EMPLOYMENT AGREEMENT
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY
BE ENFORCED BY THE PARTIES.
AGREEMENT, dated this day of May, 1996, but effective as of
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, 1996, by and between CAPTAIN TONY'S PIZZA, INC., a New York
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corporation ("Company"), and XXXXXXX X. XXXXXXXX ("Employee").
Recitals
WHEREAS, the Company and its affiliates are engaged in the restaurant,
restaurant franchising and food marketing industries.
WHEREAS, the Company desires to retain the ongoing services of the
Employee, and the Employee desires to serve, as the President and Chief
Operating Officer of the Captain Tony's Pizza Company (a subsidiary to be
formed) and in such capacities as the Company's Board of Directors shall from
time to time determine.
WHEREAS, the Employee is, and will be, employed by the Company in a
confidential relationship wherein Employee, in the course of his employment
with the Company, has, and will, become familiar with and aware of information
as to the specific manner of doing business and the customers of the Company
and its affiliates and future plans with respect thereto, all of which has been
established and maintained, and will be established and maintained, at great
expense to the Company.
WHEREAS, Employee recognizes that the Company's business is dependent upon
a number of trade secrets, the protection of which is of critical importance to
the Company.
WHEREAS, the Company will sustain great loss and economic damage if during
the term of this Agreement or Employee's employment with the Company, or for a
period of one (1) year immediately following the termination of the Agreement
or Employee's employment, for any reason, Employee should violate the
provisions of Paragraphs 3 or 4 of this Agreement.
WHEREAS, monetary damages for such losses would be extremely difficult to
measure.
WHEREAS, the Company and Employee desire to formally evidence their
relationship and the terms of employment.
NOW, 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:
ARTICLE I
Employment and Duties
1.01 Employment. The Company hereby employs Employee as the President and
Chief Operating Officer of Captain Tony's Pizza Company (a company to be
formed). Additional or different duties, titles or positions may be assigned
to Employee or may be taken from Employee from time to time at the discretion
of the Board of Directors ("Board") of the Company. Employee hereby accepts
this employment upon the terms and conditions herein contained and agrees to
devote his time, attention and efforts to promote and further the business and
services of the Company. Employee shall faithfully adhere to, execute and
fulfill all policies established by the Company.
1.02 Duties.Employee shall perform such duties, assume such
responsibilities and devote such time, attention and energy to the business of
the Company as the Board shall from time to time require including working
overseas, although such shall be limited to not more than two consequative
weeks per trip, and shall not, during the term of his employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity interferes with Employee's duties and
responsibilities hereunder. However, the foregoing limitations shall not be
construed as prohibiting Employee from making personal investments in such form
or manner as will neither require his services in the operation or affairs of
the companies or enterprises in which such investments are made nor violate the
terms of Paragraphs 3 or 4 hereof.
The parties acknowledge that Employee is the owner of a Captain Tony's
franchise in Rochester, New York and is authorized to devote his services to
such franchise as from time to time may be required. Although Employee shall
be authorized to determine the best location from which to perform his services
if such are performed from a location other than the corporate office, employee
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shall be responsible for all expenses incurred in connection with maintaining
such seperate office.
1.03 Custody of Company Funds. All funds received by Employee on behalf of
the Company, if any, shall be held in trust for the Company and shall be
delivered and accounted for to the Company as soon as practicable.
ARTICLE II
Compensation
2.01 Base Salary. From and after the execution of this Agreement, the
Company shall pay a base salary to Employee in the amount of $75,000 per year,
payable in equal installments on a semi-monthly basis.
2.02 Expense Reimbursement. The Company shall reimburse Employee for all
reasonable travel, entertainment and other expenses related to his employment
by, or promotion of, the Company. Employee shall provide a written accounting
and explanation of all expenses for which reimbursement is sought on a monthly
basis and the Company shall reimburse all such expenses within ten (10) days
following receipt of each written accounting.
2.03 Bonuses. After the first anniversary of this Agreement, the Employee
shall be entitled to receive such bonuses as the Board shall determine from
time to time in accordance with Company policy and at the sole discretion of
the Board.
