<PAGE>
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated May 31, 2000, by and
among HMG-e, INC., a New York corporation (the "Company") and wholly-owned
subsidiary of HMG WORLDWIDE CORPORATION, a New York corporation ("HMG"), Mark
Zeff Consulting Group, Inc., a New York corporation ("MZCG"), and MARK ZEFF (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Company is purchasing of all of the outstanding
shares of common stock of MZCG from the Executive, which shares (the
"Zeff Shares") are being purchased by the Company pursuant to that
certain Stock Purchase Agreement (such purchase, the "Acquisition"),
dated the date hereof (the "Purchase Agreement");
WHEREAS, pursuant to the Stock Purchase Agreement and a term
sheet delivered in connection therewith relating to the formation of a
limited liability company (the "LLC") by the Executive and an Affiliate
of the Company (the "LLC Term Sheet"), the Executive will cause The
Glade Corp., a New York corporation ("Glade"), to contribute its assets
to the LLC and the Company will contribute the sum of $10 thereto, and
the Executive and such Affiliate (the "HMG Member") will be the members
of the LLC;
WHEREAS, the Company desires that MZCG retain the services of
the Executive to manage the business of MZCG following the Acquisition,
pursuant to the terms of an employment agreement; and
WHEREAS, the execution and delivery of this Agreement,
including the Executive's agreement to the restrictive covenants
contained herein, are a condition precedent to the consummation of the
Acquisition;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements set forth herein and the mutual
benefits to be derived from this Agreement and the purchase of the Zeff
Shares, the parties do hereby agree as follows:
1. Definitions. All capitalized terms used but not defined herein shall
have the respective meanings ascribed to them, respectively, in the Purchase
Agreement.
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2. Employment.
(a) Duties.
(i) The Company shall employ the Executive as the
President of MZCG , to perform all duties and services duties
and responsibilities consistent with such position, and such
other duties and services, consistent with such position, as
may from time to time be assigned to the Executive by the
Board of Directors of MZCG, the Company and HMG.
(ii) The Executive's employment with MZCG shall be
full-time and exclusive, except that the Executive shall
devote such time to the LLC as provided for in the LLC Term
Sheet or such other LLC operating agreement as the HMG Member
and the Executive shall execute and deliver pursuant to the
terms of the LLC Term Sheet. Except as otherwise provided in
this subparagraph (ii), during the Term (as defined in Section
3 hereof), the Executive shall, except during periods of
vacation, sick leave or other duly authorized leave of
absence, devote the whole of Executive's time, attention,
skill and ability during usual business hours to the faithful
and diligent performance of the duties and responsibilities
described herein. Without any additional consideration, the
Executive acknowledges that he may, from time to time, at the
reasonable discretion of the Board of Directors of HMG (the
"HMG Board"), be required to render services similar in
function or capacity to those required of him hereunder to or
on behalf of any or all Affiliates (as defined in below) of
HMG. Unless otherwise indicated by the context, the term
"Company" shall include the Company and all of its Affiliates.
The term "Affiliates" shall mean all entities, controlling,
controlled by, or under common control with HMG at any time
during the Term.
(b) Place of Performance. In connection with his employment by
MZCG, the Executive shall be based at the Company's offices located in
New York City, New York, except for required travel on business for
MZCG or the Company.
3. Term. The term of the Executive's employment hereunder shall have
commenced effective as of January 1, 2000 (the "Commencement Date"), shall
continue for a period of three years and end on December 31, 2002, unless sooner
terminated in accordance with the provisions hereof (the "Term").
4. Compensation.
(a) Base Salary. During the Term, the Executive shall be
entitled to receive an annual base salary (the "Base Salary") of Two
Hundred Fifty Thousand Dollars ($250,000), payable in installments at
such times as the Company customarily pays its other senior executive
employees, but in no event less than bi-monthly.
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(b) Payment of 2000 Base Salary. The Executive's Base Salary
for the calendar year 2000 shall be payable as follows: MZCG shall pay
the Executive one year's Base Salary for the period from the
Commencement Date through December 31, 2000, less (i) the sum of
Seventy Thousand Dollars ($70,000) or such other sum as shall have been
paid by MZCG to the Executive as compensation from the Effective Date
through the date hereof (the "2000 Distributed Salary") and (ii) the
amount of all New York City, State and Federal withholding taxes and
all F.I.C.A. and Medicare due with respect to the 2000 Distributed
Salary (collectively, "Withholding Taxes"). MZCG shall pay the
Withholding Taxes payable with respect to the 2000 Distributed Salary.
