EXHIBIT 10.3
EXECUTION COPY
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") dated as of [intended to be the
Closing Date of the Related Transactions], 2005 (the "Effective Date") is made
and entered into by and between The A Consulting Team, Inc., a New York
corporation having its principal place of business at 00 Xxxxx Xxxxxx, Xxxxx XX
00000 ("TACT") and its affiliates, associated companies, subsidiaries, parent,
divisions or related entities (collectively with TACT, the "Company"), and
Xxxxxxx X. Xxxxxxx ("Employee"), an individual residing at 0 Xxxxxxx Xxxx, Xxxxx
Xxxx, Xxx Xxxxxx 00000.
1. Employment and Duties.
(a) The Company hereby employs Employee as Chief
Financial Officer. Employee will be based at the New
Jersey office of TACT, and TACT will provide Employee
with an office and appropriate computer and
communications equipment at both of its offices in
that area. Employee shall perform such work as may be
required of Employee by Company in accordance with
the instructions, directions and control of Company
and at such reasonable times and places as Company
may determine. At all times during the Term, Employee
shall strictly adhere to all rules and regulations
that have been or that may hereafter be established
by Company for the conduct of its employees and
further, Employee shall strictly adhere to all
provisions of the Company's handbook(s).
(b) Employee hereby accepts employment in such capacity
and conditions as hereinafter set forth.
2. Term. Unless sooner terminated by either party in accordance
with Section 7, the term of this Agreement is for three (3)
years, commencing on the Effective Date and ending on the
third anniversary thereof (the "Term"). If the Company does
not intend to offer you an employment agreement for an
additional three-year immediately following the termination of
the Term, it will so notify you not later than six(6) months
prior to the expiration of the Term.
3. Monetary Compensation. The Company shall pay to Employee the
following monetary compensation for all services to be
rendered by Employee in any capacity:
(a) an annual base salary of TWO HUNDRED TWENTY-FIVE
THOUSAND DOLLARS ($225,000.00) (the "Base Salary"),
subject to annual review by the board of directors of
TACT, less all applicable and required federal,
state, local and authorized deductions, payable twice
a month in accordance with the Company's regular
payroll practices; and
(b) an annual special bonus of TWENTY-FIVE THOUSAND
DOLLARS ($25,000) (the "Special Bonus") less all
applicable and required federal, state, local and
authorized deductions, payable in four (4) equal
quarterly installments paid at the mid payroll cycle
of each quarter, of SIX THOUSAND TWO HUNDRED FIFTY
DOLLARS ($6,250.00) each.
4. Fringe Benefits. Company shall provide Employee with the
following fringe benefits:
(a) the opportunity, if and to the extent eligible, to
participate in any standard group health, dental,
life and disability insurance plans, pension plan or
similar benefit plan of the Company offered during
the Term;
(b) the opportunity to participate in the Company's
executive management bonus, stock option plan and
such other similar plans as may be offered by the
Company during the Term, all of which shall be
offered and administered in accordance with the
Company's normal business practices for each plan;
(c) other fringe benefits, including vacation, sick and
personal days, in accordance with TACT's then-current
policy for such other fringe benefits for a chief
financial officer position; and
(d) a monthly automobile allowance equal to the leasing
costs, automobile insurance expense, routine
maintenance and related expenses for the 2004
Cadillac CTS which Employee is leasing as of the
Effective Date.
5. Full Time and Attention. Employee shall devote full and
complete attention and energies to the business of Company,
and shall not during the Term be engaged in any other business
activity, whether or not such business activity is pursued for
gain, profit or other pecuniary advantage and whether or not
such other business activity is directly or indirectly related
or unrelated to the business activity of Company, without the
prior written consent of Company. However, this shall not be
construed as preventing Employee from investing his assets in
such form or manner as will not require any services on
Employee's part in the operation of the affairs of the
companies in which such investments are made; provided,
however, that any investment in any non-public companies shall
not be in companies having allied or related business
activities to Company. Employee shall be permitted to hold
less than five percent (5%) of the outstanding equity or
convertible debt of any publicly-owned corporation (regardless
whether such corporation is engaged in a business similar to
that of Company), provided that Employee is not in a control
position in such corporation. Notwithstanding the foregoing,
the Company understands and acknowledges that, as of the
Effective Date, Employee is a director of eRXSYS, Inc. and
Senior Days Inc., and agrees that Employee shall be permitted
to continue to serve as a director of both corporations during
the Term.
