Exhibit (c)(ii)
EMPLOYMENT AGREEMENT, dated as of
July 7, 1997, by and between THE MNI
GROUP INC., a New Jersey corporation
("MNI"), and XXXXXX XXXXX (the
"Employee").
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MNI desires to engage Employee to perform services for MNI, and any present
or future subsidiary or affiliate of MNI (collectively, with MNI, the "MNI
Companies"), and Employee desires to perform such services, on the terms and
conditions set forth below:
NOW, THEREFORE, the parties agree as follows:
1. Employment, Term.
MNI will employ Employee in its business, and Employee will work for
MNI, for a term of three (3) years, commencing as of July 7, 1997 and ending on
July 7, 2000, unless sooner terminated in accordance with Section 9 hereof.
Such period, including any extensions or renewals thereof, is referred to herein
as the "Employment Period".
2. Duties.
2.1 During the Employment Period, Employee shall serve as the
President and Chief Executive Officer of K.O.S. Labs, Inc. and NutraPet Labs,
Inc., each a subsidiary of MNI, and shall perform such other duties on behalf of
MNI and exercise such authority as may from time to time reasonably be delegated
to Employee by the Chairman of MNI and, if so requested by MNI's Chairman, on
behalf of any one or more of the MNI Companies.
2.2 Employee shall discharge his duties primarily from MNI's facility
in Scottsdale, Arizona. Employee shall also engage in such travel in
furtherance of his duties set forth in Section 2.1, as shall be reasonably
requested by MNI.
3. Devotion of Time.
3.1 During the Employment Period, Employee shall: (a) expend all of
his working time for MNI; (b) devote his best efforts, energy and skill to the
services of MNI and the promotion of its interests; and (c) not take part in
activities known by
Employee to be detrimental to the best interests of MNI or any of the
MNI Companies.
4. Compensation.
4.1 In consideration for the services to be performed by Employee
during the Employment Period hereunder, MNI shall compensate Employee at a base
salary of $125,000 per annum. Such salary shall be subject to annual review,
and possible increases (but not decreases), based on MNI's and the Employee's
performance.
4.2 Employee shall receive such additional bonuses, if any, during
the Employment Period as shall be determined from time to time by MNI's Board of
Directors (the "MNI Board") in its sole discretion.
4.3 Employee shall also receive, contemporaneously with his execution
hereof, an option to acquire up to an aggregate of 750,000 Common Shares of MNI,
exercisable at a per share exercise price equal to the closing price of MNI's
common shares on the first day of the Employment Period, as reported by NASDAQ,
which option shall be in substantially the form attached hereto as Exhibit 4.3.
5. Reimbursement of Expenses; Additional Benefits.
5.1 MNI shall pay directly, or reimburse Employee for, all reasonable
and necessary expenses and disbursements incurred by him for and on behalf of
MNI and/or the MNI Companies in the performance of his duties under this
Agreement. For such purposes, Employee shall submit to MNI itemized written
reports of such expenses (including bills and receipts) in accordance with MNI's
policies, and shall obtain prior approval of an executive officer of MNI for
each expense in excess of $500.
5.2 Employee shall be entitled to paid vacations during the
Employment Period in accordance with the then prevalent practices of MNI for its
senior executives.
5.3 During the Employment Period, Employee shall be entitled to
participate in, and to receive benefits under, such employee benefit plans of
MNI (including, without limitation, group life insurance and group medical
insurance plans) as may exist from time to time for MNI's senior executives,
generally, provided he meets the eligibility requirements thereof.
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6. Representations and Warranties of Employee.
Employee represents and warrants to MNI that (a) 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 MNI hereunder and (b) Employee is under no known mental or
physical disability that would hinder his performance of duties under this
Agreement.
7. Non-Competition and Secrecy.
7.1 No Competing Employment. For so long as Employee is employed by
MNI and continuing for one (1) year after (i) the termination of such employment
by MNI (except if such termination shall be effectuated by MNI (or any
successor) prior to the expiration of the Employment Period for reasons other
than "cause" (as hereinafter defined)), or (ii) Employee's resignation therefrom
(such period being referred to hereinafter as the "Restricted Period"), Employee
shall not, directly or indirectly, own an interest in manage, operate, join,
control, lend money, or render financial or other assistance to or participate
in or be connected with, as an officer, employee, partner, stockholder,
consultant or otherwise, any individual, partnership, firm, corporation or other
business organization or entity that competes within the United States with MNI
and/or any of the MNI Companies; provided, however, that nothing in this Section
7.1 shall prohibit Employee from making a non-controlling and passive investment
in a corporation whose shares are publicly traded.
7.2 No Interference. During the Restricted Period, Employee shall
not, whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization (other than MNI),
intentionally solicit, endeavor to entice away from MNI and/or any of the MNI
Companies, or otherwise interfere with the relationship of MNI and/or any of the
MNI Companies with, any person who is employed by or otherwise engaged to
perform services for MNI and/or any of the MNI Companies or any person or entity
who is, or was within the then most recent 12 month period, a customer or client
of MNI and/or any of the MNI Companies.
