EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, is made as of this 23rd day of September,
1999, by and among XXXX X. XXXXX, having an address at 00 Xxxxxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000 hereinafter referred to as the ("Employee") and
R-TEC TECHNOLOGIES, INC., a New Jersey Corporation with a business address at 00
Xxxxxxx Xxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (hereinafter collectively referred to
as "Employer").
RECITALS
WHEREAS, Employee is licensed to practice law in the State of New
Jersey; and
WHEREAS, Employer desires to employ the Employee as Vice President
and General Counsel for the Employer corporation, and Employee desires to be so
employed upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual
obligations and undertakings contained herein, the parties agree as follows:
STATEMENT OF AGREEMENT
SECTION 1. EMPLOYMENT
a. Position. Employer wishes to employ and Employee hereby accepts
the position of Vice President and General Counsel of the Employer corporation
for the term of this Agreement. Since Employee will serve as an officer and
director of Employer, his duties in those capacities shall be as determined from
time to time by Employer's Board of Directors or as set forth in any applicable
corporate documents, including without limitation Employer's Code of Regulations
and Bylaws, as they may be amended from time to time.
b. Employee's Commitment. Employee shall consider his employment by
Employer as his principal employment when employed on a full-time basis as
described herein, shall devote the necessary time and attention to duties and
responsibilities under this Agreement, and shall perform them to the best of his
abilities. While subject to any provision of this Agreement, Employee shall
maintain loyalty to Employer, and shall take no action that would directly or
indirectly promote any competitor to injure Employer's interests. Subject to the
foregoing, Employee may engage in other charitable or business activities to the
extent that they do not interfere with his obligations under this Agreement;
provided that employee first discloses any such activities to Employer, and
Employee's continued participation in those activities shall not be detrimental
to Employer's interests.
c. Duties. Employee's primary duties and responsibilities as Vice
President and General Counsel shall be to:
(1) Act as General Counsel to each of the Employer corporation by
rendering legal advice on matters Employer; (2) Review, prepare and
negotiate contracts and other legal documents affecting each of such
corporations.
(3) Attend to all litigation and regulatory matters affecting each
of such corporation, including the retention of outside counsel to handle any
such matters, all within the discretion of the Employee;
(4) Take any and all further actions as Employee may deem necessary
and proper in his position as General Counsel and which actions will be for the
benefit of each of such corporation.
SECTION 2. TERMINATION OF EMPLOYMENT
a. Initial Term. Unless terminated earlier in accordance with this
Agreement, the initial term of Employee's employment shall be for a term of five
(5) years commencing on September 23, 1999, and terminating on September 22,
2003, unless terminated sooner as provided herein.
b. Termination. Notwithstanding any other provision of this
Agreement, Employee's employment shall terminate at any time before the
expiration of the term specified in the preceding subsection, as follows:
(1) The Employee party may terminate Employee's employment for any
or no reason, with or without cause, upon 60 days' written notice to
the other party; (2) Employee's employment shall terminate without
notice upon Employee's date of death; (3) This Agreement shall
terminate without notice upon the sale of substantially all of
Employer's assets, or the cessation of its existence by dissolution,
merger, consolidation, or otherwise;
(4) This Agreement shall terminate without notice if Employer
becomes subject to voluntary or involuntary bankruptcy, insolvency,
receivership, assignment for the benefit of creditors, or any other type of
federal or state law debtor's proceedings which are not dismissed or removed
within 60 days of their initiation.
c. Termination for "Reasonable Cause". Employee's employment may
also be terminated by Employer at any time without prior notice upon a showing
of "reasonable cause." Should Employee be terminated by Employer for "reasonable
cause", no severance pay will be paid to Employee nor will his health insurance
benefits be continued by Employer at its expense for any period of time as
addressed in Section 4 of this Agreement.