No later than the date on which the Company shall have paid the second
installment of salary to its other senior executive employees following
the date hereof, the Company shall pay or cause MZCG to pay the
Executive the difference, if any, between (A) the amount of the Base
Salary accrued to the date hereof for the 2000 calendar year and (B)
the sum of the 2000 Distributed Salary and the Withholding Taxes
thereon.
(c) Expense Allowance. The Executive shall have the right, by
notice given to MZCG and the Company at any time during the Term, to
require MZCG to apportion up to an aggregate of $50,000 of the
Executive's Base Salary for any calendar year for use as an expense
allowance.
(d) Membership in Access Group. Effective as of the
Commencement Date, the Executive shall be deemed to be a member of the
HMG Access Group, which membership will entitle the Executive to
receive commissions for bringing business to HMG which is new to its
core businesses and unrelated to the business of MZCG or the LLC. The
amount and rate of such commissions shall be negotiated by HMG and the
Executive on a case-by-case basis.
(e) Incentive Compensation. As an incentive to the Executive
to expand the business of MZCG and increase its profitability, MZCG
hereby agrees to grant to the Executive, for each calendar year of the
Term, the cash incentive compensation set forth below for such year
("Incentive Payments") and HMG hereby agrees to grant to the Executive
options to purchase the number of shares of HMG Stock set forth below
for such year ("Incentive Options"), based on the aggregate net profits
of MZCG; provided, however, that no Incentive Payment shall be payable
or Incentive Options granted to the Executive for any such year unless
the "Minimum Net Profit" of MZCG set forth below for such year is
achieved:
<TABLE>
<CAPTION>
Minimum
Year Net Profit Incentive Payments and Options
---- ---------- ------------------------------
<S> <C> <C>
2000 $500,000 $60,000, plus 8% of the net profit in excess
of $500,000 and options to purchase 50,000
shares of HMG Stock
</TABLE>
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<TABLE>
<S> <C> <C>
2001 $720,000 $72,000, plus 8% of the net profit in excess
of $720,000 and options to purchase 50,000
shares of HMG Stock
2002 $840,000 $84,000, plus 8% of the net profit in excess
of $840,000 and options to purchase 50,000
shares of HMG Stock
</TABLE>
The exercise price per share of any Incentive Options granted
hereunder shall be the fair market value thereof on the date of grant
as determined by the HMG Board. Except as otherwise expressly provided
in Section 7 hereof, the Incentive Options granted pursuant to this
paragraph (e) shall be employee stock options and shall have such other
terms and conditions as are set forth in the applicable HMG stock
option plan(s) pursuant to which such Options are granted. The term,
"net profit," as used in this paragraph (e) with respect to any year,
shall mean the income of MZCG before taxes and amortization of good
will and/or expenses attributable to the Acquisition for such year, as
calculated in accordance with generally accepted accounting principles
consistently applied by HMG's independent certified public accountants,
in a manner consistent with the financial information, as audited by
such accountant, with respect to MZCG incorporated in the consolidated
financial statements of HMG and its subsidiaries for such year.
(i) Except as otherwise expressly provided in Section
7(f) of this Agreement, the Executive's right to receive an
Incentive Payment and Incentive Options for any of the years
set forth above is contingent upon the Executive's continuing
as a full-time employee of MZCG throughout such year.
(ii) The Incentive Payment due for each year of the
Term as provided above shall be paid by MZCG to the Executive
and the Incentive Options due for each such year as provided
above shall be issued by HMG to the Executive no later than
thirty (30) days following the date of filing with the
Securities and Exchange Commission of HMG's annual report on
Form 10-K for such year (the "Incentive Payment Date").
5. Health Insurance and Other Benefits. During the Term, the Executive
shall be a member of the HMG Access Group and will thereby entitled to all
employee benefits offered by HMG to its executives and key management employees
generally, including, without limitation, all pension, profit sharing,
retirement, bonus, vacation, deferred compensation, disability insurance,
hospitalization insurance, major medical insurance, medical reimbursement,
survivor income, life insurance or any other benefit plan or arrangement
established and maintained by the Company or HMG, subject to the rules and
regulations then in effect regarding participation therein, and in accordance
with the internal policies of the Company or HMG.
