EXHIBIT 10.8
AGREEMENT
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THIS AGREEMENT (the "Agreement") is made and entered into by and
between Premium Cigars International, Ltd., an Arizona corporation ("PCI") and
Xxxxx X. Xxxxx ("Xxxxx"). PCI and Xxxxx are collectively referred to herein as
the "Parties."
R E C I T A L S:
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X. Xxxxx entered an Employment Agreement with PCI dated June 13, 1997
(the "Employment Agreement").
B. PCI terminated Xxxxx' employment on January 16, 1998.
X. Xxxxx is the maker under a Promissory Note dated December 31, 1996
in favor of PCI (the "Note").
D. PCI and Xxxxx have certain disputes regarding Xxxxx' xxxxxxxxx
compensation and other sums payable to Xxxxx after his termination.
E. Without any admission of liability by either Party, the Parties
desire to avoid and resolve any further dispute or litigation regarding any
compensation or payments to Xxxxx from the Company.
F. It is of utmost importance to PCI that Xxxxx not compete with PCI
after his termination and PCI wishes to extend the current covenant
not-to-compete in Xxxxx' Employment Agreement.
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:
1. Settlement Contingent Upon PCI's Simultaneous Settlement with Xxxxx
and Xxxx Xxxxxxxxx. This settlement is contingent upon PCI's entering into
separate settlement agreements with both Xxxxxx X. Xxxxxxxxx and Xxxx X.
Xxxxxxxxx regarding certain compensation and other payments that they are
claiming. If PCI has not entered into such settlement agreements with Xxxxxx X.
Xxxxxxxxx and Xxxx X. Xxxxxxxxx on or before 5:00 p.m. on March 3, