EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") dated as of March 1, 1999, by and
between MIM Corporation, a Delaware corporation, with its principal place of
business at 100 Clearbrook Road, Elmsford, New York 10523 (hereinafter referred
to as the "Company"), and Edward J. Sitar, residing at 960 Glenwood Avenue,
Plainfield, New Jersey 07060 (hereinafter referred to as the "Executive").
WHEREAS, the Company wishes to offer employment to the Executive, and the
Executive wishes to accept such offer, on the terms and provisions set forth
below; Accordingly, the parties hereto agree as follows:
1. Term. The Company hereby employs the Executive, and the Executive hereby
accepts such employment, commencing as of March 1, 1999 and ending February 28,
2004, as Chief Financial Officer of the Company unless sooner terminated in
accordance with the provisions of Section 4 or Section 5 (the period during
which the Executive is employed hereunder, including any extensions or renewals
thereof, being hereinafter referred to as the "Term").
2. Duties. The Executive, in his capacity as Chief Financial Officer, shall
faithfully perform for the Company the duties of said office and position and
such other duties of an executive, managerial, or administrative nature as shall
be specified and designated from time to time by the Board. The Executive shall
devote all of his business time and effort to the performance of his duties
hereunder.
3. Compensation.
3.1 Salary. The Company shall pay the Executive during the Term an
initial base salary at the rate of $180,000 per annum (the "Annual
Salary"), in accordance with the customary payroll practices of the Company
applicable to senior executives, in installments not less frequently than
monthly.
3.2 Benefits - In General. The Executive shall be permitted during the
Term to participate in any group life, hospitalization or disability
insurance plans, health programs,
pension and profit sharing plans, salary reviews, and similar benefits
(other than bonuses and stock options or other equity-based compensation,
which are provided for under Section 3.3 and 3.4 hereof, or severance,
displacement or other similar benefits) which are of a type available from
time to time to other senior executives of the Company generally, in each
case to the extent that the Executive is eligible under the terms of such
plans or programs.
3.3 Specific Benefits. (a) During the Term, the Executive shall be
entitled to receive a bonus each calendar year, payable in cash in
accordance with, and subject to the terms and conditions of the Annual
Bonus Compensation Section of the Company's 1998 Senior Executive Bonus
Program (the "Bonus Program"), a copy of which is attached hereto as
Exhibit A. Such Annual Bonus Compensation shall be determined in accordance
with the terms and provisions of the Bonus Program and shall be payable
within ten (10) days of the completion of the audited financial results of
the Company.
(b) During the Term, the Executive shall be entitled to participate in
the Company's 1998 Senior Executive Bonus Program (the "Bonus Program"), at
the participation levels set forth in Exhibit B attached hereto, and at
such additional participation levels as may be determined from time to time
by the Chief Executive Officer of the Company or the Company's Board of
Directors or any committee thereof.
3.4 Grant of Option. Upon execution and delivery of this Agreement,
the Executive shall be granted and shall receive options ("Options") to
purchase 50,000 shares of the common stock, par value $0.0001 per share, of
the Company ("Common Stock"), at a price per share equal to $4.50 per
share, being the closing sales price per share of the Common Stock on the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") on December 2, 1998, the date on which the Company's
Compensation Committee granted the Executive these Options and the
compensation contemplated hereby. The Options shall, to the extent
permitted by Section 422
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of the Internal Revenue Code of 1986, as amended (the "Code"), be qualified
as incentive stock options ("ISO's"). Options in excess of the number
permitted to receive ISO treatment under Section 422 of the Code shall not
be qualified as ISO's. Subject to Sections 3.8, 4 and 5 hereof and the
applicable stock option award agreement (i) 16,666 of such Options shall
vest and become exercisable on each of the first and second anniversaries
of the date thereof, and (ii) the remaining 16,667 Options shall vest and
become exercisable, on the third anniversary of the date hereof. The
Options shall be subject to the terms of a definitive stock option
agreement to be provided by the Company.
3.5 Vacation. The Executive shall be entitled to vacation of 20
business days per year from and after the date hereof, to be accrued and
available in accordance with the policies applicable to senior executives
of the Company generally.
3.6 Automobile. During the Term, the Company will provide the
Executive a monthly allowance of $1,000 for the use of an automobile.
