EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered in between Freedom Financial Group, Inc., a
Delaware corporation (hereinafter "Company") and Xxxxxx X. Xxxxxxxxxxxx of
Springfield, Missouri, (hereinafter "Employee) and on this 17th day of
September, 2004, agree as follows:
WITNESSETH:
WHEREAS, Employee is presently President of Company;
WHEREAS, Company and Employee desire to enter into an agreement for
employment of Employee for a period of two (2) years from and after September
15, 2004;
NOW, THEREFORE, in consideration of the covenants and agreements as
hereinafter set forth, the parties agree as follows:
1. Employment. Subject to the terms and conditions of this Agreement,
effective as of September 15, 2004, (the "Effective Date"), the Company hereby
employs Employee to perform the duties described in Section 4 hereof. Employee
shall be an employee at will, subject only to the express provisions of this
Agreement.
2. Term of the Agreement. The term of this Agreement is two (2) years,
beginning September 15, 2004 and ending September 14, 2006.
3. Compensation of Employee:
(a) Base Compensation: Employee will be paid an annual base
salary of $185,000.00 a year, payable in equal payments, bi-monthly, on
the same day and date as other employees of Company are paid. Annual
compensation of $185,000.00 is gross compensation. Company will deduct
therefrom the normal and usual deductions for taxes, insurance and
deductions of a similar nature.
(b) Additional Compensation: In addition to Employee's base
compensation, Employee shall be entitled to additional compensation of
$16,250.00 a quarter with total additional compensation not to exceed
$65,000.00 in a twelve (12) month period. If the Company meets
financial goals of minimum net losses or income, as reflected on
Exhibit "A" attached hereto for any quarters during the term of this
agreement, commencing with the quarter beginning October 1, 2004, and
continuing quarterly thereafter, as determined by the reviewed
financial statements by outside auditors of the Company. For each
quarter in which the Company meets or exceeds the financial goals as
reflected on Exhibit A, Employee will be paid the gross sum of
$16,250.00, less all applicable taxes and all other usual and normal
deductions. The financial goals of the Company are cumulative meaning
that if the financial goals for any one quarter are not met or
exceeded, but the financial goals of the company for two or more
consecutive quarters are met or exceeded, then Employee is entitled to
be paid the quarterly additional compensation of $16,250.00 for each of
the quarters which have been combined. The goals are cumulative for a
period of one year. The present goals are cumulative for the period
ending September 30, 2005. Goals for the first three quarters of 2006
have not yet been set by the board of Company and Employee. When the
financial goals of the Company are established for those quarters, they
will be reflected as a part of this Agreement as Exhibit "B".
(c) Effect of Termination on Compensation: If Employee's
employment is terminated without cause, Employee shall receive his base
salary through the month in which the termination becomes effective. In
addition, he will receive all additional compensation to which he is
entitled under the terms hereof ending with the quarter immediately
before the effective date of his termination. In addition thereto, if
Employee's employment is not terminated for cause, he shall receive
severance pay of $3,000.00 monthly for the remaining term of this
Agreement up to September 14, 2006. If Employee resigns from his
employment prior to September 14, 2006, then Company will owe Employee
compensation only for his employment up to the date of his resignation.
4. Duties of Employee. Employee shall, during the term hereof, have the
title of President of the Company, and shall perform such duties as and have
such authority as are customary and usual for such position. Without limiting
the generality of the foregoing:
(a) Full Time. Employee shall devote Employee's full working
time during regular and normal business hours to the business of the
Company and shall, in accordance with professional standards generally
observed by senior management of the Company, seek to maximize the
financial success of the Company's business and to optimize the
goodwill and reputation of the Company within its industry and with its
customers. Nothing contained herein shall be construed to prohibit
Employee from engaging in other businesses so long as such business
does not compete with the business of the Company or conflict with the
Employee's duties hereunder;
(b) Reporting. Employee shall report to the Board of Directors
of the Company.
