Exhibit 10.3 - Employment Agreement
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") made as of June 9, 1998, by and between
Xxxxxx Media, Inc., a New York corporation having its principal place of
business at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx (the "Employer"), and Xxxxxx
X. Xxxxxxxxxx, 00 Xxxxxxx Xxxx, Xxxx Xxxxxxxxxx, Xxx Xxxx 00000 (the
"Employee").
W I T N E S S E T H:
WHEREAS t he Employer is engaged in the promotion, marketing and sales of
telecommunications-related merchandise; and
WHEREAS the Employee possesses sales, management and marketing experience
related to the type of business and activities in which the Employer is now
engaged;
WHEREAS the Employee has entered into a certain Stock Purchase Agreement dated
November 26, 1996 among DCI, Xxxxxx Xxxxxx, the Employee, and Employer (the
"Stock Purchase Agreement"); and
WHEREAS the Employee desires to be employed by the Employer and the Employer
desires to employ the Employee, upon the terms and conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the covenants and promises contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Employer and the Employee
agree as follows:
1. Employment. The Employer hereby employs the Employee and the Employee hereby
accepts employment from the Employer, upon the terms and conditions set forth in
this Agreement.
2. Term. The term of this Agreement shall commence on the date of this Agreement
and shall end three (3) years from such date plus a one (1) year extension at
Employee's option.
3. Scope of Duties. During the term of this Agreement, the Employee shall be
employed as Executive Vice President of Employer. The Employee shall have
general responsibility as to the development of new business and sales of
products of the business.
4. Scope of Service. During the term of this
Agreement, the Employee shall, consistent with his duties as Executive Vice
President of Employer, devote his attention, energies, and best efforts to the
business of the Employer, and shall perform all of the duties that are required
of him pursuant to the express terms of this Agreement. During the term of this
Agreement, the Employee shall not, directly or indirectly, alone or as a member
of any partnership, firm, corporation, association or other entity, or as an
officer, director, employee or consultant of any corporation or other entity, be
engaged in or concerned with any other business activity, whether or not such
business activity is pursued for gain or profit or for other pecuniary advantage
which shall compete with the Employer in the promotion, marketing and sales of
telecommunications-related merchandise. Employee will be allowed to serve on
boards of directors of non-profit organizations, engage in charitable activities
and deliver lectures which do not directly compete with, or directly benefit
competitors of the Employer. The foregoing shall not, however, be construed as
preventing the Employee from investing his personal assets in such form or
manner as will not require any services on his part in the operation of affairs
of the companies or enterprises in which such investments are made.
5. Compensation. As compensation for services rendered by the Employee to the
Employer, the Employee shall be paid during the term of this Agreement out of
the general fund of Employer the following amounts:
(a) Base Salary.
(i) For the calendar year 1998 and until December 31, 1998, the Employee shall
receive a base salary equal to One hundred seventy-five thousand dollars
($175,000) per annum, payable in monthly installments ("Base Salary"). In
addition, he will receive commissions in accordance that certain contract with
Delta Television Group dated April 2, 1984, as amended and supplemented on
January 2, 1985 and January 1, 1994.
(ii) The amount of the Employee's Base Salary in all subsequent years during the
term of this Agreement, and renewals thereof, will be increased on January 1 of
each year. During the term of this Agreement and all renewals thereof, the then,
current Base Salary shall be increased as of each January 1, beginning January
1, 1999, by a rate equivalent to any percentage increase in the Consumer Price
Index for the twelve month period occurring prior to the date of the scheduled
change, plus five percent (5%). As used in this section, the Consumer Price
Index shall mean (i) the "CONSUMER PRICE INDEX FOR URBAN WAGE EARNERS AND
CLERICAL WORKERS, currently published by the Bureau of Labor Statistics of the
United States Department of Labor for the Greater New York Metropolitan Area on
a bi-monthly basis, or (ii) if the publication of the Consumer Price Index shall
be discontinued, and/or the Consumer Price Index is published more or less
frequently at the time any of
the foregoing determinations are made, the comparable index most clearly
reflecting dilution of the real value of the Base Salary and/or the publication
periods most comparable to those specified above. In the event of a change in
the base for the Consumer Price Index, the numerator of the fraction referred to
above shall be appropriately adjusted to reflect continued use of the base
period in effect at the time of its adoption for use hereunder. At the request
of either party hereto, the other from time to time shall execute an appropriate
instrument supplemental to this Agreement evidencing the then current Base
Salary payable by the Employer hereunder.
