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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, dated as of December 1, 1999, by and
between PLACEMENT 0000.XXX, INC., a Delaware corporation (hereinafter called the
"Company") and XXXXXXX XXXXXXXX (hereinafter called "Employee"):
W I T N E S S E T H :
WHEREAS, the Company desires to employ, retain and make secure for
itself the experience, abilities and services of the Employee and the Employee
is desirous of being engaged by the Company upon the terms and conditions
contained herein;
WHEREAS, the Company is engaged in a highly competitive business;
and
WHEREAS, the Company must maintain its competitive position by
protecting its inventions, trade secrets, patents, know-how, and proprietary
information.
NOW, THEREFORE, in consideration of the mutual premises and
agreements contained herein and for other good and valuable consideration by
each of the parties, the parties hereby agree as follows:
1. POSITION OF EMPLOYMENT. The Company hereby employs Employee as
General Manager, and Employee hereby accepts such employment and agrees to serve
the Company as set forth in Paragraph 2 below.
2. SERVICES TO BE RENDERED. (a) During the term of this Agreement,
the Employee shall serve as an employee of the Company, subject to the
supervision and control of the Board of Directors of the Company (the "Board")
and its designees, and supervise the operations of the Company. Employee
presently is President of the Company, and the parties hereto contemplate that
Employee will continue to perform such services as he previously performed on
behalf of the Company. If asked by the Company, Employee shall serve as a member
of the Board for not longer than the Term, without additional compensation,
provided, however, that Employee shall be entitled to be reimbursed to the same
extent as other directors of the Company for expenses incurred in the
performance of his duties as a director of the Company.
(b) Unless prevented by death or disability, the Employee shall
devote his full time and attention during normal working hours to the affairs of
the Company as shall be necessary to effectively carry out his obligations
hereunder and use his best talents and abilities to the service of the Company
as the Company may reasonably direct during the Term hereof, allowing for
vacations as set forth in section 4(c) below and holidays that the Company,
pursuant to established policy, recognizes and observes, and illnesses, and
shall use his best efforts, skill and abilities to promote its interests.
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3. PERIOD OF EMPLOYMENT. The term of employment (the "Term") shall
commence on the date of this Agreement and shall expire on December 31, 2002.
4. SALARY; BENEFITS. (a) Employee shall be paid an annual base
salary during the Term (base salary) of One Hundred Seventy-Five Thousand
Dollars ($175,000) per year, to be paid pro rata for any partial year. Upon the
death or Disability (as defined herein) of Employee, base salary shall no longer
accrue. Upon the Disability of Employee, the Employee shall be entitled to the
benefits and perquisites provided by the Company to its employees generally
outlined in paragraph (c) of this Section 4 for six months after the date such
Disability is determined.
(b) At the end of each calendar year, Employee shall be entitled to
incentive compensation equal to (x) 20% of the Employee's base salary upon the
Company's business achieving $1,000,000 or more in Earnings Before Interest,
Taxes, Depreciation and Amortization ("EBITDA") for any calendar year or (y) 40%
of the Employee's base salary upon the Company's business achieving $1,500,000
or more in EBITDA for any calendar year (the "Bonus Compensation"). The Bonus
Compensation shall be payable in arrears at the end of each calendar year. The
determination of EBITDA will be made by the Company's Independent Auditors,
whose determination shall be final absent gross negligence or willful misconduct
on the part of the Company's Independent Auditors.
(c) In addition to the salary and bonuses provided for above,
Employee shall be entitled to receive during the Term a car allowance of $500
per month, a car insurance allowance of up to $1,000 per year, a parking
allowance of up to $350 per month and major medical and hospitalization
insurance. Should the Company elect to provide benefits and perquisites to the
employees of the Company, the costs of such benefits will be counted against the
calculation of EBITDA provided in paragraph (b) of this Section 4. During each
full Term year, Employee shall be entitled to four (4) weeks of paid vacation,
provided that Employee does not take more than two weeks of vacation
consecutively.
(d) During the Term, Employee shall be entitled to be reimbursed for
all reasonable business expenses incurred on behalf of the Company, as
determined by the Board or its designees. Employee shall submit appropriate
documentation to support such expenses before being reimbursed by the Company.
5. TERMINATION OF EMPLOYMENT. Anything herein contained to the
contrary notwithstanding, the parties shall have the following rights with
respect to early termination of Employee's employment under this Agreement:
(a) Except as otherwise set forth herein, the Term shall end upon
Employee's death and any accrued and unpaid base compensation, Bonus
Compensation and reimbursements for expenses shall be paid promptly to
Employee's legal representative and the Company shall have no further payment
obligations to Employee or his legal representative under this Agreement.
