EMPLOYMENT AGREEMENT
Exhibit
10.3
EMPLOYMENT
AGREEMENT (this “Agreement"), dated March 1, 2006,
between EVCI Career Colleges Holding Corp., a Delaware corporation ("EVCI"),
and
Xxxxxx X. Xxxxxxx("Executive").
In
consideration of the mutual covenants contained herein, and for other
good
and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged,
the parties hereto agree as follows:
1.
Employment; Duties.
1.1
EVCI hereby employs Executive as its General Counsel and Vice President
for Corporate Affairs. In such capacities, Executive shall report directly
to
EVCI's Chief Executive Officer (the “CEO") and, as is necessary and appropriate,
to EVCI's chairman of the board of directors (the “Chairman”) and EVCI’s board
of directors (“EVCI Board”).
1.2
As General Counsel of EVCI, Executive agrees to perform and discharge such
duties and responsibilities as are appropriate for the general counsel of
corporations with the financial, personnel and other resources that are similar
to that of EVCI, including preparing and filing reports required to be filed
with the Securities and Exchange Commission and other federal and state
regulatory authorities and otherwise dealing with such authorities; negotiating,
drafting and closing agreements relating to EVCI's internal operations and
activities; helping to identify acquisition candidates and negotiating, drafting
and closing acquisitions; and generally advising EVCI's management with respect
to EVCI's compliance with applicable laws, rules and regulations.
As
Vice
President for Corporate Affairs, Executive shall function in a business capacity
by performing such duties and responsibilities as are assigned to him by the
CEO
relating to the business and affairs of EVCI and its subsidiaries, including
assisting the CEO with strategies relating to operations and performing such
other tasks and functions as the CEO deems reasonably necessary and appropriate
under the circumstances.
The
general counsel of EVCI’s subsidiaries shall not report to Executive except as
directed by the CEO but shall consult and collaborate with Executive as such
counsel and Executive shall deem necessary and appropriate from
time-to-time.
Executive
shall devote his full business time to, and shall use his best efforts in,
the
performance of such duties and responsibilities.
2.
Compensation.
2.1
For
his services pursuant to this Agreement, EVCI will pay Executive a salary at
the
annual rate of $260,000 ("Salary").
2.2
EVCI
will pay Executive each bonus, if any, that may be awarded to Executive by
the
Board, or the compensation committee of the Board, in its sole discretion.
In
this regard, during the last quarter of each calendar year, the CEO and Chairman
will evaluate Executive’s performance during the immediately preceding year of
the Employment Term and will make recommendations to the EVCI Board or such
committee of bonuses, if any, to be granted to Executive by the payment of
cash
and/ or the grant of options and/ or restricted stock awards under EVCI’s
incentive stock plans that are in effect and have been approved by EVCI’s
stockholders in accordance with applicable regulatory requirements.
For
Executive’s performance during 2005, as generally described herein and in more
detail pursuant to a separate agreement dated today, EVCI and Executive are
confirming the terms of the award to Executive, under EVCI’s Amended and
Restated 2004 Incentive Stock Plan, of a stock bonus of 100,000 shares of EVCI’s
common stock, which shall vest and become non-forfeitable, on a cumulative
basis
as to 50 percent of the shares covered thereby on December 29, 2006 and as
to 25
percent of the shares covered thereby on each February 28, 2008 and 2009
provided that on each such date Executive has remained continuously employed
by
EVCI from today through such dates, subject to accelerated vesting as provided
in such separate agreement.
2.3
As an
incentive for Executive to enter into this Agreement, EVCI agrees to pay
Executive a cash bonus of $75,000 (the “Cash Bonus”) within ten days after EVCI
shall have determined that its cash resources reasonably permit the payment
of
the Cash Bonus. The Cash Bonus shall be paid to Executive prior to, or
simultaneously with, the payment of any cash bonus to any other officer of
EVCI
or any of its subsidiaries and even if the Employment Term has terminated for
any reason.
3.
Employment
Term.
