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EXHIBIT 10.26
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of June
1, 1996, between AMERICAN COIN MERCHANDISING, INC., d/b/a SUGARLOAF CREATIONS,
INC. (hereinafter called "Employer") and XXXXXX X. XXXXX (hereinafter called
"Employee").
1. Introduction. Employer desires to retain the services and
employment of Employee, and Employee desires to secure or retain employment
from Employer, upon the terms and conditions set forth herein. Therefore, in
consideration of the mutual covenants and agreements contained herein, the
parties to this Agreement do hereby agree as follows. This Agreement replaces
the Employment Agreement between the parties dated January 6, 1994.
2. Term. Employer hereby employs Employee to render services to
Employer as Chief Executive Officer from the date of this Agreement through and
including December 31, 1999.
3. Services. Employee hereby accepts employment under this
Agreement and agrees to devote one hundred percent (100%) of his full time and
attention to the business and affairs of Employer, as such business and affairs
now exist and as they may be hereafter changed or added to, under and pursuant
to the general direction of the Board of Directors of Employer. Employer shall
retain full direction and control of the means and methods by which Employee
performs the services for which he is employed.
4. Compensation. On the date of this Agreement, Employee is
receiving a salary of $160,000.00 per year, payable at the intervals regularly
established for payment of salaries by Employer. Such salary may be increased
from time to time by determination of the Employer's Compensation Committee.
It is anticipated that regular increases will be provided upon the Employer
meeting projections for performance and that annual bonuses will be available
for exceeding such projections; provided, however, that Employer shall have no
obligation to pay any bonuses for the year in which Employee's employment is
terminated.
5. Benefits.
(a) During the period of employment under this Agreement,
Employee shall be entitled to receive all other benefits of employment
generally available to other employees in executive positions with Employer
when and as said Employee becomes eligible for those benefits, in accordance
with the general policy of Employer, including but not limited to, sick leave,
paid holidays, life insurance, health insurance, 401k plan, 125 cafeteria
package and participation in any employee stock option or stock purchase plans.
(b) Employee shall be entitled to four weeks vacation
during each calendar year of employment. Employee shall accrue
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days of paid vacation in accordance with Employer's policy on vacation, as that
policy is applied to other employees who hold similar positions and who have
been employed by Employer as long as Employee. Employee shall take all such
accrued vacation days at times which shall not interfere with the normal
business operations of Employer.
(c) Employer will lease or purchase a motor vehicle as
mutually agreed for use by Employee. If Employee should leave employment of
Employer for any reason prior to the expiration of such lease, Employee shall
have the option to assume all obligations under the lease or purchase or to
return the vehicle to Employer.
(d) Employee shall be reimbursed by Employer for
reasonable travel and other business expenses incurred by Employee in the
performance of his duties under this Agreement, in accordance with the general
policy of Employer.
6. Employer's Authority. Employee agrees to observe and comply
with the rules and regulations of Employer as adopted by Employer's Board of
Directors either orally or in writing, respecting performance of Employee's
duties and to carry out and perform orders, directions, and policies stated by
Employer to Employee, from time to time, either orally or in writing; provided,
however, that Employee shall only be obligated to comply with legal and
ethical rules, regulations, orders, directions and policies of Employer.
7. Confidential Information and Noncompetition.
(a) Employee realizes that during this Agreement,
Employee will produce and/or will have access to confidential memoranda, notes,
information, records, maps, research results, business projections, business
and research notebooks, data, formulae, specifications, trade secrets, customer
lists, inventions and processes of Employer, and other information of a
confidential nature (collectively, "Confidential Information").
(b) Both during the term of this Agreement and subsequent
to its termination, Employee agrees to hold all Confidential Information in
confidence and not to disclose, and not directly or indirectly to use, copy,
digest or summarize, any Confidential Information, except to the extent
necessary to carry out Employee's responsibilities as directed or authorized by
Employer and, after termination of Employee's employment hereunder, as
specifically authorized in writing by Employer.