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(b) Except as otherwise set forth herein, if Employee becomes
Disabled (as defined below), then the Company may terminate Employee's
employment under this Agreement, in which case Employee shall be entitled to his
accrued and unpaid base salary and Bonus Compensation to the date of such
termination of employment, offset by any disability benefit and disability
insurance owned by the Company covering such disability. "Disabled" shall mean
Employee's being substantially unable to perform his duties under this Agreement
for a period of 90 consecutive days or 120 days within any period of 365
consecutive days, as determined in good faith by the Board.
(c) The Company may terminate Employee's employment under this
Agreement for "cause" (as defined below). If the Company terminates Employee's
employment under this Agreement for cause, the Company shall be obligated for
payment of Employee's accrued and unpaid base salary and Bonus Compensation
through the date of such termination and for reimbursement of expenses incurred
by Employee prior to the date of such termination and, except as provided below,
shall have no further payment obligations to Employee under this Agreement,
including no further obligation to pay Bonus Compensation. As used in this
Agreement, the term "cause" means (1) the willful or reckless failure by
Employee substantially to perform his duties hereunder, (2) failure to
materially comply with Company policies, which failure shall continue for 10
days after written notice of such failure from the Board or the President, (3)
knowing or willful acts or omissions of Employee injurious or intended to be
materially injurious to the Company, its customers, vendors, business partners,
employees or agents, (4) Employee's conviction of a felony or a crime involving
moral turpitude, (5) habitual alcohol or controlled substance abuse, or (6)
violation of the terms of the Confidentiality, Proprietary Information and
Non-Competition Agreement referred to below, or any other material agreement
(other than non-fraudulent breaches under Stock Purchase Agreement among the
Company, American Vantage Companies, AVC Acquisition Corp. and the Employee (the
"Purchase Agreement")) between the Company and Employee.
(d) If the Company terminates Employee's employment during the Term
for any reason other than because Employee voluntarily leaves the Company, dies,
is Disabled or for "cause", then the Company shall be obligated to pay
Employee's base salary and Bonus Compensation through the end of the Term.
Employee may treat the failure of the Company to pay him his Base Salary
provided for herein, after written notice thereof and a 30 day cure period, as a
constructive discharge without cause, provided Employee is not otherwise
discharged for "cause".
(e) Notwithstanding any termination of Employee's employment under
this Agreement, Employee shall remain obligated under the Non-Competition
Agreement referred to below.
6. CONFIDENTIALITY AND NON-COMPETITION. (a) Employee has executed
and delivered to the Company a Non-Competition Agreement of even date herewith,
which is incorporated herein by this reference and made a part hereof.
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(b) The Employee agrees that any and all inventions or improvements
as well as any and all ideas, creations, know-how and methods of applying and
putting into practice any inventions or improvements (all of the foregoing being
hereinafter called "Proprietary Property" and being more fully defined in
subparagraph (c) below) that are created, developed, conceived of or discovered
either (i) by the Employee (solely or jointly with others) either in the course
of his employment, with the Company's materials or facilities, relating to any
subject matter with which his work for the Company is or may be concerned, or
relating to any business in which the Company or any of its subsidiaries or
affiliated companies is involved, or (ii) by or for the Company, or (iii) by any
independent individual or Person and thereafter acquired by the Company, and
which are within the Employee's knowledge or possession in the case of (i) above
or that come into the Employee's knowledge or possession during and in the
course of the Employee's employment hereunder in the case of (ii) or (iii)
above, shall be, if created, developed, conceived of or discovered by the
Employee, promptly disclosed to the Company, or shall be, if otherwise developed
or acquired by the Company, received by the Employee as an employee of the
Company and not in any way for his own benefit. Employee shall neither have nor
obtain any right, title or interest in or to such Proprietary Property unless
and until the Company shall expressly and in writing waive the rights that it
has therein and thereto under the provisions of this sentence. With respect to
any and all Proprietary Property that is invented, created, written, developed,
furnished or produced by the Employee, or suggested by the Employee to the
Company, during the term of the Employee's employment under this Agreement,
Employee does hereby agree that all such Proprietary Property shall be the
exclusive property of the Company, and that the Employee shall neither have nor
retain any right, title or interest, of any kind therein and thereto or in and
to any results or proceeds therefrom. At any time, whether during or after the
term of this Agreement, the Employee will, upon the request and at the expense
of the Company, (A) obtain patents or copyrights on, or (B) permit the Company
to patent or copyright, any such Proprietary Property, whichever (A) or (B) is
appropriate, and/or (C) execute, acknowledge and deliver any and all
assignments, instruments of transfer, or other documents, that the Company deems
necessary or appropriate to transfer to and vest in the Company all right, title
and interest in and to such Proprietary Property and to evidence the Company's
ownership of such Proprietary Property, including, without limitation, taking
all steps necessary to enable the Company to publish or protect said Proprietary
Property by patents or otherwise in any and all countries and to render all such
assistance as the Company may require in any patent office proceeding or
litigation involving said Proprietary Property. The Employee shall not, without
limitation as to time or place, use any Proprietary Property except on Company
business, during or after his period of employment, nor disclose the same to any
other Person or individual except for disclosure on Company business or as may
be required by law.