7.3 Secrecy. Employee recognizes that the services to be performed
by him hereunder are special, unique and extraordinary in that, by reason of his
employment hereunder, he may acquire confidential information and trade secrets
concerning the operation of MNI and/or any of the MNI Companies, the use or
disclosure of which could cause MNI and/or any of the MNI Companies substantial
loss and damages which could not be readily calculated and for which no remedy
at law would be adequate. Accordingly, Employee covenants and agrees with MNI
that he will not at any time, except in performance of Employee' s obligations
to MNI and/or any of the
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MNI Companies hereunder or with the prior written consent of MNI pursuant to
authority granted by a resolution of the MNI Board, directly or indirectly,
disclose any secret or confidential information that he may learn or has
learned by reason of his association with MNI and/or any of the MNI
Companies. The term "confidential information" includes, without limitation,
information not previously disclosed to the public or to the trade by
management of MNI and/or any of the MNI Companies, as applicable, with
respect to the products, facilities, applications and methods, trade secrets
and other intellectual property, systems, procedures, manuals, confidential
reports, product price lists, customer lists, technical information,
financial information (including the revenues, costs or profits associated
with any of its or their products), business plans, prospects or
opportunities but shall exclude any information already in the public domain.
Notwithstanding anything to the contrary herein contained, Employee's
obligation to maintain the secrecy and confidentiality of the confidential
information under this Section 7 shall not apply to any such confidential
information which is disclosed through any means other than as a result of
any act by Employee constituting a breach of this Agreement or which is
required to be disclosed under applicable law.
7.4 Exclusive Property. Employee confirms that all confidential
information is and shall remain the exclusive property of MNI. All business
records, papers and documents kept or made by Employee relating to the business
of MNI shall be and remain the property of MNI.
7.5 Injunctive Relief. Without intending to limit the remedies
available to MNI, Employee acknowledges that a breach of any of the covenants
contained in this Section 7 may result in material irreparable injury to MNI
and/or any of the MNI Companies for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely and
that, in the event of such a breach or threat thereof, MNI shall be entitled to
seek to obtain a temporary restraining order and/or a preliminary injunction
restraining Employee from engaging in activities prohibited by this Section 7 or
such other relief as may be requires to specifically enforce any of the
covenants in this Section 7.
7.6 Extension of Restricted Period. In addition to the remedies MNI
may seek and obtain pursuant to Section 7.5, the Restricted Period shall be
extended by any and all periods during which Employee shall be found by a court
possessing personal jurisdiction over him to have been in violation of the
covenants contained in this Section 7.
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8. Patents.
8.1 Employee agrees that any interest in patents, patent
applications, inventions, copyrights, developments and processes (collectively,
"Inventions") during the period he is employed by MNI, which Employee hereafter
may develop or own relating to the fields in which MNI or any of the MNI
Companies may then be engaged shall belong to MNI. Employee shall execute all
such assignments and other documents and take all such other action as MNI may
reasonably request in order to vest in MNI all his right, title and interest in
and to each such Invention, free and clear of all liens, charges and
encumbrances.
9. Early Termination.
9.1 Employee's employment hereunder shall automatically be terminated
upon the death of Employee or Employee's leaving the employ of MNI and, in
addition, may be terminated, at the sole discretion of MNI, as follows:
(a) upon five (5) days prior written notice by MNI to
Employee, in the event of Employee's disability as set forth in
Section 9.2 below; or
(b) upon five (5) days prior written notice by MNI to
Employee, in the event that MNI terminates Employee's employment
hereunder for cause as set forth in Section 9.3 below.
9.2 Employee shall be deemed disabled hereunder if, in the opinion of
both a physician selected by MNI and a physician selected by Employee, he shall
become physically or mentally unable or otherwise unable to perform his duties
for MNI hereunder and such incapacity shall have continued for any period of six
(6) months within any twelve (12) month period.
9.3 For purposes hereof, "cause" shall mean termination of Employee's
employment with MNI by the MNI Board in its sole discretion because of: (a) any
act or omission which constitutes a material breach by Employee of his
obligations or agreements under this Agreement, or the failure or refusal of
Employee to satisfactorily perform in any material respect any duties reasonably
required by MNI hereunder, or refusal to follow lawful instructions of the MNI
Board consistent with Section 2.1, (b) Employee being convicted of the
commission of a felony or a misdemeanor involving fraud, dishonesty or deceit,
or the perpetration by Employee of a serious dishonest or fraudulent act, which
act would have a material adverse effect on MNI or any of the MNI Companies or
(c) any other act or omission by Employee which, in the good faith opinion of
the MNI Board, is injurious in any significant respect to the financial
condition or business
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reputation of MNI or any of the MNI Companies which resulted from Employee's
willful misconduct or gross negligence. The MNI Board shall give Employee
advance notice of its intention to terminate Employee's employment pursuant
to this Section and, when an act is capable of being cured or its occurrence
subject to question, afford Employee a period of thirty days in which to cure
such act or persuade the MNI Board that such act did not occur.
