Exhibit 10.3
EMPLOYMENT AGREEMENT
This agreement is made as of the 17th day of February, 1999 by and between
Frontline Communications Corporation (the "Company"), and XXXXXX XXXXXXX
("Employee").
WHEREAS, the Employee acknowledges that his talents, knowledge and services
to the Company are of a special, unique, and extraordinary character and are of
particular and peculiar benefit and importance to the Company; and
WHEREAS, the Company desires to obtain assurances that the Employee will
devote his best efforts to his employment with the Company and that he will not
solicit other employees of the Company to terminate their relationships with the
Company; and
WHEREAS, the continued availability of Employee's services is regarded by
the Company as vitally important to its continued corporate growth and success,
and Employee desires to formalize his employment with employer and to maximize
the security of his position.
NOW, THEREFORE, in consideration of the employment by the Company of the
Employee and mutual covenants and conditions contained herein, and for other
good and valuable consideration, receipt of which is hereby acknowledged, it is
agreed as follows:
1. EMPLOYMENT: The Company agrees to employ Employee in the executive
capacity of Vice President and Chief Financial Officer, and Employee accepts
employment upon the terms and conditions set forth herein.
2. TERM: Subject to the provisions for termination as provided herein, the
term of this agreement shall begin on February 27, 1999 and shall continue on a
month to month basis thereafter. Either party may cancel this Agreement, without
cause, by giving 30 days written notice.
3. COMPENSATION: As compensation for the services to be rendered by
Employee, the Company agrees to provide employee with a base salary at the
annual rate of not less than ninety-five thousand dollars ($95,000). The Board
of Directors shall meet at least annually for the purpose of determining
employee's annual base salary based upon the apparent value of his services. The
payment of the above amount shall constitute full satisfaction and discharge of
the obligations of the Company under this agreement, but are without prejudice
to Employee's rights under any employee benefit plan heretofore or hereafter
provided by the Company.
In addition hereto, upon execution of this agreement employee shall be
issued twenty thousand (20,000) of the Company's stock options, which shall vest
to the employee as follows: ten thousand (10,000) upon the execution hereof; ten
thousand (10,000) at the one year anniversary date of employee's employment with
the Company; provided, however, that the Employee's employment with the Company
has not been terminated prior to that time pursuant to Section 2. All option
shall be issued pursuant to
and in accordance with the standard Company stock option plan and the employee's
stock option agreement with the Company. The vesting of the employee's options
shall be subject to shareholder approval of an increase in the Company's stock
option plan, if necessary.
4. DUTIES: Employee shall serve as Vice-President and Chief Financial
Officer of the Company, and shall assume other duties as the Board of Directors
may assign.
Employee agrees that he will at all times. faithfully, industriously and to
the best of his ability, experience and talents, perform all of the duties that
may be required of and from his pursuant to the express and implicit terms of
this agreement, to the reasonable satisfaction of the Company. Such duties shall
be rendered at the Company's facility located at Rockland County, New York and
at such other place or places within or without the State of New York as the
Company shall in good faith require or as the interest, needs, business, or
opportunities of the Company shall require.
5. EXPENSES: Employee is authorized to incur reasonable expenses on behalf
of the Company in performing his duties, including expenses for general
administration of the Company's office, travel, transportation, entertainment,
gifts and similar items, which expenses shall be paid, or reimbursed to
Employee, by the Company, provided that the Employee furnishes to the Company
appropriate supporting documentation of such expenses, and further provided that
this authorization to incur such expenses is not hereafter withdrawn or
otherwise restricted by the Board of Directors. Additionally, Employee shall
receive a vehicle use and maintenance allowance of up to $400 per month and the
use of a Company mobile telephone for Company business.
6. VACATIONS: Employee shall be entitled each calendar year to a vacation
of twenty (20) weekdays, no two of which need be consecutive, during which time
compensation shall be paid in full. The Company shall not be required to
compensate Employee for Vacation days not taken by the Employee in any given
year, and the Employee cannot accrue or accumulate unused vacation days in
subsequent years. Employee shall endeavor in good faith to schedule such
vacation leave at times and in a manner which does not unreasonably impede the
operation of the Company.
