EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (hereinafter referred to as the
"Agreement") is made as of this 18th day of October, 1996, by and
between Kiddie Academy International, Inc., a Delaware
corporation (hereinafter referred to as the "Corporation"), and
Xxxxxx X. Xxxxxxxx (hereinafter referred to as the "Employee").
SECTION 1. Employment.
The Corporation hereby employs Employee as its Chief
Executive Officer, and Employee accepts such employment, at the
earliest possible "Commencement Date" (as hereinafter defined),
subject to the supervision and direction of the Corporation's
Board of Directors. The Corporation, together with its
subsidiaries, currently operates and franchises child care
centers and operates a school supply and equipment distribution
business, but reserves the right to engage in any other lawful
business.
SECTION 2. Term.
2.1 Initial Term. Subject to the provisions
respecting the termination of this Agreement set forth in Section
3 below, the "Initial Term" of this Agreement shall be for the
three (3) year period beginning on the Commencement Date. The
Commencement Date shall be the date immediately following the
date on which the termination of Employee's current employment as
Chief Executive Officer of Caterair International, Inc. becomes
effective, which in no event shall occur more than one hundred
twenty-five (125) days after the date on which this Agreement is
fully executed by Employee and the Corporation, and ratified by
the Corporation's Board of Directors. In the event the
Commencement Date does not occur within such one hundred twenty-
five (125) day period for any reason whatsoever, then this
Agreement shall terminate automatically and be of no further
force and effect, in which event neither Employee nor the
Corporation shall have any further liability to the other
hereunder.
2.2 Renewal Terms. This Agreement may be extended for
additional one (1) year terms (such one year terms being
hereinafter referred to as the "Renewal Terms") immediately
following the expiration of the Initial Term or the then current
Renewal Term, as the case may be, provided that, prior to the
expiration of the Initial Term or the applicable Renewal Term,
the Corporation and Employee enter into a written agreement with
respect to their mutual agreement to renew.
SECTION 3. Termination.
3.1 Termination with Cause. This Agreement shall
terminate upon the occurrence of one or more of the following
conditions or events:
(a) By mutual written consent of the Corporation and
Employee;
(b) Upon the death of Employee;
(c) Upon written notice by the Corporation to Employee
in the event of the breach by the Employee of any of the material
terms, provisions, representations or warranties of this
Agreement;
(d) Upon written notice by the Corporation to Employee
in the event of the Employee's willful violation of specific
written directions of the Corporation's Board of Directors, which
violation shall continue for a period of thirty (30) days after
Employee shall have first received written notice from the Board
of Directors of the specific acts or omissions alleged to
constitute such violation and the specific actions required to be
taken by Employee to cure such violation;
(e) Upon written notice by the Corporation to Employee
in the event of the Employee's misconduct or neglect,
misrepresentation or other similar action that is materially
damaging or detrimental to the Corporation;
(f) Upon written notice by the Corporation to Employee
in the event of the Employee's commission of fraud, embezzlement
or misappropriation; the Employee's conviction of a felony (or
the entering of a plea of guilty or nolo contendere); or other
action by the Employee involving moral turpitude which brings the
Corporation into material public disrepute; or
(g) Upon written notice by the Corporation to Employee
if, as a result of the Employee's incapacity due to physical or
mental illness, the Employee shall have been unable to perform
all of the Employee's duties hereunder by reason of illness or
physical or mental disability or other similar incapacity, which
inability shall continue for more than three (3) consecutive
months or shall aggregate in the total three (3) months within
any twelve (12) month period.
In the event this Agreement is terminated pursuant to this
Section 3.1, all compensation, benefits and other amounts payable
to Employee under this Agreement shall terminate immediately.
Prior to terminating Employee's employment pursuant to
subparagraph (c) or (e) above, the Corporation will advise
Employee in writing of any breach or other action that permits
such termination and Employee shall have a period of thirty (30)
days after such notice is given within which to cure such claimed
breach or other action and the Corporation may not terminate his
employment hereunder unless the same is not cured during that
period. However, if the procedure contemplated by the preceding
sentence is followed twice during the term of this Agreement, the
preceding sentence shall not apply thereafter.
