EXHIBIT 10.10
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between Hospitality
Design & Supply, Inc., a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxxxx ("Founder") is hereby entered into and effective as of the date of the
consummation of the initial public offering of the common stock of the Company.
This Agreement hereby supersedes any other employment agreements or
understandings, written or oral, between the Company and Founder.
R E C I T A L S
A. As of the date of this Agreement, the Company is engaged primarily
in the commercial kitchen design and/or supply industry.
B. Founder is employed hereunder by the Company in a confidential
relationship wherein Founder, in the course of his employment with the Company,
has and will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company, and future plans with
respect thereto, all of which has been and will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable goodwill of the Company.
Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
A G R E E M E N T S
1. Employment and Duties. The Company hereby employs Founder as the
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President of the Xxxxx division of the Company. As such, Founder shall have
responsibilities, duties and authority reasonably accorded to and expected of a
president of a division and will report directly to the Chief Executive Officer
of the Company or such other officer as shall be determined by the Chief
Executive Officer of the Company. Founder hereby accepts this employment upon
the terms and conditions herein contained. It is anticipated by the parties
that, typically, Founder will devote not less than twenty (20) hours and not
more than forty (40) hours a week to his employment with the Company. Founder
agrees to devote his working time, attention and efforts to promote and further
the business of the Company.
2. Compensation. For all services rendered by Founder, the Company
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shall compensate Founder as follows:
(a) Base Salary. The base salary payable to Founder shall be
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$30,000 per year, payable on a regular basis in accordance with the Company's
standard payroll procedures, but not less than monthly.
(b) Founder Benefits and Other Compensation. Founder will, during
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the Employment Term, have the right to receive such benefits as are generally
made available to full-time officers of the Company, including the right to
participate in any retirement plan or bonus plan that the Company may create. In
addition to, or inclusive of, such benefits, the Company will provide Founder
with, in addition to normal holidays recognized by the Company, three weeks paid
vacation annually or such other amount as may be afforded officers and key
employees generally under the Company's policies in effect from time to time
(pro rated for any year in which Founder is employed for less than the full
year).
3. Term; Termination; Rights on Termination. The term of this
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Agreement shall begin on the date hereof and continue for eighteen (18) months
(the "Initial Term"), and, unless terminated sooner as herein provided, shall
continue thereafter on a month-to-month basis on the same terms and conditions
contained herein unless either party gives to the other party written notice of
nonrenewal of the Agreement at least thirty (30) days prior to the end of the
then-current term. This Agreement and Founder's employment may be terminated in
any one of the following ways:
(a) Death. The death of Founder shall immediately terminate the
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Agreement with no severance compensation due to Founder's estate.
(b) Disability. This Agreement will terminate upon the permanent
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disability of Founder. Founder will be deemed permanently disabled for the
purpose of this Agreement if, in the good faith determination of the board of
directors of the Company (the "Board"), based on sound medical advice, Founder
has become physically or mentally incapable of performing his duties hereunder
for a continuous period of one hundred eighty (180) days, in which event Founder
will be deemed permanently disabled upon the expiration of such one hundred
eighty (180) day period. Also, Founder may terminate his employment hereunder if
his health should become impaired to an extent that makes the continued
performance of his duties hereunder hazardous to his physical or mental health,
provided that Founder shall have furnished the Company with a written statement
from a qualified doctor to such effect; and provided further that, at the
Company's request made within thirty (30) days of the date of such written
statement, Founder shall submit to an examination by a doctor selected by the
Company who is reasonably acceptable to Founder or Founder's doctor and such
doctor shall have concurred in the conclusion of Founder's doctor. In the event
this Agreement is terminated as a result of Founder's permanent disability,
Founder shall receive from the Company, in a lump-sum payment due within thirty
(30) days of the effective date of termination, an amount equal to the
difference between (a) the base salary at the rate then in effect for the lesser
of (i) whatever time period is remaining under the Initial Term of this
Agreement and (ii) one (1) year, minus (b) all payments in respect of Founder's
salary payable to Founder under the Company's disability insurance, if any, for
the same period.