3.7 Expenses. The Company shall pay or reimburse the Executive
ordinary and reasonable out-of-pocket expenses actually incurred (and, in
the case of reimbursement, paid) by the Executive during the Term in the
performance of the Executive's services under this Agreement, including,
but not limited to, business related travel and/or entertainment expenses;
provided, that the Executive submits proof of such expenses, with the
properly completed forms and supporting receipts and other documentation as
prescribed from time to time by the Company, in accordance with the
policies applicable to senior executives of the Company generally.
4. Termination upon Death or Disability.
4.1 Termination upon Death. If the Executive dies during the Term, the
obligations of the Company to or with respect to the Executive shall
terminate in their entirety except as otherwise provide under this Section
4. Upon death, (i) the Executive's estate or beneficiaries shall be
entitled to receive any Annual Salary and other benefits (including bonuses
awarded or declared but not yet paid) earned and accrued under Sections 3.1
and 3.2 of this Agreement prior to the date of termination and
reimbursement for expenses incurred prior to the date of termination as set
forth in Section 3.7 hereof; (ii) all fully vested and exercisable Options
granted under Section 3.4 hereof and held by the Executive may be exercised
by his estate for a period of one (1) year from and after the date of the
Executive's death; (iii) all Performance Units granted to the Executive
under Section 3.3(b)
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hereof shall vest at the accrued value (if any) under the Bonus Program
measured at the end of the fiscal year immediately following the
Executive's death; (iv) that portion of the Performance Shares granted to
the Executive under Section 3.3(c) hereof to which the Executive would have
been entitled to receive in accordance with the Bonus Program, as measured
at the end of the fiscal year immediately following the Executive's death
shall vest in favor of the Executive's estate; and (v) the Executive's
estate and beneficiaries shall have no further rights to any other
compensation or benefits hereunder on or after the termination of
employment, or any other rights hereunder. Notwithstanding anything to the
contrary contained in this Section 4.1, it is expressly understood and
agreed that nothing in the foregoing clause (v) shall restrict the ability
of the Company to amend or terminate such benefits plans and programs from
time to time in its sole and absolute discretion; provided, however, that
the Company shall in no event be required to provide any coverage
contemplated by Section 3.2 hereof after such time as the Executive becomes
entitled to coverage under the benefit plans and programs of another
employer or recipient of the Executive's services (and provided, further,
that such entitlement shall be determined without regard to any individual
waivers or other arrangements).
4.2 Termination upon Disability. If the Executive by virtue of ill
health or other disability is unable to perform substantially and
continuously the duties assigned to him for more than 180 consecutive or
non-consecutive calendar days out of any consecutive twelve-month period,
the Company shall have the right, to the extent permitted by law, to
terminate the employment of the Executive upon notice in writing to the
Executive; provided that the Company will have no right to terminate the
Executive's employment if, in the opinion of a qualified physician
reasonably acceptable to the Company, it is reasonably certain that the
Executive will be able to resume the Executive's duties on a regular
full-time basis within 30 days of the date the Executive receives notice of
such termination. Upon termination of employment by virtue of disability,
(i) the Executive shall receive Annual Salary and other benefits (including
Bonuses awarded but not yet paid) earned and accrued under Section 3.2, of
this Agreement prior to the effective date of the termination of employment
and reimbursement for expenses incurred prior to the effective date of the
termination of employment as set forth in Section 3.7 hereof; (ii) all
fully vested and exercisable Options granted under Section 3.4 hereof and
held by the
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Executive may be exercised by the Executive or his estate or beneficiaries
for a period of one (1) year from and after the date of the Executive's
disability; (iii) all Performance Units granted to the Executive under
Section 3.3 (b) hereof shall vest at the accrued value (if any) under the
Bonus Program measured at the end of the fiscal year immediately following
the Executive's termination of employment; (iv) that portion of the
Performance Shares granted to the Executive under Section 3.3(c) hereof to
which the Executive would have been entitled to receive in accordance with
the Bonus Program, as measured at the end of the fiscal year immediately
following the Executive's termination of employment shall vest in favor of
the Executive; and (v) if the Executive's disabilities shall continue for a
period of six (6) months after his termination under this Section 4.2, the
Executive shall receive for a period for two (2) years after termination of
employment (A) the Annual Salary that the Executive was receiving at the
time of such termination of employment, less the gross proceeds paid to the
Executive on account of Social Security or other similar benefits and
Company provided long-term disability insurance, payable in accordance with
Section 3.1 hereof; and (B) such continuing coverage under the benefit
plans and programs the Executive would have received under Section 3.2
hereof as would have applied in the absence of such termination; it being
expressly understood and agreed that nothing in this clause (v) shall
restrict the ability of the Company to amend or terminate such benefits
plans and programs from time to time in its sole and absolute discretion;
provided, however, that the Company shall in no event be required to
provide any coverage contemplated in Section 3.2 hereof after such time as
the Executive becomes entitled to coverage under the benefit plans and
programs of another employer or recipient of the Executive's services (and
provided, further, that such entitlement shall be determined without regard
to any individual waivers or other arrangements); and (vi) the Executive
shall have no further rights to any other compensation or benefits
hereunder on or after the termination of employment, or any other rights
hereunder.