(c) As used in this Agreement, "Proprietary Property" means
proprietary technical information not generally known in the Company's industry
and which is disclosed to Employee or known or developed by Employee as a
consequence of or through his employment with the Company.
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(d) During or subsequent to the Employee's employment by the
Company, Employee will never, directly or indirectly, lecture upon, publish
articles concerning, use, disseminate, disclose, sell or offer for sale any
Proprietary Property without the Company's prior written permission.
7. WAIVER. The failure of either party to insist, in any one or more
instances, upon strict performance of any of the terms of conditions of this
Agreement shall not be construed as a waiver or relinquishment of any right
granted hereunder or of the future performance of any such term, covenant, or
condition, but the obligations of either party with respect thereto shall
continue in full force and effect.
8. ENTIRE AGREEMENT. It is expressly understood that this Agreement
and the Non-Competition Agreement constitute the entire employment agreement
between the parties hereto and that there are no representations, warranties, or
agreements whether express or implied, except as set forth herein or therein.
The terms and conditions of this Agreement may be modified only by a written
agreement signed by each of the parties hereto.
9. NOTICES. Any notice to be given hereunder shall be deemed
sufficient if addressed in writing and delivered or mailed by certified or
registered mail or overnight courier to the addresses listed below:
If to the Company:
Placement 0000.Xxx, Inc.
c/o American Vantage Companies
0000 Xxxx Xxxxxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx
with a copy to:
Snow Xxxxxx Xxxxxx P.C.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxx Xxxxxx, Esq.
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If to Employee:
Xx. Xxxxxxx Xxxxxxxx
000 Xxxx 00xx Xxxxxx, Xxx. 00-X
Xxx Xxxx, XX 00000
with copy to:
Placement 0000.Xxx, Inc.
000 Xxxx Xxxxxx, Xxxx 0000
Xxx Xxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxx
with copy to:
Xxxxx & Schloss LLP
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
or to such other address or addresses as may hereafter be designated by notice
as provided for in this paragraph. Notices shall be deemed given when actually
received.
10. CONTROLLING LAW. All of the terms, conditions, and other
provisions of this Agreement shall be interpreted and governed by reference to
the laws of the State of New York as applied to agreements made and wholly
performed within such State, and any dispute arising herefrom and the remedies
available shall be determined in accordance with such laws.
11. PARAGRAPH HEADINGS. The paragraph headings in this Agreement are
for the purpose of reference only and shall not limit or otherwise affect any of
the terms hereof.
12. INVALID PROVISION(S). In the event and to the extent that any
one or more of the provisions contained in this Agreement shall for any reason
be held to be invalid, illegal or unenforceable, the same shall not affect any
other provision of this Agreement, and this Agreement shall be construed to
effect, as closely as possible, the original intent of such provision.
13. OFFSET. Notwithstanding anything contained herein to the
contrary, the Company may offset from the payments due hereunder any amounts for
which American Vantage Companies is entitled to offset for which Employee is
required to indemnify American Vantage Companies under the Purchase Agreement.
14. ASSIGNABILITY. This Agreement and all rights hereunder are
personal to the
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Employee and shall not be assignable, and any purported assignment in violation
thereof shall be null and void. Any person, firm or corporation succeeding to
the business of the Company by merger, consolidation, purchase of assets or
otherwise, shall assume by contract or operation of law the obligations of the
Company hereunder; provided, however, that the Company shall, notwithstanding
such assumption and/or assignment, remain liable and responsible for the
fulfillment of the terms and conditions of the Agreement on the part of the
Company to the extent the Company is surviving.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
EMPLOYEE PLACEMENT 0000.XXX, INC.
_______________________ By:____________________________
Xxxxxxx Xxxxxxxx
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