(1) "Reasonable cause" shall be defined for the purposes of this
Agreement as being:
(a) Any act of omission which reasonably constitutes dishonesty,
disloyalty, fraud, deceit, gross negligence, willful misconduct or recklessness,
including, but not limited to the willful violation of Employer's bylaws or code
of regulations, and which is directly or indirectly detrimental to Employer's
best interests;
(b) The limitation, suspension or revocation of Employee's license
to practice law;
(c) Inattention to, neglect of, or any other failure to competently
perform any assigned duties after receiving notice and a reasonable opportunity
to cure;
(d) Any act that constitutes a felony under the laws of the state of
New Jersey or the United States; or
(e) Breach of any material portion of this Agreement.
d. Death or Disability
(1) The terms of this Agreement shall expire upon the death or
disability of the Employee.
(2) Employee shall be deemed to be disabled if he is unable to
perform, on a full-time basis the regular activities of his employment for a
period of:
(a) Six (6) consecutive months or
(b) A total of 26 weeks during any 12 month period; provided that
authorized vacations or other leaves of absence shall not be counted.
(3) The date of disability shall be the date on which the earlier
of the requirements stated in (a) or (b) of this section are satisfied.
(4) Upon disability or death of Employee during the term of this
Agreement, Employer shall continue to provide for 90 days, at its own expense,
the same level of health insurance, and if applicable, life insurance, as was in
effect at the time of the permanent disability or death of Employee.
e. Termination Without Cause - Exception
(1) Notwithstanding anything herein to the contrary, in the event
that Employee's employment is terminated by Employer upon sixty (60) days
written notice and without cause as defined in Section 2(b)(1), then and in such
event, Employer shall be obligated to pay to Employee the balance of the salary
to which employee would have been entitled had this Agreement run for the full
Initial Term. Employer recognized and acknowledges that reasonableness of this
provision given the fact that Employee terminated his law practice in reliance
upon his Employment Agreement and the provisions contained therein.
f. Termination Upon Sale - Exception
(1) Notwithstanding anything herein to the contrary, in the event
that this Agreement shall terminate upon the sale of substantially all of
Employer's assets, or the cessation of its existence by dissolution, merger,
consolidation, or otherwise, then and in such event, Employer agrees that the
balance of the Initial Term of the Employee's employment under this Agreement
shall be made part of any included in any such sale, dissolution, merger,
consolidation or otherwise, and the purchaser or surviving entity must agree to
be responsible for the balance of the Initial Term of such contract by paying to
the Employee all amounts to which he would have been entitled has this Agreement
run for the complete Initial Term. In the event that the Employer is unable to
have any such purchaser or succeeding or surviving entity agree to such a
provision, then the responsibility for the payment to be made to the Employee
for the balance of the Initial Term is hereby specifically assumed by Employer
and all payments due and owing to Employee in connection with the balance of the
Initial Term shall be made to Employee by Employer prior to the completion of
any sale, dissolution, merger, consolidation or otherwise as may occur.
SECTION 3. COMPENSATION, BENEFITS AND EXPENSES
a. Salary. Subject to Subsection 3b, Employer shall pay employee
an annual base salary based upon full time employment of $50,000.00 plus bonus.
Employee's Bonus shall be decided by the Board of Directors.
b. Salary - When Paid. The salary to be paid to employee under
subsection a or b herein shall be payable in accordance with employer's payroll
practices in effect from time to time.
c. Benefits. Employee shall be entitled to all the rights, benefits,
and privileges (including vacation, health insurance, pension or other fringe
benefits, and compensation programs as are set forth on Exhibit A attached
hereto).
d. Withholdings. Employer shall withhold from any amounts payable as
compensation all federal, state, municipal, or other taxes as are required by
any law, regulation, or ruling. Notwithstanding the foregoing provision of this
Section 3, Employee shall be liable for the payment, if any, of any federal,
state or local taxes incurred by him as a result of Employer's provision of
benefits hereunder.
e. Effect of Termination on Salary and Benefits. Employee's salary
and benefits under Subsection 3 shall terminate effective immediately on the
date of any termination of Employee's employment or this Agreement, and from
that date Employee shall be entitled to severance benefits under Section 4 if
and only to the extent they are then payable and subject to the provisions of
Section 2(e) and (f) herein and any other provisions of this Agreement which
provide for the continuation of salary and/or benefits beyond termination.
g. Effect of Termination on Other Provisions. This Agreement shall
continue in effect upon and after the termination of Employee's employment for
any reason necessary to enforce the provisions of this Agreement which apply
subsequent to any such termination, including any provisions relating to
confidentiality, non-competition, release, or indemnification.
h. Professional Development. Employer agrees that employee shall be
permitted to continue to attend professional development training at Employer's
expense up to an aggregate annual amount of no more than two (2) percent of
Employee's annual salary.