(c) All records in whatsoever form and in whatsoever
medium recorded, and any and all copies thereof (including volatile electronic
or magnetic signals), relating to Employer's business that Employee shall
prepare, or use, or come into contact with in the course of his executing his
duties under this Agreement, shall be and remain the sole property of Employer
and shall not be
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removed from Employer's premises except as necessary to carry out Employee's
responsibilities as directed and authorized by Employer; and the same shall be
returned promptly to Employer upon termination of Employee's employment
relationship with Employer or upon Employer's request.
(d) Employee agrees that he possesses or will possess
knowledge, skills and reputation in the industry in which Employer operates
which are of material importance to Employer, and which are special, unique and
extraordinary. Employee acknowledges that the loss of his services, or the use
of his services by a competitor, may cause irreparable harm to Employer.
Therefore, for a three (3) year period following termination of employment for
any reason, with or without cause, Employee, individually and personally, shall
not do any of the following:
(i) Canvass, solicit, or accept any business in the
Industry from any present or past customer of Employer or any related
company, if the customer is located in the United States (the
"Territory").
(ii) Aid or assist any other person, entity,
partnership, or corporation in any effort to canvass, solicit, or
accept any business in the amusement vending machine business or
industry (the "Industry") from any past or present customers of
Employer or of any related company, if the customer is located within
the Territory.
(iii) Directly or indirectly request or advise any past
or present customer of Employer, or any past, present, or possible
future customer of any related companies to withdraw, curtail, cancel,
or not undertake business in the Industry with any related company, if
the customer is located within the Territory.
(iv) Directly or indirectly disclose to any other
person, entity, partnership, or corporation the names of past or
present customers of Employer, or of any related company. The parties
agree that the names of these customers are confidential and
proprietary and constitute trade secrets of Employer, and are
confidential and proprietary and constitute trade secrets of Employer
within the meaning of C.R.S. Section 8- 2-113(2)(b) and C.R.S.
Section 7-74-102(4).
(v) Suggest, solicit, or encourage any employee of
Employer or any related company to leave employment; or disparage
Employer or any related company or their conditions of employment; or
disclose to any other person, entity, partnership, or corporation the
names of employees of Employer.
(vi) Directly or indirectly establish, as manager,
employee or owner of greater than 1% of the outstanding ownership
interest, or participate in an enterprise
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competitive with any business which is conducted at any time during
the term of this Agreement by Employer or any related company, and
which business is in the Industry and in the Territory.
(vii) Provide any product, service, financing, aid, or
assistance of any kind for any person, entity, partnership,
association, or corporation which is competitive with any business
which is conducted at any time during the term of this Agreement by
Employer or any related company, and which business is in the Industry
and in the Territory.
(viii) Compete in any manner with any business which is
conducted at any time during the term of this Agreement by Employer or
any related company, and which business is in the Industry and in the
Territory.
(e) The rights and obligations of this Section 7 shall
survive any expiration or termination of this Agreement.
8. Termination of Employment.
(a) Notwithstanding anything herein to the contrary,
Employer may, without liability, terminate Employee's employment hereunder for
cause at any time and without notice, and thereafter Employer's obligations
hereunder shall cease and terminate. Termination of Employee's employment
hereunder shall be deemed to be for "cause" if such termination is because of
any act, or failure to act, by Employee which is (i) in bad faith and to the
detriment of Employer, (ii) a breach by Employee of any term of this Agreement,
which breach continues for a period of ten (10) days after Employee receives
written notice of such breach from the Board of Directors of Employer, (iii)
not in accordance with his obligations under this Agreement as amounts to an
intentional, extended, or gross neglect of his respective duties to Employer,
(iv) the result of such prolonged or continued use of alcohol or narcotics as
to leave Employee unable or unwilling to fulfill his respective duties, (v) an
act of fraud or embezzlement against Employer by Employee, or (vi) results in
his conviction for commission of a crime involving moral turpitude.
