Sample Business Contracts

Employment Severance Agreement - Infonautics Corp. and Gerard J. Lewis Jr.

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         THIS AGREEMENT, dated as of November 24, 1997, is by and between 
INFONAUTICS CORPORATION, a Pennsylvania corporation, which is a subsidiary of 
collectively referred to in this Agreement as "Corporation"), and GERARD J. 
LEWIS, JR., an individual residing at 407 Shortridge Drive, Wynnewood, 
Pennsylvania 19096 ("Employee"). In consideration of the mutual promises 
contained herein, and specifically the Corporation's promise to pay Employee 
a lump-sum severance payment in accordance with the terms of this Agreement 
in the event Employee's employment is terminated without Cause (as defined 
below), which the Corporation had not previously agreed to do, Corporation 
and Employee, both intending to be legally bound, agree as follows:

         1.       Employment

                  The Corporation employs Employee as Vice President & 
General Counsel of the Corporation, and Employee hereby accepts such 
employment on the terms set forth in this Agreement.

         2.       Base Compensation

                  In consideration of the services rendered by Employee to 
the Corporation hereunder, the Corporation shall pay to Employee a base 
salary at the annual rate of $95,000 (ninety-five thousand dollars), payable 
semi-monthly or as otherwise agreed by the Corporation and Employee. 
Employee's performance and salary will be subject to periodic review.

         3.       Expenses

                  The Corporation shall reimburse Employee for all ordinary 
and necessary expenses reasonably incurred by him in carrying out his duties 
hereunder, upon presentation to the Corporation by Employee, from time to 
time, of an itemized account of such expenses together with such receipts and 
forms as are required pursuant to the Corporation's normal policies and 

         4.       Duties

                  During the term of his employment hereunder, Employee shall 
perform duties as customarily performed by a General Counsel subject to the 
discretion and control of the President of the Corporation. Employee shall 
devote his full time, energy, skill and best efforts to promote the business 
and affairs of the Corporation. Except as may otherwise be provided herein, 
Employee agrees that during his employment hereunder he will not be employed 
by, participate or engage in or be a part of in any manner, directly or 
indirectly, in the affairs of any other business enterprise or occupation 
without approval of the Corporation's Board of Directors.



         5.       At-will Employment

                  (a) Employee's employment hereunder shall be "at will" and 
either party shall have the right to terminate this Agreement at any time, 
pursuant to the following terms and conditions:

                           (i) Termination by Employee. Employee shall have the
         right to terminate his employment hereunder by providing thirty (30)
         days' prior written notice to the President of the Corporation. Upon
         the effectiveness of such notice, this Agreement shall terminate except
         for the provisions that expressly survive termination.

                           (ii) Termination by Corporation. The Corporation
         shall have the right to terminate Employee's employment by the
         Corporation at any time, with or without Cause.

                                    (A) With Cause. In the event Corporation
                  terminates Employee's employment for "Cause," this Agreement
                  shall terminate except for the provisions which expressly
                  survive termination, and Employee shall vacate the offices of
                  the Corporation. For purposes of this Agreement, "Cause" shall
                  mean (a) dishonesty, misconduct, conviction of a crime
                  involving moral turpitude, use of alcohol or drugs in such a
                  manner or to an extent that job performance is impaired, drug
                  abuse, violation of a rule of professional conduct,
                  misappropriation of funds, disparagement of the Corporation
                  (or its management or employees), or (b) failure of Employee
                  to perform or observe any of the terms or provisions of this
                  Agreement or to comply fully with the lawful directives of the
                  Board of Directors of the Corporation or any other proper
                  cause determined in good faith by the Board of Directors of
                  the Corporation; provided, however, that Employee's conduct
                  shall not constitute "Cause" within the meaning of (b) above
                  unless and until (i) the Corporation shall have provided
                  Employee with notice setting forth with specificity (A) the
                  conduct deemed to constitute such "Cause," (B) reasonable
                  action that would remedy the objectionable conduct, and (C) a
                  reasonable time (not less than 15 days) within which Employee
                  may take such remedial action, and (ii) Employee shall not
                  have taken such specified remedial action within such
                  specified reasonable time.