3.2 Termination without Cause. This Agreement may
be terminated at any time, without cause, by majority vote of the
Corporation's Board of Directors. Such termination shall be
effective upon written notice by the Corporation to Employee that
this Agreement is terminated, but in such event, following
Employee's execution and delivery of a General Release Agreement
in a form acceptable to the Corporation for purposes of waiving
and releasing any and all claims relating to or arising out of
Employee's employment with the Corporation, Employee will be paid
a "Severance Salary" in the amount of one (1) years' Basic
Salary, as defined below. The Severance Salary shall be paid to
Employee in bi-weekly installments, or in accordance with the
Corporation's regular pay schedule as determined from time to
time by the Corporation, over a twelve (12) month period
immediately following such termination (the "Severance Period").
Notwithstanding the foregoing, in the event that Employee obtains
a new position of employment during the Severance Period
(including any position of self-employment, and any position in
connection with Employee's family farm business), then, for the
remainder of the Severance Period, Employee shall be paid the
remaining installments of the Severance Salary only to the extent
that the amount of Severance Salary payable to Employee for that
remaining portion of the Severance Period exceeds the amount of
all earned income payable to Employee for the same period.
Employee will use his best reasonable efforts to obtain a new
position of employment following the termination or expiration of
this Agreement in order to mitigate the amount of Severance
Salary payable by the Corporation. The Severance Salary shall be
in lieu of, and not in addition to, any other payments otherwise
payable to Employee under this Agreement including severance
payments to which senior management employees of the Corporation
may be entitled pursuant to policies of the Corporation
applicable to such employees or employees generally. In the
event of any breach by Employee of Section 11, 12 or 13 below,
Employee shall cease to be entitled to any payments pursuant to
this Section (no limitation on any other remedies available to
the Corporation being intended).
SECTION 4. Failure to Renew Agreement.
If this Agreement is not renewed following the Initial
three (3) year Term, then Employee shall be entitled to receive
the Severance Salary described in Section 3.2 above, and on the
same terms and conditions as described in Section 3.2 above, but
only if the following additional terms and conditions are
satisfied: (a) The failure to renew shall not be for any reason
which would have enabled this Agreement to be terminated pursuant
to Section 3.1 above; (b) Employee shall be ready, willing and
able to renew this Agreement upon substantially the same terms
and conditions as described herein; and (c) as of the close of
the Corporation's 1998-99 fiscal year, the Corporation shall be
profitable and shall have at least Two Million Dollars cash (or
such lesser amount as may have been determined by the
Corporation's Board of Directors). The Severance Salary shall be
in lieu of, and not in addition to, any other payments otherwise
payable to Employee under this Agreement including severance
payments to which senior management employees of the Corporation
may be entitled pursuant to policies of the Corporation
applicable to such employees or employees generally. In the
event of any breach by Employee of Section 11, 12 or 13 below,
Employee shall cease to be entitled to any payments pursuant to
this Section (no limitation on any other remedies available to
the Corporation being intended).
SECTION 5. Sale of Corporation.
In the event of a future disposition of the properties
and business of the Corporation, substantially or as an entirety,
by merger, consolidation, sale of assets, or otherwise, then the
Corporation may assign this Agreement and all of its rights
hereunder to the acquiring or surviving corporation; provided
that such corporation shall assume in writing all of the
obligations of the Corporation hereunder. If, as a result of
such disposition, there is a substantial, material and adverse
change in the terms or conditions of Employee's employment with
the Corporation, then Employee will be entitled to terminate this
Agreement upon no less than one hundred twenty (120) days' prior
written notice to the Corporation, and to be paid the Severance
Salary described in Section 3.2 above, and on the same terms and
conditions as described in Section 3.2 above. In the event of
such termination, the stock options granted to Employee pursuant
to Section 9.2 below shall vest immediately. The Severance
Salary shall be in lieu of, and not in addition to, any other
payments otherwise payable to Employee under this Agreement
including severance payments to which senior management employees
of the Corporation may be entitled pursuant to policies of the
Corporation applicable to such employees or employees generally.
