Employment Agreement - Jose Ferreira





	



EMPLOYMENT AGREEMENT 




        EMPLOYMENT
AGREEMENT (this “Agreement”), dated as of September 24, 2003, by and
between Eos International, Inc., a Delaware corporation, with its office located at
888 Seventh Avenue, 13th Floor, New York, New York 10106 (the
“Company”), and Jose Ferreira, Jr. with an address at 73 Turning
Mill Lane, New Canaan, Connecticut 06840 (“Executive”). 



R E  C  I  T  A  L  S: 



        WHEREAS,
the Company desires to employ Executive as its President and Chief Executive Officer, and
Executive desires to serve the Company in such capacities on the terms and conditions
hereinafter set forth. 



        NOW,
THEREFORE, it is agreed as follows: 



1.          DEFINITIONS  



               
As used in this Agreement, the following terms shall have the meanings set forth below:  



               
1.1     “2003 Plan” shall mean the Eos International, Inc. 2003 Deferred Compensation Plan.  



               
1.2     “Affiliate”shall mean a corporation which, directly or indirectly, controls, is controlled by or is under
common control with the Company, and for purposes hereof, “control” shall
mean the ownership of 20% or more of the Voting Stock of the corporation in question.  



               
1.3     “Agreement” shall
have the meaning assigned to such term in the Preamble to this Agreement.  



               
1.4     “Approved Activities” shall have the meaning assigned to such term in Section 2.2 of
this Agreement.  



               
1.5     “Basic Salary” shall have the meaning assigned to such term in Section 5.1 of
this Agreement.  



               
1.6     “Board” shall mean the Board of Directors of the Company as duly constituted from time to time. Any
action of the Board hereunder with respect to this Agreement shall require the approval
of a majority of the whole Board.  



               
1.7     “Bonus” shall have the meaning assigned to such term in Section 5.2 of this Agreement.  



               
1.8     “Business” shall mean the  business  conducted  by the  Company or any  Subsidiary,  directly or
indirectly.  


















	




               
1.9     “Cause”shall
mean any of the following:  



                         
(a)     The conviction of Executive for a felony under federal law or a felony under the
          law of the State of Connecticut or an equivalent violation under the law of any
          other jurisdiction within the United States, or the willful commission by
          Executive of a criminal act or other act not in the course of the conduct by
          Executive of the Duties that in the reasonable judgment of the Board causes or
          will likely cause substantial economic damage to the Company or substantial
          injury to the business reputation of the Company;  



                         
(b)      The commission by Executive of an act of fraud in the conduct of Executive’s duties on behalf of the Company;  



                         
(c)      The continuing willful failure of Executive to conduct the substantive duties of
          Executive to the Company (other than any such failure resulting from
          Executive’s incapacity due to physical or mental illness) after written
          notice thereof (specifying the particulars thereof in reasonable detail) and a
          reasonable opportunity to be heard and cure such failure are given to Executive
          by the Compensation Committee of the Board;  



                         
(d)      The order of a federal or state regulatory agency or a court of competent
jurisdiction requiring the termination of Executive’s employment
hereunder; or  



                         
(e)      The commission by the Executive of an action involving moral turpitude which the
          Board determines in good faith will have a material adverse effect on the
          Company.  



                         
For purposes of this Section 1.9, no act, or
failure to act, on Executive’s part shall be considered “willful” unless
done, or omitted to be done, by him not in good faith and without reasonable belief that
his action or omission was in the best interests of the Company or a Subsidiary.  



               
1.10      “Change of Control” shall mean:  



                         
(a)      any “person” (as such term is used in Sections 13(d) and 14(d)           of
the Securities Exchange Act of 1934, as amended (the           “Act”)),
other than a trustee or other fiduciary holding           securities under an employee
benefit plan of the Company, any person or           “group” (as such
term is used in Regulation D-G of the           Securities and Exchange Commission under
the Act) who on the date of this           Agreement is the beneficially owner (as
defined herein) of 5% or more of any           class of equity securities of the Company,
or a person engaging in a transaction           of the type described in clause (c) of
this subsection but which does not           constitute a change in control under such
clause, is or becomes the           “beneficial owner” (as defined in
Rule 13d-3 under the Act),           directly or indirectly, of securities of the Company
representing 45% or more of           the combined voting power of the Company’s
then outstanding securities;  



                         
(b)      during any period of two consecutive years during the term of this Agreement,
          individuals who at the beginning of such period constitute the Board and any
new           director (other than a director designated by a person who has entered into
as           agreement with the Company to effect a transaction described in clauses (a),
(c) or (d) of this subsection) whose election by the Board or nomination for
          election by the Company shareholders was approved by a vote of at least
          two-thirds of the directors then still in office who either were directors at
          the beginning of the period or whose election or nomination for election was
          previously so approved, cease for any reason to constitute a majority thereof;  



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(c)      the shareholders of the Company approve, or if no shareholder approval is           required
or obtained, the Company or a subsidiary of the Company completes a           merger,
consolidation or similar transaction of the Company or a subsidiary of           the
Company with or into any other corporation, or a binding share exchange
          involving the Company’s securities occurs, other than any such transaction
          which would result in the voting securities of the Company outstanding
          immediately prior thereto continuing to represent (either by remaining
          outstanding or by being converted into voting securities of the surviving
          entity) at least 51% of the combined voting power of the Voting Stock of the
          Company or such surviving entity outstanding immediately after such
transaction;           or  



                         
(d)      the shareholders of the Company approve a plan of complete liquidation of the
          Company or an agreement for the sale or disposition by the Company of all or
          substantially all the Company’s assets.  



               
1.11     “Code” shall mean the Internal Revenue Code of 1986, as amended, and the rules, regulations and
interpretations issued thereunder.  



               
1.12     “Commencement Date” shall be September 29, 2003. 



               
1.13     “Committee” shall have the meaning given such term in Section 5.1of this Agreement.  



               
1.14     “Company” shall
have the meaning given such term in the Preamble of this Agreement.  