(b) Stock Purchase Option.
In addition to the Base Salary, DCI shall grant to employee a stock option to
purchase 50,000 registered shares of DCI on the effective date of this Agreement
and, thereafter to purchase 50,000 registered shares of DCI on each anniversary
date of this Agreement (a total of 150,000 registered shares for the term of
this Agreement and 50,000 registered shares in the option year if option is
taken), in each case under the same terms and conditions contained in DCI's
stock option plan which is hereby incorporated by reference in this Employment
Agreement and at a price equal to the price per share prevailing on the date of
execution of the Stock Purchase Agreement, in the case of the option granted on
the effective date of this Agreement and, in the case of each subsequent option
granted on each anniversary date of this Agreement at the then existing market
price. Options granted pursuant to this section shall vest on the first
anniversary of the date such options are granted and shall be exercisable for a
period of five years after the date of grant.
6. Withholdings. All compensation, including any incentive bonus, paid to the
Employee under this Agreement shall be subject to applicable withholdings for
federal, state, and local income taxes, FICA, and all other applicable
withholdings required by law.
7. Vacation. In each calendar year during the term hereof, the Employee shall be
entitled to an annual paid vacation of four (4) weeks. Vacation shall be taken
upon reasonable advance notice to the Employer, and at such times not to
interfere with the proper operation of Employer's business or the Employee's
responsibility under this Agreement. Unused vacation shall be carried over from
year to year, and the Employee shall be entitled to the value of any unused
vacation time remaining upon the expiration or earlier termination of this
Agreement.
8. Employee Benefits. During the term of this Agreement the Employee shall be
entitled, at the Employee's option, to participate in, and to receive the
following: (a) Life insurance, disability insurance, health, dental and welfare
plans of the Employer or DCI; and (b) Any and all retirement plans established
by the Employer or DCI pursuant to the terms of said plan, including, but not
limited to, Thrift Plans, ESOP's and 401(k) plans, it being understood that, in
the event that the Employee elects to be covered under Employer's benefit plans
during the term of this Agreement and Employer is capable of maintaining such
plans without subsidy from DCI, DCI shall not terminate any such retirement
plan.
9. Expenses.
(a) Employer shall reimburse the Employee for all reasonable expenses incurred
by the Employee in connection with the rendering of services under this
Agreement including, without limitation, reasonable travel (reasonable air
travel defined as Business Class for trips in excess of 2 hours) and
entertainment, Employee's attorneys fees incurred in preparation and review of
this Agreement and reasonable legal fees if any litigation or proceeding results
in a settlement or judgment at least partly in favor of the Employee.
(b) Employer obligation to reimburse the Employee for such reasonable expenses
is conditioned upon the Employee submitting itemized statements, bills,
receipts, or other evidence of expenditure, in a form reasonably satisfactory to
the Employer. Reimbursement for any authorized expenses shall be made by the
Employer within thirty (30) days after the Employer's receipt of such itemized
statements, bills, receipts, or other evidence of expenditure from the Employee.
10. Termination.
(a) Termination for cause. The Employer, acting through its Board of Directors,
may terminate this Agreement only for cause by written notice to the Employee.
For the purposes of this Agreement, the term "cause" shall include only the
following acts: (1) any material breach of any fiduciary duty owed by the
Employee to Employer which if curable is not cured within 30 days after written
notice from Employer to Employee; or (2) any mental or physical disability
suffered by the Employee which makes it impossible for the Employee to perform
his duties under this Agreement for a period of one hundred eighty (180)
consecutive days; or (3) the Employee's failure, not caused by physical or
mental disability, to perform his duties and responsibilities as required under
the express
terms of this Agreement. Employer may not terminate this Agreement under any
other circumstances.
(b) Voluntary termination by Employee. This Agreement may be terminated by the
Employee with or without cause upon sixty (60) days written notice to the
Employer provided that employee may not compete with Employer and or DCI in the
television distribution business for a period equal to the lesser of one year
from date of termination or the remainder of the then effective term of this
Agreement.
In the event that this Agreement is terminated by the Employee for any of the
following reasons (collectively, "Employee Cause"), the Employee shall be
entitled to Severance Benefits described in Section 11 below:
(i) The Employer is liquidated, dissolved, consolidated, merged or sold, or a
controlling interest in the common stock of the Employer is transferred from the
current owner (s) thereof;
(ii) Any material breach of any other obligation of the Employer hereunder.
