Exhibit 10.3


	
 


	
Seconded
 Amended


	
EMPLOYMENT
 AGREEMENT BETWEEN


	
SMARTPROS
 LTD.


	
AND


	
JACK
 FINGERHUT








	
 

	
 

	
 

	
 


	
This seconded amended employment agreement (the
 “Agreement”) dated as of October 1, 2008 is by and between SmartPros Ltd., a
 Delaware corporation (the “Company”), and Jack Fingerhut, an individual
 residing at 32 Charles Street, Apt 2C Westwood, New Jersey 07675 (the
 “Executive”).


	
 

	
 

	
 

	
 


	
1.

	
Employment. The Company shall
 employ the Executive, and the Executive agrees to serve the Company, on the
 terms and conditions set forth herein. The Executive shall serve as President
 of the Company and shall be based at the Company’s headquarters in Hawthorne,
 New York. The Executive hereby accepts such employment hereunder, except for
 absences occasioned by illness and reasonable vacation periods, and agrees to
 undertake the duties and responsibilities inherent in such position and such
 other duties and responsibilities as the Company shall from time to time
 reasonably assign to him. The Executive shall report to and be supervised by
 the Chief Executive Officer of the Company or any other person who may be
 designated by the Board of Directors of the Company (the “Board”) from time
 to time. The Executive shall use his best efforts, including the highest
 standards of professional competence and integrity, and shall devote his full
 business time and effort to the performance of his duties hereunder. The
 Executive shall not engage in any other business activity except that the
 Executive may engage from time to time in such personal investment activities
 as do not interfere with his day to day responsibilities to the Company. The
 Executive shall be allowed to serve as an independent member of the boards of
 directors of other companies with the prior approval of the Board.


	
 

	
 

	
 

	
 


	
2.

	
Compensation and Benefits.


	
 

	
 

	
 

	
 


	
 

	
2.1

	
Salary. During the Term (as
 defined below) of this Agreement, the Executive shall be paid a salary at the
 rate of $212,500 per annum (“the Base Salary”), payable as customarily paid
 by the Company. During the Term of this Agreement, executive’s base salary
 shall be reviewed at least annually by the Board. 


	
 

	
 

	
 

	
 


	
 

	
2.2

	
Bonus. In addition to his Base
 Salary, the Executive may be entitled to bonuses at times and in amounts
 determined in the discretion of the Board. The target bonus shall equal 50%
 of Base Salary. The bonus












	
 

	
 

	
 

	
 


	
 

	
 

	
will be based 50% on Company performance
 and 50% on individual performance. Incentive bonuses shall be paid as soon as practicable after each
 year-end, and in all events by March 15 of the year following the year for
 which the bonus was determined.


	
 

	
 

	
 

	
 


	
 

	
2.3

	
Benefits. The Executive shall be
 entitled to participate in all employee benefit programs or plans maintained
 by the Company from time to time on the same basis as other similarly
 situated executive employees of the Company. The Executive shall be entitled
 to family medical coverage. The Company will pay or reimburse the lease cost
 of the automobile currently leased by the Executive, and upon expiration or
 termination of the lease, will continue to provide the Executive with a
 suitable automobile for his business and/or personal use for the term of this
 Agreement. The Company will pay or reimburse the Executive for all repairs,
 gas, maintenance and insurance expenses of the automobile currently leased by
 Executive or any replacement provided by the Company hereunder including any
 excess mileage charges within 30 days after Executive incurs such expenses.
 The Executive will be entitled to 4 weeks paid vacation per year.


	
 

	
 

	
 

	
 


	
 

	
2.4

	
Reimbursement of Expenses. The
 Company shall reimburse the Executive in accordance with its general
 reimbursement policies for all ordinary and necessary expenses incurred by
 the Executive on behalf of the Company upon the presentation of appropriate
 supporting documentation.


	
 

	
 

	
 

	
 


	
3.

	
Term; Termination; Rights upon Termination.


	
 

	
 

	
 

	
 


	
 

	
3.1

	
Term. The Company agrees to employ
 the Executive, and the Executive agrees to serve the Company for a period
 commencing on October 1, 2008 and continuing until September 30, , 2011 (the
 “End Date”) unless otherwise amended or terminated pursuant to the terms
 hereof (the “Term”).


	
 

	
 

	
 

	
 


	
 

	
3.2

	
Termination. The Company may at
 any time, terminate the employment of the Executive under this Agreement for
 Cause (as defined below), or without Cause, immediately and without any
 requirement of notice. The rights and obligations of the parties upon any
 termination of the Executive’s employment shall be as set forth in Section
 3.3. For purposes of this Agreement the term “Cause” shall mean (i) any act
 of dishonesty or gross and willful misconduct with respect to the Company,
 including without limitation, fraud or theft, on the part of the Executive,
 (ii) conviction of the Executive of a felony, or (iii) the Executive’s
 failure to perform his assigned duties hereunder after written notice and a
 30 day opportunity to cure.


