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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective as specified herein, between Xxxxxxxxx
Technologies Inc., a Delaware corporation (including any of its subsidiaries,
collectively the "Company"), located at 000 Xxxxx Xxxxxx, Xxx Xxxxxxxxxx, Xxx
Xxxxxx 00000 and ("Executive") residing at .
NOW, THEREFORE, in consideration of the terms and mutual undertakings
herein contained, it is agreed by and between the Company and Executive as
follows:
1. Effective Date and Term of Employment:
This Agreement shall become effective on November 1, 1996 and
shall supersede any other agreements, if any, now in effect. This Agreement
shall remain in effect until the close of business one year from such effective
date ("Agreement Expiration Date"); provided, however, that on the Agreement
Expiration Date and on each anniversary of the Agreement Expiration Date (a
"Renewal Date"), this Agreement shall be renewed for a period of one additional
consecutive year unless either the Company or Executive provides written notice
to the other party at least ninety (90) days prior to a Renewal Date that the
Agreement shall terminate without renewal as of the corresponding Agreement
Expiration Date. When the Agreement extends for a period of one additional
consecutive year, the Agreement Expiration Date shall also extend by one year.
2. Duties and Responsibilities:
2.1 Executive will continue to serve as of the
Company and, as such, shall have such functions, duties and responsibilities,
not inconsistent with his title and office, as may be assigned to him by or
under the authority of the Board of Directors of the Company, and shall have
such authority and power as is necessary or appropriate to carry out his
assigned duties.
2.2 During the term of this Agreement the Executive shall,
without compensation other than that herein provided, also serve and continue to
serve, if and when elected and re-elected, as a director or member of any
committee of the Company and as an officer, director and/or member of any
committee of any subsidiary or affiliate of the Company.
2.3 During the term of this Agreement the Executive shall
devote his full time and undivided attention during normal business hours to the
business and affairs of the Company; provided however, that the Executive may
engage in charitable, educational, religious, civic and similar types of
activities (all of which shall be deemed to benefit the Company), speaking
engagements, memberships on the board of directors of other organizations, and
similar activities to the extent that such activities do not inhibit or prohibit
the performance of his duties hereunder or inhibit or conflict in any material
way with the business of the Company.
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2.4 The Executive's principal place of employment shall be at
the Company's principal executive offices in New Providence, New Jersey, or at
such other location in the New Jersey/New York metropolitan area as the Company
may determine to relocate its principal executive offices.
3. Compensation and Benefits:
3.1 For all services rendered by the Executive in any capacity
during the term of this Agreement, the Executive shall be paid as compensation a
base salary, payable semi-monthly, at the rate of $ per annum ("Base
Salary"), which amount shall be reviewed by the Board of Directors annually as
of January 1, of each year and which may be increased at the discretion of the
Board of Directors. Such increased amount to be referred to hereinafter as
Current Salary.
3.2 The Executive shall be eligible to participate in the
Company's management cash bonus incentive arrangement from time to time in
effect and payable with respect to the immediately preceding full calendar year
on or before April 1 of each year; provided that for the purposes of this
Section 3.2 the term of this Agreement shall be deemed to have commenced on
January 1, 1996.
3.3 During the term of this Agreement the Executive shall be
entitled to all benefits, including without limitation, a private office,
secretarial, computer and other support services and facilities consistent with
his title and office, and to all fringe benefits generally made available to
executive officers of the Company. The Executive shall also be entitled to
reimbursement in accordance with the policies of the Company, upon proper
accounting, of ordinary and necessary expenses and disbursements reasonably
incurred by him in the course of his duties, to paid holidays in accordance with
the policies of the Company, and to paid vacation of four (4) weeks per year.
Should the Executive not use his entire annual vacation, he will be allowed to
carry over to the next year up to two (2) weeks of such unused vacation.