The
term of Executive's employment (the "Employment Term")
will commence as of the date first written above and, unless sooner terminated
as provided in Section 5, will end on February 28, 2009.
4.
Benefits,
Payments and Withholding.
4.1
Executive will be entitled to vacation of 25 days, 28 days and 30 days per
year
in 2006, 2007 and 2008, respectively, and holidays and sick days in accordance
with EVCI's policy, during which Executive will be entitled to the full
compensation and Benefits (as defined in Section 4.2) otherwise payable
hereunder.
4.2
Executive may participate, on the same basis and subject to the same
qualifications as other executive personnel (exclusive of the founders, Xx.
Xxxx
X. Xxxxxxxx and Xx. Xxxx X. XxXxxxx) of EVCI, in any pension, profit sharing,
life insurance, health insurance, hospitalization, dental, drug prescription,
disability, accidental death or dismemberment and other benefit plans and
policies EVCI provides with respect to its executive personnel (collectively,
the "Benefits").
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4.3
EVCI
will pay or promptly reimburse Executive, in accordance with EVCI's normal
policies and procedures for its executive personnel, for all allowances and
expenses provided for hereunder and for all reasonable out-of-pocket business,
entertainment and travel expenses incurred by Executive in the performance
of
his duties hereunder.
4.4
EVCI
will pay the Salary at the biweekly rate of $10,000 and may withhold from the
Salary, the Benefits and any other compensation provided to Executive hereunder,
all Federal, state and local income, employment and other taxes, as and in
such
amounts as may be required to be withheld under applicable law.
4.5
EVCI
shall pay for Executive's CLE courses, in accordance with its current policy
and
shall pay for such legal publications as Executive reasonably determines are
necessary for Executive's performance of his duties as General Counsel. In
addition, EVCI shall pay the costs and disbursements of outside legal counsel
recommended by Executive and approved by the CEO and/ or EVCI’s Board or audit
committee thereof, to perform such services as Executive and the CEO determine
are necessary and appropriate.
4.6
Executive shall receive a car allowance of $600 per month.
5.
Termination
and Severance Benefits.
5.1
Termination
by EVCI and Resignation by Executive.
EVCI’s
Board may terminate Executive's employment with EVCI, with or without Cause
(as
defined in Section 5.5). Termination with Cause shall be effective immediately
and termination without Cause shall be effective upon 30 days prior written
notice to Executive. Executive may voluntarily resign his employment with EVCI,
with Good Reason (as defined in Section 5.5), upon 30 days prior written notice
to EVCI.
5.2
Compensation
Upon Termination Without Cause or Upon Resignation with
Good Reason.
If
EVCI’s Board terminates Executive's employment hereunder for any reason other
than Cause or Executive's death or Permanent Disability (as defined in
Section 5.5), or if Executive voluntarily resigns his employment with EVCI
with
Good Reason (the effective date of the first to occur of such termination or
his
resignation being the "Termination Date"), then (a) Executive shall be entitled
to receive (i) the Salary and Benefits accrued prior to the Termination Date
and
(ii) payment or reimbursement of any expenses, provided for under Section 4.3,
that were incurred by Executive prior to the Termination Date and (b) after
the
Termination Date, EVCI will also continue (i) to pay the Salary, in equal
biweekly payments, to Executive throughout the greater of 24 months or the
unexpired portion of the Employment Term and (ii) continue for Executive and
his
spouse and dependent children, if any, the health insurance coverage and medical
and dental reimbursement referred to in Section 4.2 for 24 months after the
Termination Date. Executive shall be under no duty to seek other employment
following termination but any amounts earned by him in connection with other
full-time employment shall reduce and offset the amounts otherwise owing
hereunder.
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5.3
Compensation
Upon Resignation Without Good Reason or Upon Termination for
Cause.
If
Executive breaches this Agreement by voluntarily resigning his employment with
EVCI without Good Reason or Executive's employment is terminated for Cause,
then
Executive shall only be entitled to receive, except as otherwise required by
law, the Salary and Benefits accrued prior to the effective date of the first
to
occur of his resignation or such termination, and reimbursement of any expenses,
provided for under Section 4.3, that were incurred by Executive prior to the
effective date of his resignation or such termination of his employment. Nothing
in this Section 5.3 shall create any implication that EVCI is waiving any remedy
EVCI may have for breach by Executive of this Agreement.
