event shall such termination date be more than
sixty (60) days after the date that the notice is delivered. For purposes
hereof, the term "Cause" shall mean one or more of the following: (i) the court
appointment of a conservator or like official for the person or property of the
Executive; (ii) the Executive's conviction of, or the entering of a guilty plea
or plea of no contest with respect to, a crime of moral turpitude or a felony;
(iii) the issuance of a court order, judgment or decree enjoining or having the
effect of preventing the
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Executive from performing his duties under this Agreement; (iv) the Executive's
willful failure to substantially perform his duties hereunder under the
direction of the CEO of FIND or to adhere to any written Company policy
generally applied (or FIND policy applicable to the Company and generally
applied) if the Executive has been given a reasonable opportunity to comply with
such duties or policy or cure his failure to comply (which reasonable
opportunity must be granted by notice no less than twenty (20) business days
preceding termination of this Agreement, except that if two such prior notices
have been received by Executive for substantively the same or related matter, no
further notice or cure or compliance period shall be required); (v) because of
his physical or mental illness, injury, psychological disability or other
infirmity pursuant to the criteria set forth on SCHEDULE 6(a) hereto, the
Executive does not fulfill his duties hereunder on a full-time basis for either
sixty (60) consecutive days or one hundred twenty (120) days in any period of
eighteen (18) months; (vi) the Executive's commission of a willful action or an
act of fraud, deception or dishonesty when acting for the Company or under other
circumstances, and such act xxxxx or may reasonably be expected to harm the
Company or any of its Affiliates or their respective businesses, including,
without limitation, (A) the appropriation (or attempted appropriation) of a
material business opportunity of the Company, including attempting to secure or
securing any personal profit in connection with any transaction entered into on
behalf of the Company and (B) the misappropriation (or attempted
misappropriation) of any of the Company's funds or property; (vii) the
Executive's gross negligence or willful misconduct in connection with his duties
hereunder; or (viii) the Executive's breach of any of the covenants contained in
Section 4 hereof.
(b) FOR GOOD REASON. The Executive shall be entitled to terminate
Executive's employment and all of his obligations hereunder (except the
obligations set forth in (i) Section 4 unless otherwise permitted pursuant to
Section 4(g) hereof and (ii) Sections 6(d) and 6(e)) for Good Reason, as defined
below, and as of the expiration of a period of twenty (20) business days
following the Executive's delivery of a written notice to the Company setting
forth his election to terminate the Executive's employment hereunder and
specifying briefly the facts forming the basis for the Executive's exercise of
his right of termination pursuant to this Section. For purposes of this
Agreement, "Good Reason" shall mean any act or omission on the part of the
Company which constitutes a material breach of this Agreement (including the
failure to timely file the Registration Statement in accordance with the
provisions of Section 5(g)(i) hereof) or the Purchase Agreement, unless the
Company ceases, corrects and cures all adverse effects of such breach within the
20 business day notice period specified in this Section, if reasonably curable
during such period, or if not reasonably curable in such period, the Company
commences to cure such breach within such period and diligently proceeds to cure
such breach within forty (40) days thereafter.
(c) OTHER THAN FOR CAUSE. Subject to Executive's rights pursuant to
Section 6(d) hereof, the Company shall be entitled to terminate this Agreement
for any or no reason.
(d) COMPENSATION AND BENEFITS FOLLOWING TERMINATION.
(I) If the Executive's employment with the Company is terminated by
the Company upon the death of Executive, for Cause in accordance with Section
6(a) hereof or by the Executive for other than Good Reason in accordance with
Section 6(b) hereof, the
10
Company shall pay the Executive, without deduction or set off except for tax,
social security or other mandated withholdings, the amounts set forth in
subsections (A) and (B) below:
(A) On or before the executive's payroll date next following the
day on which such termination becomes effective (the
"Termination Date"), an amount equal to that proportion of the
Executive's salary, at the rate then in effect, determinable
under Section 5(a) hereof, and
(B) With reasonable promptness following the Termination Date,
reimbursement for all expenses subject to reimbursement under
Section 5(c) hereof.
