EDUCATION ALTERNATIVES, INC.
1300 Norwest Financial Center
0000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
EMPLOYMENT AGREEMENT
with
XXXX X. XXXXXXXX
THIS AGREEMENT is made as of November 3, 1997, between EDUCATION
ALTERNATIVES, INC., a Minnesota corporation (the "Company"), and Xxxx X.
Xxxxxxxx ("Employee").
RECITALS
The Company's current business activities include, among other
things, designing, developing, marketing and providing educational services.
Employee desires to be employed, and the Company desires to employ
Employee, in connection with its business in the position of Vice President of
Human Resources.
Accordingly, in consideration of the mutual promises and agreements
contained herein, the parties hereto agree as follows:
1. NATURE OF EMPLOYMENT. The Company shall employ corporate
Employee and Employee shall serve the Company as the Vice President of Human
Resources of the Company upon the terms and conditions contained herein.
Employee agrees to devote his full time and best efforts to the business of the
Company and the performance of his duties hereunder. Such duties shall be
consistent with the position description of the Company and which such
description may be changed by the Company from time to time. Employee shall be
subject to the supervision and direction of the Chief Executive Officer of the
Company, as to assignment and performance of his duties.
2. TERM OF EMPLOYMENT. The term of Employee's employment under
this Agreement shall commence on November 7, 1997, and continue, upon the terms
and conditions contained herein, until terminated in accordance with
paragraph 3 hereof.
3. TERMINATION. This Agreement and Employee's employment hereunder
may be terminated in accordance with the following provisions:
(a) DISABILITY. If Employee at any time is prevented from
performing his duties under this Agreement by reason of illness, injury or
mental incapacity for an aggregate of one hundred twenty (120) days in any
twelve consecutive months during the term of this Agreement, the Company shall
have the right to terminate this Agreement and Employee's employment hereunder
by giving Employee fourteen (14) days' prior written notice of termination.
(b) CAUSE. The Company shall have the right to terminate this
Agreement and Employee's employment hereunder for cause by giving Employee
thirty (30) days' prior written notice of termination. "Cause" shall include
gross negligence, gross neglect of duties, gross insubordination, Employee's
unauthorized appropriation of the Company's property, willful violation of any
law applicable to the conduct of the Company's business and affairs, the
violation of which could have a material adverse effect upon the business or
financial condition of the Company, and conviction of or plea of no contest to
any crime involving moral turpitude.
(c) WITHOUT CAUSE. The Company shall have the right to terminate this
Agreement and Employee's employment hereunder without cause at any time by
giving Employee thirty (30) days' prior written notice of termination,
provided, that the Company shall be obligated to make severance payments to
Employee (provided that Employee has not violated the terms of his non-
competition agreement set forth in paragraph 9 hereof) in an amount equal to
$10,000 per month (exclusive of any benefits) for six (6) months.
(d) BY EMPLOYEE. This Agreement may be terminated at any time by
Employee upon thirty (30) days' prior written notice to the Company.
(e) RETURN OF PROPERTY. No later than the date of cessation of his
employment by the Company, Employee shall deliver to an executive officer of
the Company (or another Company employee designated by an executive officer)
all keys, credit cards, travel advances, business plans and records (including
all copies and extracts thereof) and other property of the Company in
Employee's possession, custody or control.
(f) RIGHT TO RECEIVE COMPENSATION AND BENEFITS. Employee's right to
receive compensation and benefits pursuant to paragraphs 4 and 5 of this
Agreement (except for disability or other benefits that, by their terms, arise
or are operative after termination) shall cease upon the effective date of
termination under this paragraph 3.
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4. COMPENSATION.
(a) BASE SALARY. Employee shall receive a base salary of $10,000 per
month ($120,000 annualized), payable semi-monthly, on the 15th and last day of
each calendar month commencing with the first day of employment, or such higher
compensation as the Company in its discretion may from time to time determine
to be appropriate.
(b) PERFORMANCE BONUS. Employee shall be eligible to receive annual
performance bonuses to be determined by the Board of Directors in amounts not
to exceed $25,000 per year based upon the achievement (as determined by the
Board of Directors) of mutually agreed performance objectives.
5. EMPLOYEE BENEFITS.
(a) BENEFIT PLANS AND PROGRAMS. During his term of employment Employee
shall be entitled to participate in such benefit plans and programs as the
Company may make available from time to time. The details of the availability
and operation of benefit plans and programs are governed by the plan or program
documents or by the Company's employee handbook, where applicable. The Company
reserves the right to change or discontinue any benefit plan or program at any
time upon reasonable notice to employees.
(b) OPTIONS. In addition to any benefits received under subparagraph
5(a) above and subject to the terms and conditions of a definitive stock
option agreement between Employee and the Company pursuant to the Company's
1988 Stock Option Plan, as Amended and Restated, Employee shall receive
options to purchase 25,000 shares of the Company's common stock, par value
$.01 per share, at a price as determined by the then current market price at
date of grant (hire). Vesting of these options will be subject to the
Employees performance as assessed by the CEO and approved by the Board of
Directors.