5. Expenses. Employee will be authorized to incur reasonable and
necessary expenses in connection with the discharge of Employee's duties and in
promoting the business of the Company. The Company, according to its usual
practices, will reimburse Employee for all such reasonable and necessary
expenses upon presentation of a properly itemized account of such expenditures,
setting forth the business reasons for such expenditures.
6. Other Benefits. Employee shall be entitled to such pension, profit
sharing and fringe benefits, such as hospitalization, medical, life and other
insurance benefits, sick pay and short-term disability, paid time off including
vacation, as determined for similarly situated employees of the Company by the
President and Chief Executive Officer of the Company and approved by the Board
of Directors of the Company (the "Fringe Benefits"). Employee acknowledges that
the Company shall have the right to change the Fringe Benefits from time to
time, and such changes shall not be deemed a termination of employment by the
Company.
7. Stock Ownership. Employee currently owns 700,000 shares of common
stock of Company. Employee shall be protected against dilution of his shares
during the term of this Agreement. Unless terminated for cause, if Employee's
employment with Company is terminated, either voluntarily or involuntarily,
Employee shall have the right to put his stock to Company at ninety percent
(90%) of its value as determined by a recognized market for the stock of Company
as of the date of termination of Employee's employment with Company. In the
event there is no recognized market for the shares of stock of Company, then
Employee shall have the right to put his stock to Company at ninety (90%)
percent of its fair market value as of the date of his termination. The parties
agree that until the Preferred Stock is fully paid, the Common Stock of the
Company has no value. If Employee resigns his employment or voluntarily
terminates his employment with Company during the first year of the term of this
Agreement, then he will voluntarily assign to the Company at no cost or charge
to Company 350,000 shares of stock in Company which Employee currently owns.
Employee will be under no obligation to return any shares of stock to Company if
his employment is terminated for any reason on or after September 15, 2005. In
the event of the sale or liquidation of Company or if Employee is totally
disabled, then all 700,000 shares of stock which Employee currently owns are
deemed owned and vested in Employee.
8. Termination by the Company Due to Death, Disability, Cause or Other.
(a) Death, Disability. In the event of Employee's death during
the Term, this Agreement and the employment of Employee hereunder shall
terminate automatically as of the date of death, except that Sections
9, 10, 11, 12, 13, 14 and 15 shall survive such termination. In the
event of Employee's Disability (as hereinafter defined) for ninety (90)
consecutive calendar days or one hundred and twenty (120) calendar days
in the aggregate during any consecutive twelve (12) months of the Term,
the Company shall have the right, by written notice to Employee, to
terminate this Agreement and the employment of Employee hereunder as of
the date of such notice, except that Sections 9, 10, 11, 12, 13, 14 and
15 shall survive such termination. "Disability" for the purposes of
this Agreement shall mean Employee's physical or mental disability so
as to render Employee incapable of carrying out substantially all of
Employee's duties under this Agreement. In the event of termination
pursuant to this subsection (a), the Company shall not be under any
further obligation to Employee hereunder except to pay Employee (or
Employee's estate) within thirty (30) days of such termination (a)
salary, declared bonuses and benefits (including paid time off pay)
accrued and payable up to the date of termination, (b) reimbursement
for expenses accrued and payable under Section 5 hereof through the
date of termination, and (c) continued Employee's Fringe Benefits other
than paid time off (as defined in Exhibit A attached hereto) for the
remaining term of this agreement.
(b) Cause. The Company shall have the right to discharge
Employee and terminate this Agreement for Cause (as hereinafter
defined) by written notice to Employee and this Agreement shall be
deemed terminated as of the date of such notice, except that Sections
9, 10, 11, 12, 13, 14 and 15 shall survive such termination. For the
purpose of this Agreement, "Cause" shall mean (a) conviction of, or a
plea of nolo contendere to, a felony, (b) substantial neglect,
substantial misconduct or substantial failure (including conflict of
interest) in the carrying out of Employee's duties in accordance with
Section 4 hereof, (c) the engaging by Employee in a material act or
acts of dishonesty adversely affecting the Company, any affiliate or
any client of the Company, or (d) habitual drunkenness or the illegal
use of drugs by Employee. In the event of a termination pursuant to
this subsection (b), the Company shall not be under any further
obligation to Employee hereunder, except to pay Employee within thirty
(30) days of such termination (i) salary, declared bonuses and benefits
(including paid time off pay) accrued and payable up to the date of
termination, and (ii) reimbursement for expenses accrued and payable
under Section 5 hereof through the date of termination.
