EXHIBIT 99.1
FORM OF
EMPLOYMENT AND NONCOMPETITION AGREEMENT
This Agreement is made as of November 13, 1997 (the "Effective Date"), by
and between McLagan Partners, Inc., a Delaware corporation (the "Employer") and
______________ (the "Employee").
WHEREAS, the Employer desires to employ the Employee and the Employee
desires to be employed by the Employer;
NOW THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby irrevocably acknowledged, the Employer and the Employee agree as
follows:
1. Employment. The Employer hereby employs the Employee and the Employee
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hereby accepts such employment on the terms and conditions set forth in this
Agreement.
2. Capacity. The Employee shall serve the Employer as a Managing
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Director. The Employee shall also serve the Employer in such other or
additional offices as the Employee may be requested to serve by the Board of
Directors of the Employer (the "Board of Directors") or the Chief Executive
Officer of the Employer. In such capacity or capacities, the Employee shall
perform such services and duties in connection with the business, affairs and
operations of the Employer as may be assigned or delegated to the Employee from
time to time by or under the authority of the Board of Directors or the Chief
Executive Officer. Notwithstanding anything stated in this Section 2, in no
case shall the Employee be required to serve in an office or perform any service
or duty which is (i) not of a professional level generally consistent with the
position initially held by the Employee, or (ii) not related to the businesses
acquired by the Employer (the "Acquired Business") pursuant to Asset Purchase
Agreements dated as of November 13, 1997 by and among the Employer, the Employee
and other parties named in each such agreements (the "Asset Purchase
Agreements"), as such business is conducted from time to time. In no case shall
the Employee be required to relocate without his consent.
3. Term. Subject to the provisions of Section 6, the term of employment
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pursuant to this Agreement shall commence on the Effective Date and expire at
11:59 p.m. on March 31, 2000 (the "Initial Term"). At the Employee's option,
the Initial Term may be extended for one year upon the same terms and conditions
(the "Additional Term"). The Initial Term, the Additional Term and any
extensions thereof are hereinafter collectively referred to as the "Term".
4. Compensation and Benefits. The regular compensation and benefits
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payable to
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the Employee under this Agreement shall be as follows:
4.1 Salary. For all services rendered by the Employee under this
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Agreement, the Employer shall pay the Employee a salary (the "Salary") at the
annual rate of _________ Dollars ($______), subject to review for increases only
from time to time by the Board of Directors or the Compensation Committee of the
Board of Directors (the "Compensation Committee"). The Salary shall be payable
in periodic installments no less frequently than on a monthly basis.
4.2 Benefits.
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(a) Incentive Compensation Plan. The Employee shall be entitled
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to incentive compensation pursuant to the terms of the Employer's
Incentive Compensation Plan (the "Incentive Plan") established by the
Board of Directors, a copy of which is attached hereto as Exhibit A.
(b) Other Benefits. The Employee shall also be entitled to
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participate in any employee benefit plans, medical insurance plans,
life insurance plans, disability income plans, retirement plans,
vacation plans, expense reimbursement plans and other benefit plans
which the Employer may from time to time have in effect for all or
most of its employees. Such participation shall be subject to the
terms of the applicable plan documents, generally applicable policies
of the Employer, applicable law and the discretion of the Board of
Directors, the Compensation Committee or any administrative or other
committee provided for in or contemplated by any such plan. The
parties acknowledge and agree that they are parties to the Asset
Purchase Agreements and that pursuant to Section 5.9 of such Asset
Purchase Agreements, the Employer has certain obligations to establish
and maintain certain insurance and employee benefit plans. Except as
provided in the preceding sentence, nothing contained in this
Agreement shall be construed to create any obligation on the part of
the Employer to establish any such plan or to maintain the
effectiveness of any such plan which may be in effect from time to
time.
(c) Taxation of Payments and Benefits. The Employer shall
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undertake to make deductions, withholdings and tax reports with
respect to payments and benefits under this Agreement to the extent
that it reasonably and in good faith believes that it is required to
make such deductions, withholdings and tax reports. Payments under
this Agreement shall be in amounts net of any such deductions or
withholdings. Nothing in this Agreement shall be construed to require
the Employer to make any payments to compensate the Employee for any
adverse tax effect associated with any payments or benefits or for any
deduction or withholding from any payment or benefit.