6. REIMBURSEMENT OF EXPENSES. The Company shall reimburse the
Employee for all reasonable and necessary business expenses incurred in the
performance of his duties hereunder.
7. TRADE SECRETS. Employee shall not, during the term of this
Agreement or at any time thereafter, divulge, furnish or make accessible to
anyone other than the directors, officers, employees and agents of the Company
any knowledge or information with respect to (a) processes, plans, software,
formulae, machinery, devices or material relating to the business, products, or
activities of the Company, its affiliates or subsidiaries which is maintained
by the Company as secret or confidential, or (b) any development or research
work of the Company, its affiliates or subsidiaries which is maintained by the
Company as secret or confidential, or (c) any other aspect of the business,
products, or activities of the Company, its
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affiliates or subsidiaries which is maintained by the Company as secret or
confidential, or (d) any customer or student lists of the Company, its
affiliates or subsidiaries which are maintained by the Company as secret or
confidential. This restriction shall not apply to any information (a) that
becomes generally available to the public other than as a result of
unauthorized disclosure by Employee, (b) that was available to Employee on a
nonconfidential basis prior to the date hereof or is received hereafter from
a third party without restriction, or (c) that is disclosed pursuant to a
requirement of a government agency.
8. INTELLECTUAL PROPERTY. As one of the conditions to Employee's
employment hereunder, Employee shall do all in his power to promote the
interests of the Company and shall exercise his inventive faculties for the
benefit of the Company. If Employee shall discover or invent anything related
to the business of the Company, or its affiliates or subsidiaries, at the
specific request or instruction of the Company, the same shall be the exclusive
property of the Company. Employee shall forthwith disclose in writing such
discoveries or inventions to the Company but to no other person and shall
forthwith assign to the Company full and exclusive rights to any such discovery
or invention and to any trademark, copyright or patent to the full end of the
term of such trademark, copyright or patent. Employee, upon request of the
Company, shall forthwith execute all documents necessary or advisable in the
opinion of the Company to direct the issuance of trademarks, copyrights or
patents to the Company or to vest title in the Company to such inventions or
discoveries. The expense of securing any trademark, copyright or patent shall
be borne by the Company. The continuance of Employee in the Company's employ
for a definite period is not made obligatory upon either party hereto as a
condition hereof. Employee shall hold any secret process, software, plans,
formula, methods or applications developed for the Company or its affiliates or
subsidiaries but for which no trademark, copyright or patent is issued, as
trustee for the benefit of the Company. This paragraph does not apply to an
invention which was developed entirely on Employee's own time and (a) which
does not relate (i) directly to the business of the Company or (ii) to the
Company's actual or demonstrably anticipated research or development, or (b)
which does not result from any work performed by the Employee for the Company.
9. NON-COMPETITION. Employee covenants and agrees that, commencing on
November 7, 1997, and thereafter during the term of this Agreement and without
the express consent of the Board of Directors of the Company, he will not give
advice or render services as an employee or consultant to, nor invest or
acquire any interest in, any corporation or any other business organization, a
substantial portion of the business of which is the same as, related to, or
complementary to the business of the Company or its affiliates or subsidiaries,
provided, however, that Employee may invest in securities of any company which
is listed on a national securities exchange. Employee also covenants and
agrees that for one (1) year(s) following termination of this Agreement (unless
such termination is involuntary and effected by the Company without cause), he
will not in any manner personally solicit or cause to be solicited in
competition with the Company or its affiliates or subsidiaries any persons or
companies who were or are employees, customers or reasonably firm prospective
customers of
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the Company or such affiliates or subsidiaries during the term of this
Agreement. Employee hereby agrees to these restrictions in recognition that
the imposition of such restrictions may be essential to the success of the
Company and the livelihood of the Employee's associates.
10. SPECIFIC ENFORCEMENT. Employee acknowledges and agrees that a
breach by him of the provisions of this Agreement, including without limitation
the provisions of paragraphs 8, 9, and 10 hereof, may cause the Company
irreparable injury and damage which cannot be reasonably or adequately
compensated by damages at law. Employee, therefore, expressly agrees that the
Company shall be entitled to injunctive relief or other equitable relief to
prevent a breach of this Agreement or any part thereof, in addition to any
other remedies legally available to it.
11. INVALIDITY. In case any one or more of the provisions of this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
12. NOTICES. Any notices required to be given to the Company hereunder
shall be deemed properly given if addressed to its registered office. Any
notices required to be given to Employee hereunder shall be deemed properly
given if addressed to:
0000 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, Xxxxxxxxx 00000
13. GOVERNING LAW. This Agreement shall be construed under and
governed by the laws of the State of Minnesota.
14. ASSIGNMENTS. This Agreement shall not be assignable, in whole or
in part, by either party.
15. AMENDMENTS. This Agreement may be amended, terminated or
superseded only by an agreement in writing between the Company and the
Employee.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
EDUCATION ALTERNATIVES, INC. EMPLOYEE
By /s/ Xxxx X. Xxxxx /s/ Xxxx X. Xxxxxxxx
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11/5/97
Its Chairman and CEO
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11/3/97
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