9.4 (a) In the event that Employee's employment under this Agreement
shall be terminated due to Employee's disability, then MNI shall pay to Employee
or his designees, as the case may be, continuing base salary for a period of
twelve (12) months at the rate set forth in Section 4.1 hereof.
(b) In the event that Employee's employment under this Agreement
shall be terminated by Employee, or by MNI for cause, then MNI shall not be
obligated to make any severance payments whatsoever to Employee hereunder.
9.5 In the event that either (a) both Xxxxxx Xxxx and Xxxx Xxxx are
no longer employed by and are no longer serving as directors of the Company or
(b) all or substantially all of the assets of MNI or both K.O.S. Labs,Inc. and
NutraPet Labs, Inc. are sold or MNI merges or consolidates with another entity
and does not retain control over the merged or consolidated entity, upon five
(5) days prior written notice to the Company, Employee may elect to terminate
his employment under this Agreement.
9.6 Regardless of the reason for termination of Employee's employment
under this Agreement, Employee shall be entitled to the compensation set forth
in Section 4.1 hereof which shall have accrued but be unpaid at the effective
time of termination.
9.7 The covenants, agreements, representations, and warranties
contained in or made pursuant to this Agreement (including, specifically, the
covenants set forth in Sections 7 and 8) shall survive Employee's termination of
employment, irrespective of any investigation made by or on behalf of any party,
for a period of one (1) year measured from the date of such termination.
10. Assignment.
This Agreement, as it relates to the employment of the Employee, is a
personal contract and the rights, interests and obligations of the Employee
hereunder may not be sold, transferred, assigned, pledged or hypothecated.
Except as otherwise herein expressly provided, this Agreement shall be binding
upon and inure to the benefit of Employee and his personal representatives and
shall inure to the benefit of and be binding upon MNI and its successors and
assigns, including without limitation, any
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corporation or other entity into which MNI is merged or which acquires all of
the outstanding shares of MNI's capital stock, or all or substantially all of
the assets of MNI.
11. Notices.
Any notice required or permitted to be given pursuant to this
Agreement shall be deemed given three (3) business days after such notice is
mailed by certified mail, return receipt requested, or delivered against receipt
to the party to whom it is to be given, addressed as follows:
(a) if to Employee:
Xxxxxx Xxxxx
0000 X. Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
With a copy to:
Xxxxx & Xxxxxx
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx, Esq.
(b) if to MNI:
The MNI Group Inc.
00 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attn: Chairman
With a copy to:
Xxxxxxxxx Xxxxxx Xxxxxxxx
Xxxxxx & Xxxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxxx, Esq.
or to such other address as any such party shall designate by written notice to
the other party.
12. Governing Law.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York, without giving effect to
conflict of laws.
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13. Waiver.
The waiver by either party of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach. The failure of a party to insist upon strict adherence to any provision
of this Agreement on one or more occasions shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that provision or any other provision of this Agreement. Any waiver must be in
writing.
14. Severability.
If any provision of this Agreement, or the application of such
provision to any person or circumstance, is declared by any arbitration panel or
court of competent jurisdiction to be invalid or unenforceable:
14.1 Such invalidity or unenforceability shall not affect the
remaining provisions of this Agreement or the application of such provisions to
persons or circumstances other than those to which it is held invalid or
unenforceable;
14.2 If such invalidity or unenforceability is due to the court's
determination that the provision's scope is excessively broad or restrictive
under applicable law then in effect, the parties hereby jointly request that
such provision be construed by modifying its scope so as to be enforceable to
the fullest extent compatible with applicable law then in effect; and
14.3 If any provision is held to be invalid or unenforceable with
respect to a particular circumstance, such provision shall nevertheless remain
in full force and effect in all other circumstances, subject to the other
provisions of this Section 14.
15. Entire Agreement.
15.1 This Agreement constitutes the entire agreement and understanding
between the parties with respect to the employment of the Employee and there are
no representations, warranties or commitments except as set forth herein. This
Agreement supersedes all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether written or oral, of the parties hereto
relating to the transactions contemplated by this Agreement.
15.2 This Agreement does not create, and shall not be construed as
creating, any rights enforceable by any person not a party to this Agreement,
except as provided in Section 10 hereof.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as of
the day and year first above written.
THE MNI GROUP INC.
By:/s/Xxxxxx Xxxx
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Name: Xxxxxx Xxxx
Title: President
/s/Xxxxxx Xxxxx
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Xxxxxx Xxxxx
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