Exhibit 10.11
EXECUTIVE EMPLOYMENT AGREEMENT
BY AND BETWEEN
RTIN Holdings Inc.
AND
XXXXX XXX
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is entered into
to commence and be effective as of the 29th day of April 2002
("Effective Date") by and between RTIN HOLDINGS, INC., a Texas
corporation, (the "Company") and XXXXX XXX, the undersigned individual
("Executive").
R E C I T A L
The Company and Executive desire to enter into this Agreement, setting
forth the terms and conditions of Executive's employment with the Company.
A G R E E M E N T
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the Company and Executive agree as follows:
1. Employment
(a) Term The Company hereby agrees to employ Executive and Executive
agrees to work for the Company as a full-time employee, for a period commencing
on the date first set forth above and ending on the fourth anniversary of such
date (the "Original Term"). The Original Term shall be extended automatically
for an additional one-year period, unless notice that this Agreement will not be
extended is given by either party to the other at least thirty (30) day prior to
the expiration of the Original Term.
(b) Title and Job Description The Company hereby employs Executive as
its Chief Information Technology Officer ("CTO") upon the terms and conditions
set forth in this Agreement. As CTO, the Executive shall always be the most
senior technology officer and shall have the duties, responsibilities and
authority that are customarily associated with such position. Executive's duties
and responsibilities shall include authority for overall management of the
technology department subject to Board policies and direction. Executive's
duties and responsibilities hereunder shall also include the responsibilities of
President for Safe Med Systems, Inc., a Texas corporation, (SafeMed) and the
provision of management support services to Company's subsidiaries Safescript
Pharmacy, Inc., a Texas corporation, ("Safescript"). Executive shall report
directly to the president of RTIN Holdings, Inc. Executive shall perform his job
in Longview, Texas and shall not have to render services at another location,
except on a temporary basis.
2. Compensation
(a) Base Salary Executive shall be paid a base salary ("Base Salary")
at the annual rate of $195,000.00 for year one, $215,000 for year two, $235,000
for year three, and $275,000 for year four, payable in bi-weekly installments
consistent with Company's payroll practices. The annual Base Salary shall be
reviewed on or before the fourth anniversary date of this Agreement by the
Compensation Committee of the Board of Directors of RTIN Holdings, Inc.,
Company's parent, ("RTIN") to determine if such Base Salary should be increased
for the following year in recognition of services to the Company. In no event,
however, will the Executive's Base Salary for any subsequent year be reduced
below the level of the previous year.
(b) Incentive Compensation In addition to the Base Salary, the Company
shall pay to Executive as incentive compensation ("Incentive Compensation") an
amount equal to 25% for year one, 45% for year two, 50% for year three, and 50%
for year four of the base salary as defined in 2(a) above provided that the
Company achieves or exceeds it's earnings per share estimate as defined in the
earnings guidance report published by the Company on December 6, 2001 or any
amendments thereto. In the event the Company does not achieve it's earnings per
share estimate as so defined then the Incentive Compensation shall be reduced by
two percent (2%) for each one percent (1%) below the targeted earnings number.
The determination of the earning per share made by the independent accounting
firm employed by the Company shall be final and binding upon Executive and
Company. The Incentive Compensation shall be paid within thirty (30) days after
the independent accounting firm has concluded its audit. If the final audit is
not prepared within ninety (90) days after the end of the fiscal year, then
Company shall make a preliminary payment equal to fifty percent (50%) of the
amount due based upon the earnings per share preliminarily determined by the
independent accounting firm, subject to payment of the balance, if any, promptly
following completion of the audit by the independent accounting firm.
(c) Stock Options Executive shall be entitled to options to acquire
250,000 shares of common stock of RTIN pursuant to the terms of a Stock Option
Plan to be adopted by the Company and RTIN on or before the Effective Date,
subject to the following terms:
(i) The options will vest only as follows:
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If still employed by Company on Options Vest for
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January 1, 2003 62,500 shares
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January 1, 2004 87,500 shares
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January 1, 2005 100,000 shares
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(ii) The exercise price per share for the options shall be ten cents
($.10) per share.
