REFERENCE 10.1
EMPLOYMENT AGREEMENT FOR XXXXX XXXXXXXX
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EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 30th day of August, 1999 (the "Agreement"), by
and between Hojo Holdings, Inc., a Delaware corporation ("Employer"), and Xxxxx
Xxxxxxxx ("Employee").
WITNESSETH:
WHEREAS, Employer desires to employ Employee and Employee desires to be
employed by Employer as President of Employer; and
WHEREAS, Employer recognizes the need of the knowledge, talents and assistance
of Employee and desires to enter into this Agreement to secure the foregoing.
NOW, THEREFORE, in consideration of the promises herein contained, the parties
covenant and agree as follows:
1. EMPLOYMENT. Employer agrees to employ Employee and Employee agrees to be
employed by Employer and to perform work as determined by Employer, as President
of Employer, on the terms and conditions set forth in this Agreement. This
Agreement shall be effective as of the date mutually agreed to in writing by
both parties (the "Effective Date") but in no event shall it be more than two
weeks following the date on which the Employer receives more than $200,000 of
gross investment capital.
2. COMPENSATION. Employer agrees to employ Employee at the base rate of
compensation of twenty-four thousand and No/Dollars ($24,000.00) per year.
Compensation is to be paid twice per month. Compensation is to be reviewed by
the Compensation Committee on an annual basis.
In addition to the base compensation, Employer agrees to pay or provide Employee
with the following:
A. Expenses. Reimbursement for reasonable expenses actually incurred by
Employee in the furtherance of Employer's business, including, but not
limited to, telephone calls (including business related calls on
Employee's cellular phone and business related long distance calls),
entertainment, attendance at conferences, conventions and institutes,
provided proper itemization of said expenses is furnished to Employer by
Employee. All such expenditures shall be subject to the reasonable control
of Employer.
B. Medical and Disability Benefits. Employee and his spouse shall be entitled
to participate in Employer's medical program, Employer-paid disability and
other benefit programs as other executives of Employer are entitled to
participate in, as is in place from time to time. If Employee desires to
include any family members other than his spouse in the medical plan,
Employee shall be responsible for all additional costs.
C. Additional Benefits. Employee shall be entitled to participate in and
receive such additional benefits as Employer shall from time to time make
available to its executive employees including, without limitation, profit
sharing, stock purchase, stock option and other incentive plans.
D. Bonus. Employee shall be entitled to receive cash or stock option bonuses.
The amount of bonus shall be determined by the Compensation Committee.
3. DUTIES. Employee agrees to perform work as determined by the Board of
Directors, subject to the direction of Employer and agrees to subject himself at
all times during the Term (as hereinafter defined) to the direction and control
of Employer in respect to the work to be performed. Employee shall devote his
full business time and attention to the furtherance of Employer's best
interests. In that regard, and as further consideration for this Agreement,
Employee agrees to comply with, and abide by, such rules and directives of
Employer as may be reasonably established from time to time, and recognizes the
right of Employer, in its reasonable discretion, to change, modify or adopt new
policies and practices affecting the employment relationship, not inconsistent
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with this Agreement, as deemed appropriate by Employer. During the term of
Employee's employment, Employee will not undertake any new business ventures,
partnerships, consulting arrangements or other enterprise or business other than
those on behalf of Employer, without Employer's prior written consent.
4. WORKING FACILITIES. Employee shall be furnished with office space,
secretarial services, and such other facilities and services suitable to
Employee's position and adequate for the performance of Employee's duties.
5. AGENCY. Employee shall have no authority to enter into any contracts binding
upon Employer, except as authorized in writing, in advance, by Employer.
6. TERM OF EMPLOYMENT; SEVERANCE.
A. Employee's employment hereunder shall commence as of the Effective Date
hereof and continue for a period of two (2) years thereafter (the "Term").
B. Anything herein to the contrary notwithstanding, Employee's employment
hereunder may be terminated at any time and for any reason by either party
upon not less than one hundred twenty (120) days' prior written notice to
the other party. It is understood and acknowledged that Employer shall
have the right to effectuate such termination at will, with or without
Reasonable Cause (as hereinafter defined). Any such termination shall be
effective as of the end of such one hundred twenty (120) day period (the
"Final Date").
C. If Employee's employment hereunder shall be terminated by Employer
without Reasonable Cause pursuant to paragraph 6.B. or because of
Employee's disability, as determined by Employer in good faith, then
Employee shall be entitled to (i) severance compensation equal to
Employee's then-current base salary and benefits (which for purposes
hereof shall include all compensation payable hereunder, of any type) for
a period equal to the Severance Period (as defined below). Such severance
compensation payments consisting of cash shall be paid in a lump sum plus
any outstanding benefits and allocated bonuses on or before the Final
Date. The severance compensation are intended to be in lieu of all other
payments to which Employee might otherwise be entitled in respect of
termination of Employee's employment without Reasonable Cause or in
respect of any action by Employer constituting Good Reason for voluntary
termination.
