EMPLOYMENT AGREEMENT
This
Employment Agreement (this "Agreement") is made and entered into effective
as of
the 13th day of December, 2007 (the “Effective Date”), by and between
DIET
COFFEE, INC.,
a
Delaware corporation (hereafter referred to as the "Company"), and XXXX
XXXXX (hereafter
referred to as “Executive”). The Company and Executive may sometimes hereafter
be referred to singularly as a “Party” or collectively as the
“Parties.”
W
I T N E S S E T H:
1.
Employment and Duties of Executive
On
the
terms and subject to the conditions hereinafter set forth, and beginning as
of
the Effective Date, the Company employs Executive as its President, Chief
Executive Officer, Chief Financial Officer, Treasurer and Secretary and the
Executive will serve as the Company’s employee in that position. Executive shall
also have such additional powers, authority, functions, duties, and
responsibilities as may be reasonably assigned to him, from time to time, by
the
Board of Directors of the Company (the “Board”).
2.
Place of Employment
The
required duties of Executive under this Agreement shall be performed by
Executive at the Company’s current offices in the New York, New York and in New
Jersey after expiration of the current lease, and in such other place or places
to which Company may, from time to time, request Executive to travel in
connection with Executive’s duties under this Agreement.
3.
Time to be Devoted to Contractual Duties of Executive
Executive
shall give his best efforts and endeavors, on a full time basis, to the
discharge of his duties under this Agreement and shall not, at any time during
the Term (as defined in Agreement Paragraph 4), engage in any business activity
other than the business activities permitted or required hereunder, or enter
into the services of or be employed in any capacity or for any purpose by any
individual, firm, association, organization, partnership (general or limited),
corporation, limited liability company, or other party or legal entity other
than the Company (or any affiliate of the Company), on a fee or salary or other
compensatory basis, it being the intention of the Company and Executive that
the
capacity in which Executive is hired by the Company under this Agreement
represents a full-time duty and responsibility. The foregoing shall not be
interpreted to (a) prohibit Executive from engaging in recreational, charitable,
religious, or community service activities outside the scope of Executive’s
employment under this Agreement, or from making passive investments in
businesses or enterprises, (b) prohibit Executive from holding stock or other
equity interests in a publicly traded entity (even if such entity is competitive
with the Company so long as such ownership does not exceed one percent (1%));
or
(c) prohibit Executive from taking part in a real estate ventures, so long
as:
(i) such activities or investments, individually or in the aggregate, do not
interfere or require services on the part of Executive that interfere with
Executive’s performance of his duties and obligations under this Agreement; (ii)
such activities or investments do not involve or relate to any activities or
business in competition with the business of the Company or any affiliates
of
the Company (except as provided in item (b) above), and (iii) Executive has
complied with Paragraph 10 of this Agreement with respect to each such activity
and investment.
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4.
Term of Employment
The
term
of the Company’s employment of Executive shall be for a period of three (3)
years from the Effective Date (such period being referred to as the “Initial
Term”). After the expiration of the Initial Term, the employment of Executive
shall continue for successive three (3) month periods. The Initial Term
plus
any
period or periods of time during which the employment of Executive continues
with the Company after the expiration of the Initial Term is sometimes referred
to as the “Term.”
5.
Compensation of Executive
A. (1) As
compensation for the services and duties performed and to be performed by
Executive as provided in this Agreement, the Company agrees to pay Executive
a
salary in the amount of ONE HUNDRED TWENTY THOUSAND DOLLARS ($120,000) per
annum
(“Base Salary”), less applicable withholding, F.I.C.A., and other lawful
deductions, such salary to be payable semi-monthly, in equal installments,
in
arrears, and otherwise in accordance with the Company’s payroll policies in
effect from time to time. The Board will review Executive's compensation
annually to consider possible upward adjustments (it being agreed that the
base
salary shall not be reduced during the Initial Term).
(2) The
Company may pay all or part of the Executive’s Base Salary in shares
(the
“Shares”) of the Company’s Common Stock
on the
terms and conditions set forth herein. The number of Shares to be issued shall
be calculated by dividing the amount of the Fee due and owing by the average
of
the Per Share Market Values during the three (3) Trading Days immediately
preceding the date on which the payment is due. The Shares shall be issued
in
the form of a stock award under the Company’s 2007 Stock Incentive Plan No. 2
(or successor plan) and will be registered as set forth under Section 5.A.(3)
below; provided,
however,
that
Consultant shall have established and adopted a Rule 10b5-1 sales agreement
and
plan in relation to the sale of such shares in substantially the form attached
hereto as Exhibit
“B”
and
shall sell the shares pursuant to the 10b5-1 plan. For the purposes of this
Section 5.A.(2), “Per
Share Market Value”
means
on any particular date (a) the closing bid price per share of Common Stock
on
such date on the OTC Bulletin Board or on such subsequent market on which the
shares of Common Stock are then listed or quoted, or if there is no such price
on such date, then the closing bid price on the OTC Bulletin Board or on such
subsequent market on the date nearest preceding such date, or (b) if the shares
of Common Stock are not then listed or quoted on the OTC Bulletin Board or
a
subsequent Market, the closing bid price for a share of Common Stock in the
over-the-counter market, as reported by the National Quotation Bureau
Incorporated or similar organization or agency succeeding to its functions
of
reporting prices) at the close of business on such date, or (c) if the shares
of
Common Stock are not then reported by the National Quotation Bureau Incorporated
(or similar organization or agency succeeding to its functions of reporting
prices), then the average of the “Pink Sheet” quotes for the relevant payment
period, as determined in good faith by the Company.