(iii) The vested options shall be exercisable until the earlier of (A)
three (3) years after vesting or (B) ninety (90) days after termination
of Executive's employment or Continuation Period, as hereinafter
defined, with the Company with or without cause or with good reason.
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(iv) Issuance of the options shall be in accordance with all applicable
securities laws and the other terms and conditions of the Company's
Stock Option Plan and form of the Stock Option Agreement to be adopted
by RTIN and the Company.
(v) Upon the completion of year three the Compensation Committee of the
Board of Directors of the Company will evaluate the overall performance
of Executive and determine if an option to purchase and additional
fifty thousand (50,000) shares are warranted to be vested on January
1, 2006.
3. Benefits
(a) Holidays Executive will be entitled to at least eight (8) paid
holidays each calendar year and two (2) personal days. Company will notify
Executive on or about the beginning of each calendar year with respect to the
holiday schedule for the coming year. Personal holidays, if any, will be
scheduled in advance subject to requirements of Company.
(b) Vacation Executive shall be entitled to fourteen (14) paid vacation
days per calendar year.
(c) Sick Leave Executive shall be entitled to sick leave and emergency
leave according to the regular policies and procedures of the Company.
Additional sick leave or emergency leave over and above paid leave provided by
the Company shall be granted at the discretion of the Board of Directors.
(d) Medical, Disability and Group Life Insurance Company agrees to (i)
include Executive in the group medical and hospital plan of Company, (ii)
provide short- and long-term disability insurance, at no cost to Executive, and
(iii) provide group life insurance for Executive, at no cost to Executive, in
the minimum amount of $1,000,000.00 during this Agreement. Executive shall be
responsible for payment of any federal or state income tax imposed upon these
benefits.
(e) Pension and Profit Sharing Plans Executive shall be entitled to
participate in any pension, profit sharing or other type of plan adopted by the
Company for the benefit of its officers and/or regular employees.
(f) Automobile Company shall provide Executive the use of an automobile
of Executive's choice at a monthly lease rate not to exceed $1000.00. Company
agrees to replace the automobile with a new one at Executive's request no more
often than the earlier of once every two (2) years or 24,000 miles. Company will
pay all automobile operating expenses incurred by Executive in the performance
of Executive's professional duties. Company will procure and maintain in force
an automobile liability policy for the automobile with coverage, including
Executive, in the minimum amount of $1,000,000.00 combined single limit on
bodily injury and property damage.
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(g) Expenses Executive shall be entitled to reimbursement for all
reasonable expenses, including travel and entertainment, incurred by Executive
in the performance of Executive's duties. Executive will maintain records and
written receipts, as required by Company policy and reasonably requested by the
Board of Directors to substantiate such expenses.
(h) Health Club Benefits The Company shall provide Executive's family
with full health club benefits at a health club of Executive's choice in
Longview, Texas.
4. Termination
(a) Termination With Cause The Company may terminate Executive's
employment with Company for Cause by a majority vote of the Board of Directors,
provided that the triggering event, as defined below, is not cured within thirty
(30) days after written notice of such Cause is delivered to Executive. If the
event is not timely cured, the Board of Directors shall provide Executive a
final written notice of termination. In such event, Executive will be entitled
to receive only accrued compensation and benefits. For purposes of this
Agreement, "Cause" shall mean the occurrence of any of the following events
during the term of this Agreement:
(i) serious misconduct, dishonesty or disloyalty, directly related to
the performance of duties for the Company, which results from a willful
act or omission or from gross negligence and which is materially or
potentially materially injurious to the operations, financial condition
or business reputation of the Company or any significant affiliate
thereof;
(ii) a conviction (or a plea bargain admitting criminal guilt) in any
criminal proceeding that may have a material adverse impact on the
Company's reputation and standing in the community or which is
punishable by imprisonment;
(iii) drug or alcohol abuse, but only to the extent that such abuse has
an obvious and material effect on the Company's reputation and/or the
performance of duties and responsibilities required under this
Agreement;
(iv) willful and continued failure to substantially perform duties
required under this Agreement; or
(v) any other material breach of this Agreement by Executive.
