EXHIBIT 10.3
EMPLOYMENT AGREEMENT
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AGREEMENT, dated as of July 19, 2004, between PROTOCALL
TECHNOLOGIES INCORPORATED, a New York corporation (including any successor, the
"Company"), and Xxxxxxx Xxxxxxx (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Company desires to retain the services of the
Executive and to that end desires to enter into a contract of employment with
him / her, upon the terms and conditions herein set forth; and
WHEREAS, the Executive desires to be employed by the Company upon
such terms and conditions;
NOW, THEREFORE, in consideration of the premises and of the mutual
benefits and covenants contained herein, the parties hereto, intending to be
bound, hereby agree as follows:
1. APPOINTMENT AND TERM
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Subject to the terms hereof, the Company hereby employs the
Executive, and the Executive hereby accepts employment with the Company, all in
accordance with the terms and conditions set forth herein, for a five-year
period commencing on the closing date of the Company's proposed reverse merger
and concurrent private placement (the "Commencement Date"), unless the parties
mutually agree in writing upon a later date.
2. DUTIES
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(a) During the term of this Agreement, the Executive shall be
employed as a senior Executive officer of the Company, and shall, unless
prevented by incapacity, devote all of his / her business time, attention and
ability during normal corporate office business hours to the discharge of his /
her duties hereunder and to the faithful and diligent performance of such duties
and the exercise of such powers as may be assigned to or vested in him by the
Board of Directors of the Company (the "Board"). The Executive shall obey the
lawful directions of the Board and shall use his / her diligent efforts to
promote the interests of the Company and to maintain and promote the reputation
thereof.
(b) The Executive shall not during his / her term of employment
(except as a representative of the Company or with the consent in writing of the
Board) be directly or indirectly engaged or concerned or interested in any other
business activity, except through ownership of an interest of not more than 2%
in any entity that does not compete with the Company, provided it does not
impair the ability of the Executive to discharge fully and faithfully his / her
duties hereunder.
(c) Notwithstanding the foregoing provisions, the Executive shall
be entitled to serve in various leadership capacities in civic, charitable and
professional organizations. The Executive recognizes that his / her primary and
paramount responsibility is to the Company.
(d) The Executive shall be based in Suffolk County, New York,
except for required travel on the Company's business.
3. REMUNERATION
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(a) As compensation for his / her services pursuant hereto, the
Executive shall be paid a base salary, as adjusted pursuant to the Company's
annual review, during his / her employment hereunder at the annual rate of
$127,500.
(b) The Executive shall be eligible to receive incentive
compensation, subject to the Company meeting specified financial and operating
milestones as determined by the Board. Within 90 days after the Commencement
Date, the Board shall have provided the milestones, which will permit the
Executive to earn incentive compensation.
(c) The Executive shall receive stock options to purchase shares of
common stock as determined by the Board and, if there is a Change of Control (as
such term is defined in Section 7(g) hereof), any unvested options held by
Executive under 3 (c) shall vest immediately.
(d) Except as provided above in Sections 3 (a), (b) and (c) and in
Sections 4, 5 and 7 hereof, the Company shall not be obligated to provide any
additional compensation, remuneration or other payments to the Executive
although the Company, as determined by the Board, reserves its right to do so.
(e) The Company shall have no obligation actually to utilize the
Executive's services; if the Company elects not to use the Executive's services
at any time, the Company's obligations to the Executive shall be satisfied, in
all respects, by the payment to the Executive of a severance allowance based on
the Executive's length of employment with the Company (including its
predecessor) as of the date of such termination in accordance with Schedule A
hereto, at the Executive's then current compensation provided in Section 3(a),
less applicable taxes and social security deductions required to be withheld, on
the same payroll schedule as if the Executive were still so employed, plus the
continuation of benefits under Section 4 through the end of the month of
termination.
(f) During such remaining term of employment, the Executive shall
be entitled to seek other employment provided that such employment would not
violate the terms of this Agreement, including Sections 8 and 9 hereof; and the
seeking of such employment shall not be deemed a violation of this Agreement.
Notwithstanding the foregoing, the above payments to the Executive shall not be
reduced or offset by any compensation whatsoever received by the Executive from
any other permitted employment of the Executive.
4. HEALTH INSURANCE AND OTHER FRINGE BENEFITS
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The Executive shall be entitled to participate in regular employee
fringe benefit programs to the extent such programs are offered by the Company
to its executive employees, including, but not limited to, medical, and
hospitalization insurance that are substantially consistent with the programs of
the Company in effect prior to the Commencement Date.
