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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into on July 15, 1997, by and between
DIRECT Rx, INC. and Ohio corporations (the "Company"), and XX. XXXXX X.
XXXXXXXX ("Executive") currently holding the position of President.
WITNESSETH:
WHEREAS, the Company believes that the attraction and retention of key
employees such as Executive is essential to the Company's growth and success;
and
WHEREAS, the Company desires to employ Executive as its President and
Executive desires to accept such employment, all on the terms and conditions as
hereinafter provided.
NOW, THEREFORE, in consideration of the premises and covenants set forth
in this Agreement, the parties hereto agree as follows:
I. TERM
1.1 The Company hereby employs Executive and Executive hereby accepts
employment by the Company for a period of two years beginning on the date
of this Agreement, subject to the terms and conditions contained in this
agreement. This Agreement will be renewed automatically thereafter for
successive periods of one year, unless not less than thirty days prior to
the end of the initial two year period or prior to the end of any one year
renewal period, one of the parties sends written notice to the other party
of its intent to terminate this Agreement at the end of such period.
II. DUTIES
2.1 Executive shall hold the office of and shall function as President. In
such capacities, Executive will supervise the Company's research and
production operations and report to the Board of Directors.
III. BASE SALARY
3.1 As compensation for the services to be rendered by Executive hereunder and
all services as an officer of the Company, the Company agrees to pay or
cause to be paid to Executive an annual base salary of not less than
Seventy-five Thousand Dollars ($75,000), payable in equal bi-weekly
installments in accordance with the Company's standard payroll schedule.
Executive's base salary shall be increased annually by an amount to be
determined in the sole discretion of the Board of Directors based upon the
Boards's review of Executive's individual performance and the financial
performance of the Company.
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3.2 This salary is based on the assumption that Executive continues to
accept the responsibilities assigned to him by the Board of Directors,
meets the Company's goals agreed to by the Executive and the Board of
Directors, and continues to satisfactorily perform the duties of
President, as presented in this Agreement and as indicated to the Board
of Directors.
IV. PERFORMANCE BONUS AND STOCK OPTIONS
4.1 As additional compensation, Executive shall receive an annual bonus in
the first year of this Agreement as determined in the sole discretion
of the Board of Directors based upon the Board's evaluation of
Executive's individual performance and the financial performance of
the Company.
4.2 Executive shall receive an annual bonus in the second year of this
Agreement in an amount to be determined as set forth below, with any
such amount to be subject to an increase or decrease as determined by
the Board of Directors based upon the Board's evaluation of
Executive's individual performance and the financial performance of
the Company:
4.2.1 Two and one-half percent (2.5%,) of income before federal and
state income taxes, and
4.2.2 Two percent (2%) of annual revenues exceeding the "Base".
Executive's bonus for Year 2 will have a base equal to the total
audited revenues for Year 1. Subsequent years will be
calculated in the same manner.
4.3 The bonus shall be paid to Executive, or Executive's designee, as soon
as practicable following the close of the Company's fiscal year and
the preparation of the Company's financial statements. This bonus
shall continue as long as Executive is employed by the Company. Upon
termination of Executive's employment, Executive shall recieve a pro
rata amount of this Bonus through the date of such termination.
4.4 Subject to the grant and approval of the Board of Directors, Executive
shall be eligible for the grant of stock option to purchase additional
common shares of the Company at such times and on such terms as shall
be determined by the Board of Directors.
V. FULL TIME
5.1 Executive agrees to devote 100* of his professional time, attention
and energies during each normal business day to the performance of the
business of the Company, except as may otherwise be authorized by
the Board of Directors, or except for minor personal matters.
VI. FRINGES
6.1 Executive shall be entitled to vacations, health care benefits, fringe
benefits and
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reimbursement for reasonable out-of-pocket expenses, including but not
limited to those hereinafter detailed, in accordance with the Company's
practices covering executive personnel. The Company shall use
reasonable efforts to seek waivers of waiting periods, if any,
applicable to particular benefits. Such benefits shall include:
6.1.1 Health Insurance coverage with major medical, dental and
disability insurance benefits equal to those benefits available
to employees; the Company will pay 100% of the monthly premiums
for Executive and immediate family members;
6.1.2 Reimbursement of all properly approved travel and business
related expenses normally paid by the Company. All expense
reports must be approved by the President or the Board of
Directors prior to reimbursement;
6.1.3 Paid vacation per calendar year of not more than 3 weeks unless
otherwise authorized by the Board of Directors at any time or
times selected by Executive taking into account the convenience
of the Company. Executive shall give the Board of Directors
of the Company at least 14 calendar days prior notice of
selected vacation times of one week or more. Unused vacation
time will not be cumulative from year to year unless approved
by the Board of Directors.
6.1.4 5 days paid sick leave annually;
6.1.5 A holiday on the following days with full pay: New Year's Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day,
Christmas Day, the Executive's birthday, one floating holiday
and such other holidays or personal days as the Company shall
declare;
VII. TERMINATION
7.1 Executive's employment by the Company may be terminated by the Company
at any time upon:
7.1.1 the death or disability of Executive (as defined below);
7.1.2 the termination of this Agreement by the Company for
justifiable cause (as defined below); or
7.1.3 a decision by the Board of Directors of the Company, in the
exercise of their reasonable business judgment, to cease to
conduct operations.
