EXHIBIT 10.3
FORM OF EMPLOYMENT AGREEMENT,
DATED AS OF AUGUST 1, 2000,
BETWEEN PROTOSOURCE CORPORATION AND
XXXX XXXXXXXXX
EMPLOYMENT AGREEMENT
XXXX XXXXXXXXX
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AGREEMENT, dated as of the ___t day of July 2000, and effective as of
August 1, 2000, between Protosource Corporation, a California corporation,
having its primary place of business at 0000 00xx Xxxxxx, Xxxxx 000, Xxxxx
Xxxxxx, Xxxxxxxxxx 00000 (the "Company"), and Xxxx Xxxxxxxxx, an individual
residing at 150 Xxxxxx, Oldsmar Florida (the "Executive").
WHEREAS, the Company is an Internet service company principally engaged in
the business of providing residential and commercial high-speed Internet
dedicated and dial-up access, Web hosting, Web site development, and electronic
commerce services; and
WHEREAS, the Company has acquired Suncoast Automation, Inc. of which the
Executive was co-owner; and
WHEREAS, the Company desires to employ the Executive as its Vice President
and General Manager of the Suncoast division; and
WHEREAS, Executive is willing to accept such employment by the Company, all
in accordance with provisions hereinafter set forth; and
NOW, THEREFORE, in consideration of the promises and mutual
representations, covenants, and agreements set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree effective upon the Acquisition as
follows:
1. Term: The term of this Agreement shall be for a period of twenty-seven
(27) months commencing on the effective date of the Acquisition (the "Effective
Date"). The term of this agreement shall also be subject to earlier termination
as provided herein or unless extended by mutual consent of the parties.
2. Employment:
(A) Subject to the terms and conditions and for the compensation
hereinafter set forth, the Company hereby agrees to employ Executive for and
during the term of this Agreement. Executive is hereby employed by the Company
as its Vice President and General Manager. The Executive's powers and duties
shall be those of an executive nature which are appropriate for a Vice President
in accordance with the Company's By-Laws; and Executive does hereby accept such
employment or greater employment as may be mutually agreed upon by the parties
hereto and agrees to devote only as much time to the affairs of the Company as
Executive deems necessary to discharge his duties to the Company during the term
of this Agreement, to the performance of his duties upon the conditions
hereinafter set forth. Executive shall report to the Chief Executive Officer of
the Company.
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(B) During the term of this Agreement, Executive shall be furnished with
office space and facilities in the greater Tampa area, commensurate with his
position and adequate for the performance of his duties; he shall be provided
with the perquisites customarily associated with the position of Vice President.
3. Compensation:
(A) Salary: During the term of this Agreement, the Company agrees to pay
Executive, and Executive agrees to accept, an annual salary of not less than One
Hundred and Four thousand dollars ($104,000) per year, payable in accordance
with the Company's policies, for services rendered by Executive hereunder.
(B) Stock Options: As additional compensation, at the discretion of the
CEO, the Company may issue Executive stock options after three (3) months of
employment.
(C) Increases: The annual salary is subject to periodic increases at the
discretion of the Chief Executive Officer.
4. Expenses: The Company shall reimburse Executive for all reasonable and
actual business expenses incurred by him in connection with his service to the
Company, upon submission by him of appropriate vouchers and expense account
reports.
5. Benefits:
(A) Employee Benefits: In addition to the salary and bonus to be paid to
Executive hereunder, Executive and his dependents shall be entitled to
participate in such other benefits as are extended to active executive employees
of the Company and their dependents including but not limited to pension,
retirement, profit-sharing, 401(k), stock option, bonus and incentive plans,
group insurance, hospitalization, medical or other benefits made available by
the Company to its employees generally.
(B) Vacation: Executive shall be entitled to take up to two (2) weeks of
paid vacation annually at a time mutually convenient to the Company and
Executive. Any such vacation time not used by Executive in any one year shall
accumulate to his benefit in the succeeding year.