               
1.15     “Competes” shall
mean the direct competition by a person or entity with the Company, which shall be
determined by the Board, in good faith, based upon the one or more of the following
factors: (a) whether the person or entity is engaged in the sale of children’s
educational products through a party plan sales model in the United States, (b) whether
the person or entity is engaged in for-profit fund raising activities in the United
States, (c) whether the person or entity is engaged in the sale of general merchandise,
i.e. greeting cards, gift-wrap and giftware items, utilizing an independent
representative assisted mail order sales model in Canada or the United States, and (d)
any activity of the Company added to this list by action of the Board, in good faith; provided,
that, no activity added to this list by action of the Board shall prohibit
Executive from engaging in any then current activity of Executive.  



               
1.16      “Confidential
Information” shall include, without limitation by reason of specification, any
information, including, without limitation, trade secrets, operational methods, methods
of doing business, technical processes, formulae, designs and design projects,
inventions, research projects, strategic plans, possible acquisition information and
other business affairs of the Company or its Affiliates in that it is not generally known
or available to the public, except as the result of unauthorized disclosure by or
information supplied by Executive or employees or agents of Woodclyffe, which (i) is or
are designed to be used in, or are or may be useful in connection with, the Business of
the Company, any Subsidiary or any Affiliate of any thereof, or which, in the case of any
of these entities, results from any of the research or development activities of any such
entity, or (ii) gives the Company or a Subsidiary or any Affiliate an opportunity or the
possibility of obtaining an advantage over competitors who may not know or use such
information or who are not lawfully permitted to use the same.  



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1.17     “Date of Termination” shall mean the Term Date, or any date upon which this Agreement
shall terminate pursuant to Section 7 of this Agreement.  



               
1.18      “Disability” shall
mean the inability of Executive to perform the Duties, if performing the Duties for the
Company or a Subsidiary, pursuant to the terms of this Agreement and by-laws of the
Company as hereinafter provided, because of physical or mental disability, where such
disability shall have existed for a period of more than 90 consecutive days or an
aggregate of 120 days in any 365 day period. The existence of a Disability means that
Executive’s mental and/or physical condition substantially interferes with Executive’s
performance of his substantive duties for the Company and/or its Subsidiaries as
specified in this Agreement. The fact of whether or not a Disability exists hereunder
shall be determined by professionally qualified medical experts selected by the Board and
reasonably acceptable to Executive or his agent.  



               
1.19     “Duties” shall
have the meaning assigned to such term in Section 2.1 of this Agreement.  



               
1.20     “Executive” shall
have the meaning assigned to such term in the Preamble of this Agreement.  



               
1.21     “Fair Market Value” shall mean the fair market value of stock, including the
Restricted Stock Award, or other property as determined by the Committee or under
procedures established by the Committee. Unless otherwise determined by the Committee, in
good faith, the Fair Market Value of stock as of any given date shall be determined as
follows: (i) if the stock is traded over-the-counter on the date in question, but is not
classified as a national market issue, and the stock is regularly traded in this manner,
then the Fair Market Value shall be equal to the mean between the last reported
representative bid and asked prices quoted by the Nasdaq system for such date; or (ii) if
the stock is traded over-the-counter on the date in question and is classified as a
national market issue, and is regularly traded in this manner, then the Fair Market Value
shall be equal to the last-transaction price quoted by the Nasdaq system for such date;
or (iii) if the stock is traded on a stock exchange on the date in question, and is
regularly traded in this manner, then the Fair Market Value shall be equal to the closing
price reported by the applicable composite transactions report for such date; or (iv) if
(i), (ii) or (iii) shall not apply, as the Committee shall, in good faith, determine.  



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1.22     “Goals” shall
mean the goals, the completion of which is a condition of the payment of the Bonus for a
fiscal year of the Company, which are to be initially proposed by Executive and approved
by the Committee as goals with respect to a specific fiscal year of the Company.  



               
1.23      “Good Reason”shall have the meaning given such term in Section 7.6 of
this Agreement.  



               
1.24     “Grant” shall
have the meaning assigned to such term in Section 5.3 of this Agreement.  



               
1.25      “Guaranteed
Amount” shall have the meaning assigned to such term in Section 5.4 of
this Agreement.  



               
1.26     “Panel” shall
have the meaning given such term in Section 8 of this Agreement.  



               
1.27     “Person” shall
mean any individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability company,
institution, public benefit corporation, entity or government (whether federal, state,
county, city, municipal or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).  



               
1.28     “Private Investors” shall mean the purchasers of common stock of the Company in the
Company’s $7.5 million private equity offering consummated on January 14, 2003.  



               
1.29     “Registration Rights Agreement” shall have the meaning assigned to such term in Section 5.3 of
this Agreement.  



               
1.30     “Registration Statement” shall have the meaning assigned to such term in Section 5.3 of
this Agreement.  



               
1.31     “Restricted Stock Award” shall have the meaning assigned to such term in Section 5.3 of
this Agreement.  



               
1.32     “Service
Year” shall mean each twelve-month period, or part thereof, during which
Executive is providing services to the Company hereunder, commencing on the Commencement
Date and on the same day of the subsequent calendar year and each consecutive 12 month
period thereafter.  



               
1.33     “Subsidiary” shall
mean a corporation of which more than 50% of the Voting Stock is owned, directly or
indirectly, by the Company.  



               
1.34     “Term”shall
mean the term of employment of Executive under this Agreement.  



               
1.35     “Term Date” shall have the
meaning assigned to such term in Section 3 of this Agreement.  



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1.36     “Trust
Agreement” shall mean the Trust Agreement to be entered into by and between the
Company and a financial institution, as trustee, the corpus of which shall be the Grant.  



               
1.37     “Voting
Stock” shall mean capital stock of a corporation which gives the holder the
right to vote in the election of directors for such corporation in the ordinary course of
business and not as the result of, or contingent upon, the happening of any event.  



               
1.38     “Woodclyffe”shall
mean Woodclyffe Group, L.L.C., a Connecticut limited liability company.  



               
Wherever from the context it appears appropriate, each
word or phrase stated in either the singular or the plural shall include the singular and
the plural, and each pronoun stated in the masculine, feminine or neuter gender shall
include the masculine, feminine and neuter.  