SECTION 4. SEVERANCE
x. Xxxxxxxxx Payments and Benefits. Subject to Subsection 4b, if
Employee's employment under this Agreement is terminated by employer without a
showing of reasonable cause, as defined under Subsection 2.c(1), employee shall
be entitled to receive the following Severance Payments and Benefits from
Employer:
(1) A continuation of Employee's wages equal to the amount of his
regular salary as of the date of his termination for the balance of the Initial
Term as set forth in Section 2(e) and (f) above, or if such termination occurs
beyond the Initial Term of employment, for a period of eighteen (18) months
following such termination.
(2) Payment of health insurance premiums under COBRA for twelve
(12) months.
(3) Outplacement services selected by the Employer up to the sum of
Five Thousand Dollars ($5,000.00).
b. Execution of Release. Employer's obligation to pay severance
benefits under Subsection 4.a is expressly conditioned upon Employee's execution
and delivery to Employer a Release and Agreement, as drafted at the time of
Employee's termination of employment, including, but not limited to:
(1) An unconditional release of all rights to any claims, charges,
complaints, grievances, known or unknown to Employee, against employer, its
affiliates or assigns, through the date of Employee's termination from
employment;
(2) A representation and warranty that Employee has not filed or
assigned any claims, charges, complaints, or grievance against Employer, its
affiliates, or assigns;
(3) An Agreement not to use, disclose or make copies of any
confidential information of Employer, as well as to return any such confidential
information and property to Employer upon execution of release;
(4)An Agreement to maintain the confidentiality of the release; and
(5) An Agreement to indemnify Employer, or its affiliates or
assigns, in the event that Employee breaches any portion of the Agreement or
Release.
c. No Admission. Employee acknowledges such an Agreement and Release
shall not be construed as an admission by Employer or any other release of
wrongdoing whatsoever against Employee, and all of the releases specifically
deny any such wrongdoing.
d. Payments Upon employee's Death or Disability. If severance
benefits are payable because of Employee's death or disability, they shall be
deemed to be made as compensation for Employee's past services to Employer.
e. Termination of Employer's Severance Obligation. Employer's
obligation to provide Employee with severance pay shall cease upon the earlier
of the expiration of the Severance Pay Period or when Employee obtains a
position comparable to that which he held with Employer. Similarly, Employer's
obligation to provide Employee with the health insurance continuation premium
shall cease upon the earlier of the expiration of the Severance Pay Period or
when Employee is eligible to participate in a comparable health insurance plan.
SECTION 5. CONFIDENTIALITY
a. Confidential Information. "Confidential Information" mans
information in whatever form, including information that is written,
electronically stored, orally transmitted, or memorized, that is of commercial
value to Employer and that was created, discovered, developed, or otherwise
becomes known to Employee, or in which property rights are held, assigned to, or
otherwise acquired by or conveyed to Employer, including any Employee
Invention(as subsequently defined) or idea, knowledge, know how, process,
system, method, technique, research and development, technology, software,
technical information, trade secret, trademark, copyrighted material, reports,
records, documentation, data, customer or supplier list, tax or financial
information, business or marketing plan, strategy, or forecast. Confidential
Information does not include information that is or becomes generally known
within Employer's industry through no act or omission by Employee; provided,
however, that the compilation, manipulation, or other exploitation of generally
known information may constitute Confidential Information.
b. Employee Invention. "Employee Invention" means any idea,
invention, software, technique, modification, process, improvement, or similar
item, whether or not reduced to writing or stored electronically or otherwise,
and whether or not protectible by patent, trademark, copyright, or other
intellectual property law, that is created, conceived, or developed by Employee
or under his direction, whether solely or with others, during or after his
employment by Employer, that relates in any way to, or is useful in any manner
in, the business now or then conducted or proposed to be conducted by Employer
or which is based upon or otherwise derives from or makes use of the
Confidential Information.
c. Ownership; Disclosure. Any Confidential Information, whether nor
not developed by employee, shall at all times be Employer's exclusive property.