	
 

	
 

	
 

	
 


	
 

	
3.3

	
Rights Upon Termination. In the
 event that:





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(a)

	
          The
 employment of the Executive is terminated by the Company without Cause, then,
 for the remainder of the then current Term of employment hereunder, then,
 (subject to Section 3.3(e)) within 30 days after the date of such termination
 of employment, the Company shall pay to the Executive (x) a cash lump sum
 equal to Executive’s Base Salary at the rate in effect at the time of
 termination calculated through the remainder of the then-current term of
 employment, and (y) a bonus equal to the average of the last two years annual
 bonuses received by the Executive multiplied by the amount of whole and
 partial years remaining on the contract. In addition, the Company shall
 provide to Executive all benefits described in section 2.3 through the
 remainder of the then-current term of employment. The obligations of the
 Company pursuant to this Section 3.3(a) shall be in lieu of any other rights
 of the Executive hereunder to compensation or benefits in respect of any
 period before or after the date of such termination.


	
 

	
 

	
 

	
 


	
 

	
 

	
(b)

	
          The
 Executive’s employment terminates by reason of death or disability, then the
 Company shall pay and provide to the Executive or Executive’s estate or other
 successor in interest at the time otherwise due under Section 2 all Base
 Salary and benefits due to the Executive under Section 2 through the end of
 the sixth month after the month in which the termination occurs, but reduced
 in the case of disability by any payments received under any disability plan,
 program or policy paid for by the Company. The obligations of the Company pursuant
 to this Section 3.3(b) shall be in lieu of any other rights of the Executive
 hereunder to compensation or benefits (excluding any tax-qualified retirement
 plan benefits) in respect of any period before or after the date of such
 termination and in lieu of any severance payment, and no other compensation
 of any kind or any other amounts shall be due to the Executive by the Company
 under this Agreement. For purposes of this Agreement, the term “disability”
 shall mean: (i) the Company’s determination that Executive will be unable to
 engage in any substantial gainful activity by reason of any medically
 determinable physical or mental impairment that can be expected to result in
 death, or last for a continuous period of not less than 12 months; (ii) by
 reason of any medically determinable physical or mental impairment that can
 be expected to result in death, or last for a continuous period of not less
 than 12 months, Executive is receiving income replacement benefits for a
 period of not less than three months under an accident and health plan
 covering employees of the Company; or (iii) Executive is determined to be
 totally disabled by the Social Security Administration.


	
 

	
 

	
 

	
 


	
 

	
 

	
(c)

	
          The
 employment of the Executive is terminated by the Company for Cause, or by the
 Executive other than under circumstances 





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described in Section 3.3(a) or (b) above, the
 Executive shall not be entitled to compensation or benefits granted hereunder
 beyond the date of the termination of the Executive’s employment.


	
 

	
 

	
 

	
 


	
 

	
 

	
(d)

	
          If
 a Change in Control, as defined in Section 7, shall occur at any time between
 October 1, 2008 and September 30, 2011 then upon the occurrence of such
 Change in Control the Executive shall be entitled to one year’s severance pay
 in lieu of any other payments that would be due under any other section of
 this contract in the event that, within 30 days after the Change in Control,
 the Executive is not continued in a position at the same or greater salary as
 stated in the contract. Such payment shall be made no later than 60 days
 after the Change in Control.


	
 

	
 

	
 

	
 


	
 

	
 

	
(e)

	
          If
 Executive shall be entitled to a payment or payments under Section 3.3 and at such time the Executive is a
 “specified employee” of the Company within the meaning of Section
 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the
 “Code”) (or any successor provision), to the extent the amount payable
 pursuant to Section 3.3(a) exceeds the limits set forth in Section
 1.409A-1(b)(9)(iii) of the Income Tax Regulations (or any successor
 provision), no payment in excess of those limits shall be made until the
 earliest to occur of the following (the earliest to occur of such dates being
 hereafter referred to as the “End Date”) unless any other provision under
 Section 409A of the Code, and the regulations promulgated thereunder, would
 allow any other payment or portion of payment without triggering the
 penalties under Section 409A of the Code: (a) the date that is six (6) months
 after the date Employee’s employment is terminated within the meaning set
 forth in Section 1.409A-1(h) of the Income Tax Regulations; and (b) the date
 of the Employee’s death. Except as provided in the following sentence, any
 amounts deferred under this Section 3.3(e) shall be due and payable no later
 than the fifth business day after the End Date. If the Company determines,
 based upon written advice of counsel, that any such payment, if made during
 the calendar year that includes the date Employee’s employment is terminated,
 would not be deductible in whole or in part by reason of Code Section 162(m),
 such payment shall be made on January 2 of the following calendar year (or
 such later date as may be required under the preceding proviso if the
 Employee is a “specified employee”).