5. Certain Terminations of Employment
5.1 Termination for "Cause"; Termination of Employment by the
Executive Without Good Reason. (a) For purposes of this Agreement, "Cause"
shall mean (i) the Executive's conviction of a felony or a crime of moral
turpitude; or (ii) the Executive's commission of unauthorized acts
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intended to result in the Executive's personal enrichment at the material
expense of the Company; or (iii) the Executive's material violation of the
Executive's duties or responsibilities to the Company which constitute
willful misconduct or dereliction of duty, or the material breach of the
covenants contained in Section 6 hereof; or (iv) the Executive's other
material breach of this Agreement which breach shall have continued
unremedied for ten (10) days after written notice by the Company to the
Executive specifying such breach.
(b) The Company may terminate the Executive's employment hereunder for
Cause. If the Company terminates the Executive for Cause, (i) the Executive
shall receive Annual Salary and other benefits (including bonuses awarded
or declared but not yet paid) earned and accrued under this Agreement prior
to the effective date of the termination of employment (and reimbursement
for expenses incurred prior to the effective date of the termination of
employment as set forth in Section 3.7); (ii) the Executive shall be
entitled to retain only those Performance Shares which shall have vested on
or prior to the date of termination under this Section 5.1; (iii) all
vested and unvested options shall lapse and terminate immediately and may
no longer be exercised; (iv) all Performance Units shall terminate
immediately; and (v) the Executive shall have no further rights to any
other compensation or benefits hereunder on or after the termination of
employment, or any other rights hereunder.
(c) The Executive may terminate his employment upon written notice to
the Company which specifies an effective date of termination not less than
30 days from the date of such notice. If the Executive terminates his
employment and the termination is not covered by Section 4, 5.2, or 5.3,
(i) the Executive shall receive Annual Salary and other benefits (including
bonuses awarded or declared but not yet paid) earned and accrued under this
Agreement prior to the effective date of the termination of employment (and
reimbursement for expenses incurred prior to the effective date of the
termination of employment as set forth in Section 3.7); (ii) all fully
vested and exercisable options granted under Section 3.4 hereof and held by
the Executive may be exercised by the Executive for a period of 30 days
from and after the date of the Executive's effective date of termination;
(iii) all Performance Units and Performance Shares shall lapse and
terminate immediately; and (iv) the Executive shall have no further rights
to any compensation or other benefits hereunder on or after the termination
of employment, or any other rights hereunder.
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5.2 Termination Without Cause; Termination for Good Reason. (a) For
purposes of this Agreement, "Good Reason" shall mean the existence of any
one or more of the following conditions that shall continue for more than
45 days following written notice thereof by the Executive to the Company:
(i) the material reduction of the Executive's authority, duties and
responsibilities, or the assignment to the Executive of duties materially
inconsistent with the Executive's position or positions with the Company;
or (ii) the Company's material and continuing breach of this Agreement.