Employee shall promptly disclose any employee Invention to Employer in writing.
d. Restrictions. During the term of this Agreement, and for as long
after its termination as any confidential Information is subject to protection
under applicable law, Employee shall not, without Employer's prior written
consent specifically referring to this covenant.
(1) Use any Confidential Information for the benefit of himself or
any other party other than Employer or disclose it to any other person or
entity;
(2) Remove any Confidential Information or other documentation,
device, plan, or other record or evidence pertaining to Employer's business form
Employer's premises, except when specifically authorized to do so in pursuit of
Employer's business; or
(3) Retain copies of other records of any such items.
e. Purpose. The parties acknowledge and agree that the confidential
Information is a valuable business asset, and that this Section is necessary to
protect employer's legitimate business interests.
SECTION 6. ADDITIONAL REPRESENTATIONS AND WARRANTIES
In addition to his other representations and warranties set forth in
this Agreement, Employee further represents and warrants as follows:
a. Employee's performance of this Agreement shall not breach any
agreement to which he is or was a party that requires him to hold any
information in confidence or in trust;
b. Employee has not and shall not breach any such Agreement;
c. Employee shall not bring to Employer or use in connection with
his employment any confidential or proprietary information belonging to another
entity without first delivering a written release of that information to
Employer.
SECTION 7. REMEDIES
a. Irreparable Harm. The parties acknowledge and agree that
irreparable harm would result in the event of a breach or threat of a breach by
Employee of Section 5 or the making of any untrue representation or warranty by
Employee in this Agreement. Therefore, in such an event, and notwithstanding any
other provision of this Agreement.
(1) Employer shall be entitled to a restraining order, order of
specific performance, or other injunctive relief, without showing actual damage
and without bond or other security; and
(2) Employer's obligation to make any payment or provide any benefit
under this Agreement, including without limitation any severance benefits,
shall immediately cease.
b. Remedies Not Exclusive. Employer's remedies under this Section
are not exclusive, and shall not prejudice or prohibit any other rights or
remedies under this Agreement or otherwise. To the extent required to be
enforceable by applicable law, the cessation of Employer's obligation to make
payments or continue benefits under this Section shall be deemed to be in the
nature of liquidated damages and not a penalty.
c. Cessation of Payments. In the event Employer obtains relief as
provided in this Section, or in the event of Employee's breach of Section 5 or
the making of any untrue representation or warranty by Employee in this
Agreement, Employer's obligation to make any payment or provide any benefit
under this Agreement, including any severance benefits, shall immediately cease.
SECTION 8. INDEMNIFICATION
a. Either Party. Each party shall indemnify and hold the other
harmless from and against any and all liability and expense of any kind,
including legal costs and reasonable attorney's fees, arising from the
indemnifying party's fraud, deceit, gross negligence, or willful misconduct with
respect to the performance of this Agreement, or breach of any provisions of
this Agreement.
SECTION 9. RETURN OF COMPANY PROPERTY
a. Immediately upon termination of his employment or upon Employer's
earlier request, Employee shall return to Employer all Confidential Information
and other items described in Section 5 and all originals and copies of any other
property or information owned by Employer or relating to its business, that
Employee has in his possession or under his control, including all credit cards,
papers, books, equipment, files and samples.
