EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between Hospitality
Design & Supply, Inc., a Delaware corporation (the "Company"), and Xxxxxxx
Xxxxxx ("Founder"), is hereby entered into and effective as of the date of the
consummation of the initial public offering of the common stock of the Company.
This Agreement hereby supersedes any other employment agreements or
understandings, written or oral, between the Company and Founder.
R E C I T A L S
A. As of the date of this Agreement, the Company is engaged primarily
in the commercial kitchen design and/or supply industry.
B. Founder is employed hereunder by the Company in a confidential
relationship wherein Founder, in the course of his employment with the Company,
has and will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company, and future plans with
respect thereto, all of which has been and will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable goodwill of the Company.
Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
A G R E E M E N T S
1. Employment and Duties. The Company hereby employs Founder as the
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President of the Xxxxxx division of the Company. As such, Founder shall have
responsibilities, duties and authority reasonably accorded to and expected of a
president of a division and will report directly to the Chief Executive Officer
of the Company or such other officer as shall be determined by the Chief
Executive Officer of the Company. Founder hereby accepts this employment upon
the terms and conditions herein contained and agrees to devote his working time,
attention and efforts to promote and further the business of the Company.
2. Compensation. For all services rendered by Founder, the Company
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shall Compensate Founder as follows:
(a) Base Salary. The base salary payable to Founder shall be
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$100,000 per year, payable on a regular basis in accordance with the Company's
standard payroll procedures, but not less often than monthly. On at least an
annual basis, the board of directors of the Company (the "Board") will review
Founder's performance and may make increases to such base salary if, in the
Board's discretion, any such increase is warranted. Founder shall be eligible
for such bonuses, if any, as may be granted to him from time to time by the
Board.
(b) Founder Benefits and Other Compensation. In addition to the
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compensation provided for under subparagraph (a) above, Founder will, during the
Employment Term, have the right to receive such benefits as are generally made
available to full-time officers of the Company, including the right to
participate in any retirement plan or bonus plan that the Company may create. In
addition to, or inclusive of, such benefits, the Company will provide Founder
with the following:
(i) the opportunity to apply for coverage under the Company's
medical, life and disability plans, if any. If Founder is accepted for coverage
under such plans, the Company will provide to Founder and his immediate family
such coverage on the same terms as are customarily provided by the Company to
the plan participants as modified from time to time; and
(ii) in addition to normal holidays recognized by the Company,
three weeks paid vacation annually or such other amount as may be afforded
officers and key employees generally under the Company's policies in effect from
time to time (pro rated for any year in which Founder is employed for less than
the full year).
3. Term; Termination; Rights on Termination. The term of this Agreement
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shall begin on the date hereof and continue for three (3) years (the "Initial
Term"), and, unless terminated sooner as herein provided, shall continue
thereafter on a year-to-year basis on the same terms and conditions contained
herein unless either party gives to the other party written notice of nonrenewal
of the Agreement at least ninety (90) days prior to the end of the then-current
term. This Agreement and Founder's employment may be terminated in any one of
the following ways:
(a) Death. The death of Founder shall immediately terminate the
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Agreement with no severance compensation due to Founder's estate.
(b) Disability. This Agreement will terminate upon the permanent
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disability of Founder. Founder will be deemed permanently disabled for the
purpose of this Agreement if, in the good faith determination of the Board,
based on sound medical advice, Founder has become physically or mentally
incapable of performing his duties hereunder for a continuous period of one
hundred eighty (180) days, in which event Founder will be deemed permanently
disabled upon the expiration of such one hundred eighty (180) day period. Also,
Founder may terminate his employment hereunder if his health should become
impaired to an extent that makes the continued performance of his duties
hereunder hazardous to his physical or mental health provided that Founder shall
have furnished the Company with a written statement from a qualified doctor to
such effect; and provided further that, at the Company's request made within
thirty (30) days of the date of such written statement, Founder shall submit to
an examination by a doctor selected by the Company who is reasonably acceptable
to Founder or Founder's doctor and such doctor shall have concurred in the
conclusion of Founder's doctor. In the event this Agreement is terminated as a
result of Founder's permanent disability, Founder shall receive from the
Company, in a lump-sum payment due within thirty (30) days of the effective date
of termination, an amount equal to the difference between (a) the base salary at
the rate then in effect for the lesser of (i) whatever time period is remaining
under the Initial Term of this
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Agreement and (ii) one (1) year, minus (b) all payments in respect of Founder's
salary payable to Founder under the Company's disability insurance, if any, for
the same period.