(c) Termination by the Company Other Than Due to Death,
Disability or Cause. This Agreement and the employment of Employee
hereunder may be terminated by the Company other than pursuant to
subsection (a) or subsection (b) by giving thirty (30) days prior
written notice to the Employee at any time, and such termination shall
be effective as of the date of termination stated in such notice,
except that Sections 9, 10, 11, 12, 13, 14 and 15 shall survive such
termination. In the event of a termination pursuant to this subsection
(c), the Company shall not be under any further obligation to Employee
hereunder, except to pay Employee (a) within thirty (30) days of such
termination (i) salary, declared bonuses and benefits (including paid
time off pay) accrued and payable up to the date of termination, (ii)
reimbursement for expenses accrued and payable under Section 5 hereof
through the date of termination, and (b) Severance Benefits as defined
below.
(d) Severance Benefits. For purposes of this Agreement,
"Severance Benefits" shall mean (a) The sum of $3,000.00 a month for
each month that remains under the term of this agreement, which be
payable to Employee monthly starting with the first month following
termination; and (b) continuation of all of Employee's Fringe Benefits,
except vacation pay, for the remaining term of this agreement. To the
extent any of the Fringe Benefits are not readily available to the
Employee following termination of employment, the monthly cost thereof,
except vacation pay, incurred by Company prior to termination shall be
paid to Employee at the same time as the Severance Base Salary.
9. Termination by the Employee. The Employee shall have the right to
terminate Employee's employment under this Agreement by giving thirty (30) days
prior written notice to the Company at any time, and such termination shall be
effective as of the date of termination stated in such notice, provided that the
Company may elect to accelerate the date of termination. Sections 9, 10, 11, 12,
13, 14 and 15 shall survive such termination. In the event Employee terminates
employment under this Section 9, the Company shall not be under any further
obligation to Employee hereunder, except to promptly pay Employee (a) salary,
declared bonuses and benefits (including vacation pay) accrued and payable up to
the date of termination, and (b) reimbursement for expenses accrued and payable
under Section 5 hereof through the date of termination.
10. Non-Disclosure. Employee agrees that during and after the
expiration of the Term, any confidential information concerning the Company or
its businesses, or customers of the Company (including, without limitation,
trade secrets, plans, processes, customer lists, customer names and all other
information relating to customers, price lists, pricing policies, any and all
financial information, employee lists, prospect lists, contracts and
compilations of information, records and specifications) which comes to Employee
in the course of Employee's employment and which is not (independent of
disclosure by Employee) public knowledge or general knowledge in the trade,
shall remain confidential and, except as required by legal process, may not be
used or made available for any purpose except as necessary in the performance of
Employee's duties hereunder. Employee agrees that, upon termination of
Employee's employment hereunder, Employee will promptly deliver to the Company
all materials constituting confidential information (including all copies
thereof that are in the possession of, or under the control of, the Employee),
and Employee will not make or retain any copies or extracts of such materials in
any form.
11. Governing Law and Choice of Venue. This Agreement shall be governed
by and interpreted in accordance with the laws of the State of Missouri. The
parties hereto agree to submit to the jurisdiction of the courts of Missouri for
the purposes of enforcement of this Agreement or any action that may arise
relating to the employment relationship or the enforcement of this Agreement
between Employee and Company. The parties further agree that any such action
must be brought in a court of competent jurisdiction sitting in the State of
Missouri.