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6. Reimbursement of Expenses. The Executive shall be reimbursed for all
reasonable amounts for items of travel, entertainment and miscellaneous expenses
that the Executive incurs in connection with the performance of his duties
hereunder, provided that the Executive submits to the Company such statements
and other evidence supporting said expenses as the Company may reasonably
require. Notwithstanding the foregoing, the Executive must receive the written
approval of the Chief Financial Officer or Chief Executive Officer of HMG before
incurring any (a) single expense or (b) group of related expenses, in either
case in excess of $5,000.
7 Termination of Employment. MZCG shall have the right to terminate the
Executive's employment hereunder with or without Cause (as defined below).
(a) Termination for Cause.
(i) MZCG shall have the right to terminate the
Executive's employment hereunder, at any time during the Term, under
any of the circumstances set forth in this paragraph (a) of this
Section 7 upon giving notice to the Executive, which notice shall set
forth the "Cause" which is the basis of such termination. Except as
otherwise expressly provided in this Section 7, (A) upon termination of
the Executive's employment for Cause, neither of MZCG, HMG nor the
Company shall have any further obligation to the Executive hereunder,
except for the (1) payment of any unpaid Base Salary pro-rated through
the date of termination and (2) any benefits accrued and expenses
reimbursable to such date and (B) except as otherwise expressly
provided in clause (A) of this subparagraph (i), or paragraph (c) of
this Section 7, the Executive's termination for Cause shall be
effective on the date on which notice thereof is given to the
Executive;
(ii) "Cause" shall mean termination upon the
occurrence of any of the following:
(A) the Executive's failure or refusal for any reason
(other than his death or Total Disability to perform his
material duties under this Agreement, provided, however, that
this Agreement shall not be terminated pursuant to this
subparagraph (A) unless MZCG first provides the Executive with
written notice of demand to cure, but only in the event that
such failure or refusal is, in the commercially reasonable
business judgment of MZCG, capable of being cured; such notice
of demand to cure shall specify the acts or omissions that
allegedly constitute the Executive's failure or refusal to
perform his duties and a reasonable opportunity to cure such
failure or refusal, which opportunity shall not exceed a
period of thirty (30) days following the giving of notice of
demand to cure; in such event, if such failure or refusal is
not cured by the Executive by the 30th day following the
giving of notice of demand to cure, the Executive's employment
hereunder shall terminate upon such 30th day. Anything
contained herein to the contrary notwithstanding, if MZCG
gives the Executive a notice of demand to
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cure pursuant to this subparagraph, and the Executive cures
within the prescribed time period, MZCG shall not be obligated
to give the Executive the right to cure his failure or refusal
to perform his duties on any subsequent occasion during the
Term as a condition to termination the Executive's employment
hereunder or for any other purpose. Upon such subsequent
failure or refusal, MZCG shall give written notice to the
Executive, and the Executive's employment hereunder shall
terminate immediately upon the 30th day following the giving
of such notice.
(B) the Executive's breach of his fiduciary duty (1)
as an officer and/or director of MZCG or (2) to the Company;
(C) the Executive's conviction of (1) any misdemeanor
that involves dishonesty and, in the reasonable determination
of the Board of Directors of MZCG, harms the material
interests of MZCG, or the Company, HMG or any of their
respective Affiliates; or (2) any felony;
(D) the Executive's possession or use of illegal
drugs, or excessive use of alcohol on the premises of MZCG,
the Company or HMG or at a work-related function at any
location;
(E) conduct by the Executive that materially harms
the reputation or goodwill of MZCG, or the Company, HMG or any
of their respective Affiliates or that otherwise materially
undermines the best interests of MZCG, or the Company, HMG or
any of their respective Affiliates or any of their respective
officers or directors; anything contained herein to the
contrary notwithstanding, in no event shall any action taken
by the Executive in good faith to enforce his rights under
this Agreement, the Purchase Agreement or the LLC Term Sheet
or the LLC operating agreement to be entered into by the
Executive and the HMG Member pursuant to the terms of the LLC
Term Sheet and the Purchase Agreement (the "LLC Agreement") be
considered to be conduct by the Executive that materially
harms the reputation or goodwill or that otherwise materially
undermines the best interests of either MZCG, the Company, HMG
or any of their respective Affiliates;
(F) the Total Disability (as defined below) of the
Executive for 60 or more days during any period of 180
consecutive days during the Term. The term "Total Disability,"
as used in this Agreement, shall mean a mental or physical
condition that in the reasonable opinion of the insurance
carrier which provides the disability insurance on behalf of
the HMG, the Company or MZCG covering the Executive renders
the Executive unable or incompetent to carry out the material
duties and responsibilities of the Executive under this
Agreement;
(G) the Executive's death;
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(H) the Executive's breach of any of the covenants
contained in Section 8 hereof; and
(I) any event which results in an automatic, 50%
reduction in the membership interest of the Executive in the
LLC pursuant to the LLC Term Sheet or the LLC Agreement.
