EMPLOYMENT AGREEMENT
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AGREEMENT dated as of July 7th, 1999, between TSG Global Education Web,
Inc. ("Company"), a Delaware corporation, having its principal place of business
located at ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ ("Employee"), residing at ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇.
WITNESSETH:
WHEREAS, the Employee has expertise in the management of a company that
provides educational and other consulting services to major corporations through
the means of a secure internet connection, which company has been merged into
the Company concurrently with the execution of this Agreement;
WHEREAS, the parties acknowledge that the Employee's abilities and services
are unique and essential to the prospects of the Company; and
WHEREAS, in light of the foregoing, the Company desires to employ the
Employee to perform Employee and other services for the Company, and the
Employee desires to accept such employment, subject to the terms and conditions
set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment. The Company hereby employs the Employee as Advisor to the
Company, President and Chief Executive Officer and the Employee hereby accepts
employment upon the terms and conditions hereinafter set forth.
2. Term. The term of this Agreement shall be three (3) years, commencing on
the date hereof ("Effective Date") and ending July , 2002, subject to earlier
termination as provided in this Agreement ("Term") and subject to certain
provisions hereof which survive the Term. The Term shall be extended for
additional one (1) year periods automatically unless either party shall give the
other party a written termination notice, which notice shall be given at least
ninety (90) days prior to the end of the Term.
3. Compensation.
(a) For all services rendered under this Agreement:
(i) The Company shall pay the Employee a base salary at the rate of
$150,000.00 per annum payable in equal monthly installments. ("Base Salary"), as
may be adjusted from time to time by the CPI Factor (as defined below) as
provided in Section 3(b) below, or such greater amount as shall be approved by
the Company's Board of Directors from time to time; and
(ii) The Company shall pay the Employee Incentive Compensation, calculated
and payable as set forth on Exhibit A attached hereto and made a part hereof.
(iii) The Company shall agree to grant to the Employee on the Effective
Date options to acquire TSG $0.001 par value Common Stock ("Shares") pursuant to
the provisions of the Company's qualified Incentive Stock Option Plan ("ISO")
attached as Exhibit B and the number of Shares at the ▇▇▇▇▇ ▇▇▇▇▇ of the ISO
Shares in accordance with the table in Exhibit C, attached hereto.
(iv) The Company shall also agree to sell to the Employee on the Effective
Date the numbers of Shares in accordance with the table on Exhibit D;
(b) The Base Salary shall be subject each year to adjustment to reflect
changes in the cost of living as set forth in this Section 3(b). Effective on
each May 1st the Base Salary shall be changed to the amount derived by
multiplying the Base Salary by a fraction, the numerator of which shall be the
Consumer Price Index for All Urban Consumers, [U.S. City Average] (1982-84 =
100) for the month of March immediately preceding such May 1st and the
denominator of which shall be 165.0, the said Consumer Price Index for the month
of March, 1999 ("CPI Factor"). The amount so determined shall be the Base Salary
for the calendar year beginning as of that May 1st until the next May 1st or the
end of the Term, whichever occurs sooner.
(c) ▇▇▇▇▇▇▇▇ shall receive deferred compensation in the amount of $100,000,
payable in monthly installments from October 1999 through March 2000 in the
amount of $16,667.00 per month.
4. Duties. The Employee shall perform such duties of an advisory nature as
shall be requested by the President and Chief Executive Officer subject to the
direction of the Board of Directors. The Employee shall perform and discharge
well and faithfully the duties which may be assigned to him from time to time by
the Company in connection with the conduct of its business. If the Employee is
elected or appointed a director or officer of the Company or any subsidiary
thereof during the term of this Agreement, the Employee will serve in such
capacity without further compensation.
5. Extent of Services. So long as during the Term of this Agreement the
Company has not notified the Employee of his disability pursuant to Section 9
hereof, the Employee shall devote reasonable time, attention and energies to the
business of the Company, in order to perform the duties assigned to him;
however, notwithstanding anything to the contrary otherwise stated Employee
shall be entitled to own and invest in other businesses, so long as he does not
assume an operational role of such businesses.
6. Benefits/Expenses.
(a) During the term of his employment, the Employee shall be entitled to
participate in employee benefit plans or programs of the Company, provided that
they should conform to the benefits which are now offered to the Employee in his
current position, if any, to the extent that his position, tenure, salary, age,
health and other qualifications make him eligible to participate, subject to the
rules and regulations applicable thereto. Such additional benefits shall
include, subject to the approval of the Board of Directors, medical and dental
insurance, paid vacation and qualified pension and profit sharing plans.