2.     SERVICES AND DUTIES OF EXECUTIVE  



               
2.1     Services; Title; Duties.   The Company hereby employs Executive, and Executive hereby accepts
employment, as President and Chief Executive Officer of the Company. The duties of
Executive (the “Duties”) shall be (i) to have general and active
management and control over the business and affairs of the Company and its Subsidiaries,
(ii) as are provided in the bylaws of the Company, (iii) those responsibilities assigned
to him by the Board consistent with the foregoing, (iv) to propose the Goals for each
fiscal year, commencing the fiscal year beginning October 1, 2003, such proposed Goals to
be submitted to the Committee no later than October 30, 2003 and 30 days prior to the
beginning of each fiscal year thereafter, and (v) services as are necessary and desirable
to protect and to advance the best interests of the Company and its Subsidiaries, acting,
in all instances, under the supervision of and in accordance with the policies set by the
Board.  



               
2.2     Performance of Duties.   Executive is engaged in other business activities which as of the date
hereof have been disclosed by Executive to the Board in writing. These activities
together with any other business activities for which Executive receives compensation
which are hereafter approved by the Board are referred to as the “Approved
Activities.” Executive agrees to disclose to the Chairman of the Board and the
General Counsel of the Company a list of Approved Activities and proposed Approved
Activities, in writing, every 90 days, commencing 90 days after the Commencement Date.
Executive shall not engage in business activities for compensation other than Approved
Activities. Executive shall devote such amount of Executive’s working time as is
necessary and appropriate (60% of Executive’s working hours are committed to
Executive’s employment hereunder) to conduct diligently the Duties as an executive
of the Company and to conduct such other executive duties as are assigned to him from
time to time by the Board. Executive agrees that the Approved Activities will be
subservient to the Duties and will not interfere with Executive’s obligations
hereunder in any material way. During the Term, except for the Approved Activities,
Executive: (i) shall comply with all laws, statutes, ordinances, rules and regulations
relating to the Business, and (ii) except for Approved Activities, shall not engage in or
become employed or otherwise retained, directly or indirectly, in a business which
Competes with the Business of the Company and its Subsidiaries, without the prior written
consent of the Board, nor shall Executive act as a consultant to or provide any services
to, whether on a remunerative basis or otherwise, the commercial or professional business
of any other Person which Competes with the Business of the Company and its Subsidiaries,
without such written consent, which, in both instances, may be given or withheld by the
Board in its absolute discretion. Activities of Woodclyffe shall not be deemed activities
of Executive unless Executive is directly engaged in such activities.  



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3.     TERM OF SERVICES  



               
The employment of Executive pursuant to this Agreement commenced as of the Commencement Date
and shall end on September 30, 2005, unless sooner terminated pursuant to Section 7of
this Agreement or unless extended for one additional year to September 30, 2006 at the
option of Executive (the “Term Date”). To exercise the foregoing option,
Executive shall give written notice to the Company of the exercise of such option no
later than August 11, 2005. Executive may not exercise such option after the earlier of
such time as (i) the Board notifies Executive that Executive’s employment hereunder
is being terminated for Cause, and (ii) Executive gives to the Company notice of
termination of Executive’s employment hereunder for any reason.  



4.     FEES,
PAYMENTS, AND BENEFITS  



               
The Company shall pay Executive as provided herein, for all of the services to be rendered by
Executive hereunder during the Term, and in consideration of the various restrictions
imposed upon Executive during the Term and the Restricted Period, and otherwise under
this Agreement, the Basic Salary and other benefits as provided for and determined
pursuant to Sections 5 and 6, inclusive, of this Agreement; provided,
however, that no amounts shall be paid to Executive under this Agreement for any
period subsequent to the termination of employment of Executive for any reason
whatsoever, except as provided in subparagraph (c) of Section 5.2 of this
Agreement, Section 5.4 of this Agreement, or Section 7 of this Agreement.  



5.     BASIC SALARY
/ BONUS  



               
5.1      Basic Salary.   The Company shall pay Executive, for all of the services to be rendered by
Executive hereunder during the Term, a fee of $50,000 per month (as adjusted upward by
the Board from time to time) (the “Basic Salary”), payable monthly (in
advance at the beginning of each month), less such deductions or amounts as are required
to be deducted or withheld by applicable laws or regulations, deductions for Executive’s
contributions to welfare benefits provided by the Company to Executive and such other
deductions or amounts, if any, as are authorized by Executive. The Basic Salary shall be
prorated for the month in which Executive’s employment pursuant to this Agreement
commences or terminates. The Basic Salary may be increased from time to time by the Board
and, once increased, shall not thereafter be reduced. The Basic Salary shall be reviewed
at least once in every Service Year by a committee of the Board responsible for
determining compensation of senior management of the Company, each of the members of
which is a “non-employee-director” as defined in Rule 16b-3 of the Securities
and Exchange Commission under the Act (the “Committee”). Any increase in
the Basic Salary shall not serve to offset or reduce any other obligation to Executive
under this Agreement.  



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5.2     Bonus.  Executive shall be eligible to receive an annual Bonus (the “Bonus”) as
follows: (a) $150,000 on December 31, 2003, (b) 75% of the Basic Salary for the fiscal
year commencing October 1, 2003, subject to achievement of the Goals for such fiscal
year, payable on November 15, 2004, and (c) 75% of the Basic Salary for the fiscal year
commencing October 1, 2004, subject to achievement of the Goals for such fiscal year,
payable on November 15, 2005 if, in connection with this clause (c), Executive is
employed by the Company as Chief Executive Officer of the Company on September 30, 2005.  



               
5.3     Restricted Stock Award. 



                         
(a)     The Grant.   On the date that the Registration Statement becomes effective,           the
Company hereby grants to the trustee under the Trust Agreement for the           benefit
of Executive 10,000,000 shares of common stock of the Company (the           “Grant”),
which shall vest as follows:  



                              
(i)      On the date that the Registration Statement becomes effective, 2,000,000 shares of
common stock of the Company of the Grant shall be fully vested and receipt of
          which shall be deferred pursuant to the terms of the 2003 Plan, subject to the
          provisions of Section 7 of this Agreement.  



                              
(ii)      On September 30, 2004, 4,000,000 shares of common stock of the Company of the
          Grant shall be fully vested, subject to (A) the right of Executive to defer
          receipt of the such shares pursuant to the terms of the 2003 Plan, and (B) the
          provisions of Section 7 of this Agreement.  