                                    (B) Without Cause. In the event Corporation
                  terminates Employee's employment without Cause, the
                  Corporation shall pay to the Employee in a lump sum in cash
                  within 30 days of the date of such termination an amount equal
                  to the Employee's annual base salary (gross salary less any
                  applicable withholdings) as of the termination date.
                  Notwithstanding the foregoing, payments to be provided
                  pursuant to this Section shall in all respects be conditioned
                  upon (i) the prior receipt by the Corporation from Employee of



                  general release of all claims of any nature whatsoever which
                  Employee had, has or may have against the Corporation and
                  related parties relating to his employment by the Corporation
                  (other than his entitlement under any employee benefit plan or
                  program sponsored by the Corporation in which he participated
                  and under which he has accrued a benefit) or the termination
                  thereof and (ii) continued compliance by Employee with the
                  provisions of this Agreement that expressly survive

                  (b) Excess Parachute Payments. Notwithstanding anything in
this Agreement to the contrary, if it shall be determined that any payment or
distribution by the Corporation to or for the benefit of Employee pursuant to
the terms of this Agreement or otherwise (a "Payment") would constitute an
"excess parachute payment" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), as a result of a "Change of
Control" of the Corporation as defined in Section 11 of the Corporation's 1996
Equity Compensation Plan and that it would be economically advantageous to the
Corporation to reduce the Payment to avoid or reduce the taxation of excess
parachute payments under Section 4999 of the Code, the aggregate present value
of the amounts payable or distributable to or for the benefit of Employee
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be subject to taxation under
Section 4999 of the Code. For purposes of this Paragraph 5, present value shall
be determined in accordance with Section 280G(d)(4) of the Code. The
calculations under Paragraph 5(a) shall be made as follows:

                           (i) All determinations to be made under this 
Paragraph 5(b) shall be made by the Corporation's independent public 
accounting firm (the "Accounting Firm"), which firm shall provide its 
determinations and any supporting calculations to the Corporation and 
Employee within 10 business days of the event that gives rise to the "excess 
parachute payment." Any such determination by the Accounting Firm shall be 
binding upon the Corporation and Employee. Employee shall in his sole 
discretion determine which and how much of the Agreement Payments shall be 
eliminated or reduced consistent with the requirements of this Paragraph 
5(b). Within five business days after Employee's determination, the 
Corporation shall pay (or cause to be paid) or distribute (or cause to be 
distributed) to or for the benefit of Employee such amounts as are then due 
to Employee under this Agreement.

                           (ii) As a result of the uncertainty in the 
application of Section 280G of the Code at the time of the initial 
determination by the Accounting Firm hereunder, it is possible that Agreement 
Payments will have been made by the Corporation which should not have been 
made ("Overpayment") or that additional Agreement Payments which have not 
been made by the Corporation could have been made ("Underpayment"), in each 
case, consistent with the calculations required to be made hereunder. Within 
two years after the event that gives rise to the "excess parachute payment," 
the Accounting Firm shall review the determination made by it 



pursuant to the preceding paragraph. If the Accounting Firm determines that 
an Overpayment has been made, any such Overpayment shall be treated for all 
purposes as a loan to Employee which Employee shall repay to the Corporation, 
together with interest at the applicable Federal rate provided for in Section 
7872(f)(2) of the Code (the "Federal Rate"); provided, however, that no 
amount shall be payable by Employee to the Corporation if and to the extent 
such payment would not reduce the amount which is subject to taxation under 
Section 4999 of the Code. In the event that the Accounting Firm determines 
that an Underpayment has occurred, any such Underpayment shall be promptly 
paid by the Corporation to or for the benefit of Employee, together with 
interest at the Federal Rate.

                           (iii) All of the fees and expenses of the 
Accounting Firm in performing the determinations referred to in Paragraphs 
5(b)(i) and 5(b)(ii) above shall be borne solely by the Corporation. The 
Corporation agrees to indemnify and hold harmless the Accounting Firm from 
any and all claims, damages and expenses resulting from or relating to its 
determinations pursuant to Paragraphs 5(b)(i) and 5(b) (ii) above, except for 
claims, damages or expenses resulting from the gross negligence or willful 
misconduct of the Accounting Firm.