(c) Good Cause. The Company may terminate this Agreement ten (10)
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days after written notice to Founder, for good cause, which shall be: (1)
Founder's material and irreparable breach of this Agreement; (2) Founder's gross
negligence in the performance or intentional nonperformance (continuing for ten
(10) days after receipt of the written notice) of any of Founder's material
duties and responsibilities hereunder; (3) Founder's dishonesty, fraud or
misconduct with respect to the business or affairs of the Company which
materially and adversely affects the operations or reputation of the Company;
(4) Founder's conviction of a felony crime; (5) chronic alcohol abuse or illegal
drug abuse by Founder; or (6) any other good faith determination of the Board
that Founder has engaged in any act that has a material adverse effect on the
business, affairs or reputation of the Company. In the event of a termination
for good cause, as enumerated above, Founder shall have no right to any
severance compensation.
(d) Without Cause. At any time after the commencement of employment,
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the Company may, without cause, terminate this Agreement and Founder's
employment effective sixty (60) days after written notice is provided to
Founder, or if the effective date of termination, as determined in the sole
discretion of the Company, is less than sixty (60) days after written notice is
provided to Founder, then Founder shall receive from the Company compensation
for sixty (60) days from the date of written notice at the rate then in effect,
in a lump sum payment due on the effective date of termination.
(e) Termination by Founder Without Cause. If Founder resigns or
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otherwise terminates his employment Founder shall receive no severance
compensation.
Upon termination of this Agreement for any reason provided in this
Section 3, Founder shall be entitled to receive all compensation earned and all
benefits and reimbursements vested or due through the effective date of
termination. Additional compensation subsequent to termination, if any, will be
due and payable to Founder only to the extent and in the manner expressly
provided above. All other rights and obligations of the Company and Founder
under this Agreement shall cease as of the effective date of termination, except
that the Company's obligations under paragraph 8 herein and Founder's
obligations under paragraphs 4, 5, 6, 7, 8 and 9 herein shall survive such
termination.
4. Return of Company Property. All records, designs, patents, business
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plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Founder by or on behalf of the Company or its
representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company, and be subject at all
times to its discretion and control. All correspondence, reports, records,
charts, advertising materials and other similar data pertaining to the business,
activities or future plans of the Company in the possession of Founder shall be
delivered promptly to the Company without request by it upon termination of
Founder's employment.
5. Noncompetition. During the term of his employment with the Company
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(including the subsidiaries thereof) (the "Noncompetition Period"), Founder
agrees to be bound by each of the provisions set forth in Section 13 of that
certain Agreement and Plan of
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Reorganization dated of even date herewith by and among the Company and the
"Stockholders" named therein (the "Reorganization Agreement"), to the extent
that such Noncompetition Period extends beyond the four (4) year time period
provided for in the Reorganization Agreement.
6. Inventions. Founder shall disclose promptly to the Company any and all
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significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Founder,
solely or jointly with another, during the period of employment or within one
(1) year thereafter, and which are either directly related to the business or
activities of the Company or conceived by founder as a result of his work for
the Company. Founder hereby assigns and agrees to assign all his interests
therein to the Company or its nominee. Whenever requested to do so by the
Company, Founder shall execute any and all applications, assignments or other
instruments that the Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.
7. Trade Secrets. Founder agrees that he will not, during or after the
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term of this Agreement, disclose the specific terms of the Company's
relationships or agreements with its respective significant vendors or customers
or any other significant and material trade secret of the Company, whether in
existence or proposed, to any person, firm, partnership, corporation or business
for any reason or purpose whatsoever.