5.4
Compensation
Upon Death or Permanent Disability.
If
Executive dies or suffers a Permanent Disability, then EVCI will (i) promptly
pay Executive or his estate, in one lump sum, four months' Salary and (ii)
continue for Executive's spouse and dependent children (if Executive has died)
and for Executive and his spouse and dependent children (if Executive suffers
a
Permanent Disability), all of the Benefits that they were receiving at the
time
of his death or Permanent Disability, for eight months after Executive's death
or Permanent Disability.
5.5
Definitions.
"Cause"
Shall be limited to (a) Executive’s failure to carry out a reasonable and lawful
order of the Board of Directors or CEO that is within the scope of Executive’s
duties, responsibilities and workload under this Agreement, which failure has
a
material adverse effect on EVCI and its subsidiaries taken as a whole, (b)
a
breach by Executive of this Agreement having a material adverse effect on EVCI
and its subsidiaries taken as a whole or (c) Executive’s conviction of a felony;
provided, however, that any action or failure to act by Executive shall not
constitute “Cause” if, in good faith, Executive reasonably believed such action
or failure to act to be in or not opposed to the best interest of EVCI and
its
subsidiaries taken as a whole, or if Executive shall be entitled, under
applicable law or the charter or bylaws of or an indemnification agreement
with,
EVCI, to be indemnified by EVCI with respect to such action or failure to act.
Termination of Executive for Cause shall be communicated by a Notice of
Termination. For purposes of this Agreement, a “Notice of Termination” shall
mean delivery to Executive of a copy of a resolution duly adopted by the
affirmative vote of not less than a two-thirds of the entire membership of
EVCI’s Board at a meeting of the EVCI Board called and held for the purpose
(after reasonable notice to Executive and reasonable opportunity for Executive,
together with Executive’s counsel, to be heard before the EVCI Board prior to
such vote), finding that in the good faith opinion of the EVCI Board, Executive
was guilty of the conduct set forth in the first sentence of this definition
of
“Cause” and specifying the particulars thereof in detail. In the case of a
purported termination pursuant to clauses (a) or (b) of this definition of
Cause, Executive shall first be given written notice by EVCI of the alleged
failure or breach and shall have twenty business days to cure such failure
or
breach and, if so cured within this twenty business day period, then Cause
shall
not be deemed to exist in respect of such failure or breach. For purposes of
this Agreement, no such purported termination of Executive’s employment shall be
effective without such Notice of Termination.
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"Good
Reason" means a breach by EVCI of any of its material agreements contained
herein, and the continuation of such breach for twenty business days after
notice thereof is given to EVCI. Good reason shall also include the change
of
Executive’s place of employment to a location that, if not mid-town Manhattan,
is more than 20 miles from EVCI’s executive offices on the date of this
Agreement or to a location that is different than the place of employment of
either EVCI’s Chairman or Chief Executive Officer. Good Reason does not include
the death or Permanent Disability of Executive.
"Permanent
Disability" means the inability of Executive to perform his duties hereunder,
as
a result of any physical or mental incapacity, for 30 consecutive days or 60
days during any twelve-month period, as determined by the Board.
6.
Covenants
Not to Compete.
6.1
Executive agrees that for 18 months following termination of his employment
with
EVCI he will not, without EVCI's prior written approval, engage in any business
activities that are competitive with any of the business activities then being
conducted by EVCI within 75 miles of any college, school or office operated
by
EVCI.
6.2
During the 18 months following termination of his employment with EVCI,
Executive shall not without the permission of EVCI, directly or indirectly,
hire
any employee of EVCI, or solicit or induce, or authorize any other person to
solicit or induce, any employee of EVCI to leave such employ during the period
of such employee’s employment with EVCI or within six-months following such
employee's termination of employment with EVCI.