(b) The Company may terminate the Executive's employment at any
time for any reason whatsoever. If the Company terminates the
Executive's employment and the termination is not covered by Section
4, 5.1 or 5.3 hereof, , (i) the Executive shall receive Annual Salary
and other benefits (including bonuses awarded but not yet paid) earned
and accrued under this Agreement prior to the effective date of the
termination of employment (and reimbursement for expenses incurred
prior to the effective date of the termination of employment as set
forth in Section 3.7); (ii) the Executive shall receive (A) for the
longer of (x) two (2) years after termination of employment or (y) the
period of time remaining under the Term, the Annual Salary that the
Executive was receiving at the time of such termination of employment,
payable in accordance with Section 3.1 hereof, and (B) for a period of
two (2) years after termination of employment, such continuing
coverage under the benefit plans and programs the Executive would have
received under Section 3.2 hereof as would have applied in the absence
of such termination, it being expressly understood and agreed that
nothing in this clause (ii) shall restrict the ability of the Company
to amend or terminate such benefits plans and programs from time to
time in its sole and absolute discretion; provided, however, that the
Company shall in no event be required to provide any coverage
contemplated by Section 3.2 hereof after such time as the Executive
becomes entitled to coverage under the benefit plans and programs of
another employer or recipient of the Executive's services (and
provided, further, that such entitlement shall be determined without
regard to any individual waivers or other arrangements); (iii) all
outstanding unvested Options granted under Section 3.4 hereof and held
by the Executive shall vest and become immediately exercisable and
shall otherwise be exercisable in accordance with their terms and the
Executive shall become vested in any pension or other deferred
compensation other than pension or deferred compensation under a plan
intended to be qualified under Section 401(a) or 403(a)
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of the Internal Revenue Code of 1986, as amended; (iv) that portion of
the Performance Units granted under Section 3.3(b) hereof to which the
Executive would have been entitled to receive in accordance with the
Bonus Program, as measured on the date of the Executive's termination
of employment shall vest and become immediately payable at any time
and from time to time from and after the termination date at the then
applicable target rate set forth in the Bonus Program; and (v) that
portion of the Performance Shares granted under Section 3.3(c) hereof
to which the Executive would have been entitled to receive in
accordance with the Bonus Program as at the end of the fiscal year
immediately following the termination of the Executive's employment
shall vest and become immediately transferable free of any
restrictions on transferability of the Performance Shares (other than
restrictions on transfer imposed under Federal and state securities
laws) by the Executive and all other restrictions imposed thereon
shall cease, other than those restrictions, limitations and/or
obligations contained in the Bonus Program that expressly survive the
termination of the Executive's employment with the Company; and (vi)
the Executive shall have no further rights to any other compensation
or benefits hereunder on or after the termination of employment, or
any other rights hereunder.
(c) The Executive may terminate the Executive's employment with
the Company for "Good Reason". If the Executive terminates his
employment for Good Reason and such termination is not covered by
Section 5.3 hereof, (i) the Executive shall receive Annual Salary and
other benefits (including bonuses awarded but not yet paid) earned and
accrued under this Agreement prior to the effective date of the
termination of employment (and reimbursement for expenses incurred
prior to the effective date of the termination of employment as set
forth in Section 3.7); (ii) the Executive shall receive for a period
of two (2) years after termination of employment (A) the Annual Salary
that the Executive was receiving at the time of such termination of
employment, payable in accordance with Section 3.1 hereof, and (B)
such continuing coverage under the benefit plans and programs the
Executive would have received under Section 3.2 hereof as would have
applied in the absence of such termination, it being expressly
understood and agreed that nothing in this clause (ii) shall restrict
the ability of the Company to amend or terminate such benefits plans
and programs from time to time in its sole and absolute discretion;
provided, however, that the Company shall in no event be required to
provide any coverage contemplated by Section
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3.2 hereof after such time as the Executive becomes entitled to
coverage under the benefit plans and programs of another employer or
recipient of the Executive's services (and provided, further, that
such entitlement shall be determined without regard to any individual
waivers or other arrangements); (iii) all outstanding unvested Options
granted under Section 3.4 hereof and held by the Executive shall vest
and become immediately exercisable and shall otherwise be exercisable
in accordance with their terms and the Executive shall become vested
in any pension or other deferred compensation other than pension or
deferred compensation under a plan intended to be qualified under
Section 401(a) or 403(a) of the Internal Revenue Code of 1986, as
amended; (iv) all Performance Units granted under Section 3.3(b)
hereof and held by the Executive shall vest and become immediately
payable at any time and from time to time from and after the
termination date at the maximum target rate set forth in the Bonus
Program; and (v) all Performance Shares granted under Section 3.3(c)
hereof and held by the Executive shall vest and become immediately
transferable free of any restrictions on transferability of the
Performance Shares (other than restrictions on transfer imposed under
Federal and state securities laws) by the Executive and all other
restrictions imposed thereon shall cease, other than those
restrictions, limitations and/or obligations contained in the Bonus
Program that expressly survive the termination of the Executive's
employment with the Company; and (vi) the Executive shall have no
further rights to any other compensation or benefits hereunder on or
after the termination of employment, or any other rights hereunder.