4. Employee Benefit Plans:
The Executive, his dependents and beneficiaries shall be
entitled to participate in all employee benefit plans to which officers of the
Company, their dependents and beneficiaries, are entitled during the term of
this Agreement, including, without limitation, medical and health insurance and
welfare plans, pension plans and other present or equivalent successor plans and
practices of the Company for which officers, their dependents and beneficiaries
are eligible, and to all payments or other benefits under any such plan or
practices subsequent to the term of this Agreement as a result of participation
in such plan or practice during the term of this Agreement.
5. Termination of Employment:
5.1 The Executive's employment under this Agreement shall
terminate upon the Executive's death or legal incapacity. In such event, the
Executive or his legal representative shall be entitled to that portion of his
Current Salary accrued to or payable as of the end of the month
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during which such termination occurs. In addition, the Executive or his legal
representative shall be entitled to any accrued and unpaid vacation including
any allowable carry over, and to the pro-rata portion of any compensation due
pursuant to Section 3.2 that is earned in the year of death or legal incapacity.
5.2 The Company, may at its option, terminate the Executive's
employment under this Agreement if the Executive shall fail, or if the Board of
Directors shall find on the basis of medical evidence reasonably satisfactory to
it that the Executive is unable, by virtue or reason of physical injury or
physical or mental illness, to perform his duties hereunder on a full-time basis
for a period of ninety (90) consecutive days or more during any two hundred
seventy (270) day period or that the Executive's group and supplemental
long-term disability coverage, if any, as provided by the Company, commences the
payment of benefits. In such event, the Executive shall be entitled to that
portion of his Current Salary accrued to or payable as of the date of such
termination. In addition, the Executive shall be entitled to any accrued and
unpaid vacation including allowable carry over, and to the pro-rata portion of
any compensation due pursuant to Section 3.2 that is earned in the year of such
termination.
5.3 (a) The Company may terminate the Executive's employment
hereunder at any time for "cause", which includes but is not limited to the
following reasons:
i. an act or acts of dishonesty on the part of the
Executive constituting a felony or resulting or intended to result directly or
indirectly in gains or personal enrichment at the expense of the Company;
ii. the continued willful failure by the Executive to
perform substantially his duties with the Company (other than any such failure
resulting from his incapacity due to physical injury or physical or mental
illness) or a continuing material breach by the Executive of his obligations
hereunder for a period of thirty (30) days after a demand for substantial
performance is delivered to the Executive on behalf of the Board of Directors
which specifically identifies the manner in which the Board of Directors
believes that the Executive has not substantially performed his duties;
iii. willful abuse of corporate power, willful neglect or
willful misconduct in the performance of the Executive's duties and obligations
to the Company.
(b) For purposes of clauses ii and iii of Section 5.3(a),
no act, or failure to act, on the part of the Executive shall be considered
"willful" unless done or omitted to be done by the Executive without reasonable
belief in good faith that his action or omission was in, or not opposed to, the
best interests of the Company. Any act, or failure to act, based upon authority
given pursuant to a resolution duly adopted by the Board or based upon the
advice of counsel for the Company shall be conclusively presumed to have been
done or omitted to have been done by the Executive in good faith and in the best
interests of the Company, unless such action by the Board of Directors was taken
upon the recommendation of the Executive upon information provided by the
Executive which the Executive knew to be false or upon the omission of material
facts by the Executive, which facts
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would have been adverse to the Executive's recommendation.
In such event, the Executive or his legal representative shall be
entitled to that portion of his Current Salary accrued to or payable as of the
date of termination. In addition, the Executive shall be entitled to any accrued
and unpaid vacation including any allowable carryover.
5.4 The Company may terminate the Executive's employment
hereunder at any time, with or without cause, upon at least thirty (30) days
prior written notice to the Executive. In such event, the Executive or his legal
representative shall be entitled to receive his Current Salary until the
applicable Agreement Expiration Date and the pro-rata portion of any
compensation due pursuant to Section 3.2 that is earned in the year of such
termination. In addition, the Executive shall be entitled to any accrued and
unpaid vacation including any allowable carryover.
5.5 The Executive may voluntarily terminate the Executive's
employment hereunder at any time without cause upon at least ninety (90) days
prior written notice to the Company. Upon receipt of the ninety (90) day notice,
the Company may, at its option, terminate the Executive during such ninety (90)
day period. In such event, the Executive or his legal representative shall be
entitled to that portion of his Current Salary accrued to or payable as of the
date of termination. In addition, the Executive shall be entitled to any accrued
and unpaid vacation including any allowable carry over.
5.6 The severance payments described in Section 6 ("Severance
Award") shall be payable to the Executive if Executive's employment with the
Company terminates during the term of this Agreement or, if the Company does not
renew this agreement such non-renewal will be deemed to be a termination without
cause, or for any of the following reasons:
(a) involuntarily, other than pursuant to Sections 5.1, 5.2, 5.3
and 5.5; or
(b) voluntarily within 90 days, following:
i. any reduction in Executive's Current Salary other than
pursuant to a general reduction of Executives' salaries; or
ii. any material reduction in the benefits provided to the
Executive pursuant to Sections 3.2, 3.3 and 4. It is the intent that this
provision will in no way limit the ability of the Company to reasonably alter,
which would include a reasonable reduction in benefits on account of a Change in
Control without triggering the Severance Award, provided that any such
alteration is uniformly applied to all similarly situated executives; or
iii. any relocation to which Executive has not agreed to an
office of the Company or related entity more than sixty (60) miles from the
office where the Executive was located at the time of the Change in Control or
any increase in Executive's required travel amounting to a constructive
relocation; or
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iv. following a Change in Control, any material reduction
in the level of responsibility, position (including status, office, title,
reporting relationships or working conditions), authority or duties of the
Executive with the Company from that as existed within ninety (90) days
preceding the date of Change in Control. The intent of this provision is that
the Executive, following a Change in Control, will have a materially comparable
position with the Company or a successor or related entity as existed within
ninety (90) days preceding the date of Change in Control and that changes in
level of responsibility, position, authority or duties which are consistent with
the Change in Control will not be construed as constituting a material
reduction. If Executive believes that a material change has occurred, Executive
shall provide the Company or a successor or related entity with a notice and a
reasonable opportunity to cure (not to exceed forty-five (45) business days); or
(c). voluntarily within 90 days if, following a Change in Control, the
Company or any successor of the Company either announces that it will not honor
or cause the Company or any successor of the Company to not honor the terms of
this Agreement, or if the Company or any successor of the Company or related
entity at any time fails to confirm in writing to Executive, within forty-five
(45) business days of a request by the Executive, that it will honor the terms
of this agreement.
6. Severance Award:
The Severance Award, which shall be in lieu of additional
payments under this Agreement, shall consist of the following:
6.1 The Executive will be paid a sum (in equal monthly
installments) equal to the product of one month's Current Salary times the
number of years, including fractional years, employed by the Company or any of
its successor or affiliates not to exceed six (6) months Current Salary;
provided that, in the event the Executive's employment is terminated pursuant to
Section 5.6(b) or 5.6(c), the Executive will be paid a sum (in equal monthly
installments) equal to the product of two months Current Salary times the number
of years, including fractional years, employed by the Company or any of its
successor or affiliates. Such amount not to exceed twelve (12) months Current
Salary. Payments shall commence not later than thirty (30) days after the
Executive's date of termination.
6.2 All payments received pursuant to Section 5 or this
Section 6 shall be treated as salary for purposes of the Company's 401(k)
Savings Plan to the extent permitted by law.
6.3 Any amounts owed to the Company or any of its successors,
pursuant to the Employee Stock Option Exercise Plan, shall be canceled as to
interest and principal upon return by the Executive of the common stock securing
such obligations.
6.4 The Executive will receive continuation of all benefits
being provided at the time of termination pursuant to Section 4 for the number
of months computed by multiplying the number of full and fractional years
employed by the Company times two (2) but not to exceed twelve (12)
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months.
6.5 Following a Change in Control, the Executive will fully
vest in any stock options or equity equivalents held by the Executive that are
not fully vested and exercisable on the Executive's date of termination. Should
any stock option or equity equivalent document contain a Change in Control
clause, then such clause shall supercede this clause 6.5.