(c) Good Cause. The Company may terminate this Agreement ten (10)
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days after written notice to Founder, for good cause, which shall be: (1)
Founder's material and irreparable breach of this Agreement; (2) Founder's gross
negligence in the performance or intentional nonperformance (continuing for ten
(10) days after receipt of the written notice) of any of Founder's material
duties and responsibilities hereunder; (3) Founder's dishonesty, fraud or
misconduct with respect to the business or affairs of the Company which
materially and
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adversely affects the operations or reputation of the Company; (4) Founder's
conviction of a felony crime; (5) chronic alcohol abuse or illegal drug abuse by
Founder; or (6) any other good faith determination of the Board that Founder has
engaged in any act that has a material adverse effect on the business, affairs
or reputation of the Company. In the event of a termination for good cause, as
enumerated above, Founder shall have no right to any severance compensation.
(d) Without Cause. At any time after the commencement of
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employment, the Company may, without cause, terminate this Agreement and
Founder's employment effective sixty (60) days after written notice is provided
to Founder, or if the effective date of termination, as determined in the sole
discretion of the Company, is less than sixty (60) days after written notice is
provided to Founder, then Founder shall receive from the Company compensation
for sixty (60) days from the date of written notice at the rate then in effect,
in a lump sum payment due on the effective date of termination.
(e) Termination by Founder Without Cause. If Founder resigns or
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otherwise terminates his employment Founder shall receive no severance
compensation.
Upon termination of this Agreement for any reason provided in this
Section 3, Founder shall be entitled to receive all compensation earned and all
benefits and reimbursements vested or due through the effective date of
termination. Additional compensation subsequent to termination, if any, will be
due and payable to Founder only to the extent and in the manner expressly
provided above. All other rights and obligations of the Company and Founder
under this Agreement shall cease as of the effective date of termination, except
that the Company's obligations under paragraph 8 herein and Founder's
obligations under paragraphs 4, 5, 6, 7, 8 and 9 herein shall survive such
termination.
4. Return of Company Property. All records, designs, patents,
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business plans, financial statements, manuals, memoranda, lists and other
property delivered to or compiled by Founder by or on behalf of the Company or
its representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company, and be subject at all
times to its discretion and control. All correspondence, reports, records,
charts, advertising materials and other similar data pertaining to the business,
activities or future plans of the Company in the possession of Founder shall be
delivered promptly to the Company without request by it upon termination of
Founder's employment.
5. Noncompetition. During the term of his employment with the Company
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(including the subsidiaries thereof) (the "Noncompetition Period"), Founder
agrees to be bound by each of the provisions set forth in Section 13 of that
certain Agreement and Plan of Reorganization dated of even date herewith by and
among the Company and the "Stockholders" named therein (the "Reorganization
Agreement"), to the extent that such Noncompetition Period extends beyond the
four (4) year time period provided for in the Reorganization Agreement.
6. Inventions. Founder shall disclose promptly to the Company any and
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all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Founder,
solely or jointly with another, during the period of employment or within one
(1) year thereafter, and which are either directly related to the business or
activities of the Company or conceived by Founder as a result
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of his work for the Company. Founder hereby assigns and agrees to assign all his
interests therein to the Company or its nominee. Whenever requested to do so by
the Company, Founder shall execute any and all applications, assignments or
other instruments that the Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.
7. Trade Secrets. Founder agrees that he will not, during or after
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the term of this Agreement, disclose the specific terms of the Company's
relationships or agreements with its respective significant vendors or customers
or any other significant and material trade secret of the Company, whether in
existence or proposed, to any person, firm, partnership, corporation or business
for any reason or purpose whatsoever.