(b) Payments to Executive Upon Termination for Cause. Except
as otherwise provided in paragraph (c) of this Section 7, in the event
that the Executive is terminated for Cause under this Agreement, MZCG
shall pay the Executive the Base Salary and any and all finders' fees
or benefits accrued and unpaid to the date of termination and
reimbursement of expenses incurred by the Executive to the date of
termination pursuant to Sections 4, 5 and/or 6 hereof, respectively;
and neither MZCG, the Company nor HMG shall have any further obligation
to make any payments to the Executive under this Agreement.
(c) Certain Provisions In Event of Total Disability or Death
of Executive. Anything contained in this Section 7 to the contrary
notwithstanding: (i) in the event of termination owing to the
Executive's Total Disability, the Executive's employment hereunder
shall not terminate until the 30th day following the giving of notice
of termination, which notice shall be accompanied by a copy of the
determination of the insurance carrier regarding the Executive's
disability; (ii) in the event of the Executive's death during the Term,
termination of his employment hereunder shall be effective on the date
of death; and (iii) payment of any Base Salary, finders' fees or
benefits accrued and unpaid to the date of termination and
reimbursement of expenses incurred by the Executive pursuant to
Sections 4, 5 and/or 6 hereof and unpaid, respectively, up until the
occurrence of a Total Disability, or to the date of death upon the
death of the Executive, shall be made to the Executive or his personal
representative, as the case may be, net of disability and/or life
insurance benefits payable to the Executive or his personal
representative as a consequence of the Executive's Total Disability or
death pursuant to any policy or policies of insurance maintained by
either MZCG, the Company or HMG for such purpose, it being understood
that any key man life insurance purchased by MZCG, the Company or HMG
on the life of the Executive shall be payable solely to the purchaser
or the beneficiary or beneficiaries named in such policy.
(d) Termination Without Cause. MZCG may terminate the
Executive's employment hereunder without Cause at any time by giving
the Executive notice of termination stating the effective date of such
termination, which date shall be not less than [forty-five] ([45]) days
following the date on which such notice is given. If the Executive's
employment is terminated by MZCG other than for Cause, then MZCG shall
pay the Executive an amount equal to the balance of the Base Salary and
pay the Executive, finders' fees or benefits accrued and unpaid and
reimbursement of expenses incurred by the Executive pursuant to
Sections 4, 5 and 6 hereof and unpaid through the
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date of termination, plus one full year's Base Salary ($250,000). Such
amount ($250,000) shall be payable over the course of year following
the date of termination at such times as the Company customarily pays
its other senior executive employees. In the event of the Executive's
termination by MZCG without Cause, the Executive shall also be entitled
to receive the Incentive Payment and Incentive Options as provided in
paragraph (f) of this Section 7. MZCG's obligation to make payments
under this paragraph (d) and/or paragraph (f) of this Section 7 shall
immediately cease upon the Executive's breach of any of the covenants
contained in Section 8 hereof or the automatic reduction by 50% of his
membership interest in the LLC pursuant to the terms of the LLC Term
Sheet or the LLC Agreement.
(e) Termination by the Executive. The Executive may
terminate his employment by MZCG under this Agreement as follows:
(i) voluntarily at any time during the Term, for any
reason other than the material breach of this Agreement by
MZCG (as described in subparagraph (ii) of this paragraph
(e)), by giving written notice of termination to MZCG and the
Company of his intention to so terminate stating the effective
date of such termination, which date shall be not less than
thirty (30) days following the date on which such notice is
given. Upon the Executive's termination of his employment
pursuant to this subparagraph (i), the sole obligation of
MZCG, the Company and HMG to the Executive shall be to pay the
Executive all accrued and unpaid Base Salary and benefits, if
any, to the date of termination.