                              
(iii)      On September 30, 2005, 4,000,000 shares of common stock of the Company of the
          Grant shall be fully vested, subject to (A) the right of Executive to defer
          receipt of the such shares pursuant to the terms of the 2003 Plan, and (B) the
          provisions of Section 7 of this Agreement.  



                    
(b)       Definition.  The foregoing award of equity of the Company to Executive is           referred to as the
“Restricted Stock Award” so long as the           shares subject to the
award are not vested.  



                    
(c)      Registration.  



                              
(i)      The securities subject to the Grant will not be registered for resale under the
          Securities Act of 1933, as amended, on the date of grant.  



                              
(ii)      As soon as reasonably practicable after the date of this Agreement, the Company
          shall file with the Securities and Exchange Commission a registration statement
          on Form S-8 (the “Registration Statement”) registering the
          grant by the Company of the Grant.  



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(iii)      As soon as reasonably practicable after the date of this Agreement, the Company
          and Executive shall enter into a Registration Rights Agreement (the
          “Registration Rights Agreement”), which shall provide that the
          Company shall register for resale the shares of common stock of the Company
          subject to the Grant as follows: (A) with respect to such shares notdeferred in
accordance with this Agreement and the 2003 Plan, as soon as           reasonably
practicable following vesting, and (B) with respect to such shares deferred in
accordance with this Agreement and the 2003 Plan, as soon as           reasonably
practicable following expiration of such deferral. No registration           rights
granted under the Registration Rights Agreement shall be more favorable           than
registration rights granted to the Private Investors.  



                    
(d)      Certificates for Stock.   The Restricted Stock Award may be evidenced in           such manner as
the Committee shall determine. If certificates representing such           shares are
registered in the name of Executive, the Committee may require that           such
certificates bear an appropriate legend referring to the terms, conditions,           and
restrictions applicable to the Restricted Stock Award.  



                    
(e)      Trust.  The certificates representing shares of common stock of the           Company subject to
the Grant shall be held in trust pursuant to the terms and           conditions of the
Trust Agreement, pending distribution of the shares to           Executive (or Executive’s
beneficiaries or estate in the event of the death           of Executive) or the Company
in accordance with the Trust Agreement.  



                    
(f)      Rights Upon Deferral.   To the extent that any portion of the Restricted           Stock Award
is deferred under the 2003 Plan pursuant to Section 5.3 of           this
Agreement, Executive’s rights with respect to such deferred shares,           once
deferred, shall be determined in accordance with the provisions of the 2003
          Plan, except as otherwise specifically provided in this Agreement.  



                    
(g)      Voting Rights.   The Compensation Committee of the Board of Directors of           the Company
may direct the trustee under the Trust Agreement as to the voting of           the shares
so held in trust and the Compensation Committee’s instructions           shall be
subject to the fiduciary duties of the trustee. Any dividends on shares           held in
trust pursuant to the Trust Agreement shall be held in trust until such           time as
the shares upon which such dividends were paid are distributed in           accordance
with the Trust Agreement.  



                    
(h)      Restrictions on Transfer.   Executive may not offer, sell, transfer, or           otherwise dispose
of any shares granted pursuant to the Restricted Stock Award           prior to the
vesting thereof. Executive understands and acknowledges that shares           granted to
Executive under this Agreement, whether Restricted Stock or           otherwise, may not
be offered, sold, transferred, or otherwise disposed of           (“Transferred”)
except in accordance with the Securities Act of           1933, as amended, the rules and
regulations thereunder, and all applicable state           securities laws, and may not
be Transferred during any Company imposed blackout           periods.  



                    
(i)      Withholding Taxes.   It shall be a condition to delivery of a vested           portion of the
Restricted Stock Award (whether a distribution under the 2003           Plan or
otherwise) that Executive must satisfy all applicable federal, state and           local
income tax, employment tax, and withholding requirements by payment of           cash of
such amounts to the Company. It shall also be a condition of any           deferral under
the 2003 Plan that Executive shall satisfy all applicable           employment tax
withholding requirements attributable to such deferral by payment           of cash of
such amounts to the Company. Failure to pay such amounts in full           within 30 days
after the date due shall result in forfeiture of the Restricted           Stock Award
with respect to which such payment is due.  



                    
(j)      Beneficiaries.  Executive may designate a beneficiary to be assigned the           portion of the
Restricted Stock Award granted but unvested at the time of           Executive’s
death to which Executive’s estate or legatees are entitled           pursuant to Section
7 of this Agreement. If no beneficiary has been named           by Executive at the
time of death, any unvested portion of the Restricted Stock           Award shall be
transferred to Executive’s estate to the extent provided in Section 7 of this
Agreement.  



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5.4      Guaranteed Amount.   If Executive is the Chief Executive Officer of the Company on September 30,
2005, the Company shall pay Executive on November 15, 2005 the amount by which the
aggregate of the Basic Salary paid through September 30, 2005, plus the Bonus paid
through November 15, 2005, is less than $2,000,000 (the “Guaranteed Amount”).
The Guaranteed Amount shall be paid in cash unless the Committee determines in good faith
that the payment of the Guaranteed Amount in cash (i) would render the Company insolvent,
or (ii) leave the Company unable to meet its obligation as they accrue, or (iii) would
violate the provisions of an agreement to which the Company is a party which had been
approved by Executive, in which event the Guaranteed Amount shall be paid in the form of
shares of common stock of the Company valued at Fair Market Value by the Committee, or in
the event such form of payment is deemed by the Committee, in good faith, to be
unavailable or not desirable, then in the form of five year subordinated notes with an
interest rate equal to the prime or base rate of interest charged by banks with their
main offices located in the City of New York, as reported in the Wall Street Journal or a
similar publication, such notes to provide that all principal and interest thereon shall
be paid at maturity.  



          
5.5      Change of Control.   Upon a Change of Control that occurs prior to the Date of Termination,
(i) Executive shall receive the same payments and benefits as Executive would have
received if Executive’s employment was terminated without Cause pursuant to Section
7.5 of this Agreement, except with respect to the vesting of unvested portions of the
Grant, and (ii) to the extent to which such Change of Control occurs prior to the vesting
of any portion of the Grant, any unvested portion of the Grant shall immediately
accelerate and vest as of the date of such Change of Control.  



          
5.6.      Withholding Taxes.   As an employee of the Company, Executive’s Basic           Salary and
Bonus shall be subject to all applicable federal, state, and local           income tax,
employment tax, and withholding requirements.  



