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Exhibit 10.3
THE RTK GROUP, INC.
EMPLOYMENT AGREEMENT
FOR
XXX X. XXXXXXXXX
EMPLOYMENT AGREEMENT, dated as of June 14, 1999, by and between THE RTK
GROUP, INC., a New Jersey corporation (the "Company") and Xxx X. Xxxxxxxxx (the
"EXECUTIVE").
WHEREAS, the Company desires to employ Executive to provide personal
services to the Company, and wishes to provide Executive with certain
compensation and benefits in return for his services; and
WHEREAS, Executive wishes to be employed by the Company and provide
personal services to the Company in return for certain compensation and
benefits;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, it is hereby agreed by and between the parties hereto as
follows:
1. EMPLOYMENT BY THE COMPANY.
1.1 TERM; POSITION. Subject to earlier termination as set forth in
Section 5 below, for a period of three (3) years (the "AGREEMENT TERM"), the
Company agrees to employ Executive in the position of Chief Operating Officer
and Executive hereby accepts such employment effective as of the date first
written above. During the Agreement Term, Executive will devote his best efforts
and substantially all of his business time and attention (except for vacation
periods and reasonable periods of illness or other incapacities permitted by the
Company's general employment policies) to the business of the Company.
1.2 DUTIES. Executive shall serve in an executive capacity and shall
perform such duties as are customarily associated with his then existing
title(s), consistent with the Bylaws of the Company and as required by the
Company's Board of Directors (the "BOARD") or the Executive's supervisor.
Executive agrees to provide his services in substantial conformance with all
laws and regulations.
1.3 EMPLOYMENT RELATIONSHIP. The employment relationship between the
parties shall also be governed by the general employment policies and practices
of the Company, including those relating to protection of confidential
information and assignment of inventions, except that when the terms of this
Agreement differ from or are in conflict with the Company's general employment
policies or practices, this Agreement shall control.
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2. COMPENSATION.
2.1 SALARY. Executive shall receive for services to be rendered
hereunder an annualized base salary of $200,000 payable on a semi-monthly basis,
which may be reviewed at the discretion of the Compensation Committee of the
Board.
2.2 DISCRETIONARY BONUS. Executive will be eligible for a discretionary
bonus, in an amount to be determined solely by the Compensation Committee in its
discretion, subject to the terms and conditions outlined in a Company bonus
plan, which may be established and in effect from time to time.
2.3 INCENTIVE COMPENSATION. In addition to any other compensation or
benefits set forth in this Agreement, Executive shall be entitled to participate
during the Employment Term in the Company's Stock Incentive Plan in such amounts
and on such terms as may be determined by the Company's Compensation Committee
and approved by the Board, and in any incentive plans, programs or arrangements
generally applicable to the Company's executives and employees on such terms as
are determined by the Board.
2.4 STANDARD COMPANY BENEFITS. Executive shall be entitled to all
rights and benefits for which he is eligible under the terms and conditions of
the standard Company benefits and compensation practices which may be in effect
from time to time and provided by the Company to its employees in comparable
positions (the "COMPANY BENEFITS").
2.6 BUSINESS EXPENSES AND PERQUISITES. Reasonable travel, entertainment
and other business expenses incurred by Executive in the performance of his
duties hereunder shall be reimbursed by the Company in accordance with Company
policies; PROVIDED that Executive provides the Company with reasonable
documentation of such expenses satisfactory to the Company.
3. PROPRIETARY INFORMATION OBLIGATIONS. Executive will not at any time (whether
during or after his employment with the Company) disclose or use for his own
benefit or purposes or the benefit or purposes of any other person, firm,
company, joint venture, association, corporation or other business organization,
entity or enterprise other than the Company and any of its subsidiaries or
affiliates, any trade secrets, information, data, or other confidential
information relating to customers, development programs, costs, marketing,
trading, investment, sales activities, promotion, credit and financial data,
manufacturing processes, financing methods, plans, or the business and affairs
of the Company generally, or of any subsidiary or affiliate of the Company;
PROVIDED that the foregoing shall not apply to information which is not unique
to the Company or which is generally known to the industry or the public other
than as a result of Executive's breach of this covenant. Executive agrees that
upon termination of his employment with the Company for any reason, he will
return to the Company immediately all memoranda, books, papers, plans,
information, letters and other data, and all copies thereof or therefrom, in any
way relating to the business of the Company and its affiliates, except that he
may retain personal notes, notebooks and diaries. Executive further agrees that
he will not retain or use for his account at any time any trade names, trademark
or other proprietary business designation or intellectual property used or owned
in connection with the business of
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the Company or its affiliates. Notwithstanding the foregoing, the Executive
shall be permitted to disclose confidential information to the extent required
by law or judicial order.
