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EXHIBIT 10.78
FIRST AMENDMENT TO MANAGING DIRECTOR'S AGREEMENT
Agreement made as of October 1, 1998, by and between ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Partners
Inc., a New York corporation with offices at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ 10017(the "Corporation"), and ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, residing at ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("▇▇▇▇▇").
W I T N E S S E T H:
Whereas, the parties hereto entered into a managing director's agreement dated
as of September 11, 1997 (the "Managing Director's Agreement"); and
Whereas, the parties hereto desire to amend and/or supplement the Managing
Director's Agreement as herein set forth.
Now, therefore, in consideration of the premises, the mutual covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. Section 2 of the Managing Director's Agreement is hereby amended and
restated in its entirety to read as follows:
"Term.
(a) The Term of this agreement is three (3) years, commencing on
September 11, 1997 and ending on September 10, 2000, unless earlier terminated
by the Corporation or by ▇▇▇▇▇ in accordance with the provisions hereof. This
agreement shall be automatically renewed for periods of one (1) year each (the
"Renewal Term") unless either party shall give the other notice of her or its
desire to terminate this agreement no later than on the June 1st immediately
preceding the expiration of the then current term, in which event Susan's
employment shall terminate at the end of the Term or the applicable Renewal
Term, as the case may be. The Term and the Renewal Term are hereinafter
collectively referred to as the Term.
(b) If ▇▇▇▇▇ has not given notice to the Corporation on or before
June 1, 2000 that she elects not to renew this agreement at the expiration of
the Term and the Corporation gives notice to ▇▇▇▇▇ that it elects not to renew
this agreement at the expiration of the Term, then and only in such event,
provided that Susan's employment is not properly terminated by the Corporation
for cause pursuant to and in accordance with the provisions of Section 7 below,
in addition to and without limitation of any other compensation, severance
payments or employment benefits which may be or become due from the Corporation
to ▇▇▇▇▇ pursuant to this agreement (but not in addition to any severance
payment which may be due pursuant to the provisions of subparagraph (c) of this
Section 2, it being understood that such severance payment and the severance
payment payable pursuant to this subparagraph (b) are mutually exclusive), the
Corporation shall pay to ▇▇▇▇▇, within ten (10) days following the expiration of
the Term, a severance payment in the amount of Three Hundred Fifty Thousand
($350,000.00) Dollars.
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(c) If ▇▇▇▇▇ elects not to renew this Agreement at the expiration of
the Term and Susan's employment is not properly terminated by the Corporation
for cause pursuant to and in accordance with the provisions of Section 7 below,
then and only in such event, in addition to and without limitation of any other
compensation, severance payments or employment benefits which may be or become
due from the Corporation to ▇▇▇▇▇ pursuant to this agreement (but not in
addition to any severance payment which may be due pursuant to the provisions of
subparagraph (b) of this Section 2, it being understood that such severance
payment and the severance payment payable pursuant to this subparagraph (c) are
mutually exclusive), the Corporation shall pay to ▇▇▇▇▇, within ten (10) days
following the expiration of the Term, a severance payment in the amount of Two
Hundred Fifty Thousand ($250,000.00) Dollars.
(d) For purposes of this agreement, the term "employment benefits"
shall be deemed to include Susan's Annual Bonus (as such term is hereinafter
defined)."
2. Subparagraph (a) of Section 5 of the Managing Director's Agreement
is hereby amended and restated in its entirety to read as follows:
"(a) For all services rendered by ▇▇▇▇▇ pursuant to this agreement,
the Corporation shall pay ▇▇▇▇▇ an annual salary payable bi-weekly, in arrears,
as follows: (i) One Hundred Fifty Thousand ($150,000.00) Dollars per annum
during the period commencing on September 11, 1997 through September 30, 1998;
and (ii) Two Hundred Fifty Thousand ($250,000.00) Dollars per annum during the
period commencing on October 1, 1998 through the balance of the Term. Such
salary shall be subject to periodic increases as shall be determined by the
Board of Directors of the Corporation."
3. Section 6 of the Managing Director's Agreement is hereby re-titled
"Employment Benefits" and the last sentence thereof is hereby amended in its
entirety to read as follows:
"The Corporation shall also provide ▇▇▇▇▇ with (i) a clothing
expense allowance in the amount of ten thousand and 00/100 ($10,000.00) dollars
for the first year of the Term and fifteen thousand and 00/100 ($15,000.00)
dollars for each remaining year of the Term and (ii) a leased automobile of
Susan's choice throughout the Term."
4. Subparagraph (a) and (b) of Section 7 of the Managing Director's
Agreement are hereby amended and restated in their entirety to read as follows:
"7. Termination.