                           (iv) The limitations of this Paragraph 5(b) shall 
only apply if payments under this Agreement are subject to Section 280G at 
the time of the Change of Control.

                  (c) This Agreement and all of Employee's rights hereunder 
shall terminate upon the death of Employee, and neither Employee nor his 
estate shall have any further rights hereunder, except for any unpaid 
compensation, unpaid benefits (including but not limited to unpaid vacation, 
if any) and expense reimbursements through the date of death and except to 
the extent otherwise provided in any applicable welfare or benefit plan of 
the Corporation in which Employee is a participant at the date of death.

                  (d) Following termination of this Agreement, neither the 
Corporation nor Employee shall direct any disparaging statements against the 
other party.

         6.   Benefits; Vacation

                  The Corporation shall provide and Employee shall be 
entitled to participate in all benefit plans and programs generally available 
to the officers of the Corporation upon their adoption and implementation. It 
is the Corporation's intention, but not its obligation, to adopt and make 
available to Employee a stock option or similar plan or plans relating to the 
Corporation or an affiliate of Corporation, all on such terms and with such 
conditions and restrictions as may be determined by the Board of Directors of 
the Corporation in its sole discretion. Employee shall be entitled to 
vacation in accordance with the Corporation's policies, to be scheduled after 
consultation with and as approved by the President of the Corporation.

         7.   Notices



                  All notices and other communication which are required or 
permitted hereunder shall be given in writing and either delivered by hand or 
mailed by certified mail, return receipt requested, postage prepaid, as 
follows or to such other address as a party may specify in a written notice 
given hereunder:

                                    (a)  If to Employee, to:

                                    Gerard J. Lewis, Jr.
                                    407 Shortridge Drive
                                    Wynnewood, PA 19096

                                    with a required copy to:

                                    Robin Sheldon, Esquire
                                    Reed Smith Shaw & McClay LLP
                                    2500 One Liberty Place
                                    1650 Market Street
                                    Philadelphia, PA 19103-7301

                                    (b)  If to the Corporation, to:

                                    Ronald A. Berg
                                    Infonautics Corporation
                                    900 West Valley Road, Suite 1000
                                    Wayne, PA  19087

                                    with a required copy to:

                                    David R. King, Esquire
                                    Morgan, Lewis & Bockius LLP
                                    2000 One Logan Square
                                    Philadelphia, PA  19103

A notice shall be effective upon receipt, or if delivery is refused, an the 
third business day after the attempted delivery.

         8.   Miscellaneous

                  (a) This Agreement shall be binding upon, inure to the 
benefit of, and be enforceable by the successors and assigns of Corporation 
and the heirs, estate, personal representatives and beneficiaries of 
Employee. The rights, obligations and duties of the Employee hereunder shall 
be personal and are not assignable or delegable by him in any manner 



                  (b) This Agreement constitutes the entire understanding of 
the parties with respect to the subject matter hereof, supersedes all prior 
discussions, promises, and representations between the parties, and shall not 
be modified, terminated or any provisions waived orally, including this 

                  (c) No failure to exercise, delay in exercising, or single 
or partial exercise of any right, power or remedy hereunder shall preclude 
any other or further exercise of the same or any other right, power or remedy.

                  (d) The headings of the paragraphs of this Agreement have 
been inserted for convenience of reference only and shall not constitute a 
part of this Agreement.

                  (e) This Agreement shall be construed and enforced in 
accordance with the laws of the Commonwealth of Pennsylvania, notwithstanding 
choice of law principles, applicable to contracts made and to be performed 
solely therein, and each party consents to the exclusive jurisdiction and 
venue of the state and Federal courts of Pennsylvania to resolve any disputes 
between the parties.

                  IN WITNESS WHEREOF, the parties have executed this 
Agreement on the date first written above.

INFONAUTICS CORPORATION                                EMPLOYEE:

By: /s/ Ronald A. Berg                                 /s/ Gerard J. Lewis, Jr.
------------------------------------                   ------------------------ 
    Name:  Ronald A. Berg                              Gerard J. Lewis, Jr.
    Title: Vice President - Finance
           and Administration