6. Restrictive Covenants:
(A) Executive recognizes and acknowledges that the Company, through the
expenditure of considerable time and money, has developed and will continue to
develop in the future information concerning customers, clients, marketing,
business and operational methods of the Company and its customers or clients,
contracts, financial or other data, technical data or any other confidential or
proprietary information possessed, owned or used by the Company, and that the
same are confidential and proprietary, and are "confidential information" of the
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Company. In consideration of his employment by the Company hereunder, Executive
agrees that he will not, without the consent of the Chief Executive Officer,
make any disclosure of confidential information now or hereafter possessed by
the Company to any person, partnership, corporation or entity either during or
after the term hereunder, except to employees of the Company or its subsidiaries
or affiliates and to others within or without the Company, as the Executive may
deem necessary in order to conduct the Company's business and except as may be
required pursuant to any court order, judgment or decision from any court of
competent jurisdiction. The foregoing shall not apply to information which is in
the public domain on the date hereof; which, after it is disclosed to Executive
by the Company, is published or becomes part of the public domain through no
fault of Executive; which is known to Executive prior to disclosure thereof to
him by the Company as evidenced by his written records; or, after Executive is
no longer employed by the Company, which is thereafter disclosed to Executive in
good faith by a third party which is not under any obligation of confidence or
secrecy to the Company with respect to such information at the time of
disclosure to him. The provisions of this Section shall continue in full force
and effect notwithstanding any lawful termination of Executive's employment
under this Agreement for a period of one (1) year following said termination of
employment.
(B) Except in the ordinary course of his duties as Vice President and
General Manager, or in the furtherance of the business of the Company, during
the period from the date of this Agreement until the date on which his
employment with the Company is terminated, Executive will not, directly or
indirectly:
(i) persuade or attempt to persuade any person or entity which is or
was a customer, client or supplier of the Company on the date on which
Executive's employment with the Company is terminated to cease doing
business with the Company, or to reduce the amount of business it does with
the Company;
(ii) solicit for himself or any other person or entity other than the
Company the business of any person or entity which is a customer or client
of the Company, or was its customer or client within six (6) months prior
to the termination of his employment by the Company, with respect to
providing cable television or Internet related services to the extended
stay hospitality industry; or
(iii) persuade or attempt to persuade any employee of the Company, or
any individual who was an employee of Company during the six (6) month
period prior to the lawful and proper termination of this Agreement, to
leave Company's employ, or to become employed by any person or entity other
than the Company.
(C) Executive acknowledges that the restrictive covenants (the "Restrictive
Covenants") contained in this section 6 are a condition of his employment and
are reasonable and valid in geographical and temporal scope and in all other
respects. If any court determines that any of the Restrictive Covenants, or any
part of any of the Restrictive Covenants, is invalid or unenforceable, the
remainder of the Restrictive Covenants and parts thereof shall not thereby be
affected and shall be given full effect, without regard to the invalid portion.
If any court determines that any of the Restrictive Covenants, or any part
thereof, is invalid or enforceable because of the geographic or temporal scope
of such provision, such court shall have the power to reduce the geographic or
temporal scope of such provision, as the case may be, and, in its reduced form,
such provision shall then be enforceable.
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(D) If Executive breaches, or threatens to breach, any of the Restrictive
Covenants, the Company, in addition to and not in lieu of any other rights and
remedies it may have at law or in equity, shall have the right to injunctive
relief; it being acknowledged and agreed to by Executive that any such breach or
threatened breach would cause irreparable and continuing injury to the Company
and that money damages would not provide an adequate remedy to the Company.
7. Termination:
(A) Disability:
(a) In the event Executive, by reason of physical or mental incapacity,
shall be disabled ("Disability") for a period of at least six (6) consecutive
months, the Company shall have the option at any time thereafter to terminate
Employee's employment hereunder for disability. Such termination will be
effective thirty (30) days after the Chief Executive Officer gives written
notice of such termination to Executive, unless Executive shall have returned to
the performance of his duties prior to the effective date of the notice. All
obligations of the Company hereunder shall cease upon the effectiveness of such
termination, provided that such termination shall not affect or impair any
rights Executive may have under any policy of long term disability insurance or
benefits then maintained on his behalf by the Company. In addition, for a period
of six (6) months following termination of Executive's employment for
disability, Executive and his dependents, as the case may be, shall continue to
receive the benefits set forth under subparagraph 5(A) hereof, as well as such
benefits as are extended to the Company's active executive employees and their
dependents during such period.