(a) The Corporation may, at its election in accordance with the
procedures more particularly set forth below, terminate this agreement for
cause. For purposes of this agreement, "cause" shall be defined as and limited
to the following: (i) a material breach by ▇▇▇▇▇ of any material term of this
agreement which causes substantial damage to the reputation, business or
property of the Corporation, any of the Corporation's affiliates or any of the
Corporation's (or any affiliate's) customers and which shall not have been cured
within thirty (30) days of receipt by ▇▇▇▇▇ of notice of such breach; (ii) a
continued failure of ▇▇▇▇▇ after thirty (30) days' notice of a prior failure to
devote Susan's full active business time (as more particularly described in
Section 4 above) to the performance of Susan's duties hereunder; (iii) an act of
willful misconduct in the performance of Susan's duties hereunder which causes
substantial damage to the reputation, business or property of the Corporation,
any of the Corporation's affiliates or any
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of the Corporation's customers including, without limitation, any oral or
written misrepresentation relating to the Corporation or any of the
Corporation's (or any affiliate's) customers; (iv) conviction of a felony; or
(v) substantial, continuing and willful improper performance or non-performance
of any of Susan's material duties hereunder. For purposes of this subsection
(a), no act, or failure to act, on Susan's part shall be considered "willful"
unless done, or omitted to be done, by her not in good faith or without
reasonable belief that her action or omission was in the best interests of the
Corporation. Notwithstanding the foregoing, ▇▇▇▇▇ shall not be deemed to have
been terminated for cause without (i) thirty (30) days' notice to ▇▇▇▇▇ setting
forth the reasons for the Corporation's intention to terminate for cause, (ii)
an opportunity for ▇▇▇▇▇, together with her counsel, to be heard before the
Corporation's board of directors, and (iii) delivery to ▇▇▇▇▇ of a Notice of
Termination as defined in subsection (d) below from an executive officer of the
Corporation finding that in the good faith opinion of the Corporation's Board of
Directors or in the good faith opinion of the Board of Directors of FPC, ▇▇▇▇▇
was guilty of conduct set forth or described above in justifying the
Corporation's termination of Susan's employment for cause and specifying the
particulars thereof in detail.
(b) ▇▇▇▇▇ may terminate her employment under this agreement for Good
Reason (as hereinafter defined). For purposes of this agreement, "Good Reason"
shall mean (i) a Change of Control (as defined below) of the Corporation or of
FPC which shall have been in effect for a period of at least ninety (90)
consecutive days; provided, however, that ▇▇▇▇▇ shall be unable to work
harmoniously and effectively with the personnel constituting the new management
of the Corporation resulting from such Change of Control (if any), (ii) a
failure by the Corporation to comply with any material provision of this
agreement which noncompliance shall have a material adverse effect upon ▇▇▇▇▇
and which shall not have been cured within thirty (30) days after notice of such
noncompliance has been given by ▇▇▇▇▇ to the Corporation pursuant to this
agreement, (iii) if Susan's management functions, duties or responsibilities or
any other material aspect of Susan's employment shall have been materially and
adversely changed by the Corporation for a period in excess of thirty (30)
consecutive days notwithstanding Susan's written objection thereto or (iv) any
purported termination of Susan's employment which is not properly effected
pursuant to a Notice of Termination satisfying the requirements of subsection
(d) below (and for purposes of this agreement no such purported termination
shall be effective)."
5. Section 8 of the Managing Director's Agreement is hereby amended and
restated in its entirety to read as follows:
"8. Compensation Upon Termination or During Disability.
(a) During any period that ▇▇▇▇▇ fails to perform her duties
hereunder as a result of incapacity due to physical or mental illness
("disability period"), ▇▇▇▇▇ shall continue to receive her full salary at the
rate then in effect for such period and all employment benefits due to ▇▇▇▇▇
until her employment is terminated pursuant to Section 7 above, provided that
payments so made to ▇▇▇▇▇ during the disability period shall be reduced by the
sum of the amounts, if any, payable to ▇▇▇▇▇ at or prior to the time of any such
payment under disability benefit plans of the Corporation and which were not
previously applied to reduce any such payment.
(b) If Susan's employment is terminated by her death, the
Corporation shall pay to Susan's spouse, or if she leaves no spouse, to her
estate, within thirty (30) days of Susan's death, all salary and employment
benefits due to ▇▇▇▇▇ accrued through the date of her death.
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(c) If Susan's employment shall be properly terminated for cause
pursuant to all of the applicable provisions of this agreement, the Corporation
shall pay ▇▇▇▇▇ her full salary only through the Date of Termination at the rate
in effect at the time Notice of Termination is given and the Corporation shall
have no further obligations to ▇▇▇▇▇ under or pursuant to this Agreement.
