EXHIBIT 10.19
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), entered into as of January 1,
2004, between EVCI Career Colleges Incorporated a Delaware corporation ("EVCI"),
and Xxxxxx X. Xxxxxxx ("Executive").
In consideration of the mutual covenants contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Employment; Duties.
1.1 EVCI hereby employs Executive as its General Counsel and Vice
President for Corporate Affairs. In such capacities, Executive shall report
directly to EVCI's Chief Executive Officer ("the CEO") and, as is appropriate
for the general counsel of a public company, to EVCI's board of directors as
well.
1.2 As General Counsel of EVCI, Executive agrees to perform and
discharge such duties and responsibilities as are appropriate for the general
counsel of corporations with the financial, personnel and other resources that
are similar to that of EVCI, including preparing and filing reports required to
be filed with the Securities and Exchange Commission and other federal and state
regulatory authorities and otherwise dealing with such authorities; negotiating,
drafting and closing agreements relating to EVCI's internal and external
operations and activities; and generally advising EVCI's management with respect
to EVCI's compliance with applicable laws, rules and regulations.
As Vice President for Corporate Affairs, Executive shall perform
such duties and responsibilities as are assigned to him by the CEO relating to
the business and affairs of EVCI and its subsidiaries, including Interboro
Institute, Inc. ("Interboro"), including assisting with registration and
admissions and performing such other tasks and functions as the CEO deems
reasonably necessary and appropriate under the circumstances.
The general counsel of Interboro shall not report to Executive.
Executive shall devote his full business time to, and shall use his
best efforts in, the performance of such duties and responsibilities.
2. Compensation.
2.1 For his services pursuant to this Agreement, EVCI will pay
Executive a salary at the annual rate of $200,000 ("Salary").
2.2 As an incentive for Executive to enter into this Agreement, EVCI
agrees to grant Executive five-year options that do not qualify as incentive
stock options, to purchase 90,000 shares of EVCI's common stock at the price per
share equal to the closing price of EVCI's common stock, as reported by NASDAQ,
on December 23, 2004. Such options will expire at midnight on December 31, 2008,
will vest and become exercisable, in whole or in part on a cumulative basis as
to one-half of the shares covered thereby, on each of December 31, 2004 and
2005, will contain cashless exercise provisions permitting payment of any
portion of the exercise price by surrendering options and/or EVCI common stock
to EVCI, and will be governed by the provisions of a stock option agreement
substantially in the same form as EVCI uses for non-qualified option grants to
its other senior executives.
3. Employment Term. The term of Executive's employment (the "Employment
Term") will commence as of the date first written above and, unless sooner
terminated as provided in Section 5, will end on December 31, 2005.
4. Benefits, Payments and Withholding.
4.1 Executive will be entitled to vacation of four weeks per year,
and holidays and sick days in accordance with EVCI's policy, during which
Executive will be entitled to the full compensation and Benefits (as defined in
Section 4.2) otherwise payable hereunder.
4.2 Executive may participate, on the same basis and subject to the
same qualifications as other executive personnel (exclusive of the founders, Xx.
Xxxx X. Xxxxxxxx and Xx. Xxxx X. XxXxxxx) of EVCI, in any pension, profit
sharing, life insurance, health insurance, hospitalization, dental, drug
prescription, disability, accidental death or dismemberment and other benefit
plans and policies EVCI provides with respect to its executive personnel
(collectively, the "Benefits").
4.3 EVCI will pay or promptly reimburse Executive, in accordance
with EVCI's normal policies and procedures for its executive personnel, for all
allowances and expenses provided for hereunder and for all reasonable
out-of-pocket business, entertainment and travel expenses incurred by Executive
in the performance of his duties hereunder.
4.4 EVCI will pay the Salary at the semimonthly rate of $8,333.33
and may withhold from the Salary, the Benefits and any other compensation
provided to Executive hereunder, all Federal, state and local income, employment
and other taxes, as and in such amounts as may be required to be withheld under
applicable law.