	
 

	
 

	
 

	
 


	
4.

	
Proprietary Information.


	
 

	
 

	
 

	
 


	
 

	
4.1

	
The Executive agrees that all information and know
 how, whether or not in writing, of a private, secret or confidential nature
 concerning the business or financial affairs of the Company and its
 subsidiaries (collectively, for purposes of this Section 4, the “Company”)
 and not within Executive’s possession or 





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knowledge prior to his employment with the Company
 (collectively, “Proprietary Information”), is and shall be the exclusive
 property of the Company. By way of illustration, but not limitation,
 Proprietary Information may include inventions, products, processes, methods,
 techniques, projects, developments, plans, research data, financial data, and
 personnel data. The Executive will not disclose any Proprietary Information
 to others outside of the Company or use the same for any unauthorized
 purposes without the written consent of the Company, either during or after
 his employment, unless and until such Proprietary Information has become
 public knowledge without fault of the Executive.


	
 

	
 

	
 

	
 


	
 

	
4.2

	
The Executive agrees that all files, letters,
 memoranda, reports, records, data, sketches, drawings, or other written,
 photographic, or other tangible material containing Proprietary Information,
 whether created by the Executive or others, which shall come into his custody
 or possession, shall be and are the exclusive property of the Company to be
 used by the Executive only in the performance of his duties for the Company.


	
 

	
 

	
 

	
 


	
 

	
4.3

	
The Executive agrees that his obligation not to
 disclose or use Proprietary Information and records of the type set forth
 herein also extends to such types of Proprietary Information, records and
 tangible property of other third parties who may have disclosed or entrusted
 the same to the Company or to the Executive in the course of the Company’s
 business.


	
 

	
 

	
 

	
 


	
5.

	
Other Agreements. The Executive
 hereby represents that his performance of all the terms of this Agreement and
 as an employee of the Company does not and will not breach any agreement to
 keep in confidence proprietary information, knowledge or data acquired by him
 in confidence or in trust prior to his employment with the Company.


	
 

	
 

	
 

	
 


	
6.

	
Non-Competition, Non- Solicitation.


	
 

	
 

	
 

	
 


	
 

	
6.1

	
Non-solicitation of Employees and Customers.
 The Executive agrees that during the Term of the Executive’s employment with
 the Company and for a period of one year thereafter, the Executive shall not
 directly or indirectly (i) recruit, solicit or otherwise induce or attempt to
 induce any employees of the Company or any of its subsidiaries to leave their
 employment or (ii) call upon, solicit, divert or take away, or attempt to
 divert or take away, the business or patronage of any customer licensee,
 vendor, collaborator or corporate partner of the Company or any of its
 subsidiaries that had a business relationship with the Company or any of its
 subsidiaries at the time of termination of Executive’s employment with the
 Company and that did not have a business or personal relationship or was
 known to Executive prior to his employment with the Company. 





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6.2

	
Non-competition. The Executive
 agrees that during the Term of the Executive’s employment with the Company,
 the Executive shall not directly or indirectly, engage in competition with
 the Company or any subsidiaries, or own or control any interest in, or act as
 director, officer or employee of, or consultant to, any firm, corporation or
 institution directly engaged in competition with the Company or any of its
 subsidiaries; provided that the Company or one of its subsidiaries is
 actively engaged in such business at the time the Executive’s employment by
 the Company is terminated; and provided that the foregoing shall not prevent
 the Executive from holding shares as a passive investor in a publicly held
 company which do not constitute more than 5% of the outstanding shares of
 such company. In the event that the Executive (i) voluntarily terminates his
 employment, (including at any time on or after the End Date) other than
 provided for in this agreement, or (ii) is terminated by the Company for
 Cause, the Executive agrees to not compete in the E-Learning marketplace
 until one year from the date of such termination.


	
 

	
 

	
 

	
 


	
7.

	
Change in Control Protection. For
 purposes of this Agreement, a “Change in Control” of the Company shall mean a
 change in the ownership or effective control of the Company or in the
 ownership of a substantial portion of the assets of the Company as determined
 under Section 1.409A-3((i)(5) of the Income Tax Regulations, as amended from
 time to time (or any successor provision).”


	
 

	
 

	
 

	
 


	
8.

	
Miscellaneous.