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6. Reimbursement of Expenses. The Company will reimburse Employee
for expenses incurred by Employee in the course of his
employment provided that such expenses are reimbursable by
Company policy, and further, such expenses are authorized by
Company and an accounting is made to Company therefor, in
accordance with the procedures of Company pertaining thereto.
7. Termination of Agreement.
(a) The Agreement shall be terminated upon the death of
Employee or may be terminated by Company if Employee
fails to render the services required hereunder for a
continuous period of ninety (90) days because of
Employee's physical or mental disability.
(b) Notwithstanding anything to the contrary herein,
either party may terminate this Agreement, with or
without Cause and for any reason whatsoever, by
giving ten (10) days prior written notice to the
other party. In the event Company terminates Employee
without Cause, Employee shall be entitled to receive
as severance an amount equal to nine (9) months of
Base Salary and any Special Bonus to which he would
be entitled during such nine-month period. If
Employee voluntarily terminates this Agreement,
Employee shall be entitled to Base Salary accrued
through the date of termination and shall forfeit his
right to receive any Special Bonus for the quarter in
which his resignation occurs, but shall receive any
Special Bonus to which he is entitled for all
quarters up to such quarter. For purposes of this
Section 7, "Cause" shall mean: (i) Employee's
embezzlement, willful breach of fiduciary duty or
fraud with regard to Company or any of Company's
assets or businesses; (ii) Employee's conviction of,
or pleading of nolo contendre with regard to a felony
(other than a traffic violation) or any other crime
involving moral turpitude and involving activity
related to the affairs of Company; or (iii) any other
breach by Employee of a material provision of this
Agreement that remains uncured for thirty (30) days
after written notice thereof is given to Employee. In
the event Company terminates this Agreement for
Cause, Company's sole obligation is to pay Employee
his Base Salary accrued through the date of
termination.
(c) On or after the Effective Date, Employee may
terminate this Agreement for Sufficient Reason. For
purposes of this Section 7, "Sufficient Reason" shall
mean (i) a direct or indirect change in the ownership
or control of Company by purchase, merger,
consolidation, reorganization, lease, exchange,
transfer or sale of all or substantially all of the
assets and/or outstanding stock of Company, taking
the Company private, or any other business
transaction involving Company or any combination of
the foregoing transactions which results in any
material demotion of Employee and/or any material
reduction in Employee's authority or responsibilities
(it being understood that the change in control that
occurs pursuant to or in conjunction with the Share
Exchange Agreement, dated as of January 21, 2005
shall not be "Sufficient Reason" for purposes of this
Section) or (ii) a written request by the Company for
the Employee to act in any manner that will result in
a breach of the Company's Code of Ethics by Employee
or (iii) a material reduction in the Employee title,
assignment, operating authority, duties, or
responsibilities. In the event Employee or Company
terminates this Agreement for Sufficient Reason,
Employee shall be entitled to receive as severance an
amount equal to nine (9) months of Base Salary and
any Special Bonus to which he is entitled through the
quarter in which such resignation occurs.
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8. Confidentiality. Employee recognizes and acknowledges that
Company's trade secrets, customer/broker/client lists, private
processes, prospective customer/broker/client lists, and staff
and prospective staff lists (collectively, "Confidential
Information") are deemed to be the private and proprietary
information of Company and are available, special, unique and
significant proprietary assets of Company's business. Employee
will not either during or subsequent to the Term, in whole or
in part, disclose such Confidential Information to any person,
firm, corporation, association or other entity for any reason
or purpose whatsoever. In addition, Employee shall not make
use of any Confidential Information for Employee's own
purposes or for the benefit of any person, firm, corporation,
or other entity other than Company under any circumstances
during the Term or subsequent to employment.
