EMPLOYMENT AGREEMENT
THIS AGREEMENT made this 15 day of August l996, by and between STARLOG
FRANCHISE CORPORATION, a New Jersey corporation having its office in Clearwater,
Florida, hereinafter referred to as "Employer", XXXX X. XXXXXXXXXX, hereinafter
referred to as "Employee", and HOPE ASSOCIATES, LLC, a New Jersey limited
liability company, hereinafter referred to as "Hope", entered into in the City
of Clearwater, County of Pinellas, State of Florida.
The parties recite that:
A. Employer is engaged in the business of retail sales of personal
property bearing licensed logos throughout the United States and
internationally and maintains business premises at Clearwater,
Florida.
B. Employee is willing to be employed by Employer, and Employer is
willing to employ or continue employment of Employee, on the terms
and conditions hereinafter set forth.
C. Hope has provided financing to Employer and, being desirous of
obtaining Employee's continued employment is willing to provide the
common stock of Employer to Employee called for in this Agreement.
For the reasons set forth above, and in consideration of the mutual covenants
and promises of the parties, the sufficiency of which the parties hereby
acknowledge, Employer, Employee, and Hope covenant and agree as follows:
1. Agreement to Employ or to Continue Employment; Term of Agreement.
Employer hereby employs Employee for the position of President, and
Employee hereby accepts and agrees to such employment and both parties
hereby cancel any prior Employment Agreement between parties.
2. Description of Employee's Duties.
Subject to the supervision and pursuant to the orders, advice, and
direction of Employer, Employee shall perform such duties as are
customarily performed by one holding such position in other businesses or
enterprises of the same or similar nature as that engaged in by Employer.
Employee shall additionally render such other and unrelated services and
duties as may be assigned to his from time to time by Employer.
3. Manner of Performance of Employee's Duties
Employee shall at all times faithfully, industriously, and to the best of
his ability, experience and talent perform all duties that may be required
of and from him pursuant
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to the express and implicit terms hereof, to the reasonable satisfaction
of Employer. Such duties shall be rendered at the above mentioned premises
and at such other place or places as Employer shall in good faith require
or as the interest, needs, business and opportunities of Employer shall
require or make advisable.
4. Compensation
Employee acknowledges and agrees that the only compensation and/or
benefits that Employee is to receive from Employer are as follows:
(a) Employee shall receive a base annual salary to be paid in accordance
with Employer's customary payro1l practice. The initial amount of
Employee's base annual salary shall be EIGHTY THOUSAND DOLLARS
($80,000.00) for the first year of this Agreement, and shall be increased
by the amount of TEN THOUSAND DOLLARS ($10,000.00) upon confirmation of
the Employer's Chapter 11 Plan. In addition, as of January 1 of each year
during the term of this Agreement commencing on January 1, 1997, such base
annual salary shall likewise be increased by such amount. Such increases
shall not exceed salary of ONE HUNDRED FORTY THOUSAND DOLLARS ($140,000)
per annum.
(b) Employee shall receive a performance bonus for each year during the
term of this Agreement. Such bonus shall be equal to an amount which bears
the same ratio to Employee's base annual salary for such year as
Employer's "net income before taxes" bears to Employer's "gross sales" for
such year not to exceed, however, fifty percent (50%) of Employees' base
annual salary. Employer's net income before taxes and gross sales shall be
equal to those amounts determined by Employer's certified public
accountants and reported in Employer's Form 10-K filed with the Securities
and Exchange Commission.
(c) Employee shall receive an automobile allowance of FIVE HUNDRED DOLLARS
($500.00) per month, payable in accordance with Employer's customary
payroll practices.
(d) Employer shall provide health insurance coverage for Employee and
Employee's spouse in accordance with Employer's customary health insurance
coverage for its employees.
5. Stock Option
Employee shall have the option, exercisable annually for three consecutive
one-year periods beginning thirty (30) days after confirmation of
Employer's Chapter 11 Plan of Reorganization upon ten day's (10) prior
notice to Employer, to acquire at a cost of $.06 per share, five percent
(5%) per year (up to a total of 15%) of the then issued and outstanding
common stock of Employer. Employer and Hope Associates, LLC agree to do
whatever is necessary, including the issuance of previously unissued
shares and purchasing shares on the open market, to carry out the terms of
this paragraph. Failure to exercise such option in any year, except the
third year, shall not deprive Employee of the right to exercise the option
in a subsequent year. Notwithstanding the foregoing,
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Employee's total stock ownership as a result of the exercise of the
options granted in this paragraph shall not exceed the percentage of stock
Employee would own as if he were a member of Hope Associates, LLC
calculated by deriving the total stock of Employer owned by the members
plus the stock owned by Employee and dividing the sum by the number of
members plus one (1). Employee agrees to adjust his ownership of
Employer's stock upon request of Hope Associates, LLC from time to time to
comply with this provision.
6. Duration and Termination of Employment
The term of this Agreement is for a period of five (5) years, commencing
upon April 1, 1996. The employment relationship may be terminated at any
time by either party with or without cause. In the event that this
Agreement is terminated by Employer without cause, then until the sooner
of a period of one year (1) subsequent to such termination, or until
Employee obtains other employment, Employer shall continue to pay
Employee's base annual compensation, determined upon the date of such
termination, and shall continue to provide health insurance coverage to
Employee and Employee's spouse upon terms identical to that prior to the
termination of this Agreement. Termination without cause will not
terminate Employee's stock options hereunder. This paragraph shall survive
termination of this agreement.