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(3) As
soon
as practicable, following the execution of this Agreement, the Company will
set
aside, out of its existing stock compensation plan(s), the Shares and register
such Shares on a Form S-8 or other applicable registration statement, which
the
Company agrees to file, if not already filed, with the Securities and Exchange
Commission (the “Commission”) as soon as practicable after the date
hereof.
(4) In
the
event that this Agreement is terminated for “cause” (as defined in Section
7.A.(b)), the Company shall have the right, but not the obligation, to rescind
the issuance of the Shares and place a stop-transfer order with the Company’s
transfer agent with respect to the certificate representing the Shares. In
the
event that Executive has disposed of any of the Shares prior to such termination
for “cause,” the Executive shall purchase in the open market the number of
shares of the Company’s common stock so disposed and return such shares to the
Company, along with any Shares not so disposed, for cancellation.
B. Executive
may also receive bonuses, from time to time, in the discretion of the Board,
depending upon Executive’s performance and achievement of specific goals, and
upon the profitability of the Company, which bonuses may be payable in cash,
options, and common stock, in the discretion of the Board.
C. (1)
On or
as soon as practicable after the date of this Agreement, the Company’s Board of
Directors shall grant
Executive options to purchase a total of 3,600,000 shares of Company’s Common
Stock (the “Options”), with an exercise price of $.01(which price shall not be
less than 85% of the Fair Market Value (as defined in the Plan)) of the
Company’s Common Stock on the date of grant. The Options shall be granted under
the Company’s 2007 Stock Incentive Plan No. 2 (the “Plan”) and shall be subject
to the terms and conditions of the Plan. In the event that any provision of
this
Agreement respecting the Options shall conflict with the terms of the Plan,
however, the terms of this Agreement shall control. The Options shall be
incentive stock options, within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the “Code”), to the extent permitted by law,
and shall have a 5-year term. The Options shall become vested and exercisable
over a 3-year schedule, with 100,000 shares vesting during each month of the
Executive’s employment provided that the Executive remains in the employ of the
Company continuously through the applicable vesting date; provided, however,
that the Options shall vest immediately upon a Change of Control (as defined
below) of the Company.
(2) For
purposes of this Agreement, “Change in Control” means the occurrence of any of
the following after the date of this Agreement with respect to the Company:
(A)
the acquisition (other than from the Company) in one or a series of transactions
by any Person, as defined in this Section 5.D.(2), of the beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Securities Exchange
Act
of 1934, as amended) of 40% or more of (1) the then outstanding shares of the
securities of the Company, or (2) the combined voting power of the then
outstanding securities of the Company entitled to vote generally in the election
of directors (the “Company Voting Stock”); (B) the closing of a sale or other
conveyance of all or substantially all of the assets of the Company; (C) the
effective time of any merger, share exchange, consolidation, or other business
combination of the Company if immediately after such transaction persons who
hold a majority of the outstanding voting securities entitled to vote generally
in the election of directors of the surviving entity (or the entity owning
100%
of such surviving entity) are not persons who, immediately prior to such
transaction, held the Company Voting Stock; or (D) the execution and delivery
by
the Company of an agreement providing for any of the transactions described
in
paragraphs (A), (B) or (C) of this Section 5.C.(2), provided that such
transaction does in fact occur. For purposes of this Section 5.C.(2) a “Person”
means any individual, entity or group within the meaning of Section 13(d)(3)
or
14(d)(2) of the Securities Exchange Act of 1934, as amended, other than:
employee benefit plans sponsored or maintained by the Company and corporations
or other entities controlled by the Company.
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D. Executive
shall be authorized to incur, and shall be entitled to receive prompt
reimbursement for, all reasonable expenses incurred by Executive in (i) setting
up the Company’s office in its New Jersey location upon expiration of the lease
for the New York office and (ii) performing his duties and carrying out the
responsibilities hereunder, including business meals, entertainment, and travel
expenses, provided that Executive complies with all of the applicable policies,
practices and procedures of the Company related to the submission of expense
reports, receipts, or similar documentation of those expenses. The Company
shall
either pay directly, or reimburse Executive for such expenses in accordance
with
Company policies.