4. OUTSIDE ACTIVITIES. Except with the prior written consent of the Company's
Board, Executive will not, during the Agreement Term, undertake or engage in any
other employment, occupation or business enterprise, other than those in which
Executive is a passive investor. Executive may engage in civic and
not-for-profit activities so long as such activities do not materially interfere
with the performance of his duties hereunder.
5. TERMINATION OF EMPLOYMENT.
(a) VOLUNTARY TERMINATION. During the Agreement Term, the
Executive may voluntarily terminate his employment relationship at any
time for any reason upon thirty (30) days' prior written notice to the
Company. Upon such voluntary termination, the Executive shall not be
entitled to any further compensation or rights under this Agreement
other than (i) accrued but unpaid compensation rights as of the date of
termination, or (ii) any rights or benefits accrued to the date of
termination under the terms of any Company Benefits the Executive
participated in prior to such termination (together, the "ACCRUED
RIGHTS").
(b) TERMINATION FOR CAUSE. During the Agreement Term, the
Executive's employment may be terminated by the Company for Cause. Such
termination shall be effective on the date of Executive's receipt of
notice in the case of clauses (i) through (v) of the definition of
Cause and, with respect to clauses (vi) and (vii) of the definition of
Cause, shall be effective on the date of the expiration of the cure
period if Executive fails to cure the breach within the cure period.
Upon such termination for Cause, the Executive shall not be entitled to
any further compensation or rights under this Agreement other than his
Accrued Rights.
For purposes of this Agreement, "CAUSE" shall mean: (i)
conviction of any felony or any crime involving moral turpitude or
dishonesty; (ii) participation in a fraud or act of dishonesty against
the Company or any of its subsidiaries or affiliates or the willful
fabrication of records of the Company or any of its subsidiaries or
affiliates; (iii) material breach of the Company's policies; (iv) any
other act or omission or series of acts or omissions which are
materially injurious to the financial condition or business reputation
of the Company or any of its subsidiaries or affiliates; (v) material
breach of Sections 3, 6 or 7 of this Agreement; (vi) a failure or
refusal in a material respect of Executive to follow the reasonable
policies or directions of the Company as specified by the Board or the
Executive's supervisor after being provided with notice of such failure
and an opportunity to cure within seven (7) days of receipt of such
notice; or (vii) failure to carry out the duties of the Executive's
position or alcoholism or other form of substance abuse, in each case
after being provided with notice of such failure and an opportunity to
cure within seven (7) days of receipt of such notice. Disability shall
not constitute "Cause."
(c) TERMINATION WITHOUT CAUSE. During the Agreement Term, the
Company may terminate the employment of the Executive at any time for
any reason other than Cause upon thirty (30) days' prior written notice
to the Executive. Upon such
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termination without Cause, the Executive will receive: (i) his Accrued
Rights, (ii) an amount equal to one (1) year of base salary, less
payroll deductions and required withholdings, payable in equal
semi-monthly installments, (iii) a lump sum payment of that portion of
the bonus Executive is entitled to for the calendar year in which the
termination occurs pro-rated based upon the number of full months
Executive was employed in such year, and (iv) continuation of all
Company Benefits for a period of one (1) year.
(d) DISABILITY. During the Agreement Term, the Company may
terminate the employment of the Executive on account of Disability upon
thirty (30) days' prior written notice to the Executive. Upon such
termination on account of Disability, the Executive will receive: (i)
his Accrued Rights, (ii) a lump sum payment equal to one (1) year of
base salary, less payroll deductions and required withholdings, (iii) a
lump sum payment of that portion of the bonus Executive is entitled to
for the calendar year pro-rated based upon the number of full months
Executive was employed in such year, and (iv) continuation of all
Company Benefits for a period of one (1) year.
For purposes of this Agreement, "DISABILITY" shall mean a
disability which prevents Executive from substantially performing his
duties under this Agreement for a period of at least 90 consecutive
days or 180 non-consecutive days within any 365-day period. Any
question as to the existence of the Disability of Executive as to which
Executive and the Company cannot agree shall be determined in writing
by a qualified independent physician mutually acceptable to Executive
and the Company. If Executive and the Company cannot agree as to a
qualified independent physician, each shall appoint such a physician
and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in
writing to the Company and Executive shall be final and conclusive for
all purposes of this Agreement.