8. Indemnification. In the event Founder is made a party to any threatened,
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pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by the Company against
Founder), by reason of the fact that he is or was performing services within the
course and scope of his employment with the Company under this Agreement, then
the Company shall indemnify Founder against all expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement, as actually and
reasonably incurred by Founder in connection therewith. without limiting the
requirement above that Founder be performing services within the course and
scope of his employment, activities constituting violations of law or Company
policy shall not constitute services within the course and scope of Founder's
employment. In the event that both Founder and the Company are made a party to
the same third-party action, complaint, suit or proceeding, the Company agrees
to engage competent legal representation, and Founder agrees to use the same
representation, provided that if counsel selected by the Company shall have a
conflict of interest that prevents such counsel from representing Founder,
Founder may engage separate counsel and the Company shall pay all attorneys'
fees of such separate counsel.
9. No Prior Agreements. Founder hereby represents and warrants to the
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Company that the execution of this Agreement by Founder and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Founder agrees to indemnify the Company for any claim,
including, but not limited to, Company's attorneys' fees and expenses of
investigation, by any third party that such third party may now have or may
hereafter have against the Company based upon or arising out of any non-
competition agreement, invention agreement or secrecy agreement between Founder
and such third party which was in existence as of the date of this Agreement.
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10. Assignment; Binding Effect. Founder understands that he has been
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selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Founder agrees, therefore, that he cannot
assign all or any portion of his performance under this Agreement. This
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective heirs, legal representatives, successors
and assigns.
11. Complete Agreement. This Agreement is not a promise of future
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employment. Founder has no oral understandings or agreements with the Company or
any of its officers, directors or representatives covering the same subject
matter as this Agreement. This written Agreement is the final, complete and
exclusive statement and expression of the Agreement between the Company and
Founder and of all the terms of this Agreement, and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written representations or agreements. This written Agreement may not be later
modified except by a further writing signed by a duly authorized officer of the
Company and Founder, and no term of this Agreement may be waived except by
writing signed by the party waiving the benefit of such term.
12. Notice. Whenever any notice is required hereunder, it shall be given in
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writing addressed as follows:
To the Company: Hospitality Design & Supply, Inc.
X.X. Xxx 0000
Xxxxxx Xxxx, XX 00000
with a copy to: Xxxxxx X. Xxxxxxx, Esq.
Howard, Rice, Nemerovski, Canady,
Xxxx & Rabkin
A Professional Corporation
0 Xxxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
To Founder: Xxxxxxx Xxxxxx
0000 Xxxx Xxxx Xxxxx
Xxxxxx, XX 00000
with a copy to: Xxx Xxxxxxxxx
Xxxxxx, Churnside & Xxxxx
000 Xxxx Xxxxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Notice shall be deemed given and effective three (3) days after the
deposit in the U.S. mail of a writing addressed as above and sent first class
mail, certified, return receipt requested, or when actually received. Either
party may change the address for notice by notifying the other party of such
change in accordance with this Section 12.
13. Severability; Headings. In the event any court of competent jurisdiction
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shall determine that the scope, time or territorial restrictions set forth
herein are unreasonable, then it
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is the intention of the parties that such restrictions be enforced to the
fullest extent which the court deems reasonable, and the Agreement shall thereby
be reformed. The paragraph headings herein are for reference purposes only and
are not intended in any way to describe, interpret, define or limit the extent
or intent of the Agreement or of any part hereof.
14. Governing Law. This Agreement shall in all respects be construed
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according to the laws of the State of California, as applied to agreements
entered into and performed wholly in California.
15. Counterparts. This agreement may be executed simultaneously in two (2)
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or more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
THE COMPANY:
HOSPITALITY DESIGN & SUPPLY, INC.
By: ____________________________
Title: __________________________
FOUNDER:
_________________________________
Xxxxxxx Xxxxxx
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