E. In
addition to the amounts set forth above, Executive shall have the option to
participate in any salary deferral, 401(k), SEP, or savings plan or other
similar plan which the Company or its successors or assigns makes available
to
its employees. Executive shall be required to comply with the conditions
attendant to coverage by such plans and shall comply with and be entitled to
benefits only in accordance with the terms and conditions of such plans as
they
may be amended from time to time.
F. During
the Term, Executive shall be entitled to four (4) weeks of annual vacation
time
per calendar year determined in accordance with the vacation policies of the
Company from time to time in effect. To the extent that Executive does not
utilize the full amount of vacation time allotted in any given calendar year,
Executive will receive a cash payment within 30 days of the end of such calendar
year for any used vacation time. Such cash payment will be calculated based
upon
Executive’s Base Salary for the calendar year in which such unused vacation time
occurred.
G. No
additional compensation (above the compensation referred to in this
Paragraph 5) shall be due or payable by Company to Executive under this
Agreement, but nothing in this Agreement shall prohibit the Company from paying
Executive any additional amount as a bonus or otherwise, as the Company may
determine from time to time.
6.
Covenants,
Representations, and Warranties of Executive
A. Executive
covenants, agrees, and promises that during the Term: (a) except as
permitted under this Agreement, Executive will not engage, directly or
indirectly, in any business other than the business of the Company, except
at
the direction of or with the prior written approval of the Company;
(b) Executive will truthfully and accurately make, maintain, and preserve
all records and reports that the Company may from time to time request or
require; (c) Executive will fully account for all money, records, goods, wares,
merchandise, and other property belonging to the Company and/or to the Company’s
clients of which Executive has custody, and will pay over and/or deliver same
promptly whenever and however Executive may be directed to do so;
(d) Executive
will (i) make reasonable efforts to obey all rules, regulations, and special
instructions applicable to him and (ii) be loyal and faithful to the Company
at
all times; and (e) Executive agrees that upon termination of his employment
under this Agreement for any reason he will immediately surrender and turn
over
to the Company all books, records, forms, mailing lists, client lists, potential
client lists, specifications, formulae, data, processes, papers, and writings
related to the Company’s business and all other property belonging to the
Company together with, except as hereinafter set forth, all copies of the items
mentioned in this Agreement Paragraph 6.A., it being understood and agreed
that
the same are the Company’s sole property.
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B. Executive
hereby represents and warrants to Company that (a) Executive is experienced
in
the subject matter of this Agreement and fully competent to exercise and
discharge his duties and obligations under this Agreement, and (b) the execution
of this Agreement by Executive does not violate the terms or conditions of
any
prior employment agreements to which Executive has been a party, and at the
time
of execution of this Agreement, Executive is not a party to any other employment
or consulting agreement and any other employment agreement between the
Executive, on the one hand, and the Company (and/or its affiliates), is
terminated and the Company (and/or its affiliates) is (are) released from all
obligations thereunder.
7.
Termination
A. The
employment of Executive may be terminated upon the occurrence of any one of
the
following events:
(a) Business
Reason.
The
Company may, at its election, and for any reason (i.e., any lawful reason other
than Cause) and effective immediately (or such longer period as determined
by
the Company in its sole discretion), terminate Executive’s employment upon
written notice to Executive. Executive, effective no less than thirty (30)
days
after written notice thereof to the Company, may resign his employment with
the
Company. A
resignation for “Good Reason” shall mean a resignation of your employment within
sixty (60) days of the occurrence of any of the following events: (i) without
your written consent, a material reduction of your duties, position or
responsibilities; (ii) without your written consent, a significant reduction
by
the Company in your base salary as in effect immediately prior to such
reduction; or (iii) without your written consent, a requirement that you
relocate your office to a location more than seventy (70) miles from its
then-current location. A resignation of your employment for any other reason
or
in any other circumstances will be a resignation “Without Good
Reason.”
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(b) With
Cause.