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(d) Exclusivity of Salary and Benefits. The Employee shall not
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be entitled to any payments or benefits for his services as an
employee other than those provided (i) under this Agreement and (ii)
pursuant to the Incentive Plan.
4.3 Vacation. The Employee shall be entitled to receive five (5)
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weeks of vacation per year, during which time the Employee's salary shall be
paid in full and all benefits shall accrue.
5. Extent of Service. During the Employee's employment under this
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Agreement, the Employee shall devote the Employee's full business time, best
efforts and business judgment, skill and knowledge to the advancement of the
Employer's interests and to the discharge of the Employee's duties and
responsibilities under this Agreement. The Employee shall not engage in any
other business activity, except as set forth on Schedule 5 attached hereto or as
may be approved by the Board of Directors; provided that nothing in this
Agreement shall be construed as preventing the Employee from:
(a) investing the Employee's assets in any company or other entity in
a manner not prohibited by Section 7(e) and in such form or manner as shall
not require any material activities on the Employee's part in connection
with the operations or affairs of the companies or other entities in which
such investments are made; or
(b) engaging in religious, charitable or other community or non-
profit activities that do not impair the Employee's ability to fulfill the
Employee's duties and responsibilities under this Agreement.
6. Termination and Termination Benefits. Notwithstanding the provisions
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of Section 3, the Employee's employment under this Agreement shall terminate
under the following circumstances set forth in this Section 6.
(a) Termination by the Employer for Cause. The Employee's employment
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under this Agreement may be terminated for cause without further liability
on the part of the Employer effective immediately upon (i) a vote of the
Board of Directors and (ii) written notice delivered to the Employee. Only
the following shall constitute "cause" for such termination:
(i) the commission by or indictment of the Employee for (A) a
felony or (B) any misdemeanor involving moral turpitude or
fraud ("indictment," for these purposes, meaning an
indictment, probable cause hearing or any other procedure
pursuant to which an initial determination of probable or
reasonable cause with respect to such offense is made);
(ii) gross negligence, willful misconduct or insubordination of
the
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Employee with respect to the Employer or any affiliate of
the Employer, which action continues, in the reasonable
judgment of the Board of Directors, after written notice
and opportunity to cure within thirty (30) days of such
notice is given to the Employee by the Board of Directors;
or
(iii) material breach by the Employee of any of the Employee's
material obligations under this Agreement, which action
continues, in the reasonable judgment of the Board of
Directors, after written notice and opportunity to cure
within thirty (30) days of such notice is given to the
Employee by the Board of Directors.
(b) Disability. If the Employee shall be disabled so as to be unable
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to perform the essential functions of the Employee's then existing position
or positions under this Agreement with or without reasonable accommodation,
or a position of comparable professional level to which the Employee has
been reassigned following such disability, the Chief Executive Officer or
the Board of Directors may remove the Employee from any responsibilities
and/or reassign the Employee to another position with the Employer for the
remainder of the Term or during the period of such disability.
Notwithstanding any such removal or reassignment, the Employee shall
continue to receive, for a period of time equal to the lesser of (x) three
(3) months, or (y) the remainder of the Term (the "Disability Period"), (i)
the Employee's full Salary (less any disability pay or sick pay benefits to
which the Employee may be entitled under the Employer's policies) and (ii)
benefits under Section 4 of this Agreement (except to the extent that the
Employee may be ineligible to receive incentive compensation benefits under
the Incentive Plan following the Employee's removal or reassignment).
Should the Employee continue to work for the Employer in any position
beyond the Disability Period, Employee's salary shall be commensurate with
the customary salary of such position. If any question shall arise as to
whether during any period the Employee is disabled so as to be unable to
perform the essential functions of the Employee's then existing position or
positions with or without reasonable accommodation, the Employee may, and
at the request of the Employer shall, submit to the Employer a
certification in reasonable detail by a physician jointly selected by the
Employer and the Employee as to whether the Employee is so disabled or how
long such disability is expected to continue, and such certification shall
for the purposes of this Agreement be conclusive of the issue. The
Employee shall cooperate with any reasonable request of the physician in
connection with such certification. If such question shall arise and the
Employee shall fail to submit such certification, the Employer's
determination of such issue shall be binding on the Employee. Nothing in
this Section 6(d) shall be construed to waive the Employee's rights, if
any, under existing law including, without limitation, the Family and
Medical Leave Act of 1993, 29 U.S.C. (S)2601 et seq. and the Americans with
Disabilities Act, 42 U. S. C. (S)12101 et seq.