For purposes of this provision, no act or failure to act shall be considered
"willful" unless it is done, or omitted, in bad faith without reasonable belief
that the action or omission was in the best interest of the Company.
(b) Involuntary Termination Without Cause or Disability or Voluntary
Termination for Good Reason In the event that, during the term of this
Agreement, (i) the Company terminates Executive's employment for any reason
other than Cause, Death or Disability, as hereinafter defined, or (ii) Executive
terminates his employment for Good Reason, as hereinafter defined, then
Executive shall be entitled to receive the following payments and benefits:
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(1) Severance The Company shall pay to Executive following the
date of the employment termination and over the succeeding
twenty-four (24) months, in accordance with standard payroll
procedures, an amount equal to the following:
(A) Two hundred percent (200%) of the Executive's
Base Salary in effect on the date of the employment
termination; plus
(B) Two hundred percent (200%) of the Executive's
Incentive Compensation for the fiscal year in which
the employment was terminated.
(2) Continuation of Health, Disability and Life Insurance The
coverage described in this Subsection (2) shall be provided
for a "Continuation Period" beginning on the date when the
employment termination is effective and ending on the earlier
of twenty-four (24) months following the date of the
employment termination or Executive's death. During the
Continuation Period, the Executive (and, where applicable,
Executive's spouse and dependents) shall be entitled to
continue participation in the group medical and hospital plan,
short-term and long-term disability plan and group term life
insurance plan maintained by Company as if Executive were
still an employee of the Company. The coverage provided under
this Subsection (2) shall run concurrently with and shall be
offset against any continuation coverage under Part 6 of Title
I of the Employee Retirement Income Security Act of 1974, as
amended. Where applicable, Executive's compensation for
purposes of such plans shall be deemed to be equal to
Executive's compensation (as defined in such plans) in effect
on the date of the employment termination. To the extent that
the Company finds it undesirable to cover Executive under the
Company's group plans, the Company shall provide Executive (at
Company's own expense) with the same level of coverage under
individual policies.
(3) Stock Option Plan Notwithstanding any provisions in the
Stock Option Plan to the contrary, the Continuation Period
shall be counted as employment with the Company for purposes
of vesting, such that any options granted to Executive
hereunder or hereafter shall continue to vest during the
Continuation Period, as if the Executive was still employed by
Company. The parties understand and agree that the
Continuation Period also counts as employment with the Company
for purposes of determining the expiration date for the
exercise of any stock options held by Executive, such that
Executive shall be permitted to exercise such vested options
until ninety (90) days after the termination of the
Continuation Period.
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(4) No Mitigation Executive shall not be required to mitigate
the amount of any payment or benefit contemplated by this
Subparagraph (b), nor shall any such payment or benefit be
reduced by any earnings or benefits that the Executive may
receive from any other source.
(5) Good Reason For purposes of this Subparagraph (b), "Good
Reason" shall mean that Executive, without his consent, has
either:
(A) incurred a material reduction in his title,
status, authority or responsibility at the Company;
or
(B) incurred a reduction in Base Salary; or
(C) a change of control in the Company resulting in a
displacement of Executive; or
(C) been notified that his principal place of work
will be relocated to a distance of one hundred (100)
miles or more.
(c) Termination for Disability The Company may terminate this Agreement
without liability if Executive shall be permanently prevented from properly
performing his essential duties hereunder with reasonable accommodation by
reason of illness or other physical or mental incapacity for a period of more
than one-hundred and twenty (120) consecutive days. Upon such termination,
Executive shall be entitled only to all accrued but unpaid compensation and
benefits.
(d) Death of Executive In the event of the death of Executive during
his employment under this Agreement, the Company's obligations hereunder shall
automatically cease and terminate, provided, however, that within fifteen (15)
days the Company shall pay to Executive's heirs or personal representatives
Executive's accrued but unpaid compensation and benefits accrued to the date of
death.