7. Confidential Information:
7.1 The Executive agrees not to disclose, either while in the
Company's employ or at any time thereafter, to any person not employed by the
Company or not engaged to render services to the Company, except with the prior
consent of the Board of Directors of the Company, any confidential information
obtained by him while in the employ of the Company, including, without
limitation, information relating to any of the Company's inventions, processes,
plans, devices, compilations of information, methods of distribution, customers,
client relationships, marketing strategies or trade secrets; provided, however,
that this provision shall not apply to any information or data which hereafter
becomes public information and shall not preclude the Executive from use or
disclosure of information for proper business purposes during the term of his
employment or from disclosure required by law or court order. This Section 7.1
shall be in addition to, and not in limitation or derogation of, any obligations
otherwise imposed by law upon the Executive in respect of confidential
information and trade secrets of the Company.
7.2 The Executive also agrees that, upon leaving the Company's
employ, he will not take with him, without the prior written consent of an
officer authorized to act in the matter by the Board of Directors of the
Company, and he will surrender to the Company, any record, list, drawing,
blueprint, specification or other document or property of the Company, together
with any copy and reproduction thereof, mechanical or otherwise, which is of a
confidential nature relating to the Company, or, without limitation, relating to
its or their methods of distribution, client relationships, marketing strategies
or any description of inventions, devices or processes, or which was produced,
developed or obtained by him or entrusted to him during the course of his
employment with the Company.
7.3 Should the Executive breach the terms and conditions of
Sections 7.1 and 7.2, then all amounts being paid pursuant to Section 6 shall be
terminated.
8. Competition:
8.1 The Executive agrees that he will not engage in
Competition, as defined in Section 8.2 below, during the period immediately
following the Executive's date of termination for the period over which the
Executive is entitled to receive severance payments pursuant to Section 6.1.
Should the Executive breach this section all amounts being paid pursuant to
Section 6 shall be terminated.
8.2 The word "Competition" for purposes of this Section 8
shall mean (a) directly or
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indirectly, as a principal, partner, agent, director, employee, consultant, or
in any other capacity, to engage, participate or become interested in,
affiliated with or connected with, or render services to, furnish any aid,
assistance or advice to any person, corporation, firm or other organization
which is engaged in any business competitive with any type of business conducted
by the Company during the term of the Executive's employment (hereinafter a
"Competitor"), in any geographical area in which the Company is engaging in
business or is soliciting business; provided, however, that in no event shall
ownership of less than five (5%) of the outstanding capital stock of a
corporation in the management of which the Executive is not active be deemed
Competition with the Company within the meaning of this Section 8; or (b)
solicit any person who is a customer of the businesses conducted by the Company,
or that is solicited by the Company at any time during the term of Executive's
employment, to do business with a Competitor; or (c)induce or attempt to
persuade any employee of the Company to terminate his employment relationship in
order to enter into employment with a Competitor.
9. Injunctive Relief:
The Executive acknowledges that monetary damages will not
adequately compensate the Company for any violation of Sections 7 and 8 hereof
and consents to the entry of an injunction in any court of competent
jurisdiction to enforce the provision of Section 7 and 8 hereof.
10. Withholding:
Anything to the contrary notwithstanding, all payments
required to be made by the Company under this Agreement to the Executive or his
estate or beneficiaries shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation.
11. Nonassignability:
No right or benefit under this Agreement shall be assigned,
transferred, pledged or encumbered (a) by the Executive, or (b) by the Company,
except that the Company may assign this Agreement and all of its rights
hereunder to any entity with which it may merge or consolidate or to which it
may sell all or substantially all of its assets provided said entity shall
assume (by contract or by operation of law) the Company's obligations hereunder.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the Company, its successors and assigns, and the Executive, his heirs
and legal representatives.
12. Notices:
Any notice, request, or other communication given hereunder
shall be in writing and, if given by the Executive to the Company, shall be
delivered personally or sent by telefax, by overnight delivery, or by certified
or registered mail, postage prepaid, addressed to the Company at its executive
offices located at the address hereinabove specified, Attention: President; and,
if given
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by the Company to Executive, shall be delivered personally or sent by telefax,
by overnight delivery, or by certified or registered mail, postage prepaid,
addressed to the Executive at his residence address hereinabove specified.