(ii) in the event of a material breach by MZCG
(whether intentional, reckless or the result of gross
negligence) of any of its material obligations under this
Agreement (a "Material Breach by MZCG"), provided, however,
that this Agreement shall not be terminated pursuant to this
subparagraph (ii) unless the Executive first provides MZCG and
the Company with written notice of demand to cure; and such
notice of demand to cure shall specify the acts or omissions
that allegedly constitute the Material Breach by MZCG and a
reasonable opportunity to cure such Breach, which opportunity
shall not be less than thirty (30) days following the giving
of notice of demand to cure; if such Material Breach by MZCG
is not cured by the 30th day following the giving of notice of
demand to cure by the Executive, the Executive's employment
hereunder shall terminate upon such 30th day. If the
Executive's employment is terminated pursuant to this
subparagraph (ii), then MZCG shall pay the Executive all
accrued and unpaid Base Salary to the date of termination and
all other sums due and owing at the date of termination
pursuant to Sections 4, 5 and 6 hereof plus one year's Base
Salary ($250,000). Such amount ($250,000) shall be payable at
such times as the Company customarily pays its other senior
executive employees. In the event the Executive terminates
this Agreement in the event of a material breach by MZCG in
compliance with the terms of this paragraph (e)(ii), the
Executive shall also be
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entitled to receive the Incentive Payment and Incentive
Options as provided in paragraph (f) of this Section 7. The
obligation of MZCG to make payments to the Executive under
this subparagraph (ii) and/or paragraph (f) of this Section 7
shall immediately cease upon the Executive's breach of any of
the covenants contained in Section 8 hereof or the automatic,
50% reduction of his membership interest in the LLC pursuant
to the terms of the LLC Term Sheet or the LLC Agreement.
(f) Additional Payments Upon Termination Without Cause or
Termination by Executive. In the event that the Executive's employment
hereunder is terminated by MZCG without Cause or the Executive
terminates his employment hereunder pursuant to clause (ii) of
paragraph (e) of this Section 7, MZCG shall make the following
additional payment(s) to the Executive:
(i) on the Incentive Payment Date for the calendar
year in which such termination occurs, the full amount of the
Incentive Payment and the Incentive Options for such calendar
year, if any, to which the Executive would otherwise have been
entitled under Section 4(e) hereof had he remained employed by
MZCG hereunder through and including the last day of such
calendar year; plus
(ii) on the Incentive Payment Date for the calendar
year next following the year in which such termination occurs:
(A) the amount derived by multiplying (1) the Incentive
Payment, if any, to which the Executive would otherwise have
been entitled under Section 4(e) hereof had he remained
employed by MZCG hereunder through and including the last day
of such next following calendar year by (2) a fraction, the
numerator of which is the number of days from January 1 of
such year through and including the date of the first
anniversary of the Executive's termination and the denominator
of which is 365 (the "Fraction"); and (B) the number of
Incentive Options derived by multiplying 50,000 by the
Fraction; provided, however, that any Incentive Options
issuable to the Executive pursuant to this paragraph (f) shall
not be employee stock options and shall not be issuable upon
the Executive's death subsequent to the termination of this
Agreement.
No payments shall be due from MZCG to the Executive under
clause (i) or (ii) hereof, (A) for any calendar year following the
calendar year 2002 or (B) for any calendar year in which MZCG does not
achieve the Minimum Net Profit for such year, as set forth in Section 4
hereof.
(g) Full and Final Payment. In the event of termination of
this Agreement for any reason, the payments, if any, required to be
made to the Executive pursuant to this Section 7 shall be in full and
complete satisfaction of any and all obligations owing to the Executive
pursuant to this Agreement, but such payments shall not abrogate or
otherwise affect any registration rights the Executive may have with
respect to securities pursuant to the terms of the Purchase Agreement.
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8. Restrictive Covenants; Work Product.
(a) Certain Definitions. The following capitalized terms, as
used herein, shall have the meanings set forth below:
(i) "Non-Compete Period" shall mean the period
commencing on the date of the first to occur of (A) the last
day of the three-year Term of this Agreement or (B) its
earlier termination and ending either on the date which is (1)
the first anniversary of the date of such last day of the Term
or earlier termination (the "One-Year Non-Compete Period") or
(2) the second anniversary of the date of such last day of the
Term or earlier termination (the "Two-Year Non-Compete
Period").
(ii) "Employer Confidential Information" shall mean
any information relating in any way to the business of HMG,
the Company, MZCG and/or any of their respective Affiliates as
now conducted or hereafter conducted during the Non-Compete
period, which information is disclosed or known to the
Executive as a consequence of, result of, or through his
affiliation with the Company and/or HMG or his conduct of the
business of MZCG, Glade and/or the LLC, which information
consists of technical or non-technical information about the
products, processes, programs, concepts, forms, business
methods, data, any and all financial or accounting data,
marketing, customer lists or other information about
customers, suppliers, or services and information
corresponding thereto of the Company, HMG , MZCG, the LLC or
any of their respective Affiliates acquired by the Executive
at any time prior up to and including the last day of the Non-
Compete Period. Employer Confidential Information shall not
include any of such items that are published without violation
by the Executive of the terms of this Section 8 or are
otherwise part of the public domain or freely available from
trade sources or otherwise other than as the result of any
violation by the Executive of the provisions of this Section
8.