(b) "Incapacity" as used herein shall mean the inability of the Executive
due to physical or mental illness, injury or disease substantially to perform
his normal duties as Vice President and General Manager. Executive's salary as
provided for hereunder shall continue to be paid during any period of incapacity
prior to and including the date on which Executive's employment is terminated
for disability.
(B) By The Company For Cause:
(a) The Company shall have the right, before the expiration of the term of
this Agreement, to terminate this Agreement and to discharge Executive for cause
(hereinafter "Cause"), and all compensation to Executive shall cease to accrue
upon discharge of Executive for Cause. For the purposes of this Agreement, the
term "Cause" shall mean (i) Executive's conviction of a felony; (ii) the
alcoholism or drug addiction of Executive, as certified by a medical expert
trained in such addiction; (iii) gross negligence or willful misconduct of
Executive in connection with his duties hereunder; (iv) the determination by any
regulatory or judicial authority (including any securities self-regulatory
organization) that Executive directly violated, before or after the date hereof,
any federal or state securities law, any rule or regulation adopted thereunder;
or (v) the continued failure by Executive to substantially and materially
perform his material duties hereunder. Such termination for Cause will be
reviewed by the Board of Directors.
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(C) By Executive for Reason: Executive shall have the right to terminate
his employment at any time for "good reason" (herein designated and referred to
as "Reason"). The term Reason shall mean (i) a reduction in Executive's overall
compensation or an adverse change in the nature or scope of the authorities,
powers, functions or duties normally attached to the Executive's position with
the Company; (ii) the Company's failure or refusal to perform any obligations
required to be performed in accordance with this Agreement after a reasonable
notice and an opportunity to cure same; and (iii) a Change in Control of the
Company, as defined herein, occurs.
(D) Severance: (a) In the event Executive's employment hereunder shall be
terminated by the Executive for Reason or by the Company for other than Cause,
Death or Disability, Executive shall thereupon receive as severance pay the
amount of salary, not including car allowance, if applicable, which the
Executive would have received for three months of service under this Agreement
(such severance pay will be payable in the same manner in which Executive
received payment of salary during employment).
(b) An election by Executive to terminate his employment under the
provisions of this paragraph shall not be deemed a voluntary termination of
employment of Executive for the purpose of interrupting the provisions of any of
the Company's employee benefit plans, programs or policies.
(E) Resignation: In the event Executive resigns without Reason prior to the
expiration hereof, he shall receive any unpaid fixed salary through such
resignation date and such benefits to which he is entitled by law.
(F) Extension of Benefits: Any extension of benefits following the
termination of employment provided for herein shall be deemed to be in addition
to, and not in lieu of, any period for the continuation of benefits provided for
by law, either at the Company's, Executive or his dependents' expense.
(G) Change in Control: For purposes hereof, a Change in Control shall be
deemed to have occurred (i) if there has occurred a "change in control" as such
term is used in Item 1 (a) of Form 8-K promulgated under the Securities Exchange
Act of 1934, as amended, at the date hereof ("Exchange Act") or (ii) if there
has occurred a change in control as the term "control" is defined in Rule 12b-2
promulgated under the Exchange Act.
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8. Indemnification: Company hereby indemnifies and holds Executive harmless
to the extent of any and all claims, suits, proceedings, damages, losses or
liabilities incurred by Executive and arising out of any acts or decisions done
or made in the authorized scope of his employment hereunder. Company hereby
agrees to pay all expenses, including reasonable attorney's fees, actually
incurred by Executive in connection with the investigation of any such matter,
the defense of any such action, suit or proceeding and in connection with any
appeal thereon including the cost of settlements. Nothing contained herein shall
entitle Executive to indemnification by Company in excess of that permitted
under applicable law.