D. If Employee's employment hereunder shall be terminated for Reasonable
Cause pursuant to paragraph 6.C., or if Employee voluntarily terminates
Employee's employment without Good Reason, Employee shall be entitled to
receive Employee's base salary as accrued through the effective date of
such termination, but shall not be entitled to any Severance Benefits or
other amounts in respect of such termination.
E. "Reasonable Cause," as used herein, shall mean Employee's involvement
in any action or inaction involving fraud resulting in a personal benefit
in excess of any payments to which Employee is entitled hereunder,
dishonesty, or material violation of Corporation policy and procedures.
Employee shall vacate the offices of Employer on such effective date.
F. "Good Reason," as used herein, means the occurrence of any of the
following events without Employee's consent:
i. a material diminution in Employee's duties and
responsibilities;
ii. a reduction in Employee's base salary;
iii. a forced relocation; or
iv. a Change of Control (as defined below)if Successor Employer
(as defined in paragraph H below) fails to assume this
Agreement in its entirety.
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G. "Severance Period," as used herein, means the lesser of (i) twelve
months (12) months or (ii) the remaining time of the Term.
H. "Change of Control" means a sale outside the ordinary course of
business of more than fifty percent (50%) of the assets of or equity
interests in Employer to any person or entity.
7. COMPLIANCE WITH LAWS. Employee will comply with all federal and state laws,
rules and regulations relating to any of Employee's responsibilities and duties
with Employer and will not violate any such laws, rules and regulations.
8. COVENANT NOT TO COMPETE. Employee agrees to conform to the following
concerning non-competition.
A. Employer undertakes to train Employee and to give Employee confidential
information and knowledge about Employer's business policies, accounts
procedures and methods. For the purposes of this Agreement, the term
"confidential information" shall include but is not limited to any list of
suppliers, customers, investors, stockholders, including their names,
addresses, phone numbers, amount of investments and similar information.
In addition, any operational information of Employer, including but not
limited to information on Employer's methods of conducting business,
profits and/or losses of Employer, marketing material and any information
that would reasonably be considered proprietary or confidential in nature.
Employer has established a valuable and extensive trade in its products
and services, which business has been developed at a considerable expense
to Employer. The nature of the business is such that the relationship of
its customers with Employer must be maintained through the close personal
contact of its employees.
B. Employee desires to enter into or continue in the employ of Employer
and by virtue of such employment by Employer, Employee will become
familiar with the manner, methods, secrets and confidential information
pertaining to such business. During the Term, Employee will continue to
receive additional confidential information of the same kind. Through
representatives of Employer, Employee will become personally acquainted
with the business of Employer and its methods of operation.
C. In consideration of the employment or continued employment of Employee
as herein provided, the training of Employee by Employer, and the
disclosure by Employer to employee of the knowledge and confidential
information described above, Employer requests and Employee makes the
covenants hereinafter set forth. Employee understands and acknowledges
that such covenants are required for the fair and reasonable protection of
the business of Employer carried on in the area to which the covenants are
applicable and that without the limited restrictions on Employee's
activities imposed by the covenants, the business of Employer would suffer
irreparable and immeasurable damage. The covenants on the part of Employee
shall be construed as an agreement independent of any other provision of
this Agreement, and existence of any claim or course of action whether
predicated on this Agreement or otherwise, shall not constitute a defense
to the enforcement by Employer of the covenants.
D. Employee agrees that during the term of Employee's employment and for
the period of twelve (12) months immediately following the termination of
employment (which said time period shall be increased by any time during
which Employee is in violation of this Agreement) Employee will not,
within the territory hereinafter defined, directly or indirectly, for
Employee, or on behalf of others, as an individual on Employee's own
account, or as an employee, agent, or representative for any other person,
partnership, firm or corporation:
i. Compete with the business of Employer by engaging or
participating in or furnishing aid or assistance in competition with
the business of Employer.
ii. Engage, in any capacity, directly or indirectly, in or be
employed by any business similar to the kind or nature of business
conducted by Employer during the employment.
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iii. For the purposes of this paragraph 8, the business of Employer
shall be limited to the (1) Internet based music magazine business,
(2) CD player software business, (3) and (3) any business that the
Employer enters into during the Term.
E. The territory referred to in this paragraph 8 shall be the entire
World.
F. Each restrictive covenant is separate and distinct from any other
covenant set forth in this paragraph. In the event of the invalidity of
any covenant, the remaining obligation shall be deemed independent and
divisible. The parties agree that the territory set forth is reasonable
and necessary for the protection of Employer. In the event any term or
condition is deemed to be too broad or unenforceable, said provision shall
be deemed reduced in scope to the extent necessary to make said provision
enforceable and binding.