SECTION 10. LEGAL COUNSEL
a. Understanding, Voluntary Agreement. Employee and Employer
represent and warrant that each party has been afforded a reasonable opportunity
to review this Agreement, to understand its terms, and to discuss it with any
attorney of their choice, and that each party knowingly and voluntarily enters
this Agreement.
b. Waiver of Separate Representation. To the extent Employer has not
engaged separate legal counsel to represent it in connection with this
agreement, the parties acknowledge and agree that their respective interests in
this Agreement are in conflict, that they have the right to retain independent
counsel, that they have been fully informed about this right and the conflicts
of interest that arise from retaining the same legal counsel to represent both
of them, and that this Section constitutes written disclosure of these
conflicts. The parties further affirm that they are waiving separate
representation freely, voluntarily, and with full knowledge of the effects of
this waiver. No party shall at any time claim that this Agreement is void or
unenforceable in any respect because of the lack of use of independent counsel,
or that the legal counsel who prepared this Agreement acted improperly in doing
so.
SECTION 11. CONFIDENTIAL AGREEMENT
This Agreement is confidential. Employee shall keep its provisions
confidential and shall not disclose them to anyone, including any past, present,
or prospective employee of Employer; provided, that this Section shall not
prohibit Employee from discussing this Agreement in confidential communications
with his family members, attorneys, accountants, or other professional advisors,
provided that the provisions of Section 5 shall at all times apply to
communications with any such persons.
SECTION 12. MISCELLANEOUS PROVISIONS
a. Notes. Unless otherwise agreed in writing by a party entitled to
notice, all notices required by this Agreement shall be in writing and shall be
deemed given when physically delivered to and acknowledged by receipt by a party
or its duly authorized attorney or legal representative, or when deposited
postage paid, registered or certified mail, addressed to the party at its
principal business or residence as set forth above.
b. Waivers. No assent, express or implied, by any party to any
breach or default under this Agreement shall constitute a waiver of or assent to
any breach or default of any other provision of this Agreement or any breach or
default of the same provision of any other occasion.
c. Entire Agreement, Modification. This Agreement constitutes the
entire agreement of the parties concerning its subject matter and supersedes all
other oral or written understandings, discussions, and agreement, and may be
modified only in writing signed by both parties.
d. Binding Effect; No Third Party Beneficiaries. This Agreement
shall bind and benefit the parties and their respective heirs, devisees,
beneficiaries, grantees, donees, legal representatives, successors, and assigns.
Nothing in this Agreement shall be construed to confer any rights or benefits on
third party beneficiaries.
e. Assignment. Neither Party may assign its interest in this
Agreement without the other's prior written consent; provided that Employer may
assign its interest to another entity which it controls, is controlled by, or is
under common control with.
f. Captions. Titles or captions contained in this Agreement are
for convenience and are not intended to affect the substantive meaning of any
provision.
g. Severability. If any provision of this Agreement shall be
declared invalid or illegal for any reason whatsoever, then notwithstanding such
invalidity or illegality, the remaining terms and provisions of this Agreement
shall remain in full force and effect in the same manner as if the invalid or
illegal provision shad not been contained herein.
h. Counterparts. This Agreement may be executed in one or more
counterpart, each of which shall be deemed and original, but all of which
together shall constitute one and same instrument.
j. Effect of Termination. This Agreement shall continue in effect
upon and after the termination of Employee's employment for any reason to the
extent necessary for the enforcement of any of its provision that apply
subsequent any such termination.
j. Governing Law. This Agreement shall be governed by and
construed under the laws of the United States and the State of New Jersey.
k. The parties acknowledge that they have read and fully understand
the contents of this Agreement and execute it after having an opportunity to
consult with legal counsel.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as specified above.
WITNESS: EMPLOYEE:
----------------------- -----------------------------
XXXX X. XXXXX
ATTEST: EMPLOYER:
R-TEC TECHNOLOGIES, INC.
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XXXXXX XXXXXX, President
EXHIBIT A
BENEFITS
A. Health Insurance.
B. Life Insurance - $500,000.00 policy.
C. Disability Insurance.
D. Vacation - Not less than five (5) weeks per year.
E. Pension Plan.
F. 401(K) Retirement Plan or Comparable Plan.
G. Expense Allowance.
H. Company Car - All insurance and related expenses of the automobile will be a
cost payable by Employer.
I. Continuation of Legal Malpractice/Liability Insurance Policy of at least
$1,000,000.00.
All of the above referenced benefits shall be provided by Employer to
Employee at no cost to Employee.