(b) Non-Compete. As a material inducement to the Company, HMG
and MZCG to enter into this Agreement and to perform the transactions
contemplated hereby, the Executive undertakes and agrees that, except
as otherwise provided in the LLC Agreement, he shall not, directly or
indirectly, (i) compete or participate as a director, officer,
employee, consultant, agent, representative or otherwise or as (A) the
holder of more than 5% of the equity securities of any Person, (B) a
partner or (C) a joint venturer, (ii) have any direct or indirect
financial interest, including, without limitation, the interest of a
creditor, in any business competing directly with the business of (1)
the Company, HMG, MZCG (to the extent of any business of MZCG other
than architectural or interior design) or any of their respective
Affiliates at any time during the Two-Year Non-Compete Period or (2)
MZCG, to the extent the business of MZCG consists of architectural or
interior design at any time during the One-Year Non-Compete Period, in
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either case within a radius of two hundred (200) miles of any office of
the Company, HMG, or MZCG or any of their respective Affiliates
existing at any time during the applicable Non-Compete Period. Anything
contained in this paragraph (b) to the contrary notwithstanding, the
Executive shall have the right to compete with the architectural and/or
interior design business of MZCG following termination of this
Agreement prior to the expiration of the Term hereof if this Agreement
is so terminated by MZCG without cause or by the Executive on account
of a material breach of any material representation or covenant as
provided in Section 7(e)(ii) hereof.
(c) Use of Name. Following the One-Year Non-Compete Period,
the Executive shall not use the name, Mark Zeff Consulting Group or any
confusingly similar name in the conduct of any business that competes
with any business of the Company, HMG, MZCG and/or any of their
respective Affiliates, except as otherwise expressly provided in the
LLC Term Sheet or the LLC Agreement.
(d) Non-Solicitation. The Executive further undertakes and
agrees that he shall not, at any time during the Two-Year Non-Compete
Period, directly or indirectly, employ, cause to be employed or solicit
for employment any employee of or consultant to the Company, MZCG, HMG
or any of their respective Affiliates or induce or attempt to induce
any customer of or supplier to the Company, MZCG, HMG, or the LLC or
any of their respective Affiliates to cease conducting business with
any of the Company, MZCG, HMG or the LLC or any of their respective
Affiliates.
(e) Non-Disclosure. The Executive shall (i) not, at any time,
directly or indirectly, disclose to any Person, for any reason, or use
for his personal benefit, any Employer Confidential Information, (ii)
at all times take all precautions necessary to protect from loss or
disclosure by him of any and all documents or other information
containing, referring or relating to any Employer Confidential
Information, (iii) promptly return to the Company any and all documents
or other tangible property containing, referring or relating to any
Employer Confidential Information, whether prepared heretofore or
hereafter by or on behalf of any of MZCG, Glade, the Company, HMG, any
of their respective Affiliates, the Executive or any other Person.
Notwithstanding any provision to the contrary contained in this
paragraph (e), this paragraph shall not apply to (A) disclosure of
Employer Confidential Information as required by legal process regular
on its face (including, without limitation, by subpoena or discovery
requirement, (B) disclosure of any information which has become part of
the public domain or is otherwise publicly disclosed, in either case
through no fault or action of the Executive, or (C) use (but not
disclosure) by the Executive of any Employer Confidential Information
to the extent related to any business he conducts in competition with
MZCG without violation of this Section 8. The parties hereby expressly
acknowledge and agree that use by the Executive of Employer
Confidential information permitted by clause (C) of this paragraph (e)
shall apply where the Executive competes with the architectural or
interior
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design business of MZCG as permitted by the last sentence of paragraph
(b) of this Section 8.