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6.     ADDITIONAL BENEFITS AND REIMBURSEMENT FOR EXPENSES



          
6.1      Additional Benefits.    The Company shall provide the following  additional  benefits to Executive
during the Term:  



                    
(a)      provision of a comprehensive medical indemnity policy for Executive and his           family having
terms no less favorable than the coverage made available to other           executives of
the Company;  



                    
(b)      a comprehensive disability policy for Executive having terms no less favorable
          than coverage made available to other executives of the Company;  



                    
(c)      such other benefits as the Board shall lawfully adopt and approve for Executive.  



          
6.2      Reimbursement for Expenses.   The Company shall pay or reimburse Executive for all reasonable
expenses actually incurred or paid by Executive during the Term in the provision of his
services hereunder upon presentation of such bills, expense statements, vouchers or such
other supporting information as the Board may reasonably require. In the event the
Company requires Executive to travel on business during the Term, Executive shall be
entitled to first class air travel and shall be reimbursed for any travel expenses in
accordance with this Section 6.2.  



7.     TERMINATION OF SERVICES  



          
7.1      Death.   If
Executive dies during the Term, this Agreement shall terminate upon the date of death of
Executive. Except as set forth in this Section 7.1, upon the death of Executive,
Executive shall receive no further payments hereunder. Upon the death of Executive:  



                    
(a)      the designated beneficiaries of Executive, or if none are designated,           Executive’s
estate, shall receive at the end of the fiscal year in which           Executive dies
only the pro rata portion of the Bonus, if any, earned during the           period
commencing at the beginning of the fiscal year (as described in Section 5.2 of
this Agreement) in which Executive’s death occurred           and ending on the date
of the death of Executive, subject to achievement of the           Goals for such fiscal
year.  



                    
(b)      in the event that Executive’s death occurs prior to September 30, 2004,           then
the portion of the Restricted Stock Award scheduled to vest on September           30,
2004 pursuant to Section 5.3(a)(ii) of this Agreement equal to the
          product of 10,928.96174 multiplied by the number of days elapsed during the
          period beginning on October 1, 2003 and ending on the date of death, inclusive,
          rounded up to the nearest whole share, shall immediately vest and be
distributed           to the designated beneficiaries of Executive hereunder, or if none
are           designated, to the Executive’s estate.  



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(c)      in the event that Executive’s death occurs after September 30, 2004 but
          before September 30, 2005, then the portion of the Restricted Stock Award
          scheduled to vest on September 30, 2005 pursuant to Section 5.3(a)(iii)          of
this Agreement equal to the product of 10,958.9041 multiplied by the number           of
days elapsed during the period beginning on October 1, 2004 and ending on the
          date of death, inclusive, rounded up to the nearest whole share, shall
          immediately vest and be distributed to the designated beneficiaries of
Executive           hereunder, or if none are designated, to the Executive’s estate.  



                    
(d)      except as indicated in Section 7.1(b) or Section 7.1(c) above, any           other
portion of the Restricted Stock Award that is unvested on the date of           death
shall terminate and be null and void as of such date.  



                    
(e)      notwithstanding the foregoing, any portion of the Restricted Stock Award, the           vesting date of
which had occurred, but the receipt of which was deferred by           Executive pursuant
to Section 5.3 of this Agreement and the 2003 Plan,           shall be disposed of
in accordance with the provisions of the 2003 Plan.  



                    
(f)      the Company shall reimburse Executive’s estate for any unreimbursed           expenses
incurred by Executive prior to the date of death and which the Company           is
required to reimburse pursuant to Section 6.2 of this Agreement.  



          
7.2      Disability.   If, during the Term, Executive has a Disability, the Company may, at any time after Executive
has a Disability, terminate this Agreement by written notice to Executive. Except as set
forth in this Section 7.2, upon termination of Executive due to Disability,
Executive shall receive no further payments hereunder. Upon termination by the Company
due to Executive’s Disability:  



                    
(a)      Executive shall receive at the end of the fiscal year in which Executive is           terminated
due to Disability only the pro rata portion of the Bonus, if any,           earned during
the period commencing at the beginning of the fiscal year (as           described in Section
5.2 of this Agreement) in which the termination for           Disability occurred and
ending on the Date of Termination due to Disability,           subject to achievement of
the Goals for such fiscal year.  



                    
(b)      in the event that such termination occurs prior to September 30, 2004, then the
          portion of the Restricted Stock Award scheduled to vest on September 30, 2004
          pursuant to Section 5.3(a)(ii) of this Agreement equal to the product of
          10,928.96174 multiplied by the number of days elapsed during the period
          beginning on October 1, 2003 and ending on the Date of Termination due to
          Disability, inclusive, rounded up to the nearest whole share, shall immediately
          vest and be distributed to Executive.  



                    
(c)      in the event that such termination occurs after September 30, 2004 but before
          September 30, 2005, then the portion of the Restricted Stock Award scheduled to
          vest on September 30, 2005 pursuant to Section 5.3(a)(iii) of this
          Agreement equal to the product of 10,958.9041 multiplied by the number of days
          elapsed during the period beginning on October 1, 2004 and ending on the Date
of           Termination due to Disability, inclusive, rounded up to the nearest whole
share,           shall immediately vest and be distributed to Executive.  



12 


















	



                    
(d)      except as indicated in Section 7.2(b) or Section 7.2(c) above, any           other
portion of the Restricted Stock Award that is unvested on the Date of
          Termination due to Disability shall terminate and be null and void as of such
          date.  



                    
(e)      notwithstanding the foregoing, any portion of the Restricted Stock Award, the           vesting date of
which had occurred, but the receipt of which was deferred by           Executive pursuant
to Section 5.3 of this Agreement and the 2003 Plan,           shall be disposed of
in accordance with the provisions of the 2003 Plan.  



                    
(f)      the Company shall reimburse Executive for any unreimbursed expenses incurred by
          Executive prior to the Date of Termination due to Disability and which the
          Company is required to reimburse pursuant to Section 6.2 of this
          Agreement.  



