Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT dated March 20, 1998, between PACT Communication
Group Inc., (the "Company"), and Xxxxxx Xxxxxxx (the "Executive").
WHEREAS, the Company desires to employ Executive and to ensure the
continued availability to the Company of the Executive's services, and the
Executive is willing to accept such employment and render such services, all
upon and subject to the terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
set forth in this Agreement, and intending to be legally bound, the Company and
the Executive agree as follows:
1. Term of Employment.
(a) Term. The Company hereby employs the Executive, and the Executive
hereby accepts employment with the Company, for a period commencing on the
date of this Agreement and ending five years from the date hereof (the
"Term").
(b) Continuing Effect. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of Sections 6
and 7 shall remain in full force and effect and the provisions of Sections
6(b) and 7 shall be binding upon the legal representatives, successors and
assigns of the Executive, except as otherwise provided in Section 5(d).
2. Duties.
(a) General Duties. The executive shall serve as chief executive
officer of the Company, with duties and responsibilities that are customary
for such executives. The Executive will also perform services for such
subsidiaries as may be necessary. The Executive will use his best efforts
to performs his duties and discharge his responsibilities pursuant to this
Agreement competently, carefully and faithfully.
(b) Devotion of Time. The Executive will devote all of his time,
attention and energies during normal business hours (exclusive of periods
of sickness and disability and of such normal holiday and vacation periods
as have been established by the Company) to the affairs of the Company. The
Executive will not enter the employ of or serve as a consultant to, or in
any way perform any services with or without compensation to, any other
persons, business or organization without the prior consent of the board of
directors of the Company; provided, that the Executive shall be permitted
to devote a limited amount of his time, without compensation, to charitable
or similar organizations.
3. Compensation and Expenses.
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(a) Salary. For the services of the Executive to be rendered under
this Agreement, the Company will pay the Executive an annual base salary of
$125,000 during the Term, subject to annual cost of living increases and
increase based on Executive's performance. The annual salary under this
Section 3(a) will be reduced, however, to the extent that the Executive
elects to defer any portion thereof under the terms of any deferred
compensation or savings plan maintained by the Company. The Company will
pay the Executive his annual salary in equal installments no less
frequently than monthly.
(b) Bonus. The Company shall determine its adjusted net profits after
excluding all compensation paid to executive officers of the Company and
corporate overhead attributable to the Company as a whole. For each fiscal
year, the Company shall take 5% of its adjusted net profits, including the
net profits of each subsidiary and pay said sum to the Executive no later
than 30 days after the company's fiscal year.
(c) Expenses. In addition to any compensation received pursuant to
Section 3(a), (b) and (c), the Company will reimburse or advance funds to
the Executive for all reasonable travel, entertainment and miscellaneous
expenses incurred in connection with the performance of his duties under
this Agreement, provided that the Executive properly accounts for such
expenses to the Company in accordance with the Company's practices. Such
reimbursement or advances will be made in accordance with policies and
procedures of the Company in effect from time to time relating to
reimbursement of or advances to executive officers, the Company will
provide up to $ 1000.00 per month as automobile expenses.
4. Benefits.
(a) Vacation. For each 12-month period during the Term, the Executive
will be entitled to three weeks of vacation without loss of compensation or
other benefits to which he is entitled under this Agreement, to be taken at
such times as the Executive may select and the affairs of the Company may
permit.
(b) Employee Benefit Programs. Without limiting the compensation to
which the Executive is entitled pursuant to the provisions of Section 3 or
this Section 4, during the Term, the Executive will be entitled to
participate in any pension, insurance or other employee benefit plan that
is maintained at that time by the Company for its executive officers,
including programs of life and medical insurance and reimbursement of
membership fees in civic, social and professional organizations.
(c) Options. The Executive shall receive incentive options to purchase
up to an aggregate of 300,000 shares of the Company's common stock on each
anniversary date of his employment, the terms and conditions of which shall
be determined by the Company's Board of Directors, provided however that
Options granted to Executive shall be on terms equal to or more favorable
than those granted or to be granted to other officers and directors of the
Company.
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The Company will not grant to officers and directors options whose terms
are more favorable than those granted to Executive's without the prior
written consent of the Executive.
5. Termination.
(a) Termination Without Cause. The Company may terminate the
Executive's employment pursuant to the terms of this Agreement without
cause. Such termination will become effective upon the date specified in
such notice, provided that such date is at least 60 days from the date of
such notice. Upon any such termination without cause:
(i) for a period of 36 months following such termination or for a
period equal to the remaining term of this Agreement, whichever is
greater, the Company will continue to pay the Executive his annual
salary than in effect at the time of his termination (pursuant to
Section 3(a), his Bonus pursuant to Section 3 (c) ;and Executive shall
be entitled to his receive Stock Options pursuant to Section 3 (c);
and
(ii) the Company will continue to maintain for such period, for
the benefit of the Executive, the employee benefit programs referred
to in Section 4(b) that were in effect on the date of such
termination.