(b) The Company will furnish the Employee, $1,000.00 each month to be used
for the purchase or lease of an automobile and an amount sufficient each month
to cover auto insurance for such vehicle.
(c) The Company shall maintain term life insurance with Mass Mutual Life
Insurance Company with annual premium payment not to exceed $4,500.00 with the
beneficiary to be designated by the Employee.
(d) The Employee shall be entitled to reimbursement of all out of pocket
expenses reasonably incurred by him in the performance of his duties to the
Company, subject to the presenting of appropriate vouchers in accordance with
the Company's policy.
7. Disclosure of Information.
(a) The Employee represents and warrants to the Company that there are no
other agreements that would interfere with his ability to perform his duties
hereunder and that Exhibit E hereto sets forth, to the best of Employee's
knowledge:
(i) All rights, in respect of the Employee's engaging in any business
activity (whether or not for profit), of former employers, clients, principals,
partners or others with whom or for whom the Employee has performed services
since 1988; and
(ii) All of the business activities (whether or not for profit) of the
Employee applicable to periods after the time such services were performed.
(b) The Employee recognizes and acknowledges that the Company's
confidential or proprietary data or information as they have existed, will
exist, may continue to exist from time to time, are valuable, special and unique
assets of the Company's business, access to and knowledge of which are essential
to the performance of the Employee's duties hereunder. The Employee will not,
during or after the term of his employment by the Company, in whole or in part,
directly or indirectly disclose, divulge or communicate such secrets,
information or processes to any person, firm, corporation, association or other
entity for any reason or purpose whatsoever, nor shall the Employee make use of
any such property for his own purposes or for the benefit of any person, firm,
corporation or other entity (except the Company) under any circumstances
provided that after the term of his employment these restrictions shall not
apply to such secrets, information and processes which are then in the public
domain (provided that the Employee was not responsible, directly or indirectly,
for such secrets, information or process entering the public domain without the
Company's consent). The Employee agrees to hold as the Company's property, all
memoranda, books, papers, letters, formulas and other data, and all copies
thereof and therefrom, in any way relating to the Company's business and
affairs, whether made by him or otherwise coming into his possession, and on
termination of his employment, or on demand of the Company, at any time, to
deliver the same to the Company.
(c) The term "confidential or proprietary data or information": as used in
this Agreement shall mean information not generally available to the public,
including without limitation, all database information, personnel information,
financial information, customer lists, supplier lists, trade secrets, patented
or proprietary information, forms, information regarding operations, systems,
services, know how, computer and any other processed or collated data, computer
programs, pricing, marketing and advertising data.
(d) All written materials, records and documents made by the Employee or
coming into Employee's possession during Employee's employment by the Company
concerning any products, processes or equipment manufactured, used, developed,
investigated, purchased, sold or considered by the Company or otherwise
concerning the business or affairs of the Company shall be the sole property of
the Company, and upon termination of Employee's employment by the Company, or
upon request of the Company during Employee's employment by the Company,
Employee shall promptly deliver the same to the Company. In addition, upon
termination of Employee's employment by the Company, Employee will deliver to
the Company all other Company property in Employee's possession or under
Employee's control, including but not limited to, financial statements,
marketing and sales data, customer and supplier lists, database information and
other documents, and any Company credit cards.
8. Restrictive Covenant. During the Term of this Agreement and for a period
of three (3) years after the date of such termination for any reason Employee
shall not without the prior written consent of the Company:
(a) Non-Competition. Act as an individual proprietor, partner, stockholder,
officer, principal, agent, employee, supervisor, manager, consultant, guarantor,
creditor, lender, co-endorser or in any other capacity whatsoever, own,
participate in the ownership of, manage, operate, exercise any control over,
render services to, or engage in any of the foregoing for any business, firm,
corporation, limited liability company, its successors or assigns, partnership
or other entity which operates a business similar to or competitive with any of
the products or services developed by the Company during the period commencing
on October 1, 1992, until termination of employment which are conducted in any
of the geographic areas, including the continental United States, in which the
Company's business is conducted. These products include, but are not limited to
the following products or services:
(a) Foxbox Technology;
(b) ESCN Training;
(c) PROFIT COACH ;
(d) PROFIT COACH TOOL KIT ;
(e) Organizational Competitive Benchmark Studies of major oil companies;
and
(f) Leader/Lead classroom training.
(b) Non-Solicitation. Solicit any business from any current customers or
clients of the Company, its successors or assigns, or from any prospective
customers or clients of Company, its successors or assigns from whom the
Company's employees or agents have engaged in, or solicited business within the
three (3) year period immediately preceding the termination date of the
Executive's employment for the purpose of selling products or services similar
to or competitive with those offered or sold or provided by the Company.