Employer covenants that it will not:
(i) Remove Employee from his current position, or reduce the Employee's duties
and responsibilities;
(ii) Relocate the Employee outside of New York or Connecticut;
(iii) Reduce the Employee's salary and/or benefits from those set forth in this
Agreement; or
(iv) Terminate this Agreement for any reason other than as set forth in Section
10(a).
Any breach by Employer of this provision will constitute a "material breach"
under Section 10(b)(ii) hereof.
(c) Physician statement. Prior to terminating the Employee by reason of the
existence of any condition of mental or physical disability, as stated in
paragraph (a) of this Section 10, the Employer shall first obtain a written
statement from an attending physician or psychotherapist competent in the area
relating to Employee's illness or condition, stating that in the physician or
psychotherapist's professional opinion, the Employee is unable to perform his
duties and responsibilities in a manner contemplated by this Agreement. If
Employee refuses or fails to consent to an examination of the Employee for the
purpose of obtaining the written statement required herein, then the necessity
of obtaining such statement shall be deemed waived by .the Employee.
(d) Termination upon death of Employee. This Agreement shall terminate upon the
Employee's death. Upon such termination Employee's estate shall be entitled to
receive Base Salary plus any adjustments due to the Employee to the last day of
the calendar month which is the full calendar month succeeding the calendar
month in which death occurs and any unpaid incentive bonus for such period which
may become due by reason of collection after Employee's death.
11. Severance. In the event that this Agreement is terminated by the Employee
for Employee Cause, then the Employer shall pay Employee the following:
(a) A severance bonus from the general funds of the Employer, consisting of:
(i) The present value of the Employee's salary, less amounts the Employee would
have paid for under the benefits set forth in Section 8 hereof for the greater
of the unexpired term of this Agreement or two (2) years;
(ii) At the Employee's election, either the payment of the present value as a
lump sum, or payment in any form and manner provided for in the Employer's or
DCI's retirement plan, of the pension benefits which the Employee would have
received at the end of the term hereof, calculated on the assumptions of full
vesting and compensation for the unexpired portion of the term hereof at the
rate in effect at the time of termination;
(iii) The present value of payments the Employer or DCI would have made during
the unexpired portion of the term hereof to any ESOP and Thrift Plan for the
Employee; and
(iv) Commissions earned per the Agreement will continue to be paid by the
Employer for sales generated by the Employee but unpaid as of the termination
date.
The severance bonus due under this paragraph 11(a) shall be paid to the Employee
in a single lump sum within thirty (30) days after the termination of the
Employee;
(b) The Employee's then-effective Base Salary for a period of six (6) months or
until such sooner time as Employee obtains new employment, to be paid to the
Employee on the dates when such salary would have been payable had such
employment not been terminated; and
(c) In addition to any COBRA rights, reasonable expenses pursuant to Paragraph 8
of this Agreement for health and life insurance in the amounts and coverages
existing at the time of termination (i) for a period of the longer of six months
or the remainder of the year in which Employee terminates this Agreement, or
(ii) until such sooner time as Employee obtains new coverage in the course of
new employment.
12. Assignment. The Employee acknowledges that the services to be rendered by
him are unique and personal. Accordingly, the Employee may not assign any of his
rights or delegate any of his duties or obligations under this Agreement.
13. Entire Agreement. This Agreement contains the entire agreement of the
parties regarding the subject matter hereof. This Agreement may not be amended
or modified except by a writing executed by both the Employer and the Employee.
14. Severability. All agreements and covenants contained in this Agreement are
severable, and in the event any of them are held to be invalid, then this
Agreement shall be interpreted as if such invalid agreements or covenants were
not contained herein.
15. Governing Law. This Agreement shall be governed, construed, and interpreted
by and in accordance with the laws of the State of New York. Any dispute arising
under this Agreement that is not settled promptly in the ordinary course of
business shall be resolved pursuant to the arbitration procedure set forth in
Section 13.5 of the Stock Purchase Agreement except that the term "Employee," as
used in this Agreement, shall be substituted for the terms "Seller" and
"Sellers" as used in the Stock Purchase Agreement, and any arbitration procedure
instituted pursuant to this Agreement shall pertain only to the Employee, not to
any other party who may have an employment agreement with the Employer nor to
any other employment agreement between the Employer and another employee.
16. Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, and all collectively
constituting the same instrument.
17. Notices. All notices required or permitted under this Agreement shall be in
writing and shall de deemed "given" when personally delivered or if mailed by
registered or certified mail, postage prepaid, to the respective addresses of
the parties stated in the preamble to this Agreement, within 5 business days of
such mailing.