7. BONUSES: The Company may, but shall not be obligated to, pay to the
Employee, in addition to his base salary, a cash bonus. Payment of any such
bonus, and the amount of any such bonus shall be at the sole discretion of the
Board of Directors.
8. EMPLOYEE MANUAL: The Company has established an Employee Manual, receipt
of which is hereby acknowledged by the Employee, which manual, as the same may
from time to time be amended or supplemented at the Company's sole discretion,
is hereby incorporated in and made a part of this agreement.
9. EMPLOYEE BENEFITS: The Employee shall be entitled to participate in any
qualified Stock Option Plan, Pension Plan, qualified Profit Sharing Plan, Group
Term Life Insurance Plan, Employee Health Plan, and any other employee benefit
plan
2
currently in place or that may be established by the Company, such participation
being in accordance with the terms of any such plans, and such participation
shall be available only upon the Company having or establishing such plans.
Employee shall be provided with the Company's existing health insurance plan, at
a cost to the employee of no more than that paid by other Executive level
employees (currently being 5% of the cost of such coverage). Employee shall be
reimbursed up to 95% of the cost of gap health coverage during any required
waiting period under the Company plan.
10. CHANGE IN OWNERSHIP OR CONTROL OF COMPANY: A. Provided that the
Employee has not been terminated pursuant to Section 2 of this Agreement, upon a
change in the ownership or effective control of the Company, the Employee shall
be paid, as additional compensation, an amount equal to 295% of the Employee's
annual base salary at the time of any such change in ownership or effective
control of the Company. Such amount shall be paid within thirty (30) days of the
happening of such change in ownership or effective control of the Company.
Additionally, upon such change in ownership or effective control of the Company,
all Company stock options issued to the employee, but not yet vested, shall
immediately vest.
B. The Employee shall have the right, at any time following a change in the
ownership or effective control of the Company, to terminate this employment
agreement, upon fourteen (14) written notice to the Company.
C. For purposes of this paragraph, a "change in the ownership or effective
control of the Company" shall mean the happening of any of the following events:
(1) Any person (as that term is defined in Section 13(d) of the Securities
and Exchange Act of 1934, as amended) is or becomes the beneficial owner,
directly or indirectly, of securities of the Corporation representing 35%
or more of the combined voting power of the Company's then outstanding
voting securities, or such lesser amount as is sufficient to obtain a
controlling interest in the Company;
(2) In any one year period, individuals who at the beginning of such period
constitute the Board cease for any reason to constitute a least a majority
thereof at or prior to the conclusion of such one year period;
(3) The sale, transfer and/or assignment of a substantial portion of the
assets of the Company.
11. CONFIDENTIALITY: The Employee will not at any time during or after his
employment with the Company, directly or indirectly, divulge, disclose,
disseminate, sell, exchange or communicate to any person, firm, or corporation
in any manner whatsoever, other than in the normal course of performing his
duties for the Company, any information concerning any matter affecting or
relating to the Company or the business of the Company. The Employee
specifically agrees and recognizes that all information, whether written or
otherwise, regarding the Company's business, including
3
but not limited to, information regarding customers, customer lists, employees,
employee salaries, costs, prices, services, formulae, compositions, machines,
equipment, apparatus, systems, processes, manufacturing procedures, operating
procedures, operations, potential acquisitions, new location plans, prospective
and executed contracts, prospective projects and other business arrangements,
and sources of supply, is presumed to be important, material and confidential
information of the Company for purposes of this agreement, except to the extent
that such information may be otherwise lawfully and readily available to the
general public. Employee agrees that all of this information is a trade secret
owned exclusively by the Company which shall at all times be kept confidential.
Employee will at no time, either during his employment with the Company or at
any time thereafter, employ or make use of, for his own profit or the profit of
any person, firm or corporation other than the Company, any of the trade secrets
acquired by him during or as a result of his employment with the Company.