(d) If (i) in breach of this agreement, the Corporation shall
terminate Susan's employment other than pursuant to subsection 7(a) above
(termination for cause) or Section 14 below (termination by reason of death or
disability)(it being understood that a purported termination by the Corporation
pursuant to subsection 7(a) above or Section 14 below which is disputed and
finally determined not to have been proper shall be deemed a termination by the
Corporation in breach of this agreement) or (ii) ▇▇▇▇▇ shall terminate her
employment for Good Reason, then
(I) the Corporation shall pay ▇▇▇▇▇ her full salary and all
employment benefits due to ▇▇▇▇▇ through the Date of Termination at the rate in
effect at the time the Notice of Termination is given;
(II) in lieu of any further salary payments to ▇▇▇▇▇ for
periods subsequent to the Date of Termination, the Corporation shall pay to
▇▇▇▇▇, as severance pay (and not as a penalty to the Corporation), an amount
equal to the product of (A) Susan's annual base salary rate in effect as of the
Date of Termination, multiplied by (B) the number two (2), such payment to be
made (X) if resulting from a termination based on a Change of Control of the
Corporation or of FPC, in a lump sum on or before the thirtieth (30th) day
following the Date of Termination, or (Y) if resulting from any other cause, in
substantially equal semimonthly installments on the fifteenth and last days of
each month commencing with the month in which the Date of Termination occurs and
continuing for forty-eight (48) consecutive semimonthly payment dates (including
the first such date as aforesaid), without interest; and
(III) in addition to the payments referred to in clause (I) and
(II) above, if termination of Susan's employment arises out of a breach by the
Corporation of this agreement, the Corporation shall also pay to ▇▇▇▇▇ (i) the
severance payment of Three Hundred Fifty Thousand ($350,000.00) Dollars payable
pursuant to subsection 2(b) of this agreement plus (ii) all other damages to
which ▇▇▇▇▇ may be entitled as a result of such breach, including damages for
any and all loss of benefits to ▇▇▇▇▇ under the Corporation's employee benefit
plans (other than the Corporation's Bonus Compensation Plan) which ▇▇▇▇▇ would
have received if the Company had not breached this agreement and had Susan's
employment continued for the full term provided in Section 2 hereof.
(e) Unless Susan's employment is properly terminated by the
Corporation for cause, the Corporation shall maintain in full force and effect,
for the continued benefit of ▇▇▇▇▇ for the greater of the number of years
(including partial years) remaining in the term of employment hereunder or the
number two (2), all employee benefit plans and programs in which ▇▇▇▇▇ was
entitled to participate immediately prior to the Date of Termination, provided
that Susan's continued participation is possible under the general terms and
provisions of such plans and programs. In the event that Susan's participation
in any such plan or program is barred, the Corporation shall arrange to provide
▇▇▇▇▇ with benefits substantially similar to those which ▇▇▇▇▇ would otherwise
have been entitled to receive under such plans and programs from which her
continued participation is barred.
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(f) Unless Susan's employment is properly terminated by the
Corporation for cause, Susan's Annual Bonus shall continue to be paid after the
Date of Termination for a period not to exceed six (6) months with respect to
all unfinished projects for which the Corporation shall have been engaged as of
the Date of Termination. The amount of Susan's Annual Bonus payable subsequent
to the Date of Termination as aforesaid shall be based upon the Corporation's
net profits before taxes which are allocable to such projects, as determined by
the Corporation's outside accounting firm, subject to review and approval by the
accounting firm which prepares the consolidated financial statements for all of
the companies affiliated with FPC, in accordance with generally accepted
accounting principles, consistently applied, as if the Corporation were not a
member of an affiliated group of corporations.
(g) The Corporation may withhold from any payments or other benefits
payable to ▇▇▇▇▇ pursuant to this Section 8 or any other provision of this
agreement all federal, state, city or other taxes as shall be required pursuant
to any law, government regulation or ruling."
6. Section 14 of the Managing Director's Agreement is hereby amended by
the addition of the following words at the end thereof: "except as otherwise
specifically set forth in Section 8 above".
7. The following provisions are hereby added as Section 23 of the
Managing Director's Agreement:
"Restated Agreement. This agreement has been restated and amended
effective as of October 1, 1998 to incorporate the provisions of the First
Amendment to the Managing Director's Agreement dated as of September 11, 1997 by
and between the Corporation and ▇▇▇▇▇."
8. Any capitalized term not specifically defined herein shall have the
meaning ascribed to such term in the Managing Director's Agreement.
9. Except as otherwise set forth in this agreement, all of the terms
and provisions of the Managing Director's Agreement, shall remain unmodified and
in full force and effect.
10. The covenants, agreements, terms, provisions and conditions
contained in this agreement shall bind and inure to the benefit of the parties
hereto and their respective heirs, successors, legal representatives and
permitted assigns, if any.
11. This agreement may not be modified orally, but only by an agreement
in writing signed by the party against whom enforcement or any waiver, change,
modification or discharge is sought.
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12. In the event of any inconsistency between the terms and provisions
of this agreement and the terms and provisions of the Shareholders Agreement,
the terms and provisions of this agreement shall govern and be binding.
In witness whereof, the parties hereto have executed this agreement as of the
day and year first above written.
WITNESS:
▇▇▇▇▇▇▇▇▇▇ Kelbick Partners Inc.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Managing Director
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Managing Director
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Individually
The provisions of this agreement are hereby consented to:
Financial Performance Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President