Employment Agreement - Scient Inc. and Jacques Tortoroli
November 7, 2001
Mr. Jacques Tortoroli
[Address]
Dear Jacques:
Scient, Inc. is pleased to offer you employment as Chief Financial Officer. This
position reports to the office of the President and CEO in New York City. We
anticipate your start date to be December 15, 2001. The purpose of this letter
is to describe the general terms and conditions of your employment with Scient
("Company").
JOB RESPONSIBILITIES
Your responsibilities will include all financial matters for the corporation.
The position will also include other related duties and responsibilities that
may be assigned to you by me.
COMPENSATION
Your annualized salary will be $350,000.
You are eligible to participate in the Senior Management Incentive Plan. Under
this Plan, you qualify for 60% of your base compensation (earnings). It is paid
at the end of our fiscal year based on your performance and the company's
performance. It is based on performance and revenue objectives to be determined.
The Incentive Plan award opportunities and performance metrics may be adjusted
as necessary to meet business objectives and are subject to change at
management's discretion.
We will recommend to the Board of Directors that you be awarded 1.2 million
options to purchase the Common Stock of Scient, Inc. The Exercise Price of these
options will be set when the Board, or its Committee, approves the options; this
price is the stock price on the day the options are approved. Under this special
vesting schedule, your options will vest as follows: 25% in six (6) months from
the date of grant and continuing to vest monthly thereafter for the next 24
months. The Grant Date is the day the Board or Compensation Committee of the
Board approves your options.
BENEFITS
In addition to your cash compensation, you will be eligible for benefits
commensurate with the benefits offered to all other Scient employees of a
similar status, subject to any applicable restrictions or waiting periods.
Currently, benefits are effective on the first of the month after thirty (30)
days Company service. Benefits currently include:
- Health, Dental and Vision Insurance upon payment of your contribution
- Medical and Dependent Spending Accounts (Section 125 Plan)
- 401(k) Plan
- Life, AD&D, Short and Long Term Disability Insurance
More details are available in the Summary Plan descriptions and the Guidelines
available to all colleagues on the internal intranet (called the Scient Zone).
If you have specific benefits questions, please contact me and I will facilitate
getting you the needed information.
<PAGE>
EMPLOYMENT AT WILL
This letter contains the entire understanding between you and Scient, Inc., and
supercedes any prior representations, in any form, that may have been made
regarding your prospective employment at the Company. Nothing contained in this
letter should be construed as a contract for employment, either express or
implied, with Scient, Inc. Should you accept this offer of employment from
Scient, you understand that your employment will be on an at-will basis and is
not for any fixed period of time. This means that either you or the Company can
terminate the employment relationship at any time, with or without cause. Your
at-will status can only be modified by an agreement signed by the President of
Scient, Inc.
TERMINATION OR RESIGNATION
BY THE COMPANY
In the event that Executive is terminated for reasons other than Cause,
Executive will be entitled to twelve (12) months of Executive's then-current
salary in the form of a severance payment payable on a bi-monthly basis together
with continuation of the health and welfare benefits provided to the Executive
during the Executive's employment. The foregoing severance shall be reduced or
offset by the amount of any subsequent salary from a new employer. In addition,
in the event the Executive is terminated for reasons other than Cause, vested
options resulting from one-year's forward vesting of the Executive's options,
will immediately vest. "Cause" shall mean: (A) conviction of a felony arising
from any act of fraud, misappropriation, embezzlement or material misconduct on
the Executive's part, (B) the Executive's (x) failure substantially to follow
written directives of the Company's Board of Directors, not inconsistent with
the terms of this Agreement contemplated herein, and (y) failure to correct same
within thirty (30) days after notice from a lawfully designated representative
of the Company (or lesser period, if appropriate under the circumstances as
described in the notice), or (C) the Executive's serious and willful breach of
any material provision of this Agreement or breach of any material provision of
the policies and procedures of the Company that affect generally all members of
the Company's senior management and the Executive's failure to cure same within
thirty (30) days after notice (to the extent such breach is subject to cure).