5.3 Certain Terminations after Change of Control. (a) For purposes of
this Agreement, "Change of Control" means the occurrence of one or more of
the following: (i) a "person" or "group" within the means the meaning of
sections 13(d) and 14(d) of the Securities and Exchange Act of 1934 (the
"Exchange Act") becomes the "beneficial owner" (within the meaning of Rule
l3d-3 under the Exchange Act) of securities of the Company (including
options, warrants, rights and convertible and exchangeable securities)
representing 30% or more of the combined voting power of the Company's then
outstanding securities in any one or more transactions unless approved by
at least two-thirds of the Board of Directors then serving at that time;
provided, however, that purchases by employee benefit plans of the Company
and by the Company or its affiliates shall be disregarded; or (ii) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or
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substantially all, of the operating assets of the Company; or (iii) a
merger or consolidation, or a transaction having a similar effect, where
(A) the Company is not the surviving corporation, (B) the majority of the
Common Stock of the Company is no longer held by the stockholders of the
Company immediately prior to the transaction, or (C) the Company's Common
Stock is converted into cash, securities or other property (other than the
common stock of a company into which the Company is merged), unless such
merger, consolidation or similar transaction is with a subsidiary of the
Company or with another company, a majority of whose outstanding capital
stock is owned by the same persons or entities who own a majority of the
Company's Common Stock at such time; or (iv) at any annual or special
meeting of stockholders of the Company at which a quorum is present (or any
adjournments or postponements thereof), or by written consent in lieu
thereof, directors (each a "New Director" and collectively the "New
Directors") then constituting a majority of the Company's Board of
Directors shall be duly elected to serve as New Directors and such New
Directors shall have been elected by stockholders of the Company who shall
be an (I) "Adverse Person(s)"; (II) "Acquiring Person(s)"; or (III) "40%
Person(s)" (as each of the terms set forth in (I), (II), and (III) hereof
are defined in that certain Rights Agreement, dated November 24, 1998,
between the Company and American Stock Transfer & Trust Company, as Rights
Agent.
(b) If within the one (1) year period commencing upon any Change of
Control, the Executive is terminated by the Company or a successor entity
and the termination is not covered by Section 4 or 5. 1, or, within such
one (1) year period, the Executive elects to terminate his employment after
the Company or a successor entity materially reduces the Executive's
authority, duties and responsibilities, or assigns the Executive duties
materially inconsistent with the Executive's position or positions with the
Company or a successor entity immediately prior to such Change of Control,
(I) the Executive shall receive Annual Salary and other benefits (including
bonuses awarded or declared but not yet paid) earned and accrued under this
Agreement prior to the effective date of the termination of employment (and
reimbursement for expenses incurred prior to the effective date of the
termination of employment as set forth in Section 3.7); (ii) the Executive
shall receive (A) for the longer of (x) three (3) years after termination
of employment; or (y) the period of time remaining under the Term, the
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Annual Salary that the Executive was receiving at the time of such
termination of employment, payable in accordance with Section 3.1 hereof,
and (B) such continuing coverage under the benefit plans and programs the
Executive would have received under Sections 3.2 of this Agreement as would
have applied in the absence of such termination; it being expressly
understood and agreed that nothing in this clause (ii) shall restrict the
ability of the Company to amend or terminate such plans and programs from
time to time in its sole and absolute discretion; provided, however, that
the Company shall in no event be required to provide any coverage under
Section 3.2 hereof after such time as the Executive becomes entitled to
coverage under the benefit plans and programs of another employer or
recipient of the Executive's services (and provided, further, that such
entitlement shall be determined without regard to any individual waivers or
other arrangements); (ill) all outstanding unvested Options granted under
Section 3.4 hereof and held by the Executive shall vest and become
immediately exercisable and shall otherwise be exercisable in accordance
with their terms and the Executive shall become vested in any pension or
other deferred compensation other than pension or deferred compensation
under a plan intended to be qualified under Section 401(a) or 403(a) of the
Internal Revenue Code of 1986, as amended; (iv) all Performance Units
granted under Section 3.3(b) hereof and held by the Executive shall vest
and become immediately payable at any time and from time to time from and