The
Company may, upon written notice effective immediately, terminate the employment
of Executive at any time during the Term for “Cause.” For purposes of this
Agreement, “Cause” shall mean the following: (i)
if
Executive should be convicted of or pleads nolo
contendre
to any
felony offense or to a crime of moral turpitude (whether or not a felony);
(ii)
if
Executive should be unable or incapable of performing the essential functions
of
his job position for a period of thirty (30) consecutive days in any twelve
(12)
month period, or one hundred twenty (120) days during any twelve (12) month
period, whether or not such days are consecutive (as used herein, “unable or
incapable of performing essential job functions” shall mean the inability of
Executive, on account of a mental, physical, or other condition, to perform
his
essential job functions as determined by at least two of three medical
physicians or by agreement of the Company and Executive or his designee (if
the
determination is to be made by medical physicians, the Executive or his designee
shall appoint one such physician, the Company shall appoint one, and the two
so
appointed shall appoint the third medical physician)); (iii) if Executive should
(1) misappropriate funds or property of the Company, or of any affiliate of
the Company, (2) secure or attempt to secure personally any profit in
connection with any transaction entered into on behalf of the Company or of
any
affiliate of the Company, or (3) make any material misrepresentation to the
Company or any affiliate of the Company; (iv) if Executive fails to comply
with
any of his duties and obligations under this Agreement and such failure
continues for fifteen (15) days after written notice to Executive from the
Company of such failure; (v) if
Executive fails to comply with the Conflict of Interest Guidelines attached
as
Exhibit “A”
to this
Agreement, and such failure continues for five (5) days after notice to
Executive; (vi) if
Executive shall give notice of resignation under Paragraph 7.A(a); or (vii)
if
Executive commits an act involving dishonesty, theft, or conduct that one could
reasonably expect to impair or injure the reputation of, or harm, the Company
or
any affiliate of the Company.
(c) Death
of Executive.
This
Agreement will terminate automatically on the death of the
Executive.
B. In
the
event of the termination of the employment of Executive, Executive shall be
entitled to compensation under Paragraph 5.A earned by him prior to the
date of termination as provided herein. Additionally, if during the Initial
Term, the Executive resigns with good reason or the Company terminates
Executive’s employment with the Company for any
reason
other
than under Paragraph 7.A(b)(i), 7.A.(b)(iii), 7.A.(b)(iv), 7.A.(b)(v), or
7.A.(b)(vii) or if during the Initial Term, Executive’s employment with the
Company is terminated due to Executive’s death under Paragraph 7.A(c), then
Executive (or his estate, as applicable) shall be entitled to and shall receive,
as his or its sole and exclusive remedy (Executive hereby waiving all other
rights or remedies in the event of such a termination), a severance payment
equal to six (6) months’ of Executive’s base salary (computed using the annual
compensation then payable to Executive under Paragraph 5.A) for six (6)
months, which shall be paid monthly following the termination of employment
for
the balance of the Initial Term. Additionally, in the event the Company
terminates Executive’s employment under Paragraph 7.A(a) hereof, the duration of
Executive’s covenants under Paragraph 10 hereof shall last until the expiration
of six (6) months from the date of such termination (however, the Company may
extend the duration of such covenant to up to twelve (12) months from the date
of such termination by increasing the severance payment payable to Executive
under the immediately preceding sentence to up to twelve (12) month’s base
salary - but the Company shall be under no obligation to do so).
If: (i) Executive resigns from his employment with the Company under
Paragraph 7.A(a) at any time; or (ii) during the Initial Term, the
Company terminates the employment of Executive pursuant to Paragraph 7.A(b)(i),
7.A(b)(iii), 7.A(b)(iv), 7.A(b)(v), 7.A(b)(vi), or 7.A(b)(vii); or
(iii) subsequent to the Initial Term, the Company terminates the employment
of Executive pursuant to any provision of Paragraph 7.A(b); or (iv) subsequent
to the Initial Term, Executive’s employment with the Company is terminated due
to Executive’s death under Paragraph 7.A(c), then the Company shall have the
obligation to pay to Executive all amounts earned under Paragraph 5.A prior
to the termination of employment, but the Company shall have no obligation
to
pay Executive any amount otherwise coming due and payable under this Agreement
after the date of such termination and Executive shall be entitled to no other
or further compensation as of the date of termination of his employment or
thereafter. Additionally, if, after the Initial Term, the Company (but
not
Executive) terminates Executive’s employment under Paragraph 7.A(a) or
Paragraph 7.A.(b)(ii), Executive shall be entitled, as his sole and exclusive
remedy (Executive hereby waiving all other rights or remedies in the event
of
such a termination) a severance payment equal to six (6) month’s salary (based
on the annual compensation payable to Executive under Paragraph 5.A), which
shall be paid monthly for six (6) months following the termination of
employment; provided, however, if Executive becomes employed or otherwise earns
income from sources other than the Company during such six (6) month period,
then the Company’s obligation to pay such severance payment shall be reduced
dollar for dollar by each dollar received by Executive during such six (6)
month
period.
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C. If
your employment with the Company is terminated by the Company “Without Cause”
(as defined herein) or if you resign “With Good Reason” you shall be entitled to
the same level of health (i.e. medical, vision and dental) coverage and benefits
as in effect for you on the day immediately preceding the day of termination
of
employment; provided, however that (A) you constitute a qualified beneficiary,
as defined in Section 4980B(g)(1) of the Internal Revenue Code of 1986, as
amended; and (B) you elect continuation coverage pursuant to the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), within the time
period prescribed pursuant to COBRA. The Company shall continue to provide
you
with such health coverage until the earlier of (i) the date you are no longer
eligible to receive continuation coverage pursuant to COBRA, or (ii) twelve
(12)
months from the termination date.