GOOD REASON
Executive may terminate employment for Good Reason or without Good Reason. "Good
Reason" means any failure by the Company to comply with any provision of this
Agreement, other than any such failure that is remedied by either of them within
thirty (30) days after receipt of notice thereof from Executive. Good Reason
includes, but is not limited to, the Company's requiring Executive to relocate
outside of a 50-mile radius of the Executive's current residence (unless agreed
to by the Executive), and any material change by the Company of the Executive's
duties, responsibilities, titles or job description in violation of this
Agreement. A termination of employment by the Executive for Good Reason shall be
effectuated by giving the Company's Board of Directors written notice ("Notice
of Termination for Good Reason") of the termination, setting forth in reasonable
detail the specific conduct of the Company that constitutes Good Reason and the
specific provision(s) of this Agreement on which the Executive relies. A
termination of employment by the Executive for Good Reason shall be effective
thirty days following the date when the Notice of Termination for Good Reason is
given; provided, that such a termination of employment shall not become
effective if the Company shall have substantially corrected the circumstance
giving rise to the Notice of Termination for Good Reason within such 30-day
period.
<PAGE>
In the event that the Executive terminates his employment for Good Reason, the
Executive will be entitled to twelve (12) months of the Executive's then-current
salary in the form of a severance payment payable on a bi-monthly basis together
with continuation of the health benefits provided to the Executive during the
Executive's employment. The foregoing severance shall be reduced or offset by
the amount of any subsequent salary from a new employer. In addition, in the
event the Executive terminates his employment for Good Reason, the greater of
(i) one-half of the total of the Executive's unvested options, or (ii) vested
options resulting from one-year's forward vesting of the Executive's unvested
options, will immediately vest. Any unvested options will be cancelled.
DEATH OR DISABILITY
The Executive's employment shall terminate automatically upon the Executive's
death during the Employment Period. The Company shall be entitled to terminate
the Executive's employment because of the Executive's Disability during the
Employment Period. "Disability" shall be defined exactly as it is defined in the
then current long-term disability insurance policy which covers the Executive.
DATE OF TERMINATION
The "Termination Date" means the date of the Executive's death, the date on
which the termination of the Executive's employment under this Agreement by the
Company for Cause or Disability, or by the Executive for Good Reason is
effective, the date on which the Company gives the Executive notice of a
termination of employment without Cause, or the date on which the Executive
gives the Company notice of a termination of employment without Good Reason, as
the case may be.
CHANGE IN CONTROL
DEFINITION
The term "Change in Control" means after the Effective Date (1) an event that
would be required to be reported by the Company in response to Item 1 of the
current report on Form 8-K, as in effect on the date hereof, pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act"); (2) any
person (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is
or becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) directly or indirectly of securities of the surviving corporation
representing 40% or more of the combined voting power of the Company's
outstanding securities; (3) individuals who are members of the Company's Board
of Directors as of the date hereof (the "Incumbent Board") cease for any reason
to constitute at least a majority thereof; or (4) consummation of a plan of
reorganization, merger, consolidation, sale of all or substantially all of the
assets of the Company or a similar transaction in which the Company is not the
resulting entity, or a transaction at the completion of which the former
stockholders of the acquired corporation become the holders of more than 40% of
the outstanding common stock of the Company; provided that the term "Change in
Control" shall not include an acquisition of securities by an employee benefit
plan of the Company or a subsidiary. For the avoidance of doubt, the term
"Change in Control" shall not include the transactions contemplated by the
Merger Agreement.
<PAGE>
EFFECT
Upon a Change in Control, Executive shall be eligible to receive any rights,
benefits and entitlements made generally available to members of senior
management of the Company as a result of a Change in Control. However, if within
one year after the Change in Control: (i) the Executive's employment is
terminated without Cause; or (ii) the Executive suffers a reduction in title or
a reduction of duties or reporting group or a material diminution of Executive's
compensation and/or compensation potential and subsequently the Executive
resigns with or without Good Reason, the Executive shall be paid an amount equal
to not less than one time his base salary, the Executive's annual target but
unpaid prorata bonus amount within 30 days after the effective date of the
Change of Control, in addition, the Executive's health benefits(medical, dental
and vision) provided to the Executive during the Executive's employment shall
continue for 12 months after the Termination Date and all of the Executive's
unvested stock options shall be accelerated and vested.