(c) Solicitation of Employees. In any manner, whether directly or
indirectly, seek to persuade any director, officer, or other employee of
Company, its successors or assigns to discontinue their employment or
relationship with Company, its successors or assigns, nor will such Employee
solicit, entice, induce or retain any such person for such purpose.
(d) The parties hereto intend that the covenants contained in this Section
8, which pertain only to geographic areas where the Company is engaged in
business, shall be deemed a series of separate covenants for each applicable
area of the relevant country, state, county and city. If, in any judicial
proceeding, a court shall refuse to enforce all the separate covenants deemed
included in this Section 8 because, taken together, they cover too extensive a
geographic area, the parties intend that those of such covenants (taken in order
of the cities, counties, states and countries therein which are least populous)
which if eliminated would permit the remaining separate covenants to be enforced
in such proceeding shall, for the purpose of such proceeding, be deemed
eliminated from the provisions of this Section 8.
(e) Nothing in this Section 8 shall reduce or abrogate the Employee's
obligations during the term of this Agreement under Sections 4 and 5 hereof.
9. Termination.
(a) Disability. The Company shall have the right to terminate this
Agreement at any time, without cause, upon ninety (90) days prior notice, or in
the event of the permanent disability of the Employee, upon five (5) days prior
written notice. Upon termination, the Company shall pay the Employee all
compensation earned under Section 3 through the date of termination; provided
that the incentive compensation shall be payable within one hundred twenty (120)
days after termination as set forth in Exhibit A. In addition, the Employee
shall receive a termination payment computed and payable as described in Section
9(e). For the purposes of this subparagraph "permanent disability" shall mean
the physical or mental incapacity of the Employee for any consecutive three (3)
month period or any aggregate period of six (6) months in any twelve (12) month
period of such a nature that the Employee shall be unable diligently to perform
the duties of advisor to the President and Chief Executive Officer as
contemplated hereby. Such determination shall be made by the mutual agreement of
the parties hereto, or in the event such agreement cannot be reached, by the
following procedure:
(i) If the Company maintains a disability income policy, the definition
set forth in such policy shall control, provided the issuing insurance
company agrees to commence disability payments as a result of such
permanent disability.
(ii) If the Company does not maintain a disability income policy:
(A) Each party shall select an independent physician who shall
examine the subject Employee. The mutual agreement of the two
examining physicians shall control, and their decision shall be
binding.
(B) If the two (2) physicians cannot agree, they (the physicians)
shall select a third physician to examine the subject Employee.
The majority opinion of such three physicians shall control, and
their decision shall be binding.
(b) Death. This Agreement shall terminate automatically upon the death of
the Employee. In such event, the Company shall pay the estate of the Employee,
within thirty (30) days after the date of death, all compensation earned under
Section 3 through the date of termination, provided the incentive compensation
shall be payable within one hundred twenty (120) days after termination as set
forth in Exhibit A.
(c) For Cause. In addition to its rights under Section 9(a) above, the
Company shall have the right, at its sole option, to terminate this Agreement
"for cause", as hereinafter defined, at any time, without any further payment to
the Employee other than compensation earned under Section 3(a)(i) prior to the
date of termination, by notice to the Employee (or his personal representative,
as the case may be), specifying the reason for such termination, and the
Employee shall be entitled to any incentive compensation on a pro rata basis for
the period ending on the date of such termination. For purposes of this Section
9(c), "cause" shall mean solely (i) the Employee's conviction of a felony or a
crime of moral turpitude, (ii) the Employee's willful misconduct or gross
negligence materially detrimental to the Company, or (iii) the breach by the
Employee of a material term of this Agreement which continues for thirty (30)
days after written notice thereof, specifying the nature of the breach, is given
to the Employee.
(d) Without Cause. If the Employee is terminated by the Company without
Cause he shall be entitled to all Incentive Compensation earned under Section 3
through the date of termination provided that the compensation shall be paid
within one hundred twenty (120) days after termination as set forth in Exhibit
A.
(e) Termination Payment. If the Employee's employment is terminated under
Section 9(a), 9(b) or 9(d) herein, the Employee shall be entitled to receive, as
a termination payment, any amount equal to his annual Base Salary, as adjusted
by the CPI Factor, in effect on the date of termination, payable through July ,
2002, or such other date as this Agreement may have been extended to pursuant to
Section 2 herein, in the same manner as such compensation was paid prior to
termination. The amount of payment under Section 9 (a) shall be reduced by the
amounts, if any, paid to the Employee by the Company's disability insurance
policy . In the event of termination upon death, the Company will fund such
payments with term life insurance at standard rates and the Employee will pay
any additional amount over and above the standard rate amount .