2.04 Plan Participation. The Employee shall be entitled to participate in
any and all stock option, stock bonus, pension, profit sharing, retirement or
other similar plans adopted by the Company. In addition, the employee shall be
granted an option to acquire 100,000 shares of the Company's common stock at
anytime after the date of this agreement and for a period ending one day
before, the fifth anniversary of this agreement at a price equal to the fair
market value of the Company's common stock (fair market value to be the mean of
the closing bid/asked price) as of the date of this agreement.
2.05 Other. The Employee shall be entitled to such fringe benefits as the
Company shall establish for its employees generally which shall include with
respect to the Employee at least three weeks paid vacation annually, life
insurance, disability pay and such other benefits as the Company shall adopt,
subject to the discretion of the Company to add or delete such standard
benefits as the Board deems appropriate, from time to time. The Company agrees
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to pay Employees Blue Cross premium until such time as the Company has a health
plan of its own.
ARTICLE III
Non-Competition Agreement
3.01 Non-Competition Agreement. Employee will not, during either the
period of this Agreement or of his employment by or with the Company, whichever
period is longer, and for a period of one (1) year immediately following the
termination of this Agreement, or his employment, whichever is longer, for any
reason whatsoever, directly or indirectly, for himself or on behalf of or in
conjunction with any other person, persons, company, partnership, corporation
or business of whatever nature (i) call upon any customer of the Company
(including, but not limited to, any customer obtained for the Company by
Employee) for the purpose of soliciting or selling any products or services in
competition with those of the Company or its affiliates; (ii) call upon any
employee of the Company or any of its affiliates for the purpose or with the
intent of enticing them away from or out of the employ of the Company or any
reason whatever; (iii) establish, enter it, be employed by or, advise, consult
with or become a part of, any company, partnership, corporation or other
business entity or venture, or in any way engage in business for himself or for
others, within ten miles of a Captain Tony's Pizza location, including any
franchise locations, in competition with the Company or its affiliates; or (iv)
during or after the term of his employment with the Company, disclose the
Company's customers or any other trade secrets of the Company whether in
existence or proposed, to any person, firm, partnership, corporation or
business for any reason or purpose whatsoever.
3.02 Equitable Relief. Because of the difficulty of measuring economic
losses to the Company and its affiliates as a result of the Employee's breach
of the foregoing covenant, and because of the immediate and irreparable damage
that would be caused to the Company and its affiliates for which it would have
no other adequate remedy, Employee agrees that the covenant specified in
Paragraph 3.01 may be enforced by the Company and its affiliates in the event
of breach by him by injunctions, restraining orders or similar equitable
relief.
3.03 Reasonableness of the Covenant Not to Compete. It is agreed by the
parties that the covenants in Paragraph 3.01 are necessary to protect the
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goodwill and business interests of the Company and its affiliates and impose a
reasonable restraint on Employee in light of the activities and business of the
Company and its affiliates on the date of the execution of this Agreement and
the future plans of the Company; but it is also the intent of the Company and
Employee that such covenants be construed and enforced in accordance with the
activities and business of the Company and its affiliates on the date of the
termination of the employment of Employee.
3.04 Severability of the Covenant Not to Compete. The covenants in
Paragraph 3.01 are severable and separate, and the unenforceability of any
specific covenant shall not affect the provisions of any other covenant.
Moreover, in the event any court of competent jurisdiction shall determine that
the scope, time or territorial restrictions set forth 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.
3.05 Independence of Covenant Not to Compete. All of the covenants in
Paragraph 3.01 shall be construed as an agreement independent of any other
provision in this Agreement and the existence of any claim or cause of action
of Employee against the Company or its affiliates, whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by
the Company of such covenants. It is specifically agreed that the period of
one (1) year stated at the beginning of this Paragraph 3, during which the
agreements and covenants of Employee made in Paragraph 3.01 shall be
effective, shall be computed by excluding from such computation any time during
which Employee is in violation of any provision of this Paragraph 3 and any
time during which there is pending in any court of competent jurisdiction any
action (including any appeal from any final judgment) brought by any person,
whether or not a party to this Agreement, in which action the Company or its
affiliates seeks to enforce the agreements and covenants of Employee or in
which any person contests the validity of such agreements and covenants or
their unenforceability or seeks to avoid their performance or enforcement.
ARTICLE IV
Non-Disclosure Agreement and Proprietary Information.