(b) Notwithstanding anything herein to the contrary,
Employer may terminate Employee's employment hereunder at any time without
cause, with sixty (60) days notice. Such termination shall be without
liability and thereafter Employer's obligations hereunder shall cease and
terminate, except that Employer shall continue to pay Employee's salary, less
applicable taxes and other required withholdings, for the remaining term of
this Agreement.
(c) If (i) Employee's employment is terminated without
cause, Employee's responsibilities are materially reduced without consent, or
Employee's duties require a move outside the Boulder, Colorado area, and (ii)
such event occurs within one year after a sale of the business or assets of
Employer, a merger in which
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Employer is not the surviving corporation, or any other transaction in which
the management or shareholder control of the Employer is changed or materially
modified, Employee's salary, less applicable taxes and other required
withholdings, shall continue for the remaining term of this Agreement.
9. Death or Permanent Disability of Employee. In the event of
the death or permanent disability of Employee (which renders him unable to
satisfactorily perform his employment with Employer) during the period of
employment under this Agreement, an amount equal to twelve months salary
payable hereunder shall be paid to Employee, Employee's surviving spouse, or if
there is no spouse surviving, then to Employee's estate. Thereafter Employer's
obligations hereunder shall cease and terminate.
10. Assignment. Employee's rights and obligations under this
Agreement shall not be transferable by assignment or otherwise, nor shall
Employee's rights hereunder be subject to any encumbrance or claim of
Employee's creditors. Nothing in this Agreement shall prevent the
consolidation of Employer with, or its merger into, any other corporation, or
the sale by Employer of all or substantially all of its properties or assets,
or the assignment by Employer of this Agreement and the performance of its
obligations hereunder to any affiliated company; and this Agreement shall,
subject to the provisions of this paragraph, inure to the benefit of, and be
enforceable by, any corporate successor to or assignee of, Employer.
11. Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto in respect of the employment of Employee
by Employer and the provisions herein shall be regarded as divisible and so far
as they are covenants not to compete shall be operative to the extent both as
to time and area covered that they may be made so applicable, and if any of
said provisions or any part thereof are declared invalid or unenforceable, the
validity and enforceability of the remainder of such provisions or parts
thereof and the applicability thereof shall not be affected thereby.
12. Governing Law and Enforcement. This Agreement and the rights
and obligations hereunder shall be governed by and construed in accordance with
the laws of the State of Colorado. This Agreement may be enforced in any court
of competent jurisdiction in Colorado and the prevailing party, if any, shall
be entitled to recover its reasonable attorneys' fees and expenses in addition
to any other damages.
13. Non-Waiver. The failure of either party at any time to
require performance by the other party of any provision of this Agreement
required to be performed by such other party, will in no way affect the right
of the such party to require such performance at any time thereafter. The
waiver by either party of a breach by the other party of any provision of this
Agreement shall in no way be construed as a waiver of any succeeding breach of
such provision
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or a waiver of the provision itself.
14. Remedy for Breach. The parties hereto agree that, in the
event of breach or threatened breach of any of the noncompetition covenants of
this Agreement or of any of the covenants respecting Confidential Information,
or of any of the provisions concerning restrictions on the rights and interest
in the in Employer, the damage or imminent damage to the value and the goodwill
of Employer's business shall be inestimable, and that therefore any remedy at
law or in damages shall be inadequate. Accordingly, the parties hereto agree
that Employer shall be entitled to injunctive relief against Employee in the
event of any breach or threatened breach of any of such provisions by Employee,
in addition to any other relief (including damages) available to Employer under
this Agreement or under law.
15. Gender, Number, and Tense. Throughout this Agreement, as the
context may require, the masculine gender includes the feminine and neuter, and
the neuter gender includes the masculine and feminine; singular number includes
the plural and the plural number includes the singular; and the past tense
includes the present and the present tense includes the past.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
EMPLOYER: AMERICAN COIN MERCHANDISING, INC.,
d/b/a SUGARLOAF CREATIONS, INC.
By /s/ Xxxxxxx X. Xxxxxxx
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Its Vice President of Operation
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EMPLOYEE: /s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
Address: 3019 So. Lakeridge Tr.
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Xxxxxxx XX, 00000
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