	
 

	
 

	
 

	
 


	
 

	
8.1 Notices. All notices required or
 permitted under this Agreement shall be in writing and shall be deemed
 effective upon personal delivery or upon deposit in the United States Post
 Office, by registered or certified mail, postage prepaid, addressed if to the
 Executive, at the address shown above and if to the Company, at its principal
 place of business at 12 Skyline Drive, Hawthorne, New York, or at such other
 address or addresses as either party shall designate to the other in
 accordance with this Section 8.1.


	
 

	
 

	
 

	
 


	
 

	
8.2 Pronouns. Wherever the context may
 require, any pronouns used in this Agreement shall include the corresponding
 masculine, feminine or neuter forms, and the singular forms of nouns and
 pronouns shall include the plural, and vice versa.


	
 

	
 

	
 

	
 


	
 

	
8.3 Entire Agreements. This Agreement
 constitutes the entire agreement between the parties and supercedes all prior
 agreements and understandings, whether written or oral, relating to the
 subject matter of this Agreement.


	
 

	
 

	
 

	
 


	
 

	
8.4 Amendment. This Agreement may be amended
 or modified only by a written instrument executed by both the Company and the
 Executive.





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8.5 Governing Law. This Agreement shall be
 construed, interpreted and enforced in accordance with the laws of the State
 of New York.


	
 

	
 

	
 

	
 


	
 

	
8.6 Successors and Assigns. This Agreement
 shall be binding upon and inure to the benefit of both parties and their
 respective successors and assigns, including any corporation with which or
 into which the Company may be merged or which may succeed to its assets or
 business, provided, however, that the obligations of the Executive are
 personal and shall not be assigned by him.


	
 

	
 

	
 

	
 


	
 

	
8.7 Waivers. No delay or omission by the
 Company in exercising any right under this Agreement shall operate as a
 waiver of that or any other right. A waiver or consent given by the Company
 on any one occasion shall be effective only in this instance and shall not be
 construed as a bar or waiver of any right on any other occasion. This
 agreement supersedes all previous agreements.


	
 

	
 

	
 

	
 


	
 

	
8.8 Captions. The captions of the sections of
 this Agreement are for convenience of reference only and in no way define,
 limit or affect the scope or substance of any section of this Agreement.


	
 

	
 

	
 

	
 


	
 

	
8.9 Severability. In case any provision of
 this Agreement shall be invalid, illegal or otherwise unenforceable, the
 validity, legality and enforceability of the remaining provisions shall in no
 way be affected or impaired thereby.


	
 

	
 

	
 

	
 


	
 

	
8.10 Specific Enforcement. The parties
 acknowledge that the Executive’s breach of the provisions of Section 4 and 6
 of this Agreement will cause irreparable harm to the Company. It is agreed
 and acknowledged that the remedy of damages will not be adequate for the
 enforcement of such provisions and that such provisions may be enforced by
 equitable relief, including injunctive relief, which relief shall be
 cumulative and in addition to any other relief to which the Company may be
 entitled.


	
 

	
 

	
 

	
 


	
9. Arbitration. Any claims, controversies,
 demands, disputes or differences between or among the parties hereto or any
 persons bound hereby arising out of, or by virtue of, or in connection with,
 or otherwise relating to this Agreement shall be submitted to and settled by
 arbitration conducted in New York, New York before one or three arbitrators
 each of which shall be knowledgeable in employment law. Such arbitration
 shall otherwise be conducted in accordance with the rules then obtaining of
 the American Arbitration Association. The parties hereto agree to share
 equally the responsibility for all fees of the arbitrators, abide by any
 decision rendered as final and binding, and waive the right to appeal the
 decision or otherwise submit the dispute to a court of law for a jury or
 non-jury trial. The parties hereto specifically agree that neither party may
 appeal or subject the award or decision of any such arbitrator(s) to appeal
 or review in any court of law or in equity or by any other tribunal, arbitration
 system or otherwise. Judgment upon any award granted by such an arbitrator(s)
 may be enforced in any court having jurisdiction thereof. If the arbitration
 decision holds that the Company is 





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at fault, the Executive shall be entitled to reimbursement
 of fees and expenses from the Company in an amount not to exceed $50,000. If
 the arbitration decision holds that the Company is not at fault, the Company
 shall be entitled to reimbursement of fees and expenses from the Executive in
 an amount not to exceed $25,000. Such amounts shall be paid to Executive
 within 30 days after the arbitration decision is made.





IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year set forth above


	
 

	
 

	
 

	
 


	
 

	
 

	
SmartPros Ltd.


	
 

	
 

	
 

	
 


	
 

	
 

	
By:

	
/s/ Allen S. Greene


	
 

	
 

	
 

	



	
 

	
 

	
 

	
 


	
 

	
 

	
Title:

	
Chief Executive Officer


	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
/s/ Jack Fingerhut


	
 

	
 

	
 

	



	
 

	
 

	
 

	
          JACK
 FINGERHUT





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