In the event Executive's employment is terminated without cause, the
Company shall release the Executive from the provisions of Section 6.
(b) Termination for Cause. The Company may terminate the Executive's
employment pursuant to the terms of this Agreement at any time for cause by
given written notice of termination. Such termination will become effective
upon the giving of such notice, except that termination based upon clause
(v) below shall not become effective unless the Executive shall fail to
correct such breach within 60 days of receipt of written notice thereof
provided pursuant to the preceding sentence. Upon any such termination for
cause, the Executive shall have no right to compensation, commission,
options, bonus or reimbursement under Section 3, or to participate in any
employee benefit programs under Section 4 for any period subsequent to the
effective date of termination. For purposes of this Section 5(b), "cause"
shall mean: (i) the Executive is convicted of a felony which is related to
the Executive's employment or the business of the Company; (ii) the
Executive, in carrying out his duties hereunder, has been found in a civil
action to have committed willful gross negligence or willful gross
misconduct resulting, in either case, in material harm to the Company;
(iii) the Executive misappropriates Company funds or otherwise defrauds the
Company; (iv) the Executive materially breaches any provision of Section 6
or Section 7; and (v) the Executive materially fails to perform his duties
under Section 2 resulting in material harm to the Company.
(c) Death or Disability. Excepting for the conditions and obligations
contained in this Section 5(c), this Agreement and the obligations of the
Company hereunder will terminate upon the death or disability of the
Executive.
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For purposes of this Section 5(c), "disability" shall mean that for a
period of six months in any 12-month period the Executive is incapable of
substantially fulfilling the duties set forth in Section 2 because of
physical, mental or emotional incapacity resulting from injury, sickness or
disease.
Upon termination by death or disability, the Company will pay the Executive
or his legal representative, as the case may be: (i) his annual salary at such
time pursuant to Section 3(a) through the date of such termination of
employment; paid upon the same terms and conditions as if this Agreement were in
fully force and effect (ii) the Executive's Bonus as set forth in Section 3(b)
of this Agreement; and his Stock Options as set forth in Section 3(c). paid upon
the same terms and conditions as if this Agreement were in fully force and
effect. Should the termination by death or disability occur prior to the
anniversary date on which Executive would be entitled to receive his Stock
Options, than Executive shall be entitled to received a portion of such stock
options equal to the total number of options to which the Executive would have
been entitled to receive on his anniversary date divided by 365, times the
number of days elapsed from his prior anniversary date to his termination.
(d) Special Termination. In the event that (i) the Executive, with or
without change in title or formal corporate action, shall no longer
exercise all of the duties and responsibilities and shall no longer possess
substantially all the authority set forth in Section 2; or (ii) the Company
materially breaches this Agreement or the performance of its duties and
obligations hereunder; or (iii) any entity or person not now an executive
officer of the Company becomes either individually or as part of a group
the beneficial owner of 20% or more of the Company's common stock, the
Executive, by written notice to the Company, may elect to deem the
Executive's employment hereunder to have been terminated by the Company
without cause under Section 5(a) hereof, in which event the Executive shall
be entitled to the compensation payable pursuant to clauses (i)and (ii) of
Section 5(a). In such event, the Company shall release the Executive from
the provisions of Section 6.
(e) Voluntary Termination. The Executive, on 30 days prior written
notice to the Company, may terminate his employment voluntarily (i) at any time
following termination of the initial Term or (ii) at any time following the
death or disabling illness of a member of the Executive's immediate family or
similar personal, non-business related occurrence as a result of which the
Executive concludes he must devote a substantial amount of his time and energies
to his family or other personal matter and not to his business activities so as
to preclude his fulfilling his obligations under this Agreement. Upon any such
termination, the Company will pay the Executive (i) his annual salary at such
time pursuant to Section 3(a) through the date of such termination of
employment; (ii) any bonus which would have been payable through the date of
termination pursuant to Section 3(b); and (iii) than Executive shall be entitled
to received a portion of such stock options equal to the total number of options
to which the Executive would have been entitled to receive on his anniversary
date divided by 365, times the number of days elapsed from his prior anniversary
date to termination.
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(f) Continuing Effect. Notwithstanding any termination of the
Executive's employment as provided in this Section 5 or otherwise, the
provisions of Sections 6 and 7 shall remain in full force and effect,
except as otherwise provided in Sections 5(a) and (d).