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(c) Certain Limitations. It is the intention of the Employee and of
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the Employer that no payments by the Employer to or for the benefit of the
Employee under this Agreement or any other agreement or plan, if any,
pursuant to which the Employee is entitled to receive payments or benefits
shall be nondeductible to the Employer by reason of the operation of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code")
relating to parachute payments or any like statutory or regulatory
provision. Accordingly, and notwithstanding any other provision of this
Agreement or any such agreement or plan, if by reason of the operation of
said Section 280G or any like statutory or regulatory provision, any such
payments exceed the amount which can be deducted by the Employer, such
payments shall be reduced to the maximum amount which can be deducted by
the Employer. To the extent that payments exceeding such maximum
deductible amount have been made to or for the benefit of the Employee,
such excess payments shall be refunded to the Employer with interest
thereon at the applicable federal rate determined under Section 1274(d) of
the Code, compounded annually, or at such other rate as may be required in
order that no such payments shall be nondeductible to the Employer by
reason of the operation of said Section 280G or any like statutory or
regulatory provision. To the extent that there is more than one method of
reducing the payments to bring them within the limitations of said Section
280G or any like statutory or regulatory provision, the Employee shall
determine which method shall be followed, provided that if the Employee
fails to make such determination within forty-five (45) days after the
Employer has given notice of the need for such reduction, the Employer may
determine the method of such reduction in its sole discretion.
7. Confidential Information, Intellectual Property, Noncompetition and
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Cooperation.
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(a) Confidential Information. As used in this Agreement,
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"Confidential Information" means information belonging to the Employer
which is of value to the Employer in the course of conducting its business
and the disclosure of which could result in a competitive or other
disadvantage to the Employer. Confidential Information includes, without
limitation, financial information, reports and forecasts; inventions,
improvements and other intellectual property; trade secrets; know-how;
designs, samples, specifications, schematics, proprietary processes or
formulae; computer programs and other computer software; market or sales
information or plans; customer lists; and business plans, prospects and
opportunities (such as possible acquisitions or dispositions of businesses
or facilities) which have been discussed or considered by the management of
the Employer. Confidential Information includes information developed by
the Employee in the course of the Employee's employment by the Employer, as
well as other information to which the Employee may have access in
connection with the Employee's employment. Confidential Information also
includes the confidential information of others with which the Employer has
a business relationship. Notwithstanding the foregoing, Confidential
Information does not include information in the public domain, unless such
information is in the public domain due to breach of the Employee's duties
under Section 7(b).
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(b) Confidentiality. The Employee understands and agrees that the
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Employee's employment creates a relationship of confidence and trust
between the Employee and the Employer with respect to all Confidential
Information. At all times, both during the Employee's employment with the
Employer and after the Employee's termination, the Employee will keep in
confidence and trust all such Confidential Information, and will not use or
disclose any such Confidential Information without the written consent of
the Employer, except as is necessary in the ordinary course of performing
the Employee's duties for the Employer.
(c) Documents, Records, etc. All documents, records, data,
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apparatus, equipment and other physical property, whether or not pertaining
to Confidential Information, which are furnished to the Employee by the
Employer or are produced by the Employee in connection with the Employee's
employment will be and remain the sole property of the Employer. The
Employee will return to the Employer all such materials and property as and
when requested by the Employer. In any event, the Employee will return all
such materials and property immediately upon termination of the Employee's
employment for any reason. The Employee will not retain any such material
or property or any copies thereof after such termination.
(d) Intellectual Property. During the Term, the Employee will
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disclose to the Employer all ideas, inventions and business plans developed
by him during such period which relate directly or indirectly to the
business of the Employer, including, without limitation, any design, logo,
slogan or campaign or any process, system, operation, product or
improvement which may be patentable or copyrightable. The Employee agrees
that all patents, patent applications, licenses, copyrights (whether or not
registered), trade names, trademarks (whether or not registered), service
marks, advertising campaigns, promotional campaigns, designs, logos,
slogans, business plans and other intellectual property rights developed or
created by the Employee in the course of his employment hereunder, either
individually or in collaboration with others, will be deemed works for hire
and the sole and absolute property of the Employer. The Employee agrees
that, at the Employer's request and expense, he will take all steps
necessary to secure the rights thereto to the Employer by patent,
copyright, trademark registration or otherwise. In the event that the
Employer is unable for any reason whatsoever to secure the signature of the
Employee on any document necessary or appropriate for any of the foregoing
purposes (including renewals, extensions, continuations, divisions or
continuations in part), the Employee hereby irrevocably designates and
appoints the Employer and its duly authorized officers and agents as agents
and attorneys-in-fact to act for and on behalf of the Employee, but only
for the purpose of executing and filing any such document and doing all
other lawfully permitted acts to accomplish the foregoing purposes with the
same legal force and effect as if executed or effected by the Employee.