8.
Confidential Information; Ideas
A.
The
Company promises that it will give Executive access to some or all of its
Confidential Information (as defined in this Paragraph 8.A.) during his
employment under this Agreement, including, without limitation, certain trade
secrets, know-how, mailing lists, clients lists, potential client lists,
employee records, and other sensitive, proprietary, or confidential information
and knowledge concerning the business of the Company, and/or affiliates of
the
Company (hereafter collectively referred to as “Confidential Information”) which
the Company desires to protect. Executive understands that such Information
is
sensitive, proprietary, or confidential, and he agrees that he will not, at
any
time (and whether during or after Executive’s employment with the Company),
reveal such Confidential Information to anyone outside the Company. The term
“Confidential Information,” as used in this Agreement, shall not include
information that (a) is already known to Executive from sources other than
the Company; (b) is or becomes generally available to the public other than
as a result of a disclosure by Executive; (c) is disclosed to Executive by
a person or entity who is not bound by any agreement regarding the confidential
nature of such information; or (d) is required to be disclosed by law or by
regulatory or judicial process. The provisions of this Paragraph 8 shall survive
any termination or expiration of this Agreement, and the termination of
Executive’s employment with the Company (for whatever cause or
reason).
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B. Executive
agrees that all ideas, improvements, inventions, discoveries, systems,
techniques, formulas, devices, methods, processes, programs, designs, models,
prototypes, copyrightable works, mask works, trademarks, service marks, trade
dress, software programs, hardware improvements, business slogans, and other
things of value conceived, reduced to practice or made or learned by Executive,
either alone or with others, while employed by the Company and for twelve (12)
months thereafter that relate to the Company's business and/or the business
of
affiliates of the Company (hereinafter collectively referred to as the "Ideas")
belong to and shall remain the sole and exclusive property of the Company
forever. Further, Executive agrees to promptly and fully disclose to the
Company’s President such Ideas in writing. In addition, Executive agrees,
without additional compensation, to cooperate and do any and all lawful things
requested by Company necessary or useful to ensure that the ownership by the
Company of such Ideas is protected. This cooperation includes, but is not
limited to, executing all documents required by the Company, and otherwise
assisting Company to vest title of such Ideas in Company and to obtain, maintain
and enforce for Company’s benefit, any patents, copyrights, mask work
registration, trade and service xxxx registrations, or other legal protection
for any Ideas in any and all countries, during or after employment with Company.
Executive will continue to assist Company as provided in the preceding sentence
even after termination of Executive’s employment with Company, but Company shall
compensate Executive at a reasonable rate after his termination for the time
actually spent by Executive in response to a written request by Company.
If
Company is unable for any reason to secure Executive's signature on any document
needed in connection with the actions specified in the preceding paragraph,
Executive hereby irrevocably designates and appoints Company and its duly
authorized officers and agents as Executive's agent and attorney-in-fact to
act
for and on Executive's behalf to execute, verify, and file any such documents
and to do all other lawfully permitted acts to further the purposes of the
preceding paragraph with the same legal force and effect as if executed by
Executive. Executive hereby waives and quitclaims to Company any and all claims,
of whatever nature, which Executive has or may have later for infringement
of
any proprietary rights assigned by Executive to Company. Executive hereby
assigns to the Company all of Executive’s right, title, and interest in and to
all such Ideas and all patents, trademarks, copyrights, other registrations,
and
applications which may be obtained as a result of the Ideas, throughout the
United States and all foreign countries. Executive agrees that no Ideas shall
be
regarded as having been conceived, reduced to practice, made, or learned by
Executive prior to Executive's employment. Executive's
obligations under this Agreement shall continue after his termination of
employment with the Company. This Agreement shall inure to the benefit of
Company, its successors (including by merger) and assigns, and is binding upon
the assigns, executors, and administrators and other legal representatives
of
Executive.
9.
Arbitration
A. If
any
dispute between the Company and Executive arises out of or is related to this
Agreement, Executive’s employment, or Executive’s separation from employment
with Company for any reason, and the parties to this Agreement cannot resolve
the dispute, the Company and Executive shall submit the dispute to final and
binding arbitration. The arbitration shall be conducted in accordance with
the
American Arbitration Association’s (“AAA”) National Rules for the Resolution of
Employment Disputes (“Rules”). If the parties cannot agree to an arbitrator, an
arbitrator will be selected through the AAA’s standard procedures and Rules.
Company and Executive shall share the costs of arbitration, unless the
arbitrator rules otherwise. Company and Executive agree that the arbitration
shall be held in New York, New York.