4.01 Proprietary Information. The Employee recognizes and acknowledges that
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the information, techniques, processes, developments, work in progress,
business, list of the Company's customers and any other trade secret or other
secret or confidential information relating to Company's business as they may
exist from time to time, are valuable, special and unique assets of Company's
business. In addition, Employee recognizes that Company is continually engaged
in research, design and development of new products and innovations and
improvements to the information, techniques, processes, developments, trade
secrets, and other secrets and confidential matters relating to Company's
business. Therefore, Employee agrees as follows:
A. That Employee will hold in strictest confidence and not disclose,
reproduce, publish or use in any manner, whether during or subsequent
to his employment, without the express authorization of the Board of
Directors of the Company, any information, design, production
technique, process, business customer lists, trade secrets or any
other secrets or confidential matter relating to any aspect of the
Company's business as designated from time to time by the Board of
Directors of Company, except as such disclosure or use may be required
in connection with Employee's work for the Company.
B. That upon request or at the time of leaving the employ of the Company
the Employee will deliver to the Company, and not keep or deliver to
anyone else, any and all notes, memoranda, documents and, in general,
any and all material relating to the Company's business.
C. That the Board of Directors of the Company may from time to time
designate other subject matters requiring confidentiality and secrecy
which shall be deemed to be covered by the terms of this Agreement.
However, any such matters must be mutually agreed upon by both the
Board and Employee.
4.02 Breach. In the event of a breach or threatened breach by the Employee
of the provisions of this Paragraph 4, the Company shall be entitled to an
injunction:
A. Restraining the Employee from disclosing, in whole or in part, any
information described in Paragraph 4.01 or from rendering any services
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to any person, firm, corporation association or other entity to whom
such information, in whole or in part, has been disclosed or is
threatened to be disclosed; and/or
B. Requiring that Employee deliver to Company all information, documents,
notes, memoranda and any and all discoveries or other material as
described above upon Employee's leave of the employ of the Company.
Nothing herein shall be construed as prohibiting the Company from
pursuing other remedies available to the Company for such breach or
threatened breach, including the recovery of damages from the
Employee.
ARTICLE V
Term; Terminations
5.01 Term. The term of this Agreement shall begin on the effective date of
this Agreement and continue for a term of two (2) years, unless terminated as
herein provided.
5.02 Termination. This Agreement and Employee's employment may be
terminated in any one of the following ways:
A. The death of Employee shall terminate the Agreement.
B. The Company may terminate the Agreement after thirty (30) days written
notice to Employee for good cause, including, but without limitation (i)
Employee's material breach of this Agreement; (ii) the material default of the
Company or its affiliates in performing their obligations under contracts with
other persons or business entities if directly caused by Employee; (iii) if,
because of illness or physical or mental disability or other incapacity which
continues for a period in excess of six (6) months, Employee is unable to
perform his duties under this agreement; (iv) Employee's fraud with respect to
the business or affairs of the Company or its affiliates or if Employee is
convicted of a felony; or (v) alcohol or drug abuse by Employee.
C. This Agreement will terminate upon (i) the sale by the Company of all
or substantially all of its assets to a bona fide third party purchaser(s);
(ii) the sale, exchange or disposition in one transaction of fifty percent
(50%) or more of the outstanding voting securities of the Company to a bona
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fide third party purchaser; (iii) a bona fide decision by the Company to
terminate its business and liquidate its assets; or (iv) the merger or
consolidation of the Company in a transaction wherein the shareholders of the
Company hold less than fifty percent (50%) of the post-transaction shares of
the surviving entity. The Employee shall have the option, at his discretion,
of joining in any sale or transfer of the Company's stock to any bona fide
third party purchaser by having a ratable portion of his stock sold on the same
terms and conditions.
5.03 Rights of Termination; Severance Payments. Upon termination of this
Agreement and Employee's employment, Employee shall be entitled to receive all
compensation earned under this Agreement to the date of termination. In the
event of termination pursuant to Paragraph 5.02C, the Employee shall be
entitled to, and the Company shall pay the Employee, severance pay in an amount
equal to ninety days (90) pay payable within 10 days of termination.
In the event of termination of this Agreement for any reason provided in
this Article 5, other than Paragraph 5.02C or if Employee resigns prior to this
expiration of the term of this Agreement, except as provided above, all rights
and obligations of the Company and Employee under this Agreement shall cease
immediately, except that Employee's obligations under Paragraph 3.01, 4.01 and
5.01 herein shall survive such termination and thereafter Employee shall have
no right to receive any compensation hereunder except as set forth in this
Paragraph, or to the extent employee is prohibited from competing under 3.01,
compensation shall continue for the non-compete period.