(e) Noncompetition and Nonsolicitation. During the Term and for a
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period
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commencing upon the conclusion of the Term and continuing thereafter until
the later of March 31, 2003 or one year after conclusion of the Term, the
Employee (i) will not, directly or indirectly, whether as owner, part-
owner, partner, shareholder, director, officer, trustee, consultant, agent,
employee, co-venturer or otherwise, engage, participate, assist or invest
in any Competing Business (as hereinafter defined); (ii) will refrain from
directly or indirectly employing, attempting to employ, recruiting or
otherwise soliciting, inducing or influencing any person to leave
employment with the Employer; and (iii) will refrain from soliciting or
encouraging any customer or supplier to terminate or otherwise modify
adversely its business relationship with the Employer. The Employee
understands that the restrictions set forth in this Section 7(e) are
intended to protect the Employer's interest in its Confidential Information
and established employee, customer and supplier relationships and goodwill,
and agrees that such restrictions are reasonable and appropriate for this
purpose. For purposes of this Agreement, the term "Competing Business"
shall mean a business which is competitive with any business which the
Employer or any of its affiliates conducts or prepares to conduct at any
time during the employment of the Employee. Notwithstanding the foregoing,
the Employee may own up to one percent (1 %) of the outstanding stock of a
publicly held corporation which constitutes or is affiliated with a
Competing Business.
(f) Third-Party Agreements and Rights. The Employee hereby confirms
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that the Employee is not bound by the terms of any agreement with any
previous employer or other party which restricts in any way the Employee's
use or disclosure of information or the Employee's engagement in any
business. The Employee represents to the Employer that the Employee's
execution of this Agreement, the Employee's employment with the Employer
and the performance of the Employee's proposed duties for the Employer will
not violate any obligations the Employee may have to any such previous
employer or other party. In the Employee's work for the Employer, the
Employee will not disclose or make use of any information in violation of
any agreements with or rights of any such previous employer or other party,
and the Employee will not bring to the premises of the Employer any copies
or other tangible embodiments of non-public information belonging to or
obtained from any such previous employment or other party.
(g) Litigation and Regulatory Cooperation. During and after the
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Employee's employment, the Employee shall cooperate fully with the
reasonable requests of the Employer in the defense or prosecution of any
claims or actions now in existence or which may be brought in the future
against or on behalf of the Employer which relate to events or occurrences
that transpired while the Employee was employed by the Employer. The
Employee's full cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to
prepare for discovery or trial and to act as a witness on behalf of the
Employer at mutually convenient times. During and after the Employee's
employment, the Employee also shall cooperate fully with the Employer in
connection with any investigation or review of any federal, state or local
regulatory authority as any such investigation or review relates to
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events or occurrences that transpired while the Employee was employed by
the Employer. The Employer shall reimburse the Employee for any reasonable
out-of-pocket expenses incurred in connection with the Employee's
performance of obligations pursuant to this Section 7(g).
(h) Injunction. The Employee agrees that it would be difficult to
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measure any damages caused to the Employer which might result from any
breach by the Employee of the promises set forth in this Section 7, and
that in any event money damages would be an inadequate remedy for any such
breach. Accordingly, subject to Section 8 of this Agreement, the Employee
agrees that if the Employee breaches, or proposes to breach, any portion of
this Agreement, the Employer shall be entitled, in addition to all other
remedies that it may have, to an injunction or other appropriate equitable
relief to restrain any such breach without showing or proving any actual
damage to the Employer.
8. Arbitration of Disputes. Any controversy or claim arising out of or
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relating to this Agreement or the breach thereof or otherwise arising out of the
Employee's employment or the termination of that employment (including, without
limitation, any claims of unlawful employment discrimination whether based on
age or otherwise) shall be settled by arbitration in the City of New York under
the auspices of the American Arbitration Association ("AAA") in accordance with
the Employment Dispute Resolution Rules of the AAA, including, but not limited
to, the rules and procedures applicable to the selection of arbitrators, except
that the arbitrator shall apply the law as established by decisions of the U.S.
