EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of ________________, 1997, between MILTON
HEADCOUNT LIMITED, an England corporation with offices at 1 Thames Street,
Windsor, Berkshire, England (the "Company"), and MICHAEL GARNHAM, residing at 42
The Burlings, Ascot, Berkshire, England SL5 8BY ("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 an indirect 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 Effective Sales Personnel Ltd. ("ESP"),
an England corporation which, as of the Effective Date will be an indirect
wholly owned subsidiaries of the Parent, and their successors and assigns, 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 Managing
Director of the Company, and shall perform the duties incident to that position.
In the performance of his duties, Employee shall be subject to the direction of
the Chairman 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, ESP
or Milton Marketing Ltd. as may from time to time be prescribed by the the
Chairman 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 $175,000 (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 12.5% of Employee's annual base
salary for such Employment Year, subject to reduction pursuant to Section
3(c) below;
(iii) if EBIT for the fiscal year corresponding to the applicable
Employment Year exceeds the Base EBIT by an amount in excess of 10% but
less than or equal to 15%, Employee shall receive an Annual Incentive
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Bonus with respect to such Employment Year in an amount equal to 18.5% of
Employee's annual base salary for such Employment Year, subject to
reduction pursuant to Section 3(c) below;
(iv) if EBIT for the fiscal year corresponding to the applicable
Employment Year exceeds the Base EBIT by an amount in excess of 15% but
less than or equal to 20%, Employee shall receive an Annual Incentive Bonus
with respect to such Employment Year in an amount equal to 26% of
Employee's annual base salary for such Employment Year, subject to
reduction pursuant to Section 3(c) below; and
(v) if EBIT for the fiscal year corresponding to the applicable
Employment Year exceeds the Base EBIT by an amount in excess of 20%,
Employee shall receive an Annual Incentive Bonus with respect to such
Employment Year in an amount equal to 35% of Employee's annual base salary
for such Employment Year, subject to reduction pursuant to Section 3(c)
below.
(c) The amount of the Annual Incentive Bonus which Employee may be entitled
to receive for each Employment Year as calculated above shall be subject to the
following reductions:
(i) if Revenues (as defined below) for the fiscal year corresponding
to the applicable Employment Year do not exceed the Base Revenues (as
defined below), Employee shall only be entitled to an Annual Incentive
Bonus with respect to such Employment Year in an amount equal to 25% of the
amount calculated in Section 3(b) above;
(ii) if Revenues for the fiscal year corresponding to the applicable
Employment Year exceed the Base Revenues by an amount equal to or less than
7.5%, Employee shall receive an Annual Incentive Bonus with respect to such
Employment Year in an amount equal to 40% of the amount calculated in
Section 3(b) above;
(iii) if Revenues for the fiscal year corresponding to the applicable
Employment Year exceed the Base Revenues by an amount in excess of 7.5% but
less than or equal to 12.5%, Employee shall receive an Annual Incentive
Bonus with respect to such Employment Year in an amount equal to 60% of the
amount calculated in Section 3(b) above;
(iv) if Revenues for the fiscal year corresponding to the applicable
Employment Year exceed the Base Revenues by an amount in excess of 12.5%
but less than or equal to 18.5%, Employee shall receive an Annual Incentive
Bonus with respect to such Employment Year in an amount equal to 80% of the
amount calculated in Section 3(b) above; and
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(v) if Revenues for the fiscal year corresponding to the applicable
Employment Year exceed the Base Revenues by an amount in excess of 18.5%,
Employee shall receive an Annual Incentive Bonus in an amount equal to the
amount calculated in Section 3(b) above.
The Company shall deliver to Employee a calculation of the Annual Incentive
Bonus together with its payment thereof.
(d) As used herein, the term "EBIT" shall mean the earnings from operations
of the Company, ESP and the field marketing business of Milton Marketing Ltd.
("Milton PDM Field Marketing") before interest, taxes and extraordinary items,
determined in accordance with United States generally accepted accounting
principles ("GAAP"). As used herein, the term "Revenues" shall mean the revenues
of the Company, ESP and Milton PDM Field Marketing (before deducting direct
labor costs of field marketing personnel), determined in accordance with United
States 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 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
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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 reasonable travel, entertainment and other out-of-pocket
expenses necessarily incurred in the performance of his duties hereunder, 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 a Company
car in accordance with the Company's practice immediately prior to the date of
this Agreement.
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. Noncompetition.
(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
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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 or ESP or Milton PDM Field Marketing, 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 or ESP or
Milton PDM Field Marketing with respect to any product or service sold or
proposed to be sold or activity engaged in or proposed to be engaged in up to
the time of such cessation within a 100-mile radius of the location of the
Company's or ESP's or Milton PDM Field Marketing'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 ESP or Milton PDM
Field Marketing any of its respective employees. Employee will not directly or
indirectly employ any person who is an employee of the Company or ESP or Milton
PDM Field Marketing 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 ESP or Milton PDM Field
Marketing 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 ESP or Milton PDM Field
Marketing may then be engaged or contemplates being engaged or conceived of or
developed utilizing the time, material, facilities, or information of the
Company or ESP or Milton PDM Field Marketing, shall belong to the Company or ESP
or Milton PDM Field Marketing, 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 ESP or Milton PDM Field Marketing
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 ESP and Milton PDM Field Marketing, 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
Chairman of the Company or the Board of Directors of the Company or shall
materially violate his duty of loyalty to the Company or ESP or Milton PDM Field
Marketing 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.
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17. No Third Party Beneficiaries.
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 England, without giving effect to conflict of laws.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
date first above written.
MILTON HEADCOUNT LIMITED
By:____________________________________
Name:
Title:
_______________________________________
Michael Garnham
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