ARTICLE VI
Representations of Employee
6.01 Representation of Employee. Employee has represented and hereby
represents and warrants to the Company that he is not subject to any
restriction or non-competition covenant in favor of a former employer or any
other person or entity and that the execution of this Agreement by Employee and
his employment by the Company or its affiliates and the performance of his
duties hereunder will not violate or be a breach of any agreement with a former
employer or any other person or entity. Further, Employee agrees to indemnify
the Company and its affiliates for any claim, including, but not limited to,
attorney's fees and expenses of investigation, by any such third party that
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such third party may now have or may hereafter come to have against the Company
or its affiliates based upon or arising out of any non-competition agreement or
invention and secrecy agreement between Employee and such third party.
ARTICLE VII
Special Provisions
7.01 Renewal. If Captain Tony's Pizza Company (an entity to be formed)
is part of the Company operations as of a date, two (2) years from the date of
this agreement, and the agreement has not terminated pursuant to Paragraph
5.02, this agreement shall be renewable at the discretion of the Employee for
additional one year periods on each subsequent anniversary therefor, on the
same terms and conditions as herein set out. Notwithstanding the foregoing,
the Employees base compensation set out in Paragraph 2.01 may be changed to a
revised amount. However, such revised amount may not be less than $75,000.00.
7.02 Sale of Captain Tony's Pizza Company. In the event that the Company
determines that it is in its best interest to sell or otherwise dispose of all
or more than fifty percent (50%) of the Captain Tony's Pizza operations,
Employee shall have the right of first refusal to purchase these operations at
a price equal to the fair market value of such operations as determined by a
third party independent appraiser competant to value such operations less ten
percent (10%). The Company agrees to finance any such sale to Employee on
terms to be mutually agreed upon. However, such financing shall extend only to
the purchase price and shall not include working capital. If a sale to the
Employee is concluded, this Agreement shall terminate as of the date of sale.
ARTICLE VIII
Miscellaneous
8.01 Complete Agreement. This Agreement is not a promise of future
employment. There are no oral representations, understandings or agreements
with the Company or any of its officers, 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 Employee 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 agreements. Furthermore, this agreement
supersedes any and all prior agreements. This written agreement may not be
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later modified except by a further writing signed by the Company and Employee,
and no term of this Agreement may be waived except by writing signed by the
party waiving the benefit of such terms.
8.02 No Waiver. No waiver by the parties hereto of any default or breach
of any term, condition or covenant of this Agreement shall be deemed to be a
waiver of any subsequent default or breach of the same or any other term,
condition or covenant contained herein.
8.03 Assignment; Binding Effect. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, that this
Agreement and the rights to his services may be assigned by the Company to
another member of the Company's affiliated group at any time without notice to
him, but that he cannot assign all or any portion of this Agreement. Subject
to the preceding two sentences, this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, successors and
assigns. It is further understood and agreed that the Company may be merged or
consolidated with another entity and that any such entity shall automatically
succeed to the rights, powers and duties of the Company hereunder.
8.04 Notice. Whenever any notice is required hereunder, it shall be
given in writing addressed as follows:
To the Company: CAPTAIN TONY'S PIZZA, INC.
000 Xxxx Xxxxxxx Xxxx., Xxx. 000
Xxxxxxx, Xxxxxxx 00000
To Employee: XXXXXXX XXXXXXXX
000 Xxxxxxxxxxx Xxxxx
XxXxxx, Xxxxxxx 00000
Notice shall be deemed given and effective three (3) days after the
deposit in the United States 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 8.04.
8.05 Severability; Headings. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
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given to the intent manifested by the portion held invalid or inoperative. 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 this
Agreement or of any part hereof.
8.06 Arbitration. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof shall be settled by arbitration in the in
accordance with the rules then existing of the American Arbitration Association
and judgment upon the award may be entered in any Court having jurisdiction
thereof.
8.07 Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and date herein first set forth.
ATTEST:
(REGISTRANT) CAPTAIN TONY'S PIZZA, INC.
BY (SIGNATURE)
(NAME AND TITLE)
(DATE)
EMPLOYEE:
BY (SIGNATURE)
(NAME AND TITLE) XXXXXXX X. XXXXXXXX
(DATE)
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