9. Waiver: No delay or omission to exercise any right, power or remedy
accruing to either party hereto shall impair any such right, power or remedy or
shall be construed to be a waiver of or an acquiescence to any breach hereof. No
waiver of any breach hereof shall be deemed to be a waiver of any other breach
hereof theretofore or thereafter occurring. Any waiver of any provision hereof
shall be effective only to the extent specifically set forth in the applicable
writing. All remedies afforded to either party under this Agreement, by law or
otherwise, shall be cumulative and not alternative and shall not preclude
assertion by either party of any other rights or the seeking of any other rights
or remedies against the other party.
10. Governing Law: The validity of this Agreement or of any of the
provisions hereof shall be determined under and according to the laws of the
State of New York, and this Agreement and its provisions shall be construed
according to the laws of the State of New York, without regard to the principles
of conflicts of law and the actual domiciles of the parties hereto.
11. Notices: All notices, demands or other communications required or
permitted to be given in connection with this Agreement shall be given in
writing, shall be transmitted to the appropriate party by hand delivery, by
certified mail, return receipt requested, postage prepaid or by overnight
carrier and shall be addressed to a party at such party's address shown on the
first page hereof. A party may designate by written notice given to the other
parties a new address to which any notice, demand or other communication
hereunder shall thereafter be given. Each notice, demand or other communication
transmitted in the manner described in this Section 11 shall be deemed to have
been given and received for all purposes at the time it shall have been (i)
delivered to the addressee as indicated by the return receipt (if transmitted by
mail), the affidavit of the messenger (if transmitted by hand delivery or
overnight carrier) or (ii) presented for delivery during normal business hours,
if such delivery shall not have been accepted for any reason.
12. Assignments: This Agreement shall be binding upon and inure to the
benefit of the parties and each of their respective successors, assigns, heirs
and legal representatives; provided, however, that Executive may not assign or
delegate his obligations, responsibilities and duties hereunder except as
permitted by the Company's by-laws, custom, practice, policies or the Board of
Directors. Company may not assign this Agreement without the prior written
consent of Executive.
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13. Miscellaneous: This Agreement contains the entire understanding between
the parties hereto and supersedes all other oral and written agreements or
understandings between them with respect to the subject matter hereof. No
modification or addition hereto or waiver or cancellation of any provision shall
be valid except by a writing signed by the party to be charged therewith.
14. Obligations of a Continuing Nature: It is expressly understood and
agreed that the covenants, agreements and restrictions undertaken by or imposed
on Executive and, the Company hereunder, which are stated to exist or continue
after termination of Executive's employment with the Company, shall exist and
continue irrespective of the method or circumstances of such termination for the
respective periods of time set forth herein.
15. Severability: The parties agree that if any of the covenants,
agreements or restrictions contained herein are held to be invalid by any court
of competent jurisdiction, the remainder of the other covenants, agreements
restrictions and parts thereof herein contained shall be severable so not to
invalidate any others and such other covenants, agreements, restrictions and
parts thereof shall be given full effect without regard to the invalid portion.
16. Venue: Jurisdiction: The Company and the Executive hereby agree that
any action, proceeding or claim against either of them arising out of, or
relating in any way to this Agreement shall be brought and enforced in any of
the courts of the State of New York in New York County, New York, or the United
States District Court for the Southern District of New York, and irrevocably
submit to such jurisdiction. The Company and the Executive hereby waive any
objection to such jurisdiction and that such courts represent an inconvenient
forum. Any process or summons to be served upon the Company or the Executive may
be served by transmitting a copy thereof by registered or certified mail, return
receipt requested, postage prepaid, addressed to their respective addresses set
forth in the initial paragraph of this agreement or such other address as a
party may so notify the other parties hereto in the manner provided by Section
II hereof. Such mailing shall be deemed personal service and shall be legal and
binding upon the Company and the Executive in any action, proceeding or claim.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the
day and year first above written.
PROTOSOURCE CORPORATION
By:
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Xxxxxxx Xxxxx, President and
Chief Executive Officer
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Xxxx Xxxxxxxxx, Vice President and
General Manager
Suncoast Division
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