12. Severability. Each of the sections contained in this Agreement
shall be enforceable independently of every other section in this Agreement, and
the invalidity or unenforceability of any section shall not invalidate or render
unenforceable any other section contained in this Agreement. Employee
acknowledges that the restrictive covenants contained in this Agreement are a
condition of this Agreement and are reasonable and valid in geographical and
temporal scope and in all other respects. If any court determines that any of
the covenants contained herein, or any part of any of them, is invalid or
unenforceable, the remainder of such covenants and parts thereof shall not
thereby be affected and shall be given full effect, without regard to the
invalid portion. If any court determines that any of such covenants, or any part
thereof, is invalid or unenforceable because of the geographic or temporal scope
of such provision, such court shall reduce such scope only to the extent
necessary to make such covenants valid and enforceable.
13. Survival of Certain Provisions. Any termination or expiration of
this Agreement or suspension of termination of Employee's employment by Company
notwithstanding, the provisions of this Agreement that are intended to continue
and survive shall so continue and survive. This Agreement and all rights
hereunder shall inure to the benefit of Company, its successors and assigns.
14. Cumulative Remedies and Fees. All rights and remedies of Company
shall be cumulative and Company shall have the right to obtain specific
performance against Employee for the enforcement of this Agreement. In addition
to its other remedies, Employee agrees that should Company elect to remedy any
actual or threatened breach of this Agreement by filing suit, Company shall be
entitled to a judgment and award against Employee in an amount equal to
Company's reasonable attorney's fees and costs associated with enforcement of
any term of this Agreement.
15. Equitable Relief. Employee acknowledges that, due to the unique
nature of the Confidential Information, Inventions, and Work Product, there may
be no adequate remedy at law for any breach of the obligations hereunder, and
that any such breach may allow Employee or third parties to unfairly compete
with Company. For that reason, it is mutually agreed that upon any such breach
or any threat thereof, Company shall be entitled to seek appropriate equitable
relief, without bond, in addition to whatever remedies it might have at law in
connection with any breach or enforcement of Employee's obligations hereunder or
the unauthorized use or release of any Confidential Information, Inventions,
and/or Work Product. Employee will notify Company in writing immediately upon
the occurrence of any such unauthorized release or other breach of which
Employee becomes aware.
16. Prior Agreements and Amendments. Employee hereby acknowledges
receipt of a signed counterpart of this Agreement and acknowledges that it is
Employee's entire agreement with Company concerning the subject matter, thereby
canceling, terminating and superseding any previous oral or written
understandings or agreements with Company or any officer or representative of
Company. Nothing in this Agreement shall be deemed to limit the right of Company
to terminate employment of Employee at will, with or without cause. No amendment
or modification of this Agreement shall be valid or binding upon Company unless
made in writing and signed by an officer of Company or upon Employee unless made
in writing and signed by him.
17. Waiver. Employee's or Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this Agreement or
the failure to assert any right Employee or Company may have hereunder shall not
be deemed to be a waiver or subsequent breach of such provision or right or any
other provision or right of this Agreement.
18. Notices. Any notice required by this Agreement or given in
connection with it, shall be in writing and shall be given to the appropriate
party by personal delivery, or by certified mail, postage prepaid, or recognized
overnight delivery service.
If to Company:
Freedom Financial Group, Inc.
0000 Xxxx Xxx Xx.
Xxxxxxxxxxx, XX 00000
If to Employee:
Xxxxxx X. Xxxxxxxxxxxx
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties have duly executed this Agreement under
seal as of the day and year first above written.
COMPANY:
FREEDOM FINANCIAL GROUP, INC.
a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxxxx
---------------------------------------
Name: Xxxxxx Xxxxxxxxxx
Title: Chairman, Compensation Committee
EMPLOYEE:
/s/ Xxxxxx X. Xxxxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxxxx
EXHIBIT A
TO EMPLOYMENT AGREEMENT
QV-IV, 2004 Operating Income ($91,000.00)
QV-I, 2005 Operating Income ($24,000.00)
QV-II, 2005 Operating Income $53,000.00
QV-III, 2005 Operating Income $142,000.00
QV-IV Operating Income $225,000.00
EXHIBIT "B"
TO EMPLOYMENT AGREEMENT