Arbitration of the parties’ disputes is mandatory, and in lieu of any and all
civil causes of action or lawsuits either party may have against the other
arising out of or related to this Agreement, Executive’s employment, or
Executive’s separation from employment with Company, with the exception that
Company alone may seek a temporary restraining order and temporary injunctive
relief in a court to enforce the protective covenants as provided in this
Agreement (Paragraph 10.C). Executive acknowledges that by agreeing to this
provision, he knowingly
and voluntarily waives
any right he may have to a jury trial based on any claims he has, had, or may
have against the Company,
including any right to a jury trial under any local, municipal, state or federal
law including, without limitation, claims under Title VII of the Civil Rights
Act of 1964, 42 U.S.C. Section 1981, the Americans With Disabilities Act of
1990, the Age Discrimination In Employment Act of 1967, the Family Medical
Leave
Act, the Xxxxxxxx-Xxxxx Act, the Older Workers Benefit Protection Act, the
Texas
Commission on Human Rights Act, claims of harassment, discrimination or wrongful
termination, and any other statutory or common law claims.
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B. Before
the arbitration hearing is conducted, the arbitrator shall have the authority
to
consider and grant a motion to dismiss and motion for summary judgment by
applying the standards governing these motions under Federal Rules of Civil
Procedure 12 and 56. The arbitrator shall issue a written decision and award,
which shall explain the basis of the decision. The decision and award shall
be
exclusive, final, and binding on both Executive and the Company, and all heirs,
executors, administrators, successors, and assigns.
C. Both
Executive and the Company understand that, by agreeing to arbitration, they
are
agreeing to substitute one legitimate dispute resolution forum (arbitration)
for
another (litigation), and thereby are waiving the right to have disputes
resolved in court
10.
Restrictive Covenants
A. As
an
inducement for Company’s agreement to employ Executive, to provide Executive
with trade secrets and other Confidential Information, and to enter into this
Agreement, Executive hereby agrees that during the Term, and for a period of
twenty-four (24) full calendar months after (i) the expiration of the Term
(as
the same may be extended) or (ii) the termination of Executive’s employment with
the Company for whatever reason or cause (whichever may occur later), or for
the
maximum period of time permitted by law, whichever is less, Executive shall
not,
whether for profit or not, whether on his own behalf or on behalf of any person
or firm in any capacity whatsoever, engage in the "Prohibited Activity" (as
hereinafter defined) within the "Relevant Geographical Area" (as hereinafter
defined). Serving as a partner, member, trustee, receiver, custodian, manager,
stockholder, officer, director, owner, joint venturer, associate, employee,
consultant, adviser or in any other capacity whatsoever with respect to any
person or firm engaged in the Prohibited Activity within the Relevant
Geographical Area shall be conclusively deemed engagement in the Prohibited
Activity within the Relevant Geographical Area regardless of whether such
service is for profit or whether such person or firm engages in the Prohibited
Activity for profit . In this Agreement, the phrase "Prohibited Activity" shall
mean, directly or indirectly: (i) soliciting the Company’s customers; or (ii)
working independently or for any person or firm involved in any business engaged
in by the Company and/or by any of its subsidiaries or affiliates during the
Term, including, without limitation, steel fabrication. For purposes of this
Agreement, the phrase "Relevant Geographical Area" shall mean the area within
political boundaries of the State of New York and any and all other areas in
which the Company or any of its subsidiaries or affiliates transact business;
provided, however, if the geographic area defined in this Agreement Paragraph
10.A. exceeds the maximum geographic area permitted by law or for any other
reason does not state a geographic area within which the provisions of this
Paragraph 10 A. are enforceable, then the provisions of this Paragraph 10
A. shall apply within the maximum geographic area permitted by law in which
such
provisions are enforceable.
9
B. As
an
inducement for Company’s agreement to employ Executive, to provide Executive
with trade secrets and other Confidential Information, and to enter into this
Agreement, Executive hereby agrees that during the Term, and for a period of
twenty-four (24) full calendar months after: (i) the expiration of the Term
(as
the same may be extended) or (ii) the termination of Executive’s employment with
the Company for whatever reason or cause (whichever may occur later), or for
the
maximum period of time permitted by law, whichever is less, Executive shall
not
induce or attempt to influence or persuade any employee of Company or any of
its
affiliates to terminate his employment with the Company (or with the applicable
affiliate).
C. In
addition to all other remedies at law and in equity which the Company might
have
for Executive’s breach of the covenants set forth in this Paragraph 10, the
Parties agree that in the event of any breach or attempted or threatened breach
of any such covenant, the Company shall also have the right to obtain a
temporary restraining order, temporary injunction and permanent injunction
against Executive prohibiting such breach or attempted or threatened breach,
merely by proving the existence of such breach, or attempted or threatened
breach (by a preponderance of the evidence) and without the necessity of proving
either inadequacy of legal remedy or irreparable harm.