5. VACATION
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The Executive shall be entitled to three weeks of vacation (in
addition to the usual national holidays) during each contract year of this
Agreement during which he serves hereunder consistent with the Company's
standard policies and procedures for executive employees of the Company at his /
her level. Such vacation shall be taken at such time or times as will be
mutually agreed between the Executive and the Company. Vacation not taken during
a calendar year may not be carried forward and will not be paid out.
6. REIMBURSEMENT FOR EXPENSES
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The Executive shall be reimbursed for reasonable documented
business expenses incurred in connection with the business of the Company in
accordance with practices and policies established by the Company.
7. TERMINATION
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(a) This Agreement shall terminate in accordance with the terms of
Section 7(b) hereof; provided, however, that such termination shall not affect
the obligations of the Executive pursuant to the terms of Sections 8 and 9.
(b) This Agreement shall terminate on the Expiration Date; or as
follows:
(i) Upon the written notice to the Executive by the Company at
any time, because of (w) the willful and material malfeasance, dishonesty or
habitual drug or alcohol abuse by the Executive related to or affecting the
performance of his / her duties, (x) the Executive's continuing and intentional
breach, non-performance or non-observance of any of the terms or provisions of
this Agreement, but only after notice by the Company of such breach,
nonperformance or nonobservance and the failure of the Executive to cure such
default as soon as practicable (but in any event within ten (10) days following
written notice from the Company), (y) the conduct by the Executive which the
Board in good faith determines
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could reasonably be expected to have a material adverse effect on the business,
assets, properties, results of operations, financial condition, personnel or
prospects of the Company (within each category, taken as a whole), but only
after notice by the Company of such conduct and the failure of the Executive to
cure same as soon as practicable (but in any event within ten (10) days
following written notice from the Company), or (z) upon the Executive's
conviction of a felony, any crime involving moral turpitude (including, without
limitation, sexual harassment) related to or affecting the performance of his /
her duties or any act of fraud, embezzlement, theft or willful breach of
fiduciary duty against the Company.
(ii) In the event the Executive, by reason of physical or
mental disability, shall be unable to perform the services required of him
hereunder for a period of more than 60 consecutive days, or for more than a
total of 90 non-consecutive days in the aggregate during any period of twelve
(12) consecutive calendar months, on the 61st consecutive day, or the 91st day,
as the case may be. The Executive agrees, in the event of any dispute under this
Section 7(b)(ii), and after written notice by the Board, to submit to a physical
examination by a licensed physician practicing in the state of the Executive's
primary residence selected by the Board, and reasonably acceptable to the
Executive.
(iii) In the event the Executive dies while employed pursuant
hereto, on the 61st day following the day in which his / her death occurs.
(c) If this Agreement is terminated pursuant to Section 7(b),
the Company will have no further liability to the Executive after the date of
termination including, without limitation, the compensation and benefits
described herein and the award of any unvested options; provided that, (i) in
the case of termination pursuant to Section 7(b)(ii), the Executive will receive
his / her then current salary until such time (but not more than 120 days after
such disability) as payments begin under any disability insurance plan of the
Executive, and (ii) in the case of termination pursuant to Section 7(b)(i), all
unexercised options held by the Executive as of the date of the termination
notice referred to therein will be canceled.
(d) In the event the Company chooses not to enter into any
agreement or amendment extending the Executive's employment beyond the
Expiration Date, the Company agrees to provide Executive at least 60 days prior
written notice of such determination (which notice may be given either prior to
or after such Expiration Date, but if notice is given any later than 60 days
prior to the Expiration Date, then the term of this Agreement shall be extended
until the date which is 60 days after the date such notice is given), during
which time the Executive may seek alternative employment while still being
employed by the Company.
(e) Without cause, the Company may terminate this agreement at
any time upon 10 days written notice to the Employee. If the Company requests,
the Employee will continue to perform his/her duties and may be paid his/her
regular salary up to the date of termination. In addition, the Company will pay
the Employee a severance allowance based on Executive's length of employment
with Company and its predecessors as of the date of such termination as further
detailed on Schedule A less taxes and social security required to be withheld on
the same payroll schedule as if the Employee was still employed provided,
however, that if the Company is deemed insolvent, such severance payments may be
delayed as and when cash flow reasonably permits. Medical benefits will be
provided through the end of the month of termination.
(f) Without cause, the Employee may terminate employment upon
written notice as further detailed on Schedule A to the Company. Employee may be
required to perform his / her duties and will be paid the regular salary to date
of termination but shall not receive severance allowance.