          
7.3      Voluntary Termination.   This Agreement may be terminated by Executive at any time with or
without cause upon 60 days prior written notice to the Company. After such sixty day
period, the Company shall have no further liability to make payments hereunder except
those required by law or which were accrued and unpaid at the Date of Termination and
Executive shall forfeit all unvested portions of the Restricted Stock Award.  



          
7.4      Termination for Cause.   The Company may terminate Executive’s employment hereunder for Cause
at any time by written notice given to Executive by the Board. Upon such termination
Executive shall not have any right to receive any further payments hereunder, except for
cash amounts accrued and unpaid hereunder prior thereto and provide welfare benefits as
required by law and except as provided in Section 7.8 of this Agreement, and
Executive shall forfeit all unvested portions of the Restricted Stock Award.  



          
7.5      Termination  Without Cause.   In the event that Executive's  employment  hereunder is terminated by the
Company without Cause:  



                    
(a)      Executive shall continue to receive the Basic Salary for a period beginning on           the Date
of Termination and ending on the earlier to occur of (i) the 12 month
          anniversary of the Date of Termination, and (ii) the Term Date. Executive shall
          also receive, at the end of the fiscal year in which the Date of Termination
          occurs, the pro rata portion of the Bonus, if any, earned during the period
          commencing at the beginning of the fiscal year (as described in Section
          5.2 of this Agreement) in which such termination occurred and ending on the
          Date of Termination, subject to achievement of the Goals for such fiscal year.  



                    
(b)      Executive shall be entitled to the Guaranteed Amount and:  



                              
(i)      in the event that such termination occurs prior to September 30, 2004, then the
          portion of the Restricted Stock Award scheduled to vest on September 30, 2004
          pursuant to Section 5.3(a)(ii) of this Agreement equal to the product of
          10,928.96174 multiplied by the number of days elapsed during the period
          beginning on October 1, 2003 and ending on the Date of Termination, inclusive,
          rounded up to the nearest whole share, shall immediately vest and be
distributed           to Executive.  



13 

















	




                              
(ii)      in the event that such termination occurs after September 30, 2004 but before
          September 30, 2005, then the portion of the Restricted Stock Award scheduled to
          vest on September 30, 2005 pursuant to Section 5.3(a)(iii) of this
          Agreement equal to the product of 10,958.9041 multiplied by the number of days
          elapsed during the period beginning on October 1, 2004 and ending on the Date
of           Termination, inclusive, rounded up to the nearest whole share, shall
immediately           vest and be distributed to Executive.  



                              
(iii)      as indicated in Section 7.5(b)(i) or Section 7.5(b)(ii)          above, any
other portion of the Restricted Stock Award that is unvested on the           Date of
Termination shall terminate and be null and void as of such date.  



                              
(iv)      notwithstanding the foregoing, any portion of the Restricted Stock Award, the           vesting date of
which had occurred, but the receipt of which was deferred by           Executive pursuant
to Section 5.3 of this Agreement and the 2003 Plan,           shall be disposed of
in accordance with the provisions of the 2003 Plan.  



                              
(v)      the Company shall reimburse Executive for any unreimbursed expenses incurred by
          Executive prior to the Date of Termination which the Company is required to
          reimburse pursuant to Section 6.2 of this Agreement.  



                    
(c)      The Company shall have no further obligation to make any payment of the Basic
          Salary or the Bonus, except as set forth in Section 7.5 of this
          Agreement.  



          
7.6.      Termination for Good Reason.   In the event Executive terminates           Executive’s
employment hereunder for Good Reason, Executive shall receive           the same payments
and benefits as Executive would have received if           Executive’s employment
hereunder was terminated without Cause pursuant to Section 7.5 of this Agreement;
provided, that, in the event           of a termination of Executive’s
employment hereunder for Good Reason as a           result of Section 7.6(h) of
this Agreement, then Section 5.5 of           this Agreement shall govern with
respect to the vesting of the Grant.           “Good Reason” for
purposes of this Agreement means:  



                    
(a)      the assignment by the Company to Executive of duties which are materially           different
than those as described in this Agreement;  



                    
(b)      the removal of Executive from, or any failure to reappoint or reelect Executive           to,
the highest title held by Executive, except in connection with a termination           of
Executive’s employment hereunder for Cause, or by reason of           Executive’s
death or Disability;  



                    
(c)      a reduction or non-payment of the Basic Salary or failure to review the Basic
          Salary as required by this Agreement or failure to pay the Bonus, as required
by           this Agreement;  



                    
(d)      a material breach by the Company of this Agreement which is not cured within 30
          days after written notice thereof to the Board by Executive;  



14 

















	




                    
(e)      requiring Executive to be based anywhere other than New Canaan, Connecticut,           except for
required travel on the Company’s business;  



                    
(f)      the failure to deliver the Restricted Stock Award as provided by this Agreement           or
the 2003 Plan or the failure to pay the Guaranteed Amount in accordance with
          this Agreement;  



                    
(g)      the failure of the Company to obtain the express written assumption of and
          agreement to perform this Agreement by any successor as contemplated in Section
13 of this Agreement; or  



                    
(h)      a Change of Control shall occur.  



          
7.7      Notice of Termination.   Any purported termination of Executive’s employment hereunder by
reason of Executive’s Disability or for Cause, or by Executive for Good Reason shall
be communicated by written Notice of Termination to the other party hereto. For purposes
of this Agreement, a “Notice of Termination” shall mean a notice given
by Executive or the Company, which shall indicate the specific basis for termination of
Executive’s employment hereunder and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for determination of any payments under this
Agreement.  