(e) DEATH. In the event of the death of the Executive during
the Agreement Term, this Agreement shall automatically terminate
(subject to Section 8.9), such termination to be effective on the date
of Executive's death, and the Company shall pay to Executive or his
heirs, executors or administrators, his Accrued Rights, a portion of a
discretionary bonus, if any, which may otherwise have been paid to
Executive pursuant to Section 2.2 hereof with respect to the annual
period in which the death occurs pro-rated based upon the number of
full months Executive was employed in such annual period prior to his
death.
6. CONTINUATION OF EMPLOYMENT/RESTRICTIVE COVENANT. Executive acknowledges and
recognizes the highly competitive nature of the businesses of the Company and
its affiliates and accordingly agrees that during the term of Executive's
employment and for a period of twenty-four (24) months immediately following the
date that Executive ceases employment with the Company for any reason, Executive
shall not, in any geographic area where the businesses of the Company and its
affiliates are conducted, without first obtaining the prior written approval of
the Company, (i) directly or indirectly engage or prepare to engage, in the
business of providing services to media or communications companies or their
customers (the "Business") in competition with the Company or its subsidiaries
or affiliates, (ii) deal, directly or indirectly, in a competitive manner with
any customers or clients of any of the businesses of the Company and
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its subsidiaries and affiliates, or (iii) accept employment or establish a
business or consulting arrangement relationship with a business that directly or
indirectly engages in the Business in competition with the Company or its
subsidiaries or affiliates, as determined by an arbitrator as provided below.
Unless otherwise agreed to by the parties, a breach of this Section 6 will be
determined by an arbitrator in accordance with the Commercial Rules of the
American Arbitration Association (the "Rules") as in effect at the time of the
arbitration; provided, however, that in the event of conflict between the Rules
and the terms of this Agreement, the terms of this Agreement shall govern. The
place of arbitration shall be New York, New York and the law applicable to the
arbitration procedure shall be the internal law of the State of New York,
applicable New York judicial decisions, and the Federal Arbitration Act (9 USC
ss. 2). To commence arbitration of any such dispute, the party desiring
arbitration shall notify the other party in writing in accordance with the
Rules. If the parties cannot agree on an independent arbitrator within 15 days
after one party has given notice that it seeks arbitration (the "Arbitration
Notice Date"), each party shall select an arbitrator within 30 days after the
Arbitration Notice Date and the two selected arbitrators will, within 45 days
after the Arbitration Notice Date, select a third arbitrator who shall act as
the independent arbitrator.
On the thirtieth business day following the appointment of the
arbitrator, each party shall submit to the arbitrator a form of final decision
specifying the relief to which such party in good faith believes it is entitled.
Such form of final decision shall not be subject to further modification by the
party making such submission after it is received by the arbitrator. Within
thirty (30) days after the submission of such proposed forms of decision, or as
soon thereafter as may be reasonably possible, the arbitrator shall adopt as its
decision one of the two alternative submissions made by the respective parties.
The alternative chosen by the arbitrator shall be chosen in its entirety and
shall not be subject to modification by the arbitrator. The arbitrator shall
choose the form of final decision that, in its judgment, is most consistent with
the terms of this Agreement and the intent of the parties, as supported by
evidence presented by the parties in the arbitration proceedings or, if the
subject matter of the dispute is not clearly addressed in or determinable under
this Agreement, that, in its opinion, is legally correct under the
circumstances. The arbitrator shall not be required to provide the reasons for
its decision. The parties agree that the award of the arbitrator shall (1) be
the sole and exclusive remedy between them regarding any claims, counterclaims,
or issues presented to the arbitrators; and (2) be final and subject to no
judicial review. The parties hereto agree that judgment on the arbitration award
may be entered and enforced in any court having jurisdiction over the parties or
their assets. Each party shall, except as otherwise provided herein, be
responsible for its own expenses, including legal fees, incurred in the course
of any arbitration proceedings. The fees of the arbitrator shall be divided
evenly between the parties.
7. NONSOLICITATION. While employed by the Company, and for twenty-four (24)
months immediately following the Executive's termination of employment for any
reason, Executive agrees not to interfere with the business of the Company by
soliciting, attempting to solicit, inducing, or otherwise causing any employee,
consultant or independent contractor of the Company or its subsidiaries or
affiliates to terminate his or her employment or other service with the Company
or its subsidiaries or affiliates in order to become an employee, consultant or
independent contractor to or for any other entity or person.
