EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of ___________, 1997, 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
XXXXXX, residing at Xxxx Xxxxxx Xxx 0000, Xxxxx Xxxxxx, Xxx Xxxx 00000-0000
("Employee").
W I T N E S S E T H:
WHEREAS, as of the Effective Date (as defined in Section 1), the
Company will be a wholly owned subsidiary of Healthworld Corporation, a Delaware
corporation (the "Parent"); and
WHEREAS, as of the Effective Date, 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
Executive Vice President - Global Communications Services of the Company, and
shall perform the duties incident to that position which shall include
responsibility for the Company's U.S. Medical Division. In the performance of
his duties, Employee shall be subject to the direction of the President and
Chief Executive Officer of the Company and the Board of Directors of the
Company. In addition, during the Employment Period, Employee may be elected to
and shall serve, if so elected, as a member of the Board of Directors of the
Company and any of the other Companies as may from time to time be prescribed by
the President and Chief Executive Officer of the Company 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 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 $300,000 (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 annual
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 10% of Employee's
annual base salary for such Employment Year, subject to reduction
pursuant to Section 3(c) below;
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(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 15% 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 22% 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 30% 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 20% 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 10%, 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 10% 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 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
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excess of 20% but less than or equal to 30%, 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
(v) if Revenues for the fiscal year corresponding to the
applicable Employment Year exceed the Base Revenues by an amount in
excess of 30%, 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 solely from
operations of the Company's U.S. Medical Division 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 solely of the Company's U.S. Medical Division, 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 Parent and
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
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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 participates)
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 $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.
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(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 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, and (ii) for a period of two years
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 two year period competes with or is
engaged in the same business as the Company 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 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 or 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 Parent, 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
President and Chief Executive Officer of the Company or 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 his current base salary for the period from the date of
termination through 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, 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
balance of the scheduled term of the Agreement 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 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:
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Name:
Title:
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Xxxxxxx Xxxxxx
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