18. Binding Agreement. The provisions, covenants and agreement contained herein
will inure to the benefit of, and be binding upon, the parties hereto and the
respective heirs,
executors, administrators, successors, legal representatives and assigns.
19. Waiver of Breach. The waiver by either party of a breach or violation of any
provisions of this Agreement shall not operate as, or be construed to be, a
waiver of any subsequent breach thereof. IN WITNESS WHEREOF, the parties have
executed this employment agreement as of the day and year first above written.
Xxxxxx Media, Inc.
---------------------------- By --------------------
Witness (Jordan X. Xxxxxx) Xxxxxx Xxxxxx
(Xxxxx Xxx) Its President
(Xxxxxxxxx Xxxxx)
-------------------------
XXXXXX X. XXXXXXXXXX
Approved by:
DCI Telecommunications, Inc.
---------------------------- By --------------------
Witness Xxxxxx X. Xxxxxx
Its: President
----------------------------
Witness
MMI
XXXXXX MEDIA, INC.
May 1, 2001
XX. XXXXXX XXXXXX
DCI TELECOMMUNICATIONS, INC.
000 Xxxxxx Xxxx
Xxxxxxxxx, XX 00000
Re: Addendum Agreement of Employment Terms and Extensions - Xxxxxx X. Xxxxxx and
Xxxxxx X. Xxxxxxxxxx
Dear Xxx:
The purpose of this letter is to confirm our meeting and conversations as to
extended or changed employment circumstances for Xxxxxx X. Xxxxxx and Xxxxxx X.
Xxxxxxxxxx effective June 9, 2001.
As to XXXXXX X. XXXXXXXXXX, he will be promoted to President and C.O.O. of
Xxxxxx Media, Inc., a wholly owned subsidiary of DCI Telecommunications, Inc.
With his added responsibilities, in addition to his usual annual salary increase
in accordance with his Employment Agreement dated June 9, 1998, Xx. Xxxxxxxxxx'x
salary (after annual increase) will increase by $25,000.00 annually beginning
June 9, 2001. In addition, his employment agreement will be extended for an
additional three (3) years under the same terms and conditions set forth in his
June 9, 1998 Employment Agreement (or to June 9, 2004).
As to XXXXXX X. XXXXXX, he will become Chairman and C.E.O. of Xxxxxx Media,
Inc., a wholly owned subsidiary of DCI Telecommunications, Inc. Xx. Xxxxxx'x
responsibilities will include advising, consulting, and assisting Xx. Xxxxxx X.
Xxxxxxxxxx with his new and expanded duties as President and C.O.O. Xx. Xxxxxx
will no longer frequent the offices of Xxxxxx Media, Inc. or travel on their
behalf on a regular basis, but will be available on an as needed basis to
prepare Xx. Xxxxxxxxxx for his new responsibilities.
In return for Xx. Xxxxxx'x adjusted position with Xxxxxx Media, Inc., he is to
have his salary reduced to $200,000., his employment as such to be for one (1)
year beginning June 9, 2001, and will include the same terms, conditions and
benefits set forth in his original June 9, 1998 Employment Agreement.
00 XXXX 00XX XXXXXX, XXX XXXX, XX 00000-0000 (000) 000-0000
FAX: (000) 000-0000 Email: xxxxxx0000@xxx.xxx
Page 2 of 2
May 1, 2001
Xx. Xxxxxx Xxxxxx,
DCI Telecommunications Addendum Agreement of Employment Terms and Conditions
It is also understood and agreed that Xx. Xxxxxxxxxx will have the right, if
needed, to hire an additional sales representative for Xxxxxx Media, Inc. to
travel, communicate and present the company's product throughout the Television
and/or Cable Territories for which the company has under license. Salary and
terms of employment for such new employee will be consistent with industry
standards.
If the above is in full accordance with our mutual understanding and
agreement, please counter-sign below, returning three (3) individually signed
copies to my attention.
Agreed to as to Agreed to as to
DCI Telecommunications, Inc. Xxxxxx Media, Inc.
DATED 5/10/01 DATED 5/1/01
XXXXXX XXXXXX TITLE XXXXXX X. XXXXXX PRESIDENT
DATED 5/1/01
XXXXXX X. XXXXXXXXXX E.V.P.
00 XXXX 00XX XXXXXX, XXX XXXX, XX 00000-0000 (000) 000-0000
FAX: (000) 000-0000 Email: xxxxxx0000@xxx.xxx