7. Employee's Loyalty to Employer's Interest
Employee shall devote his best efforts and all of his full business time,
attention, knowledge and skill solely and exclusively to the business and
interest of Employer, and Employee shall be entitled to all benefits,
emoluments, profits or other issues arising from or incident to any and
all work, services and advice of Employee. Employee expressly agrees that
during the term hereof he will not be interested, directly or indirectly,
in any form, fashion or manner as partner, officer, director, stockholder,
advisor, Employee, or in any other form or capacity in any other business
similar to Employer's business or any allied trade.
8. Nondisclosure of Information Concerning Business
Employee will not at any time, in any fashion, form or manner directly or
indirectly divulge, disclose or communicate to any person, firm or
corporation in any manner whatsoever any information of any kind, nature
or description concerning any matters affecting or relating to the
business of Employer, including without limitation, the names of any of
it's customers, the price at which it places it's advertising, or any
other information concerning the business of Employer, its manner of
operation or its plans, processes or other data of any kind, nature or
description without regard to whether any or all of the foregoing matters
would be deemed confidential, material or important, except within those
perimeters dealing with usual operating procedures in the promotion of
business services.
The parties hereby stipulate that, as between them, the foregoing matters
are important, material and confidential and gravely affect the effective
and successful conduct of the
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business of Employer and it's goodwill, and that any breach of the terms
of this section is a material breach of this agreement.
9. Trade Secrets
Employee agrees during the period of his employment by Employer and for a
one year period following the termination, for whatever reason, of his
employment with Employer and Employee shall keep and hold as confidential
all information or trade secrets relating to the business which accrued to
him during his course of employment with Employer. Employee agrees not to
divulge any trade secrets or any other confidential information pertaining
to the business of Employer, including but not limited to, names and
addresses of Employer's past or present clients. Employee will not, during
or after the term of his employment, furnish to any individual, firm or
corporation other than with Employer's written permission any list of
clients, suppliers, employees or any other information related to
Employer's business.
It is understood that "trade secrets" as used in this Agreement is deemed
to include lists of clients, customers, contracts, lists of suppliers,
employees software compilations, operating procedures, licenses, or any
other information of whatever nature which gives Employer an opportunity
to obtain an advantage over it's competitors who do not have access or
know or use it. Employee agrees that, upon separation from Employer, he
will return all company property including all copies of any company trade
secrets that have been in his possession during the term of his
employment. Employee will not make copies of these documents for personal
use at any time. After termination of Employee's employment all mail
addressed to Employee will be opened by Employer's secretary. Personal
mail not relating to Employer's business will be promptly forwarded to
Employee. Similarly, all mail received by Employee relating to the company
business will be immediately forwarded to Employer.
10. Covenant not to Compete
Employee agrees that in the event his employment with Employer is
terminated for whatever reason that he will nor for a period of one year
from the date of such termination, directly or indirectly engage in any
business which is similar to or directly competitive with the business
engaged in by Employer, either for Employee's own benefit or for the
benefit or any other person, partnership, firm or corporation whatsoever
within the United States or internationally. In the event of dismissal or
discharge the employment of Employee shall cease, but this Agreement shall
remain in full force and effect and neither direct nor indirect dismissal,
diminution in salary or compensation, nor condition and status of
Employee's employment with Employer shall be any defense to any causes of
action brought under this Agreement to enforce this covenant not to
compete. Employee hereby consents and agrees that for any violation of any
of the provisions of the Agreement, a temporary and/or permanent
restraining order or injunction may be issued against him without notice
and without the posting of a bond. This right shall be in addition to any
other rights which Employer may have, including but not limited to seeking
damages from Employee. This paragraph shall survive termination of this
agreement.
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11. Interpretation, Venue and Waiver
This agreement shall be interpreted and governed under the laws of the
State of Florida. Employee consents to the jurisdiction of any court,
State or Federal, within Pinellas County, Florida and agrees that all
litigation regarding this Agreement shall be brought only in Pinellas
County, Florida and further by execution of this agreement the undersigned
waives his privilege of venue in suits brought by Employer or against
Employer in connection with this Agreement, and the undersigned further
waives any and all right he may have in the selection of venue and to
trial by jury of this matter.
12. Descriptive Expressions
All pronouns used in any gender shall include all genders and all words
used in singular number shall include the plural and vice versa wherever
the context so permits.
13. Severability
The provisions of this Agreement are severable. If any judgment or court
order shall declare any provision of the provisions of this Agreement too
broad or unenforceable because of its breadth, the court shall determine a
smaller area or time period which is enforceable and such enforceable
limitation or provision shall be enforced and the other provisions shall
not be affected thereby and shall remain in full force and effect.
14. Entirety
Employee and Employer agree that this is the entire understanding by both
parties and that this Agreement supersedes all prior negotiations and/or
written agreements between the parties and that such Agreement may not be
amended or modified except in writing signed by Employee or Employer.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first above written in Clearwater, Pinellas County, Florida.
Witnesses:
________________________ STARLOG FRANCHISE CORPORATION
BY: /s/ Xxxxxxx Xxxxxxxxxx
-------------------------
Its
/s/ Xxxxxxxx X. Xxxxxx BY: /s/ Xxxx Xxxxxxxxxx
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Employee
This Agreement shall be executed in duplicate; one copy to be retained by
Employee and one copy to be retained by Employer.
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