In the event of any breach by Employee of Section 11, 12 or 13
below, Employee shall cease to be entitled to any payments
pursuant to this Section (no limitation on any other remedies
available to the Corporation being intended).
SECTION 6. Duties.
Employee hereby accepts employment by the Corporation
for the term and upon the conditions set forth is this Agreement,
and shall:
(a) Render to the very best of his ability, on behalf
of the Corporation, such duties and responsibilities as may be
determined by the Board of Directors of the Corporation, carrying
out such duties and assignments in accordance with policies, By-
laws, and directives of the Corporation from time to time
established; and
(b) Devote his full time, energy, and skill to his
assigned duties as Chief Executive Officer, at such place or
places and on such days as well as the hours during the day as
the Corporation's Board of Directors may direct, in the
Corporation's best interests. The Corporation acknowledges,
however, that Employee may be required to devote occasional
periods of working time to transitional responsibilities with
respect to Employee's past employment, or in connection with
litigation to which Employee's past employer is a party. Employee
will use his best efforts to carry out such responsibilities in a
manner and at a time that will cause as little interference as
possible with the duties to be performed by Employee on behalf of
the Corporation. Employee further agrees that he shall hold no
outside position, including any position of self-employment
(other than any occasional responsibilities involving Employee's
family farm business so long as such responsibilities do not
interfere with the duties to be performed by Employee under this
Agreement), without the prior written consent of the Board of
Directors of the Corporation (which consent, as to any part-time
directorship on the Board of Directors of any charitable
organization, will not be unreasonably withheld). Employee shall
serve without additional compensation if elected or appointed to
one or more additional offices or as a director of the
Corporation, or any subsidiary or affiliate of the Corporation.
SECTION 7. Representations and Warranties of Employee.
7.1 Employee's resume attached hereto and
incorporated by reference herein is complete, true, and accurate.
7.2 Employee is under no contractual or other
restriction or obligation which is inconsistent with the
execution of this Agreement, the performance of his duties
hereunder, or the other rights of the Corporation hereunder.
7.3 Employee is under no physical or mental disability
that would hinder the performance by him of his duties under this
Agreement.
7.4 Employee has not been charged with, convicted of,
or pleaded nolo contendere to a felony or any offense involving
moral turpitude.
7.5 The information contained in the attached
Litigation and Bankruptcy Certification is true and correct and
may be relied upon by the Corporation.
SECTION 8. Compensation.
8.1 Basic Salary. For all services to be rendered by
Employee to the Corporation during the term of this Agreement,
the Corporation agrees to pay Employee annually, in addition to
the compensation described in Section 8.2 and the benefits
described in Section 9, an annual "Basic Salary" of Two Hundred
Ninety-Five Thousand Dollars ($295,000). The Basic Salary shall
be paid to Employee in bi-weekly installments, or otherwise in
accordance with the Corporation's regular pay schedule, as
determined from time to time by the Corporation, and subject to
appropriate deductions for taxes and other amounts required to be
withheld under the applicable federal and state withholding laws.
8.2 Performance Bonus. In addition to the Basic
Salary, Employee will be paid an annual "Performance Bonus", with
respect to each fiscal year during which this Agreement is in
effect, in an amount equal to five percent (5%) of the total "Pre-
tax Profits" (as hereinafter defined) of the Corporation for the
applicable fiscal year. "Pre-tax Profits" shall mean the pre-tax
profits of the Corporation before making provision for Federal
and other income taxes and before deduction of the Performance
Bonus payable pursuant to this Section 8.2, and any similar bonus
compensation payable to Xxxxxxx X. Xxxxxx or Xxxxxx Xxxxxx
pursuant to each of their employment agreements with the
Corporation. The determination of Pre-tax Profits and all other
auditing determinations shall be made by the independent public
accountants retained by the Corporation (whose decisions shall be
final and binding upon Employee and the Corporation) and shall be
made in accordance with generally accepted accounting principles.