D. Executive’s
covenants set forth in this Paragraph 10 are independent and severable from
every other provision of this Agreement; and the breach of any other provision
of this Agreement by the Company or any other agreement between Executive and
the Company shall not affect the validity of the provisions of this Paragraph
10
or constitute a defense of Executive in any suit or action brought by the
Company to enforce the provisions of this Paragraph 10 or to seek any relief
from Executive’s breach thereof.
E. Each
of
the Parties agree and stipulate that: (i) the agreements and covenants not
to
compete contained in this Paragraph 10 are fair and reasonable in light of
all
of the facts and circumstances of the relationship between Executive and the
Company; (ii) the consideration provided by the Company is not illusory; and
(iii) the consideration given by the Company under this Agreement gives rise
to
the Company’s interest in restraining and prohibiting Executive from engaging in
the Prohibited Activity within the Relevant Geographical Area as provided under
this Paragraph 10 and the covenants not to engage in the Prohibited Activity
within the Relevant Geographical Area pursuant to this Paragraph 10 are designed
to enforce such consideration. The Parties are aware, however, that in certain
circumstances, courts have refused to enforce certain agreements not to compete.
Therefore, in furtherance of and not in derogation of the provisions of the
preceding sentence, the Parties agree that if a court should decline to enforce
the any of the provisions of this Paragraph 10, such affected provisions shall
be deemed to be modified to restrict competition with the Company to the maximum
extent, in both time and geography, which the court shall find enforceable.
The
provisions of this Paragraph 10 shall survive any termination or expiration
of
this Agreement, and the termination of Executive’s employment with the Company
(for whatever cause or reason, as modified by Paragraph 7.B of this
Agreement).
10
11.
Notice
Any
and
all notices permitted or required to be given under the terms of this Agreement
shall be in writing and may be served by certified mail, with return receipt
requested and proper postage prepaid, addressed to the Party to be notified
at
the appropriate address specified below, or by delivering the same in person
to
such Party, or by prepaid telegram addressed to the Party to be notified at
said
address, or by Federal Express or another nationally recognized courier service
addressed to the Party to be notified at said address. Notice given by certified
mail as aforesaid shall be deemed given and received three (3) days after
mailing, whether or not actually received. Any notice given in any other above
authorized manner shall be deemed received upon actual receipt; but shall also
be deemed received upon attempted delivery if such delivery is not accepted.
The
addresses of the parties are as follows:
| If to the Company: | Diet Coffee, Inc. |
| 00 Xxxx 00xx Xxxxxx, 00xx Xxxxx | |
| Xxx Xxxx, XX 00000 | |
| If to Executive: | Xxxx Xxxxx |
| [address] | |
The
address of any Party may be changed by notice given in the manner provided
in
this Paragraph.
12.
General Provisions
A. This
Agreement may not be assigned by Executive. This Agreement may be assigned
in
whole or in part by the Company. Executive expressly agrees to honor and accept
such assignment or other transfer and, upon the consummation thereof, to attorn
to the Company’s assignee and to perform his duties and obligations hereunder
for the benefit of the Company’s assignee as if the Company’s assignee were the
Company named herein. Executive further agrees that, upon the consummation
of
such assignment or other transfer, all references herein to the Company shall
become and shall be deemed to be references to the Company’s assignee and the
Company shall be relieved of all obligations hereunder.
B. This
Agreement shall be governed by, construed, and enforced in accordance with
the
internal, local laws of the State of New York (without regard to conflicts
of
law rules) and the obligations of the Company and Executive shall be performable
in New York, New York.
11
C. The
Company agrees to provide to the Executive all rights of indemnification to
the
fullest extent permitted by law and by the Company’s certificate of
incorporation and bylaws as well as advancement of attorneys’ fees and costs as
incurred during the pendency of a claim or action. The Company agrees to
maintain director’ and officers’ insurance for the benefit of the Executive
providing coverage identical to that of other senior executive officers of
the
Company. The indemnification and directors’ and officers’ coverage shall extend
to actions and services undertaken or performed by the Executive or omissions,
not only as an employee of the Company, but as an employee, agent, director
or
consultant of any other entity for which the Executive renders services at
the
request of the Company.
D. This
Agreement contains the entire agreement between the Parties relative to the
subject matter hereof and supersedes and replaces all prior communications
and
agreements (oral or written) between Executive and the Company. No variation,
modification, or change of this Agreement shall be binding upon either Party
hereto unless set forth in a document duly executed by both
Parties.
E. This
Agreement is intended to express the Parties’ mutual intent, and irrespective of
the Party preparing this document, no rule of construction shall be applied
against such Party, as both Parties have actively participated in the
preparation and negotiation of this Agreement.