(g) If there is a Change of Control (as defined below), and
subsequent thereto the Executive's employment with the Company terminates at any
time within six months after such Change of Control for reasons other than as
provided in Section 7(b)(i), then the Executive shall be paid pursuant to
Schedule A, and in addition pursuant to this Agreement an amount for the period
remaining between the date of such termination and the six-month anniversary of
the Change of Control at the Executive's then current compensation (pursuant to
Section 3(a)) at the date of termination (unless the Executive is otherwise paid
for such period pursuant to Section 15(c) hereof, or otherwise). Notwithstanding
the foregoing, the above payment to the Executive upon a Change of Control shall
be reduced or offset by any compensation whatsoever received by the Executive
from any other permitted employment of the Executive. A Change of Control shall
be deemed to have occurred at such time as any person, other than the Company,
its existing shareholders or any of its or their affiliates on the date hereof,
purchases the "beneficial ownership" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934), directly or indirectly, of 50% or more of the
combined voting power of voting securities then ordinarily having the right to
vote for directors of the Company.
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8. CONFIDENTIAL INFORMATION
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(a) The Executive covenants and agrees that he will not at any
time during the continuance of this Agreement or at any time thereafter (i)
print, publish, divulge or communicate to any person, firm, corporation or other
business organization (except in connection with the Executive's employment
hereunder) or use for his / her own account any secret or confidential
information relating to the business of the Company (including, without
limitation, information relating to any customers, suppliers, employees,
products, services, formulae, technology, know-how, trade secrets or the like,
financial information or plans) or any secret or confidential information
relating to the affairs, dealings, projects and concerns of the Company, both
past and planned (the "Confidential Information"), which the Executive has
received or obtained or may receive or obtain during the course of his / her
employment with the Company (whether or not developed, devised or otherwise
created in whole or in part by the efforts of the Executive), or (ii) take with
him, upon termination of his / her employment hereunder, any information in
paper or document form or on any computer-readable media relating to the
foregoing. The term "Confidential Information" does not include information
which is or becomes generally available to the public other than as a result of
disclosure by the Executive or which is generally known in the Business of the
Company (as such term is defined in Section 9(a)). The Executive further
covenants and agrees that he shall retain the Confidential Information received
or obtained during such service in trust for the sole benefit of the Company or
its successors and assigns.
(b) The term Confidential Information as defined in Section 8(a)
hereof shall include information obtained by the Company from any third party
under an agreement including restrictions on disclosure known to the Executive.
(c) In the event that the Executive is requested pursuant to
subpoena or other legal process to disclose any of the Confidential Information,
the Executive will provide the Company with prompt notice so that the Company
may seek a protective order or other appropriate remedy and/or waive compliance
with Section 8 of this Agreement. In the event that such protective order or
other remedy is not obtained or that the Company waives compliance with the
provisions of Section 8 of this Agreement, the Executive will furnish only that
portion of the Confidential Information which is legally required.
9. RESTRICTIONS DURING EMPLOYMENT AND FOLLOWING TERMINATION
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(a) The Executive shall not, anywhere within the United States,
during his / her employment hereunder, without the prior written consent of the
Company, directly or indirectly, and whether as principal, agent, officer,
director, partner, employee, consultant, broker, dealer or otherwise, alone or
in association with any other person, firm, corporation or other business
organization, carry on, or be engaged, have an interest in or take part in, or
render services to any person, firm, corporation or other business organization
(other than the Company) engaged in a business which is competitive with all or
part of the Business of the Company. The term "Business of the Company" shall
mean developing and marketing a proprietary system which enables retailers to
produce fully packaged digital media, on demand, at their stores and at their
website fulfillment centers and other types of activities then being performed
or contemplated by the Company and known to the Executive.
(b) The Executive shall not, for a period of one (1) year after
termination of his / her employment hereunder, either on his / her own behalf or
on behalf of any other person, firm, corporation or other business organization,
endeavor to entice away from the Company any person who, at any time during the
continuance of this Agreement, was an employee of the Company.
(c) The Executive shall not, for a period of one (1) year after
termination of his / her employment hereunder, either on his / her own behalf or
on behalf of any other person, firm, corporation or other business organization,
solicit or direct others to solicit, any of the Company's customers or
prospective customers (including, but not limited to, those customers or
prospective customers with whom the Executive had a business relationship during
his / her term of employment) for any purpose or for any activity which is
competitive with all or part of the Business of the Company.
(d) It is understood by and between the parties hereto that the
foregoing covenants by the Executive set forth in this Section 9 are essential
elements of this Agreement and that, but for the agreement of the Executive to
comply with such covenants, the Company would not have entered into this
Agreement. It is recognized by the Executive that the Company currently operates
in, and may continue to expand its operations throughout, the geographical
territories referred to in Section 9(a) above. The
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Company and the Executive have independently consulted with their respective
counsel and have been advised in all respects concerning the reasonableness and
propriety of such covenants.