The Performance Bonus shall be payable with respect to each
fiscal year only if this Agreement is in full force and effect on
the last day of such fiscal year. The Performance Bonus shall be
paid after the Corporation's receipt of its audited financial
statements for the applicable fiscal year (which date of receipt
is hereinafter referred to as the "Audit Receipt Date"), after
deduction for taxes and other ordinary payroll deductions. At
the Corporation's sole option, the Performance Bonus shall be
paid in either a) one (1) installment within thirty (30) days
after the Audit Receipt Date, or b) in two (2) equal
installments, the first of which shall be paid within thirty (30)
days after the Audit Receipt Date, and the second of which shall
be paid within sixty (60) days after the Audit Receipt Date.
SECTION 9. Benefits.
9.1. Medical Insurance. The Corporation shall provide
Employee with the same major medical insurance coverage, and on
the same financial terms, as that provided to other employees of
the Corporation; provided however, that Employee's insurance
coverage shall begin immediately upon the Commencement Date.
9.2 Stock Options.
A. Non-Qualified Stock Options. Subject to the
following terms and conditions, Employee is hereby granted
seventy-five thousand (75,000) non-qualified stock purchase
options (the "Non-Qualified Options"), each of which shall
entitle Employee to purchase one (1) share of the Corporation's
common stock at a purchase price equal to the fair market value
per share as of the date hereof (defined as the average of the
bid and asked price per share on the Nasdaq SmallCap Market on
the last trading day prior to the date hereof). Employee's Non-
Qualified Options will vest in accordance with the following
schedule (the following dates being hereinafter referred to as
the "Vesting Dates"), provided that this Agreement (or any
renewal thereof) is in full force and effect on the applicable
Vesting Date, and Employee is not in default, as of such date, of
any obligation on his part to be performed under this Agreement.
First Anniversary of Commencement Date 16,667 options
Second Anniversary of Commencement Date 41,667 options
Third Anniversary of Commencement Date 16,666 options
TOTAL 75,000 options
B. Incentive Stock Options. In addition to the Non-
Qualified Options, as of the Commencement Date of this Agreement,
Employee will be granted twenty-five thousand (25,000) Incentive
Stock Purchase Options (the "ISOs"), each of which shall entitle
Employee to purchase one (1) share of the Corporation's common
stock at a purchase price equal to the fair market value per
share as of the Commencement Date hereunder (defined as the
average of the bid and asked price per share on the Nasdaq
SmallCap Market on the last trading date prior to the
Commencement Date hereof). The ISOs will vest as of December 31,
1996, provided the Commencement Date has occurred on or before
such date, this Agreement is in full force and effect as of such
date, and Employee is not in default as of such date of any
obligation on his part to be performed under this Agreement. In
the event that the Commencement Date does not occur until
calendar year 1997, then the ISOs will vest as of December 31,
1997, provided the Commencement Date has occurred on or before
such date, this Agreement is in full force and effect as of such
date, and Employee is not in default as of such date of any
obligation on his part to be performed as of such date.