          
7.8      Date of Termination.   For purposes of this Agreement, “Date of Termination” shall
mean the date of termination of Executive’s employment specified in the Notice of
Termination, which shall not be more than 90 days after such Notice of Termination is
given, as such date may be modified pursuant to the following two sentences. If within 30
days after any Notice of Termination is given, the party who receives such Notice of
Termination notifies the other party that a dispute regarding the basis for termination
of employment of Executive hereunder or the determination of any payments to Executive
under this Agreement (a “Dispute”) exists (a “Notice of Dispute”),
the Date of Termination shall be the date on which the Dispute is finally determined,
either by mutual written agreement of the parties, by the Panel, or by a final judgment,
order or decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected); provided, that, the
Date of Termination shall be extended by a Notice of Dispute only if such notice is given
in good faith and the party giving such notice pursues the resolution of such Dispute
with reasonable diligence, and provided further that pending the resolution of any such
Dispute, the Company shall continue to pay the Basic Salary and to provide Executive with
the same or substantially comparable welfare benefits and prerequisites, to the extent
then so available at the date of such determination, but in no event beyond the Term
Date. Should a Dispute ultimately be determined in favor of the Company, then all sums
(net of tax withholdings by the Company from such sums) paid by the Company from the Date
of Termination specified in the Notice of Termination until final resolution of the
Dispute pursuant to this paragraph shall be repaid promptly by Executive to the Company.
Executive shall not be obligated to pay to the Company the cost of providing Executive
with welfare benefits and prerequisites for such period, unless the final judgment, order
or decree of a court arbitration panel or other body resolving the Dispute determines
that Executive acted in bad faith in giving a Notice of Dispute. Should a Dispute
ultimately be determined in favor of Executive, then Executive shall be entitled to
retain all sums paid and receive the Bonus and such portion of the Restricted Stock Award
which would have been received but for the Dispute and the Guaranteed Amount (if any) if
then due to Executive pursuant to Section 5.4 of this Agreement, and Executive
shall be entitled to receive, in addition, the payments and other benefits provided for
in this Section 7 to the extent not previously paid hereunder and the payment of
Executive’s reasonable legal fees incurred as a result of such Dispute upon
submission to the Company of a detailed statement of fees from Executive’s
attorneys.  



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8.     ARBITRATION  



          
8.1      Except as otherwise provided herein, the parties hereby agree that any Dispute or any dispute
regarding the rights and obligations of any party under this Agreement or under any law
governing the relationship created by this Agreement, including without limitation
Executive’s challenge of a purported termination for Cause or Disability, must be
resolved pursuant to this Section 8. Within seven days after either party’s
written notice to the other of his or its desire to submit any Dispute or arbitrable
matter as set forth herein to arbitration, the parties will meet to attempt to amicably
resolve their differences and, failing such resolution, either or both of the parties may
submit the matter to mandatory and binding arbitration with the Center for Public
Resources (“CPR”). The issue(s) in dispute shall be settled by
arbitration in accordance with the Center for Public Resources Rules for Non-Administered
Arbitration of Business Disputes, by a panel of three arbitrators (the “Panel”).
The only issue(s) to be determined by the Panel will be those issues specifically
submitted to the Panel. The Panel will not extend, modify or suspend any of the terms of
this Agreement. The arbitration shall be governed by the United States Arbitration Act, 9
U.S.C. §1-16, and judgment upon the award rendered by the Panel may be entered by
any court having jurisdiction thereof. A determination of the Panel shall be by majority
vote.  



          
8.2      Promptly following receipt of the request for arbitration, CPR shall convene the parties in person
or by telephone to attempt to select the arbitrators by agreement of the parties. If
agreement is not reached, the Company shall select one arbitrator and Executive shall
select one other arbitrator. These two arbitrators shall select a third arbitrator. If
these two arbitrators are unable to select the third arbitrator by mutual agreement, CPR
shall submit to the parties a list of not less than 11 candidates. Such list shall
include a brief statement of each candidate’s qualifications. Each party shall
number the candidates in order of preference, shall note any objection they may have to
any candidate, and shall deliver the list so marked back to CPR. Any party failing
without good cause to return the candidate list so marked within 10 days after receipt
shall be deemed to have assented to all candidates listed thereon. CPR shall designate
the arbitrator willing to serve for whom the parties collectively have indicated the
highest preference and who does not appear to have a conflict of interest. If a tie
should result between two candidates, CPR may designate either candidate.  



          
8.3      This agreement to arbitrate is specifically enforceable. Judgment upon any award rendered by
the Panel may be entered in any court having jurisdiction. The decision of the Panel
within the scope of the submission is final and binding on all parties, and any right to
judicial action on any matter subject to arbitration hereunder hereby is waived (unless
otherwise provided by applicable law), except suit to enforce this arbitration award or
in the event arbitration is not available for any reason or in the event the Company
shall seek equitable relief to enforce Section 9 of this Agreement. If the rules
of the CPR differ from those of this Section 8, the provisions of this Section 8will
control. The Company shall pay all the costs of arbitration including the fees of the
arbitrators, and the arbitrators shall award reasonable legal fees to Executive, unless
the arbitrators or a judicial forum shall finally determine that Executive acted in bad
faith.  



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9.     CONFIDENTIAL INFORMATION AND PROPRIETARY INTERESTS  



          
9.1      Acknowledgment of Confidentiality. 



                    
(a)      Executive understands and acknowledges that Executive may obtain Confidential           Information
during the course of Executive’s employment hereunder.           Accordingly,
Executive agrees that Executive shall not, either during the Term           or at any
time within one year after the Date of Termination (the           “Restricted
Period”), (i) use or disclose any such Confidential           Information
outside the Company, its Subsidiaries and Affiliates; or (ii) except           as
required in the proper conduct of Executive’s duties hereunder, remove           or
aid in the removal of any Confidential Information or any property or           material
relating thereto from the premises of the Company or any Subsidiary or
          Affiliate.  



                    
(b)      The foregoing confidentiality provisions shall cease to be applicable to any
          Confidential Information which becomes generally available to the public
(except           by reason of or as a consequence of a breach by Executive of his
obligations           under this Section 9).  



                    
(c)      In the event Executive is required by law or a court order to disclose any such
          Confidential Information, Executive shall promptly notify the Company of such
          requirement and provide the Company with a copy of any court order or of any
law           which in his opinion requires such disclosure and, if the Company so
elects, to           the extent that Executive is legally able, permit the Company an
adequate           opportunity, at its own expense, to contest such law or court order.  



                    
(d)      This Agreement shall constitute an agreement to maintain disclosed information           in
confidence for purposes of Rule 100(b)(ii) of Regulation FD promulgated
          pursuant to the Act. All obligations as to non-disclosure shall cease as to any
          part of such information to the extent that such information is or becomes
          public other than as a result of a breach of this provision.  



          
9.2      Delivery of Material.   Executive shall promptly, and without charge, deliver to the Company on
the termination of Executive’s employment hereunder, or at any other time the
Company may so request, all memoranda, notes, records, reports, manuals, computer disks,
videotapes, drawings, blueprints and other documents (and all copies thereof) relating to
the Business of the Company, its Subsidiaries and its Affiliates, and all property
associated therewith, which Executive may then possess or have under his control.  