CONTINUATION
To the extent Executive is not terminated under a Change in Control, this
Agreement shall continue in full force and effect and Executive shall continue
to perform his obligations hereunder through the end of the term of this
Agreement.
STOCK OPTIONS/COMPENSATION
After a Change in Control, the greater of (i) one-half of the total of the
Executive's unvested options, or (ii) vested options resulting from one-year's
forward vesting of the Executive's unvested options, will immediately vest.
NO-OTHER REPRESENTATIONS
No representations have been made to the Executive other than those set forth in
this Agreement.
WAIVER OF BREACH
Agreement by the other party does not waive any subsequent breach by such party,
nor does the failure by either party to take action against the other party for
similar prior breaches operate as a waiver by such party of any future such
breach.
SEVERABILITY
If any provision in this Agreement is determined to be in violation of any law,
rule or regulation or otherwise unenforceable, such determination shall not
affect the validity of any other provision of this Agreement, but such other
provisions shall remain in full force and effect. Each provision, paragraph and
subparagraph of this Agreement is severable from every other provision,
paragraph and subparagraph and constitutes a separate and distinct covenant.
<PAGE>
EMPLOYMENT ELIGIBILITY
This offer of employment is contingent upon submission of satisfactory proof of
your identity and your legal authorization to work in the United States. If you
fail to submit this proof within three (3) days of your start date, federal law
prohibits us from hiring you. In addition, this offer is contingent upon
satisfactory completion of a background investigation relating to your ability
to perform satisfactorily the duties of your position. You agree to release the
Company, its employees, agents, and any individuals who may provide the Company
with information regarding your background, from any liability in connection
with providing such information.
PARTY ARBITRATION AND GOVERNING LAW
The Company and you expressly agree that any and all controversies or claims
arising out of or relating to your employment at the Company, with the exception
of enforcement of the Non-Disclosure Agreement, shall be settled by binding
arbitration in New York, New York in accordance with the Employment Arbitration
Rules of the American Arbitration Association ("AAA") after final decision
before the Review Board of Scient and/or Human resources. The arbitrator shall
be selected by agreement of the Parties or, if they cannot agree on an
arbitrator within thirty (30) days after written notice of a Party's desire to
have a matter settled by arbitration, then the arbitrator shall be selected by
the AAA. The determination reached in such arbitration shall be final and
binding on all Parties hereto without any right of appeal except as provided by
the Federal Arbitration Act. Any court of competent jurisdiction may enforce any
determination or award of the arbitrator. The parties also agree that, in the
event that the need for emergency measures of protection (including preliminary
injunction or temporary restraint proceedings) arises, the AAA Optional Rules
for Emergency Measures of Protection shall apply to the proceedings. The parties
hereby expressly waive any right to trial by jury or class treatment of any
claim, demand, action or cause of action arising out of or relating to your
employment with the company, with the exception of enforcement of the
non-disclosure agreement, provided that neither party is precluded from seeking
to compel arbitration in a state or federal court of competent jurisdiction.
CONDITIONS OF EMPLOYMENT
The conditions of this offer also require that you sign a Non-Disclosure
Agreement. This Agreement contains non-disclosure, non-solicitation and
non-compete information. We require that this Agreement be signed on or before
your first day of employment.
This offer remains open until September 29, 2001. If the terms of this offer are
acceptable, please indicate your agreement by signing, dating and returning this
letter to Bob Beck at our office at 79 5th Avenue in New York.
<PAGE>
Jacques, Scient is a Company that grows and is enriched by the contributions of
its employees; and we are looking forward to the prospect of your joining the
Scient Senior Management team. We believe that your employment with Scient will
be both personally and professionally rewarding.
Sincerely,
/s/ Christopher M. Formant
Christopher Formant
President & CEO
ACCEPTED:
/s/ Jacques Tortoroli December 2001
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SIGNATURE DATE SIGNED
December 2001 **
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