C. Additional Stock Options. It is the intention
of the Company and Employee that, in addition to the Non-
Qualified Stock Options and ISOs described above, Employee will
be granted one hundred thousand (100,000) additional stock
purchase options (the "Additional Stock Options"). However, the
proposed grant of the Additional Stock Options is subject to the
stockholders of the Corporation first approving a proposed
amendment (the "Amendment") to the Corporation's 1995 Incentive
Compensation Plan (the "Plan") for purposes of increasing the
total number of securities available to be issued under the Plan
from 100,000 to 300,000. It is anticipated that the Amendment
will be presented to the Corporation's stockholders on
approximately January 28, 1997. In the event that the Amendment
is so approved, then Employee shall be granted the Additional
Stock Options as of the date the Amendment is approved or on the
Commencement Date of this Agreement, whichever last occurs. The
grant of the Additional Stock Options shall be subject to the
following additional terms and conditions: Employee will be
granted the option to purchase the Corporation's common stock
pursuant to the Additional Stock Options at a purchase price
equal to the fair market value per share as of the date of the
grant (defined as the average of the bid and asked price per on
the Nasdaq SmallCap Market on the last trading date prior to the
date of the grant). The Additional Stock Options will vest in
accordance with the following schedule, provided that this
Agreement (or any renewal thereof) is in full force and effect on
the applicable vesting date, and Employee is not in default, as
of such date, of any obligation on his part to be performed under
this Agreement:
Additional
Stock Options
First Anniversary of Commencement Date 25,000
Second Anniversary of Commencement Date 25,000
Third Anniversary of Commencement Date 25,000
January 1 of calendar year immediately
following the calendar year in
which Third Anniversary of Commencement
Date occurs 25,000
TOTAL 100,000
Notwithstanding the foregoing, in the event that this Agreement
is not renewed immediately following the expiration of the
Initial Term, then the 25,000 stock options which would otherwise
vest on January 1 of the first calendar year immediately
following the calendar year in which the third anniversary of the
Commencement Date occurs, shall instead vest on the third
anniversary of the Commencement Date (provided that this
Agreement is in full force and effect on such date, and Employee
is not in default, as of such date, of any obligation on his part
to be performed under this Agreement). The Additional Stock
Options shall be deemed "Incentive Stock Options" to the maximum
extent permitted by Federal law. To the extent that any of the
Additional Stock Options fail to qualify as Incentive Stock
Options, they shall be treated as non-qualified stock options.
D. In the event the stockholder approval to the
Amendment is not obtained by January 28, 1997 or within 60 days
thereafter, then the Corporation will issue 100,000 shares of
"phantom stock" to Employee for purposes of granting to Employee
substantially the same financial benefits as those that would
have been granted to Employee pursuant to the Additional Stock
Options. The phantom stock shall be issued pursuant to a phantom
stock agreement to be prepared by Employee's legal counsel at
Employee's sole expense, which agreement shall be, in form and
substance, acceptable to the Corporation and its counsel.
E. The stock purchase options to be granted to
Employee pursuant to the provisions of this Section 9.2 shall be
subject to all of the terms and conditions of the Plan as well as
the stock option agreements to be entered into between the
Company and Employee with respect to such options. Employee
further acknowledges and agrees that (i) his purchase of any
shares pursuant to such options shall not entitle him to
continued employment by the Corporation or affect the
Corporation's right to terminate his employment and (ii) his
investment in those shares shall not be taken into account in
determining the damages, if any, which he would be entitled to
recover upon the Corporation's termination of his employment in
contravention of, or upon any other breach of, this Agreement.
9.3. Vacation Time. During the first year of this
Agreement, Employee shall be entitled to three (3) weeks' paid
vacation time. In subsequent employment years, additional paid
vacation time may be negotiated between the Employee and the
Corporation. Any unused vacation time shall be deemed forfeited
by Employee.
9.4. Automobile. Throughout the term of this
Agreement, Employee will be entitled to the use of an automobile
which is owned or leased by the Corporation (the "Company Car").
All expenses relating to maintaining and insuring the Company Car
will be paid for by the Corporation except for the cost of
gasoline. The cost of gasoline will be reimbursed or paid for by
the Corporation only to the extent it relates to Employee's
business use of the Company Car.
9.5. Life Insurance. Throughout the term of this
Agreement, the Corporation shall provide life insurance coverage
for Employee in the amount of One Million Dollars; provided
however, that in no event shall the Corporation be required to
expend more than Four Thousand Dollars ($4,000) annually for such
insurance. Such insurance shall be purchased from a reputable
insurance company to be determined by the Corporation in its sole
discretion; provided, however, that if the Corporation is unable
to obtain a policy from a company other than that which currently
insures Employee, then the insurance coverage will be continued
with the existing company (subject, however, to the $4000
limitation described above).