8. Indemnification. In the event Founder is made a party to any
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threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Founder), by reason of the fact that he is or was performing services
within the course and scope of his employment with the Company under this
Agreement, then the Company shall indemnify Founder against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement, as
actually and reasonably incurred by Founder in connection therewith. Without
limiting the requirement above that Founder be performing services within the
course and scope of his employment, activities constituting violations of law or
Company policy shall not constitute services within the course and scope of
Founder's employment. In the event that both Founder and the Company are made a
party to the same third-party action, complaint, suit or proceeding, the Company
agrees to engage competent legal representation, and Founder agrees to use the
same representation, provided that if counsel selected by the Company shall have
a conflict of interest that prevents such counsel from representing Founder,
Founder may engage separate counsel and the Company shall pay all attorneys'
fees of such separate counsel.
9. No Prior Agreements. Founder hereby represents and warrants to
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the Company that the execution of this agreement by Founder and his employment
by the Company and the performance of his duties hereunder will not violate or
be a breach of any agreement with a former employer, client or any other person
or entity. Further, Founder agrees to indemnify the Company for any claim,
including, but not limited to, the Company's attorneys' fees and expenses of
investigation, by any third party that such third party may now have or may
hereafter have against the Company based upon or arising out of any non-
competition agreement, invention agreement or secrecy agreement between Founder
and such third party which was in existence as of the date of this Agreement.
10. Assignment; Binding Effect. Founder understands that he has been
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selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Founder agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. This
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective heirs, legal representatives, successors
and assigns.
11. Complete Agreement. This Agreement is not a promise of future
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employment. Founder has no oral understandings or agreements with the Company or
any of its officers,
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directors or representatives covering the same subject matter as this Agreement.
This written Agreement is the final, complete and exclusive statement and
expression of the agreement between the Company and Founder and of all the terms
of this Agreement, and it cannot be varied, contradicted or supplemented by
evidence of any prior or contemporaneous oral or written representations or
agreements. This written Agreement may not be later modified except by a further
writing signed by a duly authorized officer of the Company and Founder, and no
term of this Agreement may be waived except by writing signed by the party
waiving the benefit of such term.
12. Notice. Whenever any notice is required hereunder, it shall be
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given in writing addressed as follows:
To the Company: Hospitality Design & Supply, Inc.
X.X. Xxx 0000
Xxxxxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, CEO
with a copy to: Xxxxxx X. Xxxxxxx, Esq.
Howard, Rice, Nemerovski, Canady,
Xxxx & Xxxxxx
A Professional Corporation
0 Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
To Founder: Xxxxxxx X. Xxxxxxxx
000 Xxx Xxxxx Xxx
Xxxx Xxxx Xxxx, XX 00000
with a copy to: Xxx Xxxxxxx, Esq.
Xxxxxxx Law Firm
000 Xxxx 000 Xxxxx
Xxxx Xxxx Xxxx, XX 00000
Notice shall be deemed given and effective three (3) days after the
deposit in the U.S. mail of a writing addressed as above and sent first class
mail, certified, return receipt requested, or when actually received. Either
party may change the address for notice by notifying the other party of such
change in accordance with this Section 12.
13. Severability; Headings. In the event any court of competent
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jurisdiction shall determine that the scope, time or territorial restrictions
set forth herein are unreasonable, then it is the intention of the parties that
such restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed. The paragraph headings
herein are for reference purposes only and are not intended in any way to
describe, interpret, define or limit the extent or intent of the Agreement or of
any part hereof.
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14. Governing Law. This Agreement shall in all respects be construed
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according to the laws of the State of California, as applied to agreements
entered into and performed wholly in California.
15. Counterparts. This Agreement may be executed simultaneously in
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two (2) or more counterparts, each of which shall be deemed an original and all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
THE COMPANY:
HOSPITALITY DESIGN & SUPPLY, INC.
By:
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Title:
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FOUNDER:
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Xxxxxxx X. Xxxxxxxx
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