Either party may change the address to which notices, requests and other
communications are to be addressed by notice given to the other in accordance
with the provisions of this Section 12. Notices, requests and other
communications shall be deemed to be given when received, which, in the case of
notice given by mail, shall be the time indicated on the receipt thereof.
13. Amendment or Modification; Waiver:
No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be authorized by the
Board of Directors of the Company or any authorized committee of the Board of
Directors and shall be agreed to in writing, signed by the Executive and by an
officer of the Company thereunto duly authorized. No waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
subsequent breach of such condition or provision or a waiver of a similar or
dissimilar provision or condition at the same time or at any prior or subsequent
time.
14. Severability:
Anything in this Agreement to the contrary notwithstanding:
14.1 In the event that any provision of this Agreement, or
portion thereof, shall be determined to be invalid or unenforceable for any
reason, in whole or in part, such provision or portion thereof shall be deemed
modified to the extent necessary to render it valid while most nearly preserving
its original intent, and the remaining provisions of this Agreement and parts of
such provision not so invalid or unenforceable shall be unaffected thereby and
shall remain in full force and effect to the fullest extent permitted by law;
14.2 Any provision of this Agreement, or portion thereof,
which may be invalid or unenforceable in any jurisdiction shall be limited by
construction thereof, to the end that such provision, or portion thereof, shall
be valid and enforceable in such jurisdiction; and
14.3 Any provision of this Agreement, or portion thereof,
which may for any reason be invalid or unenforceable in any jurisdiction shall
remain in effect and be enforceable in any jurisdiction in which such provision,
or portion thereof, shall be valid and enforceable.
15. Entire Agreement:
This Agreement constitutes the entire agreement of the parties
to this Agreement with respect to its subject matter, supersedes all prior
agreements, if any, of the parties to this Agreement with respect to its subject
matter, and may not be amended except as may be provided for in Section 13.
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16. Applicable Law:
This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey applicable to contracts made
and performed in New Jersey.
17. Change in Control:
For purposes of this Agreement, "Change in Control" shall be
deemed to have occurred if:
i. any person, firm or corporation acquires directly or
indirectly the Beneficial Ownership (as defined in Section 13(d) of the
Securities Exchange Act of 1934, as amended) of any voting security of the
Company and immediately after such acquisition, the acquirer has Beneficial
Ownership of voting securities representing 50% or more of the total voting
power of all the then-outstanding voting securities of the Company;
ii. the individuals (a) who, as of the date of this
Agreement constitute the Board of Directors of the Company (the "Original
Directors") or (b) who thereafter are elected to the Board and whose election,
or nomination for election, to the Board was approved by a vote of at least 2/3
of the Original Directors then still in office (such Directors being called
"Additional Original Directors") or (c)who are elected to the Board and whose
election or nomination for election to the Board was approved by a vote of at
least 2/3 of the Original Directors and Additional Original Directors then still
in office, cease for any reason to constitute at least 3 of the members of the
Board;
iii. the stockholders of the Company shall approve a merger,
consolidation, recapitalization or reorganization of the Company or consummation
of any such transaction if stockholder approval is not sought or obtained, other
than any such transaction which would result in at least 51% of the total voting
power represented by the voting securities of the surviving entity outstanding
immediately after such transaction being Beneficially Owned by holders of the
outstanding voting securities of the Company immediately prior to the
transaction, with the voting power of each such continuing holder relative to
such other continuing holder being not altered substantially in the transaction;
or
iv. the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale or disposition
by the Company of all or a substantial portion of the Company's assets (i.e. 50%
or more in value of the total assets of the Company).
v. the Chief Executive Officer of the Company, at the time
of the execution of this Employment Agreement, ceases to be employed by the
Company.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
Executive and on behalf of the Company by its duly authorized officer, all as of
the date and year first above written.
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XXXXXXXXX TECHNOLOGIES INC.
BY:
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Name:
Title:
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EXECUTIVE
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