9.6. Sickness and Disability. During any period that
Employee fails to perform his duties as a result of incapacity
due to physical or mental illness, the Corporation shall continue
to pay to Employee his Basic Salary and continue all current
employment and executive benefits, incentive compensation and
bonuses, to and until the Employee's date of termination;
provided, however, that such payments made during the period of
the Employee's incapacity shall be reduced by the sum of amounts
payable to the Employee, if any, pursuant to any disability plans
maintained by the Corporation or its subsidiaries or affiliates.
9.7. Additional Benefits. Employee will be entitled
to any additional employee benefits as may be offered by the
Corporation from time to time to its full-time employees and
executives, on such terms and conditions as may be established by
the Board of Directors for such employees and executives. It is
specifically understood and agreed that the Corporation reserves
the right, in its sole discretion, to modify, amend or eliminate
any or all of the additional employee benefits.
SECTION 10. Business Expenses.
Employee is authorized to incur reasonable travel,
entertainment, or other out-of-pocket expenses in connection with
Employee's exercise of Employee's duties under this Agreement,
which expenses shall be reimbursed by the Corporation on a timely
basis. It is intended by the Corporation and Employee that all
such expenses shall be ordinary and necessary expenses incurred
in connection with the duties of Employee under this Agreement.
The Corporation may establish guidelines pertaining to Employee's
authorization to incur business expenses on behalf of the
Corporation and Employee agrees to comply with all of the
Corporation's standard policies relating to verification of such
expenses.
SECTION 11. Confidentiality.
11.1. Employee acknowledges that, in and as a
result of Employee's employment by the Corporation, Employee will
have access to and knowledge of sensitive or proprietary
information which is of value to the business of the Corporation
and its subsidiaries and affiliates (collectively, the
"Confidential Information"). The Confidential Information might
consist of, but is not limited to, trade secrets, present or
contemplated techniques and modes of business operations,
systems, concepts, curriculum designs, computer programs, sales
techniques, procedures, manuals, financial data, inventions and
patentable concepts, employment and salary data, marketing data,
demographic studies, prospective site information, names,
addresses and telephone numbers of current and prospective
franchisees, confidential reports and lists of franchisees'
clients.
11.2. For the compensation paid to Employee for
services to be rendered by Employee under this Agreement (it
being understood and agreed by the parties hereto that such
compensation shall also be paid and received in consideration
hereof), Employee agrees that he shall not, at any time during or
following the term of employment by the Corporation, directly or
indirectly, divulge or disclose, for any purpose whatsoever, any
of the Confidential Information, or use the Confidential
Information in any way except in the performance of work for the
Corporation.
SECTION 12. Property Rights of the Corporation.
Employee agrees that the Corporation shall be the sole
owner of and have exclusive rights to all work products, such as
marketing materials, business plans, manuals, handbooks, plans
and specifications, designs, development plans, computer
programs, documentation and media, drawings, prospective site
information, lead lists, curriculum materials, inventions,
patentable concepts, and any other materials developed or
acquired by the Employee in connection with all work performed
for the Corporation.
SECTION 13. Covenant Not to Compete.
13.1. During the term of Employee's employment with
the Corporation, during any period during which the Employee is
receiving payments from the Corporation or any of its
subsidiaries or affiliates, and for a period of two (2) years
immediately following the expiration of this Agreement or the
termination of the Employee's employment with the Corporation for
any reason whatsoever, Employee will not, within the United
States of America, Canada or abroad, directly or indirectly,
engage in, advise, lend money to, guarantee the debts or
obligations of or permit his name to be used in, whether as an
employee, partner, owner, principal, agent, stockholder, officer,
director, guarantor, creditor or other representative, any
business which (i) operates children's day care centers, (ii)
offers for sale a franchise for the operation of children's day
care centers, (iii) operates a wholesale or retail school supply
and equipment distribution business, or (iv) which competes in
any other manner with the products sold or services provided by
the Corporation or any of its subsidiaries or affiliates
(collectively, the Companies). Employee will be allowed to
purchase or own stock in a publicly held corporation if the
Employee's holdings do not exceed one percent (1%) of the
outstanding capital stock of such corporation.