(II) If the Executive's employment with the Company is terminated
(a) by the Company other than for Cause (except as a result of the death of
Executive), or (b) by the Executive for Good Reason, the Executive shall (i)
continue to be provided salary and those benefits specified hereunder for the
time specified hereunder and, except to the extent prohibited by applicable law,
as if Executive was still employed by the Company; and (ii) be paid in lieu of
the One Year Deferred Consideration Amount and/or the Two Year Deferred
Consideration Amount, as the case may be, an amount of liquidated damages equal
to either (a) if Executive's employment is terminated on or prior to the one
year anniversary of the Effective Date, an amount equal to $1,472,500; or (b) if
Executive's employment is terminated after the one year anniversary of the
Effective Date, an amount that would be payable as the Executive's portion of
the Two Year Deferred Consideration Amount based on the Two-Year Adjusted EBITDA
equaling twice the annualized Adjusted EBITDA of the Company for the period
commencing on the Effective Date and ending on the date of the termination of
Executive's employment. For purposes of this Section 6(d)(II), "Adjusted EBITDA"
shall mean the gross profit of each Valid Market Research Project of the
Consolidated Companies for the applicable fiscal year calculated in accordance
with GAAP and consistent with historical practices, less the sum of, to the
extent not already deducted in calculating such gross profit:(a) $4,100,000.00,
inclusive of labor costs historically included by the Consolidated Companies in
the "Selling, General and Administrative" expense category in their financial
statements; (b) to the extent not already deducted in calculating EBITDA, three
percent (3%) of the sales of the Consolidated Companies, such sales to be
determined in accordance with GAAP; and (c) to the extent not already deducted
in calculating EBITDA, ten percent (10%) of sales of the Consolidated Companies
that are sourced by the Purchaser or its Affiliates (other than the Consolidated
Companies), such sales to mean sales determined in accordance with GAAP less
pass through costs charged to customers.
(III) After termination of the Employment Period and any additional
period for which he is being paid or due salary pursuant to Section 6(d)(II)
hereof, (A) Executive shall be entitled, at his own cost, to continue any
medical benefits provided to him during the Employment Period to the extent
permitted under the policies and plans of the Company, and (B) for purposes of
clause (A) immediately above, the Company shall use its best efforts to provide
Executive, at Executive's cost, with access to the benefits provided to him
during the Employment Period through the earlier of (i) August 15, 2015, or (ii)
the date that Executive and his spouse are covered by Medicare or any successor
government-sponsored eldercare benefit, as such benefit is modified, amended or
supplemented from time to time.
11
(IV) Executive agrees that no payments or benefits shall be due
Executive after the Employment Period under this Section 6 or otherwise with
respect to this agreement or Executive's employment with the Company until such
time as Executive executes before a notary the Release annexed hereto as EXHIBIT
6(D)(IV) hereto and delivers an original counterpart thereof to the CEO of FIND.
(e) USE AND RETURN OF MATERIALS. At the termination of the
Employment Period, irrespective of the reasons for such termination, the
Executive shall return to the Board of Directors of the Company the originals
and all copies of correspondence, memoranda, papers, files, records and other
materials that may at any time have come into his possession and relate to the
business and affairs of the Company or any of its Affiliates.
ss.7. INDEMNIFICATION.
(a) GENERALLY. The Executive hereby agrees to indemnify the Company
for all loss, damage, deficiency, liability, cost and expense (including without
limitation, costs and expenses of litigation and reasonable attorneys' fees)
which may be incurred, suffered, or sustained as a result of a breach of this
Agreement by the Executive. The Company hereby agrees to indemnify the Executive
for all loss, damage, deficiency, liability, cost and expense (including,
without limitation, costs and expenses of litigation and reasonable attorneys'
fees) which may be incurred, suffered, or sustained by the Executive as a result
of a breach of this Agreement by the Company and to indemnify the Executive in
his position as an officer and director of the Company to the full extent of the
law.
(b) COSTS OF ENFORCEMENT. In the event that either party brings an
action or arbitration proceeding to enforce such party's rights under this
Agreement, including any provision of Section 4 hereof, any party or parties
prevailing in such action by judgment or order of a court of competent
jurisdiction or award of arbitration shall be entitled to recover from the party
or parties against whom the order or award is given or the judgment or award is
entered all costs and expenses, including reasonable attorneys' fees, incurred
by the prevailing party or parties with respect to such action or proceeding,
such award of costs and expenses to be determined by the Court or the
arbitrators, as the case may be.
ss.8. REASONABLENESS OF RESTRICTIONS: SEVERABILITY. The Executive has
carefully read and considered the provisions of Section 4 hereof, and agrees
that the restrictions set forth in such Section are fair and are reasonably
required for the protection of the legitimate interests of the Company. In the
event that, notwithstanding the foregoing, any section of this Agreement, or any
other part hereof, shall be held by a court of competent jurisdiction to be
invalid or unenforceable, the remaining provisions thereof and hereof shall
nevertheless continue to be valid and enforceable as though the invalid or
unenforceable parts had not been included therein. Without limiting the
foregoing, in the event that any provision of Section 4 hereof relating to the
time period or the areas of restriction (or both) shall be held by a court of
competent jurisdiction to exceed the maximum time period or area such court
deems reasonable and enforceable, the time period or areas of restriction (or
both) deemed reasonable and enforceable by the court shall become and thereafter
be the maximum time period or areas of restriction (or both). The
12
periods of time applicable to any covenant in Section 4 shall be extended by the
duration of any violation by the Executive of such covenant. The Executive
shall, while the covenants under Section 4 are in effect, give notice to the
Company, within ten days after accepting any other employment, of the identity
of the Executive's employer. The Company may notify such employer that the
Executive is bound by this Agreement and, at the Company's election, furnish
such employer with a copy of the relevant portions of this Agreement.