4.5 EVCI shall pay for Executive's CLE courses, in accordance with
its current policy and shall pay for such legal publications as Executive
reasonably determines are necessary for Executive's performance of his duties as
General Counsel. In addition, EVCI shall pay the costs and disbursements of
outside legal counsel recommended by Executive and approved by the CEO, to
perform such services as Executive and the CEO determine are necessary and
appropriate.
5. Termination and Severance Benefits.
5.1 Termination by EVCI and Resignation by Executive. The CEO may
terminate Executive's employment with EVCI, with or without Cause (as defined in
Section 5.5). Termination with Cause shall be effective immediately and
termination without Cause shall be effective upon 30 days prior written notice
to Executive. Executive may voluntarily resign his employment with EVCI, with
Good Reason (as defined in Section 5.5), upon 30 days prior written notice to
EVCI.
5.2 Compensation Upon Termination Without Cause or Upon Resignation
with Good Reason. If the CEO terminates Executive's employment hereunder for any
reason other than Cause or Executive's death or Permanent Disability (as defined
in Section 5.5), or if Executive voluntarily resigns his employment with EVCI
with Good Reason (the effective date of the first to occur of such termination
or his resignation being the "Termination Date"), then (a) Executive shall be
entitled to receive (i) the Salary and Benefits accrued prior to the Termination
Date and (ii) payment or reimbursement of any expenses, provided for under
Section 4.3, that were incurred by Executive prior to the Termination Date and
(b) after the Termination Date, EVCI will also continue (i) to pay the Salary,
in equal semimonthly payments, to Executive throughout the greater of 12 months
or the unexpired portion of the Employment Term and (ii) continue for Executive
and his spouse and dependent children the health insurance coverage and medical
and dental reimbursement referred to in Section 4.2 for 12 months after the
Termination Date. Executive shall be under no duty to seek other employment
following termination but any amounts earned by him in connection with such
other employment shall reduce and offset the amounts otherwise owing hereunder.
2
5.3 Compensation Upon Resignation Without Good Reason or Upon
Termination for Cause. If Executive breaches this Agreement by voluntarily
resigning his employment with EVCI without Good Reason or Executive's employment
is terminated by the CEO for Cause, then Executive shall only be entitled to
receive, except as otherwise required by law, the Salary and Benefits accrued
prior to the effective date of the first to occur of his resignation or such
termination, and reimbursement of any expenses, provided for under Section 4.3,
that were incurred by Executive prior to the effective date of his resignation
or such termination of his employment. Nothing in this Section 5.3 shall create
any implication that EVCI is waiving any remedy EVCI may have for breach by
Executive of this Agreement.
5.4 Compensation Upon Death or Permanent Disability. If Executive
dies or suffers a Permanent Disability, then EVCI will (i) promptly pay
Executive or his estate, in one lump sum, three months' Salary and (ii) continue
for Executive's spouse and dependent children (if Executive has died) and for
Executive and his spouse and dependent children (if Executive suffers a
Permanent Disability), all of the Benefits that they were receiving at the time
of his death or Permanent Disability, for six months after Executive's death or
Permanent Disability.
5.5 Definitions.
"Cause." For purposes of this Agreement, EVCI shall have "Cause" to
terminate the Employment Term upon (i) the determination by the CEO, in the
CEO's sole discretion, that Executive has not been performing his duties
hereunder in an appropriate or sufficiently competent manner (other than as a
result of his incapacity due to physical or mental incapacity), provided such
nonperformance continues for five business days after written notice thereof is
given to Executive or (ii) Executive's conviction of a felony.
"Good Reason" means a breach by EVCI of any of its material
agreements contained herein, including, a breach of Section 1.2, and the
continuation of such breach for ten business days after notice thereof is given
to EVCI. Good Reason does not include the death or Permanent Disability of
Executive.
"Permanent Disability" means the inability of Executive to perform
his duties hereunder, as a result of any physical or mental incapacity, for 30
consecutive days or 60 days during any twelve-month period, as determined by the
Board.
6. Covenants Not to Compete.
6.1 Executive agrees that for 18 months following termination of his
employment with EVCI he will not, without EVCI's prior written approval, engage
in any business activities that are competitive with any of the business
activities then being conducted by EVCI within 75 miles of any college, school
or office operated by EVCI.