13.2. During the term of Employee's employment with
the Corporation, during any period during which the Employee is
receiving payments from any of the Companies, and for a period of
two (2) years immediately following the expiration of this
Agreement or the termination of the Employee's employment with
the Corporation for any reason whatsoever, Employee will not,
within the United States of America, Canada or abroad, directly
or indirectly, interfere with or attempt to disrupt the
relationship, contractual or otherwise, between the Companies and
any of their employees, franchisees or others trading under the
"Kiddie Academy" tradename, or solicit an employee of the
Companies to terminate employment with the Companies and become
self-employed or employed with others.
SECTION 14. Enforcement.
14.1. Accounting for Profits. Employee agrees
that, if Employee shall violate any of the covenants or
agreements under Sections 11 through 13 of this Agreement, such
action shall be cause for dismissal and the Corporation shall be
entitled to an accounting and repayment of all losses to the
Corporation as a result of, growing out of, or in connection with
any such violation. If monetary damages are extremely difficult
to ascertain and may not compensate the Corporation for the harm
which has resulted from such a violation, then the Corporation
may be entitled to all profits, compensation, commissions,
remunerations or benefits which the Employee directly or
indirectly has realized as a result of such violation. If such
violation occurs after this Agreement is terminated, Employee
shall be additionally liable to the Corporation for the amount of
any Severance Salary paid to Employee prior to the date of the
violation (no limitation on any other damages or remedies
available to the Corporation being intended).
14.2. Enforcement. In addition to the remedies
described in Section 14.1 above, in the event of the actual or
threatened breach of the provisions of Sections 11 through 13 of
this Agreement, the Corporation shall be entitled to an
injunction restraining the Employee therefrom and the Employee
does hereby consent to the jurisdiction of a court of equity.
The remedies described herein shall be in addition to and not in
limitation of any other rights or remedies to which the
Corporation is or may be entitled at law or in equity or under
this Agreement. In the event the Corporation seeks to enforce
any of the provisions contained in Section 11 through 13 of this
Agreement, the Employee shall be obligated to reimburse the
Corporation for all of its costs and expenses associated with the
enforcement of any of these provisions, including, but not
limited to, attorneys' fees, experts' fees and court costs, but
only if the Corporation prevails in any litigation brought by the
Corporation with respect to these provisions, or reaches a
favorable out of court settlement with respect thereto.
14.3. Reasonableness of Restrictions. The
Employee has carefully read and considered the provisions of
Sections 11 through 13 hereof and, having done so, agrees that
the restrictions set forth in such paragraphs are fair and
reasonable and are reasonably required for the protection of the
interests of the Corporation, its officers, directors and other
employees. Employee acknowledges that the broad geographical
scope of the covenant not to compete set forth in Section 13 is
required because the Corporation's business can be equally broad
in scope. Such covenant not to compete on the part of Employee
will be construed as an agreement independent of any other
provision of this Agreement. The existence of any claim, dispute
or cause of action of Employee against the Corporation, whether
predicated on this Agreement or otherwise, will not constitute a
defense to the enforcement by the Corporation of the covenant not
to compete.
14.4 Severability. The provisions of this Agreement
(including particularly, but not limited to, the provisions of
Section 11 through 13 hereof) shall be deemed severable, and the
invalidity or unenforceability of any one or more of the
provisions hereof shall not affect the validity and
enforceability of the other provisions hereof.
14.5. Court's Right to Modify. If any court or
tribunal of competent jurisdiction shall refuse to enforce one or
more of the agreements or covenants in Section 13 because the
scope, geographical area and/or time limitation applicable
thereto is deemed unreasonable, it is expressly understood and
agreed that such covenant or covenants shall not be void but that
for the purpose of such proceedings the restrictions contained
therein (whether as to geographic area, scope of business or
otherwise) shall be deemed to be reduced, and the parties request
that such court make such reduction, to the extent necessary to
permit the enforcement of such covenant or covenants.
SECTION 15. Litigation Assistance.