17 

















	



10.     SURVIVAL  



                  
The provisions of Sections5.2, 7, 8, 9, and 10shall survive
termination of this Agreement and remain enforceable according to their terms.  



11.     SEVERABILITY  



                 
The invalidity or unenforceability of any provision of this Agreement shall in no way affect the
validity or enforceability of any other provisions hereof.  



12.     NOTICES  



                 
All  notices, demands and requests required or permitted to be given under the provisions of this
Agreement shall be deemed duly given if made in writing and delivered personally or
mailed by postage prepaid certified or registered mail, return receipt requested,
accompanied by a second copy sent by ordinary mail, which notices shall be addressed as
follows:  












		
		If to the Company:	
	 	 	 
		Eos International, Inc.

888 Seventh Avenue, 13th Floor,
New York, New York 10106
Attn:  Peter A. Lund	 
	 	 	 
		with a copy to:	 
	 	 	  
		Pitney, Hardin, Kipp & Szuch LLP

200 Campus Drive
Florham Park, New Jersey 07932
Attn:  Frank E. Lawatsch, Jr., Esq.	 
	 	 	  
		If to Executive:	 
	 	 	  
		Jose Ferreira, Jr.
73 Turning Mill Lane
New Canaan, Connecticut 06840	 







	



                
 By notifying the other parties in writing, given as aforesaid, any party may from time to time change
its address or the name of any person to whose attention notice is to be given, or may
add another person to whose attention notice is to be given, in connection with notice to
any party.  



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13.     ASSIGNMENT AND SUCCESSORS  



              
   Neither this Agreement nor any of his rights or duties hereunder may be assigned or delegated by
Executive. This Agreement is not assignable by the Company, including, without
limitation, to any successor in interest which takes over all or substantially all of the
business of the Company, as it is conducted at the time of such assignment, without the
written consent of Executive. Any corporation into or with which the Company is merged or
consolidated or which takes over all or substantially all of the business of the Company
shall be deemed to be a successor of the Company for purposes hereof and the Company
shall require as a condition thereof that such corporation assume this Agreement in form
and substance satisfactory to Executive. This Agreement shall be binding upon and, except
as aforesaid, shall inure to the benefit of the parties and their respective successors
and permitted assigns.  



14.     ENTIRE AGREEMENT, WAIVER AND OTHER  



          
14.1.      Integration.   This Agreement, together with the Engagement
Agreement by and between the Company and Woodclyffe dated September 24, 2003, the Trust Agreement, the 2003           Plan, and any deferral
election made by Executive under the 2003 Plan, contains           the entire agreement
of the parties hereto on its subject matter and supersedes           all previous
agreements between the parties hereto, written or oral, express or           implied,
covering the subject matter hereof. No representations, inducements,           promises
or agreements, oral or otherwise, not embodied herein, shall be of any           force or
effect.  



          
14.2.      No Waiver.  



                    
(a)      No waiver or modification of any of the provisions of this Agreement shall be
          valid unless in writing and signed by or on behalf of the party granting such
          waiver or modification. No waiver by any party of any breach or default
          hereunder shall be deemed a waiver of any repetition of such breach or default
          or shall be deemed a waiver of any other breach or default, nor shall it in any
          way affect any of the other terms or conditions of this Agreement or the
          enforceability thereof. No failure of the Company to exercise any power given
it           hereunder or to insist upon strict compliance by Executive with any
obligation           hereunder, and no custom or practice at variance with the terms
hereof, shall           constitute a waiver of the right of the Company to demand strict
compliance with           the terms hereof.  



                    
(b)      Executive shall not have the right to sign any waiver or modification of any           provisions
of this Agreement on behalf of the Company, nor shall any action           taken by
Executive reduce his obligations under this Agreement.  



                    
(c)      This Agreement may not be supplemented or rescinded except by instrument in           writing
signed by all of the parties hereto after the date hereof. Neither this
          Agreement nor any of the rights of any of the parties hereunder may be
          terminated except as provided herein. Executive may not sign any document on
          behalf of the Company which amends this Agreement.  



19 

















	



15.     MISCELLANEOUS  



          
15.1      Governing  Law.  This  Agreement  shall  be  governed  by  and  construed,  and  the  rights  and
obligations of the parties hereto enforced, in accordance with the laws of the State of
Connecticut.  



          
15.2      Headings.   The section and subsection headings contained herein are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.  



          
15.3      Severability.   The invalidity or  unenforceability  of any provision of this  Agreement  shall in no
way affect the validity or enforceability of any other provisions hereof.  



          
15.4      Obligations of Company.  The Company’s obligation to pay for the services provided by
Executive hereunder and to make the arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including, without
limitation, any setoff, counterclaim, recoupment, defense or other right which the
Company may have against Executive or anyone else. All amounts payable by the Company
hereunder shall be paid without notice or demand. Except as expressly provided herein,
the Company waives all rights which it may now have or may hereafter have conferred upon
it, by statute or otherwise, to terminate, cancel or rescind this Agreement in whole or
in part. Except as provided in Section 7.8 of this Agreement, each and every
payment made hereunder by the Company shall be final and the Company will not seek to
recover for any reason all or any part of such payment from Executive or any person
entitled thereto. Executive shall not be required to mitigate the amount of any payment
or other benefit provided for in this Agreement by seeking other employment or otherwise.  



          
15.5      Rights of Beneficiaries of Executive.   In the event of Executive’s death only, this
Agreement shall inure to the benefit of, and be enforceable by, Executive’s personal
or legal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If Executive should die while any amounts would still be payable
to Executive pursuant to Section 7.1 of this Agreement, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this Agreement
to Executive’s beneficiary (if one is designated pursuant to this Agreement) or, if
there be no such beneficiary designated, to Executive’s estate.  



20 

















	



        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above, to be effective as of the Commencement Date. 













	 		

JOSE FERREIRA, JR.


——————————————

Jose Ferreira, Jr., Individually










			EOS INTERNATIONAL, INC.



By:  PETER A. LUND
——————————————

Name:     Peter A. Lund

Title:       Chairman of the Board







	




21