3
6.2 During the 18 months following termination of his employment
with EVCI, Executive shall not without the permission of EVCI, directly or
indirectly, hire any employee of EVCI, or solicit or induce, or authorize any
other person to solicit or induce, any employee of EVCI to leave such employ
during the period of such employee's employment with EVCI or within six-months
following such employee's termination of employment with EVCI.
6.3 Sections 6.1 and 6.2 shall not apply to a termination of
Executive's employment pursuant to Section 5.2.
7. Covenant Regarding Confidentiality. All confidential information about
the business and affairs of EVCI (including, without limitation, its secrets and
information about its services, methods, business plans, technology and
advertising programs and plans) constitutes "EVCI Confidential Information."
Executive acknowledges that he will have access to, and knowledge of, EVCI
Confidential Information, and that improper use or disclosure of EVCI
Confidential Information by Executive, whether during or after the termination
of his employment by EVCI, could cause serious injury to the business of EVCI.
Accordingly, Executive agrees that he will forever keep secret and inviolate all
EVCI Confidential Information which has or shall come into his possession and
that he will not use the same for his own private benefit or directly or
indirectly for the benefit of others, and that he will not discuss EVCI
Confidential Information with any other person or organization, all for so long
as EVCI Confidential Information is not generally known by, or accessible to,
the public.
8. General.
8.1 This Agreement will be construed, interpreted and governed by
the laws of the State of New York, without regard to the conflicts of law rules
thereof.
8.2 The provisions set forth in Sections 6 and 7 shall survive
termination of this Agreement. All reference to EVCI in Sections 6 and 7 include
EVCI's subsidiaries and other affiliates, if any.
8.3 This Agreement will extend to and be binding upon Executive, his
legal representatives, heirs and distributees, and upon EVCI, its successors and
assigns regardless of any change in the business structure of EVCI, be it
through spin-offs merger, sale of stock, sale of assets or any other
transaction. However, this Agreement is a personal services contract and, as
such, Executive may not assign any of his duties or obligations hereunder.
8.4 This Agreement constitutes the entire agreement of the parties
with respect to the subject matter hereof. No waiver, modification or change of
any of the provisions of this Agreement will be valid unless in writing and
signed by both parties. Any and all prior agreements between the parties written
or oral relating to Executive's employment by EVCI are of no further force or
effect.
8.5 The waiver of any breach of any duty, term or condition of this
Agreement shall not be deemed to constitute a waiver of any preceding or
succeeding breach of the same or any other duty, term or condition of this
Agreement. If any provision of this Agreement is unenforceable in any
jurisdiction in accordance with its terms, the provision shall be enforceable to
the fullest extent permitted in that jurisdiction and shall continue to be
enforceable in accordance with its terms in any other jurisdiction.
4
8.6 All notices pursuant to this Agreement shall be in writing and
delivered personally receipt acknowledged (which shall include Federal Express,
Express Mail or similar service) or sent by certified mail, return receipt
requested, addressed to the parties hereto and shall be deemed given upon
receipt, if delivered personally, and three days after mailing, if mailed,
unless received earlier. Notices shall be addressed and sent to EVCI at its
principal executive office and to Executive at his home address as it appears in
EVCI's personnel records.
8.7 The parties agree that, in the event of any breach or violation
of this Agreement, such breach of violation will result in immediate and
irreparable injury and harm to the innocent party, who shall be entitled to the
remedies of injunction and specific performance or either of such remedies, if
available, as well as all other legal or equitable remedies, if available, plus
reasonable attorneys fees and costs incurred in obtaining any such relief.
8.8 The Section headings contained in this Agreement are for
convenience of reference only and shall not be used in construing this
Agreement.
8.9 This Agreement may be executed in counterparts, each of which
will be deemed an original but all of which will together constitute one and the
same agreement.
IN WITNESS HEREOF, the parties have executed this Agreement as of the date
first above written.
EVCI CAREER COLLEGES INCORPORATED
By: /s/ Xx. Xxxx X. XxXxxxx
-------------------------------------
Name: Xx. Xxxx X. XxXxxxx
Title: Chief Executive Officer and President
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
Xxxxxx X. Xxxxxxx
5