after the termination date, at the maximum target rate set forth in the
Bonus Program; (v) all Performance Shares granted under Section 3.3 (c)
hereof and held by the Executive shall vest and become immediately
transferable free of any restrictions on transferability of the Performance
Shares (other than restrictions on transfer imposed under Federal and state
securities laws) by the Executive and all other restrictions imposed
thereon shall cease other than those restrictions, limitations and/or
obligations contained in the Bonus Program that expressly survive the
termination of the Executive's employment with the Company or any successor
entity, as the case may be; and (vi) the Executive shall have no further
rights to any other compensation or benefits hereunder on or after the
termination of employment or any other rights hereunder.
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6. Covenants of the Executive.
6.1 Covenant Against Competition, Other Covenants. The Executive
acknowledges that (i) the principal business of the Company (which,
for purposes of this Section 6 shall include the Company and each of
its subsidiaries and affiliates) is the provision of a broad range of
services designed to promote the cost-effective delivery of pharmacy
benefits, including pharmacy benefit management services, claims
processing and/or the purchasing of pharmaceutical products on behalf
of pharmacy networks and long term care facilities (including assisted
living facilities and nursing homes) (such business, and any and all
other businesses that after the date hereof, and from time to time
during the Term, become material with respect to the Company's
then-overall business, herein being collectively refereed to as the
"Business'); (ii) the Company is dependent on the efforts of a certain
limited number of persons who have developed, or will be responsible
for developing the Company's Business, (iii) the Company's Business is
national in scope; (iv) the Executive's work for the Company has given
and will continue to give him access to confidential affairs and
proprietary information of the Company; (v) the covenants and
agreements of the Executive contained in this Section 6 are essential
to the business and goodwill of the Company; and (vi) the Company
would not have entered into do Agreement but for the covenants and
agreements set forth in this Section 6. Accordingly, the Executive
covenants and agrees that:
(a) At any time during his employment with the Company and ending
one (1) year following (i) termination of the Executive's employment
with the Company (irrespective of the reason for such termination) or
(ii) payment of any Annual Salary in accordance with Section 4 or 5
hereof (unless such termination is by the Company without Cause),
whichever occurs last, the Executive shall not engage, directly or
indirectly (which includes, without limitation owning, managing
operating, controlling, being employed by, giving financial assistance
to, participating in or being connected in any material way with any
person or entity other than the Company), anywhere in the United
States in (A) the Business or (B) any material component of the
Business; provided, however, that the Executive's ownership as a
passive investor of less than two percent (2%) of the issued and
outstanding stock of a publicly held corporation shall not be deemed
to constitute competition.
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(b) During and after the period during which the Executive is
employed, the Executive shall keep secret and retain in strictest
confidence, and shall not use for his benefit or the benefit of
others, except in connection with the business and affairs of the
Company, all confidential matters relating to the Company and/or the
Company's Business, learned by the Executive heretofore or hereafter
directly or indirectly from the Company (the "Confidential Company
Information"), including, without limitation, information with respect
to (i) the strategic plans, budgets, forecasts, intended expansion of
product, service or geographic markets of the company and it's
affiliates, (ii) sales figures, contracts agreements, and undertakings
with or with respect to the Company's customers or prospective
customers, (iii) profit or loss figures, and (iv) then existing or
then prospective customers, clients, suppliers and sources of supply
and customer lists, and shall not disclose such Confidential Company
Information to anyone outside of the Company except with the Company's
express written consent and except for Confidential Company
Information which is at the time of receipt or thereafter becomes
publicly known through no wrongful act of the Executive or is received
from a third party not under an obligation to keep such information
confidential and without breach of this Agreement. Notwithstanding the
foregoing, this Section 6.1(b) shall not apply to the extent that the
Executive is acting to the extent necessary to comply with legal
process; provided that in the event that the Executive is subpoenaed
to testify or to produce any information or documents before any
court, administrative agency or other tribunal relating to any aspect
pertaining to the Company, he shall immediately notify the Company
thereof.