10. REMEDIES
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(a) Without intending to limit the remedies available to the
Company, it is mutually understood and agreed that the Executive's services are
of a special, unique, unusual, extraordinary and intellectual character giving
them a peculiar value, the loss of which may not be reasonably or adequately
compensated in damages in an action at law, and, therefore, in the event of any
material breach by the Executive that continues after any applicable cure
period, the Company shall be entitled to equitable relief by way of injunction
or otherwise.
(b) The covenants of Section 8 shall be construed as independent of
any other provisions contained in this Agreement and shall be enforceable as
aforesaid notwithstanding the existence of any claim or cause of action of the
Executive against the Company, whether based on this Agreement or otherwise. In
the event that any of the provisions of Sections 8 or 9 hereof should ever be
adjudicated to exceed the time, geographic, product/service or other limitations
permitted by applicable law in any jurisdiction, then such provisions shall be
deemed reformed in any such jurisdiction to the maximum time, geographic,
product/service or other limitations permitted by applicable law.
11. COMPLIANCE WITH OTHER AGREEMENTS
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The Executive represents and warrants to the Company that the
execution of this Agreement by him / her and his / her performance of his / her
obligations hereunder will not, with or without the giving of notice or the
passage of time or both, conflict with, result in the breach of any provision of
or the termination of, or constitute a default under, any agreement to which the
Executive is a party or by which the Executive is or may be bound.
12. WAIVERS
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The waiver by the Company or the Executive of a breach of any of
the provisions of this Agreement shall not operate or be construed as a waiver
of any subsequent breach.
13. BINDING EFFECT; BENEFITS
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This Agreement shall inure to the benefit of, and shall be binding
upon, the parties hereto and their respective successors, assigns, heirs and
legal respectives, including any corporation or other business organization with
which the Company may merge or consolidate or sell all or substantially all of
its assets. Insofar as the Executive is concerned, this contract, being
personal, cannot be assigned.
14. NOTICES
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All notices and other communications which are required or may be
given under this Agreement shall be in writing and shall be deemed to have been
duly given when delivered to the person to whom such notice is to be given at
his / her or its address set forth below, or such other address for the party as
shall be specified by notice given pursuant hereto:
(a) If to the Executive, to him at:
Xxxxxxx Xxxxxxx
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and
(b) If to the Company, to it at:
Protocall Technologies Incorporated
00 Xxxx Xxxxx Xxxxxxx, Xxx Xxxx 00000
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with a copy to:
Xxxxxxxxx Traurig, LLP
The MetLife Building
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
15. MISCELLANEOUS
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(a) This Agreement contains the entire agreement between the
parties hereto and supersedes all prior agreements and understandings, oral or
written, between the parties hereto with respect to the subject matter hereof.
This Agreement may not be changed, modified, extended or terminated except upon
written amendment approved by the Board and executed by a duly authorized
officer of the Company.
(b) The Executive acknowledges that from time to time, the Company
may establish, maintain and distribute employee manuals of handbooks or
personnel policy manuals, and officers or other representatives of the Company
may make written or oral statements relating to personnel policies and
procedures. Such manuals, handbooks and statements are intended only for general
guidance. No policies, procedures or statements of any nature by or on behalf of
the Company (whether written or oral, and whether or not contained in any
employee manual or handbook or personnel policy manual), and no acts or
practices of any nature, shall be construed to modify this Agreement or to
create express or implied obligations of any nature to the Executive.
(c) This Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
(d) All questions pertaining to the validity, construction,
execution and performance of this Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to its
conflict of law principles.
(e) Any controversy or claim arising from, out of or relating to
this Agreement, or the breach hereof (other than controversies or claims arising
from, out of or relating to the provisions in Xxxxxxxx 0, 0 xxx 00), xxxxx xx
determined by final and binding arbitration in New York, New York, in accordance
with the Employment Dispute Resolution Rules of the American Arbitration
Association, by a panel of not less than three (3) arbitrators appointed by the
American Arbitration Association. The decision of the arbitrators may be entered
and enforced in any court of competent jurisdiction by either the Company or the
Executive.
The parties indicate their acceptance of the foregoing
arbitration requirement by initialing below:
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For the Company Executive
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
PROTOCALL TECHNOLOGIES INCORPORATED
By: /s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: President & CEO
EXECUTIVE
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
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Schedule A
Years of Employment Severance Resignation Notice
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Up to 6 full years 6 Months 6 Months
6 to 10 full years 9 Months 9 Months
11 to 15 full years 12 Months 12 Months
16 full years or greater 24 Months 12 Months
Xxxxxxx Xxxxxxx employment start date: 4/19/2000