(f) Work Product. The Executive agrees that any and all ideas,
innovations, inventions, improvements, developments, methods, designs,
analyses, drawings, reports and all similar or related information
which relates to the business of MZCG, the Company, HMG or any of their
respective Affiliates or any business which any of them has taken
significant action to pursue and which are conceived, created,
developed or made by the Executive at any time prior to the date of
this Agreement or thereafter while employed by or an officer or
director of MZCG, the Company, or HMG (all of the foregoing, "Work
Product"), belong to MZCG, the Company, or HMG, respectively. The
Executive shall promptly disclose all such Work Product to the Board of
Directors of MZCG and perform all actions reasonably requested by such
Board of Directors (whether during or after expiration of the term of
this Agreement) to establish and confirm such ownership (including,
without limitation, assignments, consents, powers of attorney and other
instruments) as each such Board of Directors in its sole discretion
deems necessary, provided, however, that anything contained in this
paragraph (f) to the contrary notwithstanding, that the rights of the
parties in and to any products using the "Zeff Brand" shall be subject
to the terms of the LLC Term Sheet and the LLC Agreement.
(g) Scope of Covenants. Should the duration, geographic area
or range of proscribed activities contained in any provision of this
Section 8 be held to be too great, too large or too long by any court
of competent jurisdiction, then such duration, geographical area or
range of proscribed activities shall be modified to such degree as is
required to make it or them reasonable and enforceable. The Executive
acknowledges that the restrictive covenants contained in this Section 8
are reasonable in view of the transactions contemplated hereby and the
Executive's receipt of substantial compensation hereunder.
(h) Enforcement. The Executive acknowledges and agrees that
entering into and performing under this Agreement and the observance of
the restrictive covenants set forth in this Section 8 are additional
consideration for MZCG, the Company and HMG to enter into this
Agreement, and that in the event of the breach by the Executive of any
of the covenants contained in this Section 8, MZCG, the Company, HMG
and/or their respective Affiliates will suffer substantial and
irreparable harm which are not readily ascertainable or compensable in
money damages. The Executive therefore agrees that the provisions of
this Section 8 shall be construed as an agreement independent of the
other provisions of this Agreement and any other agreement, and that
MZCG, the Company, HMG and their respective Affiliates, in addition to
any other remedies (including damages) provided by law, shall have the
right and remedy to have each of the provisions of this Section 8
specifically enforced by any court having equity jurisdiction hereof or
thereof. The rights and remedies set forth in this paragraph (h) shall
be in addition to, and
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not in lieu or derogation of, any other rights or remedies available to
the Company, HMG, MZCG and/or any of their respective Affiliates at law
or in equity.
(i) Effect of Termination on Restrictive Covenants. Anything
contained in this Agreement to the contrary notwithstanding, upon
termination of the Executive's employment hereunder for any reason, the
restrictive covenants contained in Section 8 hereof shall continue in
full force and effect during the applicable Non-Compete Period (as
defined therein); provided, however, that if the Executive's employment
is terminated pursuant to Section 7(d) or Section 7(e)(ii) hereof, then
the Executive shall have the right to compete with MZCG in the
architectural and interior design business and the provisions of
Section 8(b) hereof shall not apply to such competition, and the
provisions of Section 8(e) hereof shall not apply to the use of
Employer Confidential Information related solely to such business to
the extent that such use is necessary in order for the Executive to
compete with MZCG to the extent that such competition is expressly
permitted by this Section 8.
9. Key Man Insurance. In the event that MZCG, the Company or HMG elect
to obtain insurance on the life of the Executive naming any of MZCG, the Company
and/or HMG as the beneficiaries, the Executive shall make himself available as
necessary to assist any of MZCG, the Company and/or HMG in obtaining such life
insurance policy. Either the Company, any of MZCG and or HMG shall pay the
premiums on any such insurance policy as they become due, and such policy shall
be the sole and absolute property of the Company or any of MZCG, as the case may
be. Any proceeds received by any of the Company, MZCG or HMG under any insurance
policies owned by such entity or entities on the life of the Executive due to
his death shall be paid to and used by such beneficiaries in such manner as may
be determined by them in its or their sole discretion.
10. Miscellaneous.
(a) Notices. Any notice, demand or other communication
required or permitted to be given under this Agreement shall be in
writing and shall either be hand-delivered to the party for whom
intended, or mailed to such party at the address set forth below for
such party (or any other address designated by such party by notice
given pursuant to the provisions of this paragraph 10(a) by both (i)
first class and (ii) registered or certified mail, return receipt
requested, or sent by express mail or nationally recognized courier
service for next business day delivery to such address, or by facsimile
transmission if such party has designated a facsimile number below as
part of such party's address. Notice shall be deemed to have been given
and received when so hand-delivered, three (3) business days after
being so mailed, on the date sent by facsimile transmission with
written confirmation or one (1) business day after being sent by such
express mail or courier service if properly addressed to the party for
whom intended. The addresses for notice to the parties are:
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If to MZCG, to:
Mark Zeff Consulting Group, Inc.