(f) Loans. Upon termination of the Employee's employment under this
Agreement for any reason (including expiration of the term hereof), (i) all
loans made to the Employee shall become immediately due and payable, except that
if the Employee's employment is terminated under Section 9(a) or 9(b), he (or
his personal representatives) shall have the option to elect, by notice to the
Company within ten (10) days after the date of such termination, to repay such
loans in twelve (12) equal monthly installments following termination, with
interest, from the date of termination of employment, at the prime rate of
interest announced by Citibank N.A. from time to time. In such event, the
Employee (or his personal representatives) shall execute a promissory note and
other documentation evidencing such loans as the Company shall reasonably
request; and (ii) all loans due Employee and any deferred compensation owed to
the Employee by the Company shall become due and payable to the Employee be paid
in accordance with its terms.
10. Remedies. If there is a breach or threatened breach of the provisions
of Section 5, 7(b), or 8 of this Agreement, the Company shall be entitled to an
injunction restraining the Employee from such breach. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies for such
breach or threatened breach.
11. Insurance. The Company may, at its election and for its benefit, insure
the Employee through key man insurance up to $2,000,000.00 or otherwise, against
accidental loss or death and the Employee shall submit to such physical
examination and supply such information as may be required in connection
therewith.
12. Location of Performance. The Employee's services will be performed in
the Guilford, Connecticut area. The Employee's performance hereunder shall be
within such area or its environs. The parties acknowledge, however, that the
Employee may be required to travel some in connection with the performance of
his duties hereunder.
13. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the successors and assigns of the Company, and unless clearly
inapplicable, all references herein to the Company shall be deemed to include
any successors. In addition, this Agreement shall be binding upon and inure to
the benefit of the Employee and his heirs, executors, legal representatives and
assigns; provided, however, that the obligations of Employee hereunder may not
be delegated without the prior written approval of the Board of Directors of the
Company.
14. Successor Company. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform as if no such succession
had taken place.
15. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and shall be deemed given when
delivered personally or three days after being sent by first-class registered or
certified mail, return receipt requested, to the party for which intended at its
or his address set forth at the beginning of this Agreement (which, in the case
of the Company, shall be sent "Attention: Chairman of the Board") or to such
other address as either party may hereafter specify by similar notice to the
other.
16. Waiver of Breach. A waiver by the Company or the Employee of a breach
of any provision of this Agreement by the other party shall not operate or be
construed as a waiver of any subsequent breach by the other party.
17. Entire Agreement. This Agreement supersedes all prior agreements
between the parties, written and oral, and cannot be amended or modified except
by a writing signed by both parties. It may be executed in one or more
counterpart copies, each of which shall be deemed an original, but all of which
shall constitute the same instrument.
18. Choice of Law/Forum. This Agreement shall be governed and construed in
accordance with the laws of the State of New York, without regard to principles
of conflicts of law. Any disputes arising out of this Agreement shall be
adjudicated in the Federal or State court presiding in the Counties of New York,
Nassau or Suffolk, State of New York.
19. Captions/Exhibits. Captions used in this Agreement are for convenience
of reference only and shall not be deemed a part of this Agreement nor used in
the construction of its meaning. Exhibits attached to this Agreement shall be
deemed as fully a part of this Agreement as if set forth in full herein.
20. Severability. If any provision of this Agreement shall be deemed
invalid or unenforceable as written it shall be construed, to the greatest
extent possible, in a manner which shall render it valid and enforceable and any
limitations on the scope or duration of any such provision necessary to make it
valid and enforceable shall be deemed to be part thereof; no invalidity or
unenforceability shall affect any other portion of this Agreement unless the
provision deemed to be so invalid or unenforceable is a material element of this
Agreement, taken as a whole.
21. Acknowledgment. Employee acknowledges that he has carefully read this
Agreement and hereby represents and warrants to the Company that Employee's
entering into this Agreement, and the obligations and duties undertaken by
Employee hereunder, will not conflict with, constitute a breach of or otherwise
violate the terms of any other agreement to which Employee is a party and that
Employee is not required to obtain the consent of any person or entity in order
to enter into and perform his obligations under this Agreement.
With respect to the covenants contained in Sections 7 and 8 of this
Agreement, Employee agrees that any remedy at law for any breach or threatened
or attempted breach of such covenants may be inadequate and that the Company
shall be entitled to specific performance or any other mode of injunctive and/or
other equitable relief to enforce its rights hereunder or any other relief a
court might award without the necessity of showing any actual damage or
irreparable harm or the posting of any bond or furnishing of other security.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first hereinabove written.
TSG GLOBAL EDUCATION WEB, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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[Title]
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Employee