ss.9. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of the successors and assigns of the Company and the Executive's heirs
and legal representatives. This Agreement and the rights, interest and benefits
of the Executive shall not, however, be subject to voluntary or involuntary
assignment, transfer, or hypothecation, directly or indirectly, by the Executive
or his heirs and legal representatives without the prior written consent of the
Board of Directors of the Company.
ss.10. MODIFICATION AND WAIVER. No modification or waiver of any of the
provisions of this Agreement, and no extension or renewal of or substitution for
this Agreement shall be binding upon either of the parties hereto unless made in
writing and signed by the Executive and signed on behalf of the Company by its
duly authorized officer.
ss.11. ENTIRE AGREEMENT. This Agreement and the applicable provisions of
the Purchase Agreement constitute the entire agreement between the parties
hereto with respect to the employment of the Executive and supersede any and all
prior agreements, whether oral or written, concerning such employment.
ss.12. NOTICES. All notices and other communications provided in
connection with this Agreement shall be in writing and shall be deemed
effectively given in all respects (a) when received, if manually delivered or
delivered by overnight mail courier; or (b) at the time of transmission if
transmitted by facsimile (with confirmed receipt) and confirmed in written hard
copy actually delivered prior to the end of the third business day thereafter.
Notice to the Company shall be addressed to:
Guideline Research Corp.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Chairman of the Board
With copies to:
FIND/SVP, INC.
000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Chief Executive Officer
13
and
Xxxx Xxxxxxx, P.C.
1350 Avenue of the Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
or at such other address or to the attention of such other person as the Company
may designate by written notice to the Executive.
Notices to the Executive shall be addressed to:
Xxxxxx La Terra
00 Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
With a copy to:
Wormser, Kiely, Galef & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Esq.
ss.13. ARBITRATION. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to the
choice of law principles thereof. Except in the event of the need for immediate
equitable relief from a court of competent jurisdiction to prevent irreparable
harm pending arbitration relief, and except for enforcement of a party's
remedies to the extent such enforcement must be pursuant to court authorization
or order under applicable law, any dispute between the parties hereto or under
any other document, instrument or writing executed pursuant to this Agreement
shall be settled, by arbitration before three arbitrators pursuant to the
Commercial Arbitration Rules of the American Arbitration Association (the
"Rules") in New York, New York or such other location as may be agreed upon by
the parties. For purposes of this Agreement, the parties consent to jurisdiction
in New York for any arbitration proceeding or any action to enforce an
arbitration award. The arbitrators shall be selected by a joint agreement of the
parties; provided that if they do not so agree within twenty (20) business days
of the date of the request for arbitration, the selection shall be made pursuant
to the Rules. Nothing in this Agreement shall prevent the parties hereto from
settling any dispute by mutual agreement at any time. Any party or parties
awarded a final determination or order in their favor by an arbitrator or court
pursuant to this Section 13 shall be entitled to recover from the party or
parties against whom such final determination or order is given all reasonable
costs and expenses, including reasonable attorneys' fees, incurred by the
prevailing party or parties with respect to
14
such arbitration or court proceeding, such award of costs and expenses to be
determined by such arbitrator or court.
ss.14. COUNTERPARTS; FACSIMILE TRANSMISSION This Agreement may be executed
in one or more counterparts, each of which shall be deemed to be an original
copy of this Agreement and of which, when taken together, shall be deemed to
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be effective as delivery of
a manually executed counterpart of this Agreement, provided, however, that in
each instance an original executed counterpart shall be promptly delivered to
the other party by hand or overnight courier.
ss.15. SURVIVAL. The provisions of Sections 4, 6(d), 6(e) and 7 shall
survive the termination of this Agreement.
ss.16. PARTICIPATION OF PARTIES. The parties hereto acknowledge that this
Agreement and all matters contemplated herein, have been negotiated among all
parties hereto and their respective legal counsel and that all such parties have
participated in the drafting and preparation of this Agreement from the
commencement of negotiations at all times through the execution hereof.
(signature page follows)
15
IN WITNESS WHEREOF, the Company and the Executive have duly executed this
Agreement on or as of the Effective Date.
COMPANY:
GUIDELINE RESEARCH CORP.
By: /s/ Xxx X. Xxxxxxxxx
--------------------------------
Name: Xxx X. Xxxxxxxxx
Title: Chairman
EXECUTIVE:
/s/ Xxxxxx La Terra
------------------------------------
Xxxxxx La Terra
ACCEPTED AND AGREED TO
WITH RESPECT TO THE SPECIFIC
PROVISIONS OF SECTIONS
5(d), 5(e) AND 5(g):
FIND/SVP, INC.
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Chief Executive Officer