F. No
consent or waiver, express or implied, by a Party to or of any breach or default
by the other Party in the performance by the other Party of its obligations
under this Agreement shall be deemed or construed to be a consent or waiver
to
or of any other breach or default in the performance by such other Party of
the
same or any other obligation of such Party under this Agreement (e.g., any
waiver or consent from the Company with respect to any term or provisions of
this Agreement or any other aspect of Executive’s conduct or employment shall be
effective only in the specific instance and for the specific purpose for which
given and shall not be deemed, regardless of frequency given, to be a further
or
continuing waiver or consent and the failure or delay of the Company at any
time
or times to require performance of, or to exercise any of its powers, rights,
or
remedies with respect to any term or provision of this Agreement or any other
aspect of Executive’s conduct or employment in no manner [except as otherwise
expressly provided herein] shall affect the Company’s right at a later time to
enforce any such term or provision). Failure on either Party’s part to complain
of any act or failure to act of the other Party or to declare the other Party
in
default, irrespective of how long such failure or default continues, shall
not
constitute a waiver by such Party of such Party's rights under this
Agreement.
G. If
any
provision of this Agreement or the application thereof to any person or
circumstance shall be invalid or unenforceable to any extent, the remainder
of
this Agreement and the application of such provision to other persons or
circumstances shall not be affected thereby and shall be enforced to the
greatest extent permitted by law.
H. This
Agreement shall inure to the benefit of and be binding upon the undersigned
Parties and their respective permitted successors and permitted assigns.
Whenever, in this instrument, a reference to any Party is made, such reference
shall be deemed to include a reference to such Party’s permitted successors and
permitted assigns; however, neither this Paragraph 12.H nor any other
portion of this Agreement shall be interpreted to constitute a consent to any
assignment or other transfer of this Agreement or any part hereof other than
pursuant to and in accordance with this Agreement’s other
provisions.
12
I. The
prevailing Party in any dispute between the Parties to this Agreement, arising
out of the interpretation, application, or enforcement of any provision of
this
Agreement, shall be entitled to recover all of its reasonable attorneys' fees
and costs, whether suit be filed or not, including, without limitation, costs
and attorneys' fees related to or arising out of any arbitration or trial or
appellate proceedings or petition for review before any other
court.
J. Executive
agrees to diligently adhere to the Conflict of Interest Guidelines attached
hereto as Exhibit “A”.
[SIGNATURE
PAGE TO FOLLOW]
13
EXECUTED,
in multiple counterparts,
each of
which shall have the force and effect of an original, on the Effective
Date.
|
"Company"
DIET
COFFEE, INC.
a
Delaware corporation
By:
_______________________________
|
"Executive"
________________________________
Xxxx
Xxxxx
|
|
14
EXHIBIT
“A”
DIET
COFFEE, INC.
Conflict
of Interest Guidelines
1. It
is the
policy of the Company to conduct its affairs in strict compliance with the
letter and spirit of the law and to adhere to the highest principles of business
ethics. Accordingly, all officers, employees, and independent contractors
must
avoid activities which are in conflict, or give the appearance of being in
conflict, with these principles and with the interests of the Company. The
following are potentially compromising situations which must be avoided.
Any
exceptions must be reported to the Company’s Board of Directors and written
approval for continuation must be obtained.
A. Revealing
confidential information to outsiders or misusing confidential information.
Unauthorized divulging of information is a violation of this policy whether
or
not for personal gain and whether or not harm to the Company is
intended.
B. Accepting
or offering substantial gifts, excessive entertainment, favors, or payments
which may be deemed to constitute undue influence.
C. Participating
in civic or professional organizations that involve divulging the Company’s
confidential information.
D. Initiating
or approving any form of personal or social harassment of employees in violation
of any laws.
E. Execution
of transactions involving insurance products or services or other products
or
services not approved by the Company’s Board of Directors or permitted pursuant
to any existing employment agreement.
F. Improperly
using or disclosing to the Company any proprietary information or trade secrets
of any former employer or other person or entity with whom obligations of
confidentiality exist.
G. Unlawfully
discussing prices, costs, customers, sales, or markets with competing companies
or their employees.
H. Violation
of any applicable law, rule and/or regulation, state and/or
federal.
I. Improperly
using or authorizing the use of any inventions which are the subject of patent
claims of any other person or entity.
J. Engaging,
directly or indirectly, in any business other than performance of employee’s
duties under this Agreement except at the direction of or with the prior
written
approval of the Company’s Board of Directors.
2. Each
officer, employee, and independent contractor must take every necessary action
to ensure compliance with these guidelines and to bring problem areas to
the
attention of higher management for review. Violations of this conflict of
interest policy may result in discharge without warning.