(c) During the period commencing on the date hereof and ending
two (2) years following the later to occur of dates upon which the
Executive shall cease to be an (i) employee or (ii) an "affiliate", as
defined in Rule 144 promulgated under the Securities Act of 1993, and
the rules and regulations promulgated thereunder (as amended, the
"1993 Act"), of the Company, the Executive shall not, without the
Company's prior written consent, directly or indirectly, solicit or
encourage to leave the employment or other service of the Company any
employee or independent contractor thereof or hire (on behalf of the
Executive or any other person, firm, corporation or entity) any
employee or independent contractor who has left the employment or
other service of the Company within one (1)
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year of the termination of such employee's or independent contractor's
employment or other service with the Company. During such a one (1)
year period, the Executive will not, whether for his own account or
for the account of any other person, firm, corporation or other
entity, intentionally interfere with the Company's relationship with,
or endeavor to entice away from the Company any person who during the
Term is or was a customer or client of the Company.
(d) All memoranda, notes, lists, records, property and any other
tangible product and documents (and all copies thereof) made, produced
or compiled by the Executive or made available to the Executive
concerning the Business of the Company, including all Confidential
Company Information, shall be the Company's property and shall be
delivered to the Company at any time on request.
6.2 Rights and Remedies upon Breach . (a) The Executive acknowledges
and agrees that any breach by him of any of the provisions of Section 6.1
hereof (the "Restrictive Covenants") would result in irreparable injury and
damage for which money damages would not provide an adequate remedy.
Therefore, if the Executive breaches or threatens to commit a breach of any
of the provisions of Section 6. 1 hereof, the Company shall have the
following rights and remedies, each of which rights and remedies shall be
independent of the other and severally enforceable, and all of which rights
and remedies shall be in addition to, and not in lieu of, any other rights
and remedies available to the Company under law or in equity (including,
without limitation, the recovery of damages):
(i) The right and remedy to have the Restrictive Covenants
specifically enforced (without posting bond and without the need to
prove damages) by any court having equity jurisdiction, including,
without limitation, the right to an entry against the Executive of
restraining orders and injunctions (preliminary, mandatory, temporary
and permanent) against violations, threatened or actual, and whether
or not then continuing, of such covenants.
(ii) The right and remedy to require the Executive to account for
and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits (collectively, "Benefits")
derived or received by him as the result of any transactions
constituting a
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breach of the Restrictive Covenants, and the Executive shall account
for and pay over such Benefits to the Company and, if applicable, its
affected subsidiaries and/or affiliates.
(b) The Executive agrees that in any action seeking specific
performance or other equitable relief, he will not assert or contend that
any of the provisions of this Section 6 are unreasonable or otherwise
unenforceable. The existence of any claim or cause of action by the
Executive, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement of the Restrictive Covenants.
7. Other Provisions.
7.1 Severabilitv. The Executive acknowledges and agrees that (i) he
has had an opportunity to seek advice of counsel in connection with this
Agreement and (ii) the Restrictive Covenants are reasonable in geographical
and temporal scope and in all other respects. If it is determined that any
of the provisions of this Agreement, including, without limitation, any of
the Restrictive Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the provisions of this Agreement shall not
thereby be affected and shall be given full effect, without regard to the
invalid portions thereof.
7.2 Duration and Scope of Covenants. If any court or other
decision-maker of competent jurisdiction determines that any of Executive's
covenants contained in this Agreement, including, without limitation, any
of the Restrictive Covenants, or any part thereof, is unenforceable because
of the duration or geographical scope of such provision, then, after such
determination has become final and unappealable, the duration or scope of
such provision, as the case may be, shall be reduced so that such provision
becomes enforceable and, in its reduced form, such provision shall then be
enforceable and shall be enforced.