475 Tenth Avenue
New York, NY 10018
Facsimile No.: (212) 564-3395
Attention: Andrew Wahl
With a copy sent simultaneously to:
Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, NY 10017
Attention: Herbert F. Kozlov, Esq.
If to the Company, to:
HMG-e, Inc.
475 Tenth Avenue
New York, NY 10018
Facsimile No.: (212) 564-3395
Attention: Chairman of the Board
With a copy sent simultaneously to:
Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, NY 10017
Attention: Herbert F. Kozlov, Esq.
If to HMG, to:
HMG Worldwide Corporation
475 Tenth Avenue
New York, NY 10018
Facsimile No.: (212) 564-3395
Attention: Chairman of the Board
With a copy sent simultaneously to:
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Parker Duryee Rosoff & Haft
529 Fifth Avenue
New York, NY 10017
Facsimile No.: (212) 972-9487
Attention: Herbert F. Kozlov, Esq.
If to the Executive, to:
Mark Zeff
260 West 72nd Street
Apt. 12B
New York, NY 10023
With a copy sent simultaneously to:
Maloney Mehlman & Katz
405 Lexington Avenue, 43rd Floor
New York, NY 10174
Facsimile No.: (212) 972-0111
Attention: Barry T. Mehlman, Esq.
The foregoing addresses may be changed at any time by notice given in
the manner provided in this paragraph 10(a).
(b) Integration; Modification. This Agreement, together with
any other agreement specifically referenced herein and in such case
only to the extent of such reference, constitute the entire
understanding and agreement among the parties hereto regarding the
subject matter hereof and supersede all other prior or contemporaneous
negotiations and agreements, whether oral or written, among the parties
with respect to such subject matter. This Agreement may not be modified
except by a written agreement signed by the Executive and a duly
authorized officer of each of the other parties hereto.
(c) Enforceability. If any provision of this Agreement shall
be invalid or unenforceable, in whole or in part, such provision shall
be deemed to be modified or restricted to the extent and in the manner
necessary to render the same valid and enforceable, or shall be deemed
excised from this Agreement, as the case may require, and this
Agreement shall be construed and enforced to the maximum extent
permitted by law as if such provision had been originally incorporated
herein as so modified or restricted, or as if such provision had not
been originally incorporated herein, as the case may be.
(d) Survival. The provisions of Section 8 hereof shall survive
the termination of this Agreement except to the extent expressly
provided to the contrary in said Section 8.
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(e) Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties, including their respective heirs,
executors, successors and assigns, except that this Agreement may not
be assigned by the Executive.
(f) Waiver of Breach. No waiver by any party of any condition
or of the breach by any other party of any term or covenant contained
in this Agreement, whether such waiver is by conduct or otherwise, in
any one (1) or more instances shall be deemed or construed as a further
or continuing waiver of any such condition or breach or a waiver of any
other condition or of the breach of any other term or covenant set
forth in this Agreement. Moreover, the failure of either party to
exercise any right hereunder shall not bar any other or further
exercise thereof.
(g) Governing Law. This Agreement has been prepared,
negotiated and delivered in the State of New York and shall be governed
by and construed in accordance with the laws of said State without
giving effect to the principles thereof relating to the conflict of
laws.
(h) Definition of Person. The term "Person," as used in this
Agreement, shall mean any natural person or individual and any
corporation, partnership, company, firm, association, trust, sole
proprietorship or any other entity or organization, including, without
limitation, any government (whether federal, state, local or other
political subdivision, or any agency, bureau or instrumentality of any
of them).
(i) Headings. The headings of the various sections and
paragraphs hereof have been included herein for convenience of the
parties only and shall not be considered in interpreting this
Agreement.
(j) Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original and
all of which, together, shall constitute one and the same document.
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(k) Due Authorization. Each of MZCG, the Company and HMG
represents that all corporate action required to authorize the
execution, delivery and performance of this Agreement has been duly
taken.
IN WITNESS WHEREOF, this Employment Agreement has been executed by
the parties hereto on this 31st day of May, 2000.
MARK ZEFF CONSULTING HMG-e, INC.
GROUP, INC.
By: ______________________ By: ______________________
Name: ____________________ Name: ____________________
Title: _____________________ Title: ____________________
HMG WORLDWIDE CORPORATION EXECUTIVE:
By: ______________________ ___________________________
MARK ZEFF
Name: ___________________
Title: ____________________
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