G. The provisions of this paragraph 8 shall not apply if Employee's
employment is terminated by Employer without Reasonable Cause or by
Employee for Good Reason.
9. INDUCING EMPLOYEE OF EMPLOYER TO LEAVE. Any attempt on the part of Employee
to induce others to leave Employer's employ or any efforts by Employee to
interfere with Employer's relationship with other employees would be harmful and
damaging to Employer. Employee expressly agrees that during the term of
Employee's employment and for a period of twelve (12) months thereafter
(provided said time period shall be increased by any time during which Employee
is in violation of this Agreement), Employee will not in any way directly or
indirectly:
A. Induce or attempt to induce an employee to sever his or her
employment with Employer;
B. Interfere with or disrupt Employer's relationship with other
employees; and
C. Solicit, entice, take away or employ any person employed with Employer,
excluding people Employee brings to Employer.
10. CONFIDENTIAL INFORMATION. It is understood between the parties hereto that
during the term of employment, Employee will be dealing with confidential
information, as defined above, which is Employer's property, used in the course
of its business. Employee will not disclose to anyone, directly or indirectly,
any of such confidential information or use such information other than in the
course of Employee's employment. All documents that Employee prepares, or
confidential information that might be given to Employee in the course of
employment, are the exclusive property of Employer and shall remain in
Employer's possession on the premises. Under no circumstances shall any such
information or documents be removed without Employer's written consent first
being obtained.
11. RETURN OF EMPLOYER'S PROPERTY. On termination of employment, regardless of
how termination is effected, or whenever requested by Employer, Employee shall
immediately return to Employer all of Employer's property used by Employee
rendering services hereunder or otherwise that is in Employee's possession or
under Employee's control.
12. VACATION. Employee shall be entitled to a vacation period of four (4) weeks
per calendar year. The vacation shall be taken by Employee at such time during
the year and for such period as reasonable. All vacations should be taken in the
year earned. No vacations may be accrued without written permission of the Board
of Directors.
13. REFERENCES. Employer agrees that, upon termination of this Agreement, it
will, upon written request of Employee, furnish references to third parties,
including prospective employers, regarding Employee. However, Employee
acknowledges that it is Employer's policy to confirm employment only and not to
release any additional information without a written release from Employee.
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14. NOTICES. All notices, requests, consents, and other communications under
this Agreement shall be in writing and shall be deemed to have been delivered on
the date personally delivered or the date mailed, postage prepaid by certified
mail, return receipt requested, or faxed and confirmed, if addressed to the
respective parties as follows:
If to Employer: Hojo Holdings, Inc.
00 Xxxxxxxxxx Xxxx
Xxxx Xxxxx, Xxx Xxxx 00000
Attention: Board of Directors
If to Employee: Xxxxx Xxxxxxxx
00 Xxxxxxxxxx Xxxx
Xxxx Xxxxx, Xxx Xxxx 00000
Either party may change its address for the purpose of receiving notices,
demands, and other communications by giving written notice to the other party of
the change.
15. VOLUNTARY AGREEMENT. Employee represents that he has not been pressured,
misled or induced to enter this Agreement based upon any representation by
Employer not contained herein.
16. PROVISIONS TO SURVIVE. The parties hereto acknowledge that many of the terms
and conditions of this Agreement are intended to survive the employment
relationship. Therefore, any terms and conditions that are intended by the
nature of the promises or representations to survive the termination of
employment shall survive the term of employment regardless of whether such
provision is expressly stated as so surviving.
17. MERGER. This Agreement represents the entire Agreement between the parties
and shall not be subject to modification or amendment by any oral
representation, or any written statement by either party, except for a dated
written amendment to this Agreement signed by Employee and an authorized officer
of Employer.
18. VENUE AND APPLICABLE LAW. This Agreement shall be enforced and construed in
accordance with the laws of the State of Delaware, and venue for any action or
arbitration under this Agreement shall be Kent County, Delaware.
19. SUBSIDIARIES AND AFFILIATED ENTITIES. Employee acknowledges and agrees that
Employer has or may have various subsidiaries and affiliated entities. In
rendering services to Employer, Employee will have considerable contact with
such subsidiaries and affiliates. Therefore, Employee agrees that all provisions
of paragraphs 7, 8, 9 and 10 shall apply to all such subsidiaries and
affiliates.
20. PERSONNEL INFORMATION. Employee shall not divulge or discuss personnel
information such as salaries, bonuses, commissions and benefits relating to
Employee or other employees of Employer or any of its subsidiaries with any
other person except the Executive Committee and the Board of Directors of
Employer.
21. ASSIGNMENT. This Agreement shall not be assignable by either party without
the written consent of the other party; provided, however, that this Agreement
shall be assignable to any corporation or entity which purchases the assets of
or succeeds to the business of Employer (a "Successor Employer"). Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, personal representatives, successors
and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
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Employer
Hojo Holdings, Inc.
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Title: President and CEO
Employee
/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
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