6.3
Sections 6.1 and 6.2 shall not apply to a termination of Executive's employment
pursuant to Section 5.2.
7.
Covenant
Regarding Confidentiality.
All
confidential information about the business and affairs of EVCI (including,
without limitation, its secrets and information about its services, methods,
business plans, technology and advertising programs and plans) constitutes
"EVCI
Confidential Information." Executive acknowledges that he will have access
to,
and knowledge of, EVCI Confidential Information, and that improper use or
disclosure of EVCI Confidential Information by Executive, whether during or
after the termination of his employment by EVCI, could cause serious injury
to
the business of EVCI. Accordingly, Executive agrees that he will forever keep
secret and inviolate all EVCI Confidential Information which has or shall come
into his possession and that he will not use the same for his own private
benefit or directly or indirectly
for the benefit of others, and that he will not discuss EVCI Confidential
Information with any other person or organization, all for so long as EVCI
Confidential Information is not generally known by, or accessible to, the
public.
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8.
General.
8.1
This
Agreement will be construed, interpreted and governed by the laws of the State
of New York, without regard to the conflicts of law rules thereof.
8.2
The
provisions set forth in Sections 2.3, 5.2, 5.3, 5.4, 6, 7 and 8 shall survive
termination of this Agreement. All reference to EVCI in Sections 6 and 7 include
EVCI's subsidiaries and other affiliates, if any.
8.3
This
Agreement will extend to and be binding upon Executive, his legal
representatives, heirs and distributees, and upon EVCI, its successors and
assigns regardless of any change in the business structure of EVCI, be it
through spin-offs merger, sale of stock, sale of assets or any other
transaction. However, this Agreement is a personal services contract and, as
such, Executive may not assign any of his duties or obligations
hereunder.
8.4
This
Agreement constitutes the entire agreement of the parties with respect to the
subject matter hereof. No waiver, modification or change of any of the
provisions of this Agreement will be valid unless in writing and signed by
both
parties. Any and all prior agreements between the parties written or oral
relating to Executive's employment by EVCI are of no further force or
effect.
8.5
The
waiver of any breach of any duty, term or condition of this Agreement shall
not
be deemed to constitute a waiver of any preceding or succeeding breach of the
same or any other duty, term or condition of this Agreement. If any provision
of
this Agreement is unenforceable in any jurisdiction in accordance with its
terms, the provision shall be enforceable to the fullest extent permitted in
that jurisdiction and shall continue to be enforceable in accordance with its
terms in any other jurisdiction.
8.6
All
notices pursuant to this Agreement shall be in writing and delivered personally
receipt acknowledged (which shall include Federal Express, Express Mail or
similar service) or sent by certified mail, return receipt requested, addressed
to the parties hereto and shall be deemed given upon receipt, if delivered
personally, and three days after mailing, if mailed, unless received earlier.
Notices shall be addressed and sent to EVCI at its principal executive office
and to Executive at his home address as it appears in EVCI's personnel
records.
8.7
The
parties agree that, in the event of any breach or violation of this Agreement,
such breach of violation will result in immediate and irreparable injury and
harm to the innocent party, who shall be entitled to the remedies of injunction
and specific performance or either of such remedies, if available, as well
as
all other legal or equitable remedies, if available, plus reasonable attorneys
fees and costs incurred in obtaining any such relief.
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8.8
The
Section headings contained in this Agreement are for convenience of reference
only and shall not be used in construing this Agreement.
8.9
This
Agreement may be executed in counterparts, each of which will be deemed an
original but all of which will together constitute one and the same
agreement.
IN
WITNESS HEREOF, the parties have executed this Agreement as of the date first
above written.
| EVCI CAREER COLLEGES HOLDING CORP. | ||
| |
|
|
| By: | /s/ Xx. Xxxx X. XxXxxxx | |
|
Name: Xx. Xxxx X. XxXxxxx |
||
| Title: Chief Executive Officer and President | ||
| By: | /s/ Xxxxxx X. Xxxxxxx | |
|
Xxxxxx X. Xxxxxxx |
||
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