6. Non-competition Agreement.
(a) Competition with the Company. Until termination of his employment
and for a period of 12 months commencing on the date of termination, the
Executive, directly or indirectly, in association with or as a stockholder,
director, officer, consultant, employee, partner, joint venturer, member or
otherwise of or through any person, firm, corporation, partnership,
association or other entity, will not compete with the Company or any of
its affiliates in the offer, sale or marketing of products or services that
are competitive with the products or services offered by the Company,
within any metropolitan area in the United States or elsewhere in which the
Company is then engaged in the offer and sale of competitive products or
services; provided, however, the foregoing shall not prevent Executive from
accepting employment with an enterprise engaged in two or more lines of
business, one of which is the same or similar to the Company's business
(the "Prohibited Business") if Executive's employment is totally unrelated
to the Prohibited Business; provided, further, the foregoing shall not
prohibit Executive from owning up to 5% of the securities of any
publicly-traded enterprise provided Executive is not an employee, director,
officer, consultant to such enterprise or otherwise reimbursed for services
rendered to such enterprise.
(b) Solicitation of Customers. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, directly or
indirectly, will not seek Prohibited Business from any Customer (as defined
below) on behalf of any enterprise or business other than the Company,
refer Prohibited Business from any Customer to any enterprise or business
other than the Company or receive commissions based on sales or otherwise
relating to the Prohibited Business from any Customer, or any enterprise or
business other than the Company. For purposes of this Section 6(b), the
term "Customer" means any person, firm, corporation, partnership,
association or other entity to which the Company or any of its affiliates
sold or provided goods or services during the 24-month period prior to the
time at which any determination is required to be made as to whether any
such person, firm, corporation, partnership, association or other entity is
a Customer.
(c) No Payment. The Executive acknowledges and agrees that no separate
or additional payment will be required to be made to him in consideration
of his undertakings in this Section 6.
7. Nondisclosure of Confidential Information. The Executive acknowledges
that during his employment he will learn and will have access to confidential
information regarding the Company and its affiliates, including without
limitation (i) confidential or secret plans, programs, documents, agreements or
other material relating to the business, services or activities of the Company
and its affiliates and (ii)
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trade secrets, market reports, customer investigations, customer lists and other
similar information that is proprietary information of the Company or its
affiliates (collectively referred to as "confidential information"). The
Executive acknowledges that such confidential information as is acquired and
used by the Company or its affiliates is a special, valuable and unique asset.
All records, files, materials and confidential information obtained by the
Executive in the course of his employment with the Company are confidential and
proprietary and shall remain the exclusive property of the Company or its
affiliates, as the case may be. The Executive will not, except in connection
with and as required by his performance of his duties under this Agreement, for
any reason use for his own benefit or the benefit of any person or entity with
which he may be associated or disclose any such confidential information to any
person, firm, corporation, association or other entity for any reason or purpose
whatsoever without the prior written consent of the board of directors of the
Company, unless such confidential information previously shall have become
public knowledge through no action by or omission of the Executive.
8. Equitable Relief.
(a) The Company and the Executive recognize that the services to be
rendered under this Agreement by the Executive are special, unique and of
extraordinary character, and that in the event of the breach by the
Executive of the terms and conditions of this Agreement or if the
Executive, without the prior consent of the board of directors of the
Company, shall leave his employment for any reason and take any action in
violation of Section 6 or Section 7, the Company will be entitled to
institute and prosecute proceedings in any court of competent jurisdiction
referred to in Section 8(b) below, to enjoin the Executive from breaching
the provisions of Section 6 or Section 7. In such action, the Company will
not be required to plead or prove irreparable harm or lack of an adequate
remedy at law. Nothing contained in this Section 8 shall be construed to
prevent the Company from seeking such other remedy in arbitration in case
of any breach of this Agreement by the Executive, as the Company may elect.
(b) Any proceeding or action must be commenced in the federal courts,
or in the absence of federal jurisdiction in state court, in either case in
Florida where the Company maintains its principal offices. The Executive
and the Company irrevocably and unconditionally submit to the jurisdiction
of such courts and agree to take any and all future action necessary to
submit to the jurisdiction of such courts. The Executive and the Company
irrevocably waive any objection that they now have or hereafter irrevocably
waive any objection that they now have or hereafter may have to the laying
of venue of any suit, action or proceeding brought in any such court and
further irrevocably waive any claim that any such suit, action or
proceeding brought in any such court has been brought in an inconvenient
forum. Final judgment against the Executive or the Company in any such suit
shall be conclusive and may be enforced in other jurisdictions by suit on
the judgment, a certified or true copy or which shall be conclusive
evidence of the fact and the amount of any liability of the Executive or
the Company therein described, or by appropriate proceedings under any
applicable treaty or otherwise.