9. Non-Competition. Employee agrees that during the Term and for
a period of one (1) year thereafter, Employee will not
directly or indirectly, or in any capacity, individually or in
any corporation, firm, association or other business entity,
compete or attempt to compete with Company, or any corporation
merged into, or merged or consolidated with Company (a) by
soliciting business from any customer, broker and/or client of
Company with which Employee was involved (directly or
indirectly) during the Term, if such solicited business
competes with the business of Company, or (b) by inducing any
personnel of Company to leave the service of Company, or by
employing or contracting with any such personnel. The
provisions of this Section 9 shall be construed as an
Agreement independent of any other provision contained herein
and shall be enforceable in both law and equity, including by
temporary or permanent restraining orders, notwithstanding the
existence of any claim or cause of action by Employee against
Company, whether predicated on this Agreement or otherwise.
10. Intellectual Property. Employee hereby agrees to assign all
rights, title, and interest in all writings, products,
inventions, discoveries, developments, improvements, ideas,
technical notes, programs, specifications, computer or other
apparatus programs and related documentation, and other works
of authorship, tangible and intangible property, whether or
not patentable, copyrightable or subject to other forms of
protection, made, created, developed, discovered, written or
conceived by Employee, solely or jointly with another, in
whole or in part, for either Company and/or Company's
customer(s), broker(s) and/or client(s) during the Term,
whether during or outside of regular working hours, and to
promptly deliver to Company all such tangible properties and
work products at the request of Company. Employee shall not be
entitled to any compensation in addition to the amount set
forth in Section 3 of this Agreement by reason of said
assignment.
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11. Return of Company Property. Employee shall, upon termination
of employment with Company, immediately return to Company all
equipment and supplies of Company and all books, records,
lists and other written, typed or printed materials, whether
furnished by Company or prepared by Employee, which contain
any information relating to Company's business or any of its
customers, brokers and/or clients, and Employee agrees that
Employee will neither make nor retain copies of such materials
after termination of employment.
12. Authorized Deductions. Employee hereby authorizes Company, at
any time, to offset and deduct against any and all monies due
to Employee by Company, whether for salary or other
remuneration to the full extent allowed by law, any and all
monies owed by Employee to Company by law or pursuant to this
Agreement, including, but not limited to, the correction of
payroll errors, the repayment of monetary advances, the
reimbursement of tuition or training costs, and the recoupment
of auto allowances, relocation expenses, expenses, and/or
advanced vacation time.
13. Representations and Warrants of Employee. Employee hereby
represents and warrants that the execution of this Agreement
by Employee and the performance of Employee's duties and
obligations hereunder will not breach or be in conflict with
any other agreement to which Employee is a party or by which
Employee is bound, and that Employee is not now subject to any
covenant against competition or similar covenant which would
affect the performance of Employee's duties hereunder.
Employee hereby agrees to indemnify Company for all claims
arising out or related to Employee's breach of this Section
13.
14. Jurisdiction; Governing Law. Both parties hereto do hereby
consent to jurisdiction in the State of New Jersey with regard
to all controversies which may arise with respect to the
execution, interpretation of and compliance with the terms and
provisions of this Agreement; and both parties hereto agree
that New Jersey law applies and, in addition, waive any other
venue or forum to which they might otherwise be entitled by
virtue of domicile or otherwise.
15. Dispute Resolution. All disputes, controversies, or
differences arising in connection with the validity,
execution, performance breach, non-renewal or termination of
this Agreement shall be finally settled in an arbitration
proceeding under the rules of the American Arbitration
Association by three arbitrators with expertise in employment
and labor law in accordance with the Commercial Arbitration
Rules then in effect of the American Arbitration Association.