The Employee shall, upon reasonable notice, furnish
such information and assistance to the Corporation as may
reasonably be required by the Corporation in connection with any
litigation in which it or any subsidiary or affiliate is or may
become a party.
SECTION 16. Key Man Insurance.
The Corporation shall have the right to purchase such
policies or insurance on the life of the Employee as may be
determined by the Corporation in its sole discretion and as may
be available, at the sole cost and expense of the Corporation,
and naming the Corporation as owner and beneficiary, and the
Employee shall cooperate in the placement thereof.
SECTION 17. Construction of Agreement.
The validity and construction of this Agreement or of
any of its provisions shall be determined under the laws of the
State of Maryland. The invalidity or unenforceability of any
provisions of this Agreement shall not affect or limit the
validity and enforceability of the other provisions hereof.
SECTION 18. Entire Agreement.
This Agreement contains the entire understanding
between the parties hereto and supersedes all other oral and
written agreements or understandings between them. No
modification or addition hereto or waiver or cancellation or any
provision shall be valid except by a writing signed by the party
charged therewith. No waiver of any term or condition of this
Agreement shall be deemed a continuing or further waiver of the
same or any other term or condition of this Agreement.
SECTION 19. Assignment.
This Agreement shall bind and inure to the benefit of
the Corporation and its successors and assigns; this Agreement
shall bind and inure to the benefit of Employee, Employee's
heirs, guardians and personal and legal representatives. Neither
this Agreement nor any part hereof shall be assigned by Employee
without the Corporation's express written consent.
SECTION 20. Notices.
All notices and communications hereunder shall be in
writing and shall be deemed given when sent postage prepaid by
registered or certified mail, return receipt requested, or by
Airborne Express, or other overnight courier, and, if intended to
the Corporation, shall be addressed to it to the attention of
Board of Directors and Chairman at 000 Xxxxx Xxxx, Xxx Xxx,
Xxxxxxxx 00000 (or at such other address of which the
Corporation shall have given notice to Employee in the manner
herein provided), and if intended for the Employee shall be
addressed to him at X.X. Xxx 000, Xxxxxxxxxxx, Xxxxxxxx 00000 (or
at such other address of which Employee shall have given notice
to the Corporation in the manner herein provided), or hand-
delivered to Employee if Employee acknowledges receipt by
initialling a copy of such notice or communication.
SECTION 21. Further Assurances. Each of the parties
hereto shall do or cause to be made, done and executed, all such
further and other things, acts, deeds, documents, conveyances and
assurances as may be necessary or reasonably required to carry
out the intended purpose of this Agreement fully and effectually.
SECTION 22. Construction. Where the singular or masculine
are used in this Agreement, the same shall be construed as being
the plural or feminine or neuter and vice versa, where the
context so requires or permits.
SECTION 23. Headings The headings of sections of this
Agreement are inserted for purposes of convenience of reference
only and shall not affect the construction or meaning of any
provision of this Agreement.
SECTION 24. Governing Law. This Agreement shall be
governed, construed and enforced in accordance with the laws of
the State of Maryland.
SECTION 25. Ratification by Board of Directors. This
Agreement is specifically contingent upon its ratification by the
Corporation's Board of Directors within forty-eight (48) hours
after the date on which this Agreement is executed by the
Corporation and Employee. In the event such ratification is not
obtained within the aforesaid forty-eight (48) hour time period,
then it shall automatically terminate and be of no further force
and effect, in which event neither Employee nor the Corporation
shall have any further liability to the other hereunder.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement, under seal, as of the day and year first above
written.
WITNESS/ATTEST: KIDDIE ACADEMY INTERNATIONAL, INC.
___________________________ By:/s/XXXXXX XXXXXX (SEAL)
Xxxxxx Xxxxxx, Chairman
Employer
WITNESS:
____________________________ /s/ XXXXXX X. XXXXXXXX (Seal)
Xxxxxx X. Xxxxxxxx
Employee
cls/ka.476
10.15.96
BA3DOCS1/0046947.01