7.2 In the event that this Agreement is terminated as a result of the
Executive's death or disability, the Company shall pay to Executive or
Executive's estate or beneficiary Executive's base salary as provided
in Section III for a period of three months following the
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date of death or termination for disability as defined in 7.3.
7.3 The term "disability" shall mean the inability of Executive, due to
illness, accident, or any other physical or mental incapacity, to perform
Executive's duties in a normal manner for a period of twelve (12)
consecutive weeks or for a total of twenty (20) weeks (whether or not
consecutive) in any twelve-month period during the term of this
Agreement.
7.4 The term "justifiable cause," shall be defined as the commission by the
Executive of (a) fraud, (b) embezzlement, (c) a felony, or (d) an act
which (I)involves moral turpitude, (ii) action that brings the Company
into public disrespect or disgrace, (iii) action that injures the
goodwill of the Company, or (iv) causes material harm to its customer,
supplier, or employee relations or the operations or business prospects
of the Company (unless such act was expressly authorized or ratified by
the Board). If there is a dispute to whether or not "justifiable cause"
shall exist, the parties agree to settle the dispute by arbitration in
accordance with the commercial arbitration rules of the American
Arbitration Association and the judgment upon award of the arbitrators
may be entered in any court having jurisdiction thereof.
7.5 If Executive terminates this Agreement, Executive shall be entitled to
receive Executive's base salary earned through the date of termination by
Executive and a pro rata amount of the performance bonus and fringe
benefits, including vacation through the date of such termination. No
additional remuneration shall be payable by the Company to Executive and
the Company shall have no other obligations or liabilities to Executive,
except to the extent provided by law.
7.6 Notwithstanding any other provisions of this Agreement, the Company can
terminate Executive's employment at any time upon giving not less than
four weeks advance notice of such termination to Executive as
consideration for the Executive's covenants set forth below in Section
VIII:
7.6.1 Executive's base salary through the end of the then applicable
term of this Agreement pursuant to Section I; and
7.6.2 any bonus payable to Executive pursuant to Section IV.
VIII. NONDISCLOSURE, NONSOLICITATION AND AGREEMENT NOT TO COMPETE
8.1 Executive understands and agrees that Executive will acquire certain
confidential information regarding the Company, including, without
limitation, information concerning customers, accounts, employees;
suppliers, prices, business methods, competitive and marketing
strategies, and similar business matters, (the "Confidential
Information"). Executive further understands and agrees that use or
disclosure of the Confidential
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Information to compete, directly or indirectly, with the Company, will
result in irreparable harm and financial loss to the Company.
For a period of three (3) years after termination of this Agreement,
Executive shall not without prior written consent of the Company:
8.1.1 disclose directly or indirectly any Confidential Information
to any individual, firm, company, or other entity, or use any
of the Confidential Information to Executive's own-benefit;
8.1.2 contact or solicit, directly or indirectly, any of the
Company's customers, accounts, or vendors for purposes of
diverting such customers, accounts, or vendors to Executive's
benefit or for the benefit of any individual, entity, or
person (other than the Company) which is engaged or intends to
engage in the same or substantially the same businesses) in
which the Company is then engaged.
8.1.3 engage in any business in which the Company is then engaged,
or otherwise compete with the Company in any manner in the
markets in which the Company operates in the United States and
Canada;
8.1.4 offer employment to any present employee of the Company or
offer any independent Contractor relationship to any
contractor of the Company.
IX. REPRESENTATION
9.1 Executive represents and warrants that executive is free to enter into
this Agreement and that Executive is not a party to or otherwise bound
by any employment contracts, restrictive covenants or any other
contracts preventing full performance of Executive's duties hereunder.
X. INDEMNIFICATION
10.1 The Company agrees to indemnify Executive to the maximum extent
permitted by the corporate laws of the State of Ohio including all
amendments thereto, if such are applicable; subject, however, to the
limitations of other applicable laws, if any.
XI. ENTIRE AGREEMENT/BINDING EFFECT
11.1 This Agreement contains the entire agreement of the parties and
supersedes all prior understandings and agreements between the parties,
including but not limited to the Employment Agreement by and between
Solstice, Inc. and Xx. Xxxxx X. Xxxxxxxx dated September 15, 1995, with
respect to the subject matter hereof. This Agreement shall be binding
upon the legal representatives, heirs, distributees, successors and
assigns of the parties and may not be changed orally but only by a
writing signed by the parties. It is agreed that a waiver by either
party of a breach of any provision of this Agreement shall not
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operate or be construed as a waiver of any subsequent breach by that same
party. This Agreement shall be governed by the laws of the State of Ohio
IN WITNESS WHEREOF, the parties hereto have caused this Employment Agreement to
be executed the day and year first above written.
EXECUTIVE DIRECT RX, INC.
/s/ Xx. Xxxxx X. Xxxxxxxx By: /s/ Xxxxx Xxxxxx
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Xx. Xxxxx X. Xxxxxxxx Xxxxx Xxxxxx, Chairman of the Board