Selection of the arbitrators shall be as follows: each party
shall appoint one arbitrator within twenty (20) days after the
parties have agreed to go to arbitration, and those two
arbitrators shall appoint a third arbitrator who shall act as
chairman, within a twenty (20) day period thereafter. If the
parties fail to appoint the chairman within said period, the
parties will apply to the American Arbitration Association for
appointment of the third arbitrator. The parties agree to be
bound by the findings of the arbitration. Notwithstanding the
foregoing, the courts shall have jurisdiction over injunctive
or provisional relief pending arbitration. The arbitrators
shall only be empowered to award direct damages. In no event
shall the arbitrators be permitted to award special,
consequential, indirect, incidental or punitive damages or
lost profits.
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16. Waiver. The failure of either party to insist upon the
performance of any of the provisions of this agreement, or the
waiver of any breach thereof, shall not be construed as or
constitute a waiver of the rights granted herein with respect
to any subsequent forbearance or breach. No waiver or
modification of this Agreement or of any covenant, condition,
or limitation herein contained shall be valid unless in
writing and duly executed by the party to be charged therewith
and no evidence of any waiver or modification shall be offered
or received in evidence in any proceeding, arbitration or
litigation between the parties hereto arising out of or
affecting this Agreement, or the rights or obligations of the
parties hereunder, unless such waiver or modification is in
writing, duly executed as aforesaid, and the parties agree
that the provisions of this Section 16 may not be waived
except as herein set forth.
17. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and any
successor to the business of Company, but neither the
Agreement nor any rights hereunder may be assigned, pledged or
encumbered by Employee without the written consent of Company.
18. Amendments. This Agreement may not be changed, modified or
terminated orally. No amendment to or modification of this
Agreement shall be effective unless it shall be in writing and
signed by each party. Notwithstanding the foregoing, it is
expressly understood and agreed that any changes in the
Employee's compensation, duties, location or title will not
invalidate this Agreement. At the option of the parties, such
changes may be incorporated into an "Addendum" to this
Agreement. Failure to so incorporate such changes will not
affect the validity of, or the enforceability of, terms
herein.
19. Severability. All agreements and covenants contained herein
are severable, and in the event any of them shall be held to
be invalid by any competent court, this Agreement shall be
interpreted as if such invalid agreements or covenants were
not contained herein.
20. Notices. Any offer, notice, or request or other communication
hereunder shall be in writing and shall be deemed to have been
duly delivered if by hand or mailed by registered or certified
mail, return receipt requested, addressed to the respective
address of each party herein set forth, or to such other
address as each party may designate by a notice pursuant
hereto:
If to Company: The A Consulting Team, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
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With a copy (which shall not constitute notice) to:
Xxxxxxx X. Xxxxxx, Esq.
McGuireWoods LLP
1345 Avenue of the Americas, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
If to the Employee: Xxxxxxx X. Xxxxxxx
0 Xxxxxxx Xxxx
Xxxxx Xxxx, Xxx Xxxxxx 00000
21. Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same
instrument.
22. Entire Agreement. This Agreement supersedes any and all prior
agreements made between the parties, whether oral or written,
and constitutes that final and entire agreement and
understanding of the parties, all prior representations and
agreements having been merged into this Agreement, and this
Agreement shall amend, restate and replace all prior
employment agreements entered into between Company and
Employee, including the Employment Agreement, dated as of the
11th day of September, 2001 made and entered into by and
between the Company and Employee.
23. Construction. Each party acknowledges that such party and such
party's counsel have reviewed this Agreement and that the
normal rule of construction (to the effect that ambiguities
are to be resolved against the drafting party) shall not be
employed in the interpretation of this Agreement. The headings
contained in this Agreement are for convenience of reference
only and shall not affect in any way the meaning or
interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the Effective Date.
THE A CONSULTING TEAM, INC.
By: /s/ Xxxxxx XxxXxx
-----------------------------------
Name: Xxxxxx XxxXxx
Title: Chief Executive Officer
XXXXXXX X. XXXXXXX
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
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