Supreme Court, the Court of Appeals for the Second Circuit and the federal and
state courts of New York in deciding the merits of claims and defenses under
federal law or any state or federal anti-discrimination law, and any awards to
the Employee for violation of any anti-discrimination law shall not exceed the
maximum award to which the Employee could be entitled under the applicable (or
most analogous) federal anti-discrimination or civil rights laws. In the event
that any person or entity other than the Employee or the Employer may be a party
with regard to any such controversy or claim, such controversy or claim shall be
submitted to arbitration subject to such other person or entity's agreement.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction thereof. This Section 8 shall be specifically enforceable.
Notwithstanding the foregoing, this Section 8 shall not preclude the Employer
from pursuing a court action for the sole purpose of obtaining a temporary
restraining order or preliminary injunction pursuant to Section 7 (h); provided
that any other relief shall be pursued through an arbitration proceeding
pursuant to this Section 8. The prevailing party in any arbitration proceeding
instituted hereunder shall be entitled to recover from the other its costs and
expenses thereof, including, specifically, its reasonable attorneys' fees.
9. Consent to Jurisdiction. To the extent that any court action is
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permitted consistent with or to enforce Section 8 of this Agreement, the parties
hereby consent to the jurisdiction of the federal or state courts of New York.
Accordingly, with respect to any such court action, the Employee and the
Employer (a) submit to the personal jurisdiction of such courts; (b) consent to
service of process; and (c) waive any other requirement (whether imposed by
statute, rule of
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court, or otherwise) with respect to personal jurisdiction or service of
process.
10. Integration. This Agreement constitutes the entire agreement between
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the parties with respect to the subject matter hereof and supersedes all prior
agreements between the parties with respect to any related subject matter.
11. Assignment; Successors and Assigns, etc. Neither the Employer nor the
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Employee may make any assignment of this Agreement or any interest herein, by
operation of law or otherwise, without the prior written consent of the other
party; provided that the Employer may assign its rights under this Agreement
without the consent of the Employee in the event that the Employer shall effect
a reorganization, consolidate with or merge into any other corporation,
partnership, organization or other entity, or transfer all or substantially all
of its properties or assets to any other corporation, partnership, organization
or other entity. This Agreement shall inure to the benefit of and be binding
upon the Employer and the Employee, their respective successors, executors,
administrators, heirs and permitted assigns.
12. Enforceability. If any portion or provision of this Agreement
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(including, without limitation, any portion or provision of any section of this
Agreement) shall to any extent be declared illegal or unenforceable by a court
of competent jurisdiction, then the remainder of this Agreement, or the
application of such portion or provision in circumstances other than those as to
which it is so declared illegal or unenforceable, shall not be affected thereby,
and each portion and provision of this Agreement shall be valid and enforceable
to the fullest extent permitted by law.
13. Waiver. No waiver of any provision hereof shall be effective unless
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made in writing and signed by the waiving party. The failure of any party to
require the performance of any term or obligation of this Agreement, or the
waiver by any party of any breach of this Agreement, shall not prevent any
subsequent enforcement of such term or obligation or be deemed a waiver of any
subsequent breach.
14. Notices. Any notices, requests, demands and other communications
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provided for by this Agreement shall be sufficient if in writing and delivered
in person or sent by a nationally recognized overnight courier service or by
registered or certified mail, postage prepaid, return receipt requested, to the
Employee at the last address the Employee has filed in writing with the Employer
or, in the case of the Employer, at its main offices, attention of the Chief
Executive Officer, and shall be effective on the date of delivery in person or
by courier or five (5) days after the date mailed.
15. Amendment. This Agreement may be amended or modified only by a
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written instrument signed by the Employee and by a duly authorized
representative of the Employer.
16. Governing Law. This Agreement shall in all respects be governed by
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and construed in accordance with the laws of the State of New York, without
giving effect to the
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conflict of laws principles of such State.
17. Counterparts. This Agreement may be executed in any number of
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counterparts, each of which when so executed and delivered shall be taken to be
an original; but such counterparts shall together constitute one and the same
document.
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IN WITNESS WHEREOF, this Agreement has been executed by the Employer, by
its duly authorized officer, and by the Employee, as of the Effective Date.
McLAGAN PARTNERS, INC.
By:_________________________________________
Name:
Title:
____________________________________________
[Employee]
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