The Employee agrees that any business opportunity, any patentable device,
apparatus, method, process or manner of manufacturing, and any other invention,
equipment, machinery, process or device, that Employee discovers, develops,
invents or becomes aware of during the period of his employment with the
Company, shall be the sole and exclusive property of the Company, and shall be
used solely and exclusively for the benefit of the Company. The Employee agrees
to promptly turn over, and to make full and prompt disclosure of, all such
information, devices, inventions, processes, and methods to the Company. The
Employee will not disclose to any person or persons other than the proper
officer of the Company any such information, device, process, invention or
method discovered while in the employ of the Company. The above provision shall
be applicable even though the discovery is made by Employee outside working
hours fixed by the Company and/or outside the place of employment furnished by
the Company.
12. NON-COMPETITION / NON-SOLICITATION: For a period of two (2) years after
termination of his employment with the Company, the Employee agrees that he
shall not directly or indirectly, without the prior written consent of the
Company, and whether as an individual, proprietor, stockholder, partner,
officer, director, employee or otherwise, or in any other capacity whatsoever:
A. Engage in any business which is competitive with that of the
Company;
B. Solicit or entice any officer, director, employee or other
individual to leave his or his employment with the Company, or to compete in any
way with the business of the Company, or to violate the terms of any employment,
non-competition, confidentiality or similar agreement with the Company.
13. REMEDIES: Without limiting the rights of the Company to pursue any and
all other legal and equitable remedies that might be available to it as a result
of any violation by the Employee of the covenants in this agreement, it is
agreed that:
A. The services to be rendered by Employee under this agreement are of
a special, unique, unusual and extraordinary character which give them
4
a peculiar value, and the loss of those services cannot be reasonably and
adequately compensated in damages in an action at law; and
B. Remedies other than injunctive relief cannot fully compensate the
Company for violation of paragraphs 11 " and "'12" of this Agreement.
Accordingly, the Company shall be entitled to injunctive relief to prevent
violations of such paragraphs or continuing violations thereof. All of
Employee's covenants in and obligations under paragraphs "11" and "12" of this
agreement shall continue in effect notwithstanding any termination of Employee's
employment, whether by the Company or by the Employee, upon expiration or
otherwise, and whether or not pursuant to the terms of this agreement.
14. NOTICES: All notices required or permitted to be given under this
agreement shall be sufficient if in writing and if sent by certified mail,
return receipt requested, to the Employee at his residence as indicated in
Company personnel records, or at such other address designated by the Employee,
and to the Company at its principal office currently located at Rockland County,
New York.
15. SUCCESSORS AND ASSIGNS: This agreement shall be binding upon and shall
inure to the benefit of the parties, their successors, assigns and all other
successors in interest.
16. CHOICE OF LAW: This agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17. ENTIRE AGREEMENT: This agreement contains the entire agreement of the
parties. It may not be changed orally but only by an agreement in writing signed
by the party against whom enforcement of any waiver, change, modification,
extension, or discharge is sought.
18. WAIVER: The waiver of any breach of any provision of this agreement by
either party shall not operate or be construed as a subsequent waiver by either
party of any term or condition of this agreement.
19. HEADINGS: The headings in this agreement are inserted for convenience
of reference only and shall not affect the meaning or interpretation of this
agreement.
20. SEVERABILITY: The parties intend and agree that each covenant and
condition contained in this agreement shall be a separate and distinct covenant.
If any provision of this agreement is found to be invalid, illegal, or
unenforceable, the remaining provisions shall not be affected.
5
IN WITNESS THEREOF, the parties have executed this agreement as of the date
written above.
Frontline Communications Corporation
by: /s/ Xxxxxxx X. Xxxx-Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxx-Xxxxxxxx
President/CEO
/s/ Xxxxxx Xxxxxxx
---------------------------------
Xxxxxx Xxxxxxx
Employee