8. RELEASE OF GUARANTIES. The Company shall use reasonable efforts to obtain the
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release of the personal guarantees executed by Xxx X. Xxxxxxxxx in favor of
Statewide Savings Bank and First Constitution Bank. If the guarantees are not
released within one year of the date of this Agreement, the Company will issue
to the Executive warrants to purchase 50,000 shares of common stock of the
Company (subject to any stock split, reverse stock split or other similar
reorganization) at an exercise price of $.01 per share, in the form of warrant
attached hereto.
9. GENERAL PROVISIONS.
9.1 NOTICES. Any notices provided hereunder must be in writing and
shall be deemed effective upon the earlier of personal delivery (including
personal delivery by telex) or the third day after mailing by first class mail,
to the Company at its primary office location and to Executive at his address as
listed on the Company's then current payroll records.
9.2 SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provisions had never been contained herein.
9.3 WAIVER. If either party should waive any breach of any provisions
of this Agreement, he or it shall not thereby be deemed to have waived any
preceding or succeeding breach of the same or any other provision of this
Agreement. No waiver of any provision hereof shall be effective unless in
writing.
9.4 COMPLETE AGREEMENT; AMENDMENT. This Agreement hereto, constitute
the entire agreement between Executive and the Company and it is the complete,
final, and exclusive embodiment of their agreement with regard to this subject
matter. It is entered into without reliance on any promise or representation
other than those expressly contained herein, and it cannot be modified or
amended except in a writing signed by an officer of the Company.
9.5 COUNTERPARTS. This Agreement may be executed in separate
counterparts, any one of which need not contain signatures of more than one
party, but all of which taken together will constitute one and the same
Agreement.
9.6 HEADINGS. The headings of the sections hereof are inserted for
convenience only and shall not be deemed to constitute a part hereof nor to
affect the meaning thereof.
9.7 SUCCESSORS AND ASSIGNS. This Agreement is intended to bind and
inure to the benefit of and be enforceable by Executive and the Company, and
their respective successors, assigns, heirs, executors and administrators,
except that Executive may not assign any of his duties hereunder and he may not
assign any of his rights hereunder without the written consent of the Company,
which shall not be withheld unreasonably.
9.8 CHOICE OF LAW. All questions concerning the construction, validity
and interpretation of this Agreement will be governed by the law of the State of
New York.
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9.9 SURVIVAL. The following provisions of this Agreement shall survive
the termination of Executive's employment and the assignment of this Agreement
by the Company to any successor in interest or other assignee: Section 3;
Section 6; Section 7; and Section 9.
9.10 RELIEF. Executive acknowledges that the restrictions set forth in
Sections 3, 4, 6 and 7 above are necessary to protect the Company's confidential
proprietary information and other legitimate business interests and are
reasonable in all respects, including duration, territory and scope of activity
restricted. Executive further acknowledges that the provisions of Sections 3, 4,
6 and 7 hereof are essential to the Company, that the Company would not enter
into this Agreement if it did not include these provisions and that damages
sustained by the Company as a result of a breach of these provisions cannot be
adequately remedied by damages, and Executive agrees that the Company, in
addition to any other remedy it may have under this Agreement or at law, shall
be entitled to injunctive and other equitable relief to prevent or curtail any
breach of Sections 3, 4, 6 and 7 of this Agreement. Executive agrees that the
existence of any claim or cause of action by Executive against the Company or
its affiliates, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of any of the provisions
of Sections 3, 4, 6 and 7 hereof. Executive shall have no right to enforce any
of his rights under this Agreement by seeking or obtaining injunctive or other
equitable relief and acknowledges that the damages described herein are an
adequate remedy for any breach by the Company of this Agreement.
In the event of a breach of the covenants and assurances of Sections 3,
6, or 7 by the Executive or in the event the Executive voluntarily terminates
his employment pursuant to Section 5(a) or has his employment terminated
pursuant to Section 5(b) hereof, any options to purchase shares of the Company
stock, whether vested or otherwise, shall terminate immediately and shall be of
no further force or effect and any severance or any other payment due to the
Executive under this Agreement shall be immediately forfeited except as provided
for in Sections 5(a) and 5(b).
9.11 WITHHOLDING TAXES. The Company may withhold from any amounts
payable under this Agreement such Federal, state and local taxes as may be
required to be withheld pursuant to any applicable law or regulation.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written.
THE RTK GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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XXX X. XXXXXXXXX
By: /s/ Xxx X. Xxxxxxxxx
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