7.3 Enforceability; Jurisdictions. Any controversy or claim arising
out of or relating to this Agreement or the breach of this Agreement that
is not resolved by Executive and the Company (or its subsidiaries or
affiliates, where applicable), other than those arising under Section 6
thereof, to the extent necessary for the Company (or its subsidiaries or
affiliates, where applicable) to avail itself of the rights and remedies
provided under Section 6.2 hereof, shall be submitted to arbitration
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in New York, New York in accordance with New York law and the procedures of
the American Arbitration Association. The determination of the
arbitrator(s) shall be conclusive and binding on the Company (or its
subsidiaries or affiliates, where applicable) and Executive and judgment
may be entered on the arbitrator(s)' award in any court having
jurisdiction.
7.4 Notices. Any notice or other communication required or permitted
hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice shall be
deemed given when so delivered personally, telegraphed, telexed or sent by
facsimile transmission or, if mailed, five days after the date of deposit
in the United States mails as follows:
(i) If to the Company, to:
MIM Corporation
100 Clearbrook Road
Elmsford, New York 10523
Attention: Assistant General Counsel
with a copy to:
Rogers & Wells
200 Park Avenue - Suite 5200
New York, New York 10166-0153
Attention: Richard A. Cirillo
(ii) If to the Executive, to:
Edward J. Sitar
960 Glenwood Avenue
Plainfield, New Jersey 07060
Any such person may by notice given in accordance with this Section 7.4 to the
other parties hereto designate another address or person for receipt by such
person of notices hereunder.
7.5 Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all prior agreements, written or oral, with respect thereto.
7.6 Waivers and Amendments. This Agreement may be amended, superseded,
canceled, renewed or extended, and the terms hereof may be waived, only by
a written
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instrument signed by the parties or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or
privilege nor any single or partial exercise of any such right, power or
privilege, preclude any other or further exercise thereof or the exercise
of any other such right, power or privilege.
7.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPALS OF CONFLICTS OF LAW.
7.8 Assignment. This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive; any purported
assignment by the Executive in violation hereof shall be null and void. In
the event of any sale, transfer or other disposition of all or
substantially all of the Company's assets or business, whether by merger,
consolidation or otherwise, the Company (without limiting the Executive's
rights under Section 5.3) may assign this Agreement and its rights
hereunder.
7.9 Withholding. The Company shall be entitled to withhold from any
payments or deemed payments any amount of tax withholding required by law.
7.10 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors, permitted
assigns, heirs, executors and legal representatives.
7.11 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and
delivered shall be an original but all such counterparts together shall
constitute one and the same instrument. Each counterpart may consist of two
copies hereof each signed by one of the parties hereto.
7.12 Survival. Anything contained in this Agreement to the contrary
not withstanding, the provisions of Sections 5, 6, 7.3 and 7.9, and the
other provisions of this Section 7 (to the extent necessary to effectuate
the survival of Sections 5, 6, 7.3 and 7.9), shall survive termination of
this Agreement and any termination of the Executive's employment hereunder.
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7.13 Existing Agreements. Executive represents to the Company that he
is not subject or a party to any employment or consulting agreement,
non-competition covenant or other agreement, covenant or understanding
which might prohibit him from executing this Agreement or limit his ability
to fulfill his responsibilities hereunder.
7.14 Headings. The headings in this Agreement are for reference only
and shall not affect the interpretation of this Agreement.
7.15 Supercedes Prior Agreements. Upon execution and delivery of this
Agreement, this Agreement shall supercede in its entirety any and all prior
agreements with respect to the Executive's employment.
IN WITNESS WHEREOF, the parties hereto have signed their names as of the
day and year first above written.
MIM CORPORATION
By: /S/ RICHARD H. FRIEDMAN /S/ EDWARD J. SITAR
----------------------- --------------------------------
Richard H. Friedman Edward J. Sitar
Chief Executive Officer
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Exhibit A
1998 Senior Executive Bonus Program
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Exhibit B
Executive Bonus Grant
Annual Bonus Percentage Level: 25%-40%
Options to Purchase Common Stock,
Par value $0.0001 per share 50,000
(See Section 3.4)
Performance Units: 2,500 per year
Performance Shares: 5,000 per year
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