5. Specific Covenants of Executive
(a) Confidentiality The Executive will hold in confidence any
Confidential Information (as hereinafter defined) and will not disclose
Confidential Information to any person except as required by the conduct of the
Company's business and then only pursuant to a written agreement preventing
further disclosure or use. For the purposes of this Agreement, "Confidential
Information" means any and all trade secrets, methods, customer lists, computer
software (including source code and object code), databases, protocols,
specifications, designs, photographs, drawings, samples, business plans,
financial data and other information that is useful to the business of the
Company the value of which would be diminished if it were made generally known
to the public.
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(b) Non-Competition The Executive acknowledges that (i) the Company
will provide to the Executive certain information, opportunities and
compensation that would enable the Executive to have an unfair competitive
advantage if the Executive were to compete with the Company or be employed by or
become an owner of any person that competes with the Company at any time during
the Continuation Period, (ii) the Company is engaged in a development stage
business that may be conducted on a worldwide basis and (iii) the scope of the
Company's business is not presently ascertainable. During the term of this
Agreement and the Continuation Period, the Executive will not engage in, invest
in, own, manage, operate, finance, control or participate in the ownership,
management, operation, or control of, or be employed by or provide services to
any person that competes or intends to compete with the Company or its
affiliates anywhere within North America.
(c) Enforcement The Executive acknowledges that (i) the provisions of
this Section 5 are reasonable and necessary for the protection of the Company's
rights and business, (ii) while damages for any breach may be available in an
action at law, such damages are not adequate to protect the Company's interest
in its rights and (iii) the scope and duration of the restrictions are
reasonable in both size and time. The Company shall have the right, in addition
to any other rights it may have, to obtain injunctive relief to restrain any
breach or threatened breach, or to require the performance of, this Section 5.
6. General Provisions
(a) Indemnification The Company shall indemnify, hold harmless and
defend Executive against all claims arising against Executive in connection with
the performance of his duties under this Agreement to the fullest extent
permitted by law.
(b) Entire Agreement This Agreement contains the entire agreement and
understanding between the parties hereto and supersedes any prior written or
oral agreements respecting the subject matter hereof.
(c) Amendment This Agreement may be amended only by a writing signed by
Executive and by a duly authorized representative of the Company.
(d) Severability If any term, provision, covenant or condition of this
Agreement shall be held to be invalid, unenforceable or void, the remainder of
this Agreement shall remain in full force and effect.
(e) Construction The headings and captions of this Agreement are
provided for convenience only and are not intended to have effect in the
construction or interpretation of this Agreement. The language in all parts of
this Agreement shall in all cases be construed according to its fair meaning and
not strictly for or against the Company or Executive.
(f) Notices Any notice required under this Agreement or given in
connection therewith shall be in writing and given to the appropriate party by
personal delivery or by certified mail, postage prepaid or by recognized
overnight delivery service to Executive's residence (as noted in the Company's
records) or to the Company's principal office, as the case may be.
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(g) Assignment This Agreement, or any interest therein, may not be
assigned by either party without the prior written consent of the other party.
(h) Governing Law This Agreement shall be governed by and construed in
accordance with Texas law without regard to conflict of law principles.
(i) Rights Cumulative The rights and remedies provided by this
Agreement are cumulative, and the exercise of any right or remedy by either
party hereto (or by his or its successor), whether pursuant to this Agreement,
to any other agreement, or to law, shall not preclude or waive his or its right
to exercise any or all other rights and remedies.
(j) Nonwaiver No failure or neglect of either party hereto in any
instance to exercise any right, power or privilege hereunder or under law shall
constitute a waiver of any other right, power or privilege or of the same right,
power or privilege in any other instance. All waivers by either party hereto
must be in writing and signed by the party granting the waiver.
(k) Assistance in Litigation Executive shall, during and after
termination of employment, upon reasonable notice, furnish such information and
proper assistance to the Company as may reasonably be required by the Company in
connection with any litigation in which it or any of its subsidiaries or
affiliates is, or may become a party, provided, however, that such assistance
following termination shall be furnished at mutually agreeable times and for
mutually agreeable compensation.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first set forth above.
EXECUTIVE:
-----------------------------
Xxxxx Xxx
COMPANY:
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By: Xxxxxx X. Xxxxxxx
Its: President
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