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9. Assignability. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and be binding upon the successors and
assigns of the Company. The Executive's obligations hereunder may not be
assigned or alienated and any attempt to do so by the Executive will be void.
10. Severability.
(a) The Executive expressly agrees that the character, duration and
geographical scope of the provisions set forth in this Agreement are
reasonable in light of the circumstances as they exist on the date hereof.
Should a decision, however, be made at a later date by a court of competent
jurisdiction that the character, duration or geographical scope of such
provisions is unreasonable, then it is the intention and the agreement of
the Executive and the Company that this Agreement shall be construed by the
court in such a manner as to impose only those restrictions on the
Executive's conduct that are reasonable in the light of the circumstances
and as are necessary to assure to the Company the benefits of this
Agreement. If, in any judicial proceeding, a court shall refuse to enforce
all of the separate covenants deemed included herein because taken together
they are more extensive than necessary to assure to the Company the
intended benefits of this Agreement, it is expressly understood and agreed
by the parties hereto that the provisions of this Agreement that, if
eliminated, would permit the remaining separate provisions to be enforced
in such proceeding shall be deemed eliminated, for the purposes of such
proceeding, from this Agreement.
(b) If any provision of this Agreement otherwise is deemed to be
invalid or unenforceable or is prohibited by the laws of the state or
jurisdiction where it is to be performed, this Agreement shall be
considered divisible as to such provision and such provision shall be
inoperative in such state or jurisdiction and shall not be part of the
consideration moving from either of the parties to the other. The remaining
provisions of this Agreement shall be valid and binding and of like effect
as though such provision were not included.
11. Notices and Addresses. All notices, offers, acceptance and any other
acts under this Agreement (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressees in person, by Federal Express
or similar receipted delivery, by facsimile delivery or, if mailed, postage
prepaid, by certified mail, return receipt requested, as follows:
To the Company: PACT Communication Group, Inc.
0000 Xxxx Xxxxxxx Xxxx Xxxx
Xxxxx 000/0
Xx. Xxxxxxxxxx, Xxxxxxx 00000
To the Executive: Xxxxxx Xxxxxxx
0000 XX 000 Xxxxxxx
Xxxxx, Xxxxxxx 00000
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or to such other address as either of them, by notice to the other may designate
from time to time. The transmission confirmation receipt from the sender's
facsimile machine shall be conclusive evidence of successful facsimile delivery.
Time shall be counted to, or from, as the case may be, the delivery in person or
by mailing.
12. Counterpart. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument. The execution of this
Agreement may be by actual or facsimile signature.
13. Arbitration. Except for any controversy or claim seeking equitable
relief as provided in Section 8 of this Agreement, any controversy or claim
arising out of or relating to this Agreement, or to the interpretation, breach
or enforcement thereof or any other dispute between the parties, shall be
submitted to one arbitrator and settled by arbitration in West Palm Beach,
Florida, in accordance with the rules, then obtaining, of the American
Arbitration Association. Any reward made by such arbitrator shall be final,
binding and conclusive on all parties hereto for all purposes, and judgment may
be entered thereon in any court having jurisdiction thereof.
14. Attorney's Fees. In the event that there is any controversy or claim
arising out of or relating to this Agreement, or to the interpretation, breach
or enforcement thereof, and any action or proceeding is commenced to enforce the
provisions of this Agreement, the prevailing party shall be entitled to a
reasonable attorney's fee, costs and expenses.
15. Governing Law. This Agreement and any dispute, disagreement, or issue
of construction or interpretation arising hereunder whether relating to its
execution, its validity, the obligations provided therein or performance shall
be governed or interpreted according to the internal laws of the State of
Florida without regard to choice of law considerations.
16. Entire Agreements. This Agreement constitutes the entire Agreement
between the parties and supersedes all prior oral and written agreements between
the parties hereto with respect to the subject matter hereof. Neither this
Agreement nor any provision hereof may be changed, waived, discharged or
terminated orally, except by a statement in writing signed by the party or
parties against which enforcement or the change, waiver discharge or termination
is sought.
17. Additional Documents. The parties hereto shall execute such additional
instruments as may be reasonably required by their counsel in order to carry out
the purpose and intent of this Agreement and to fulfill the obligations of the
parties hereunder.
18. Section and Paragraph Headings. The section and paragraph headings in
this Agreement are for reference purposes only and shall not affect the meaning
or interpretation of this Agreement.
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IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written.
PACT Communication Group, Inc.
(illegible) By: /s/ Xxxxxx Xxxx
--------------------------- -------------------------------
Xxxxxx Xxxx, Vice-President
(illegible) By: /s/ Xxxxxx Xxxxxxx
--------------------------- -------------------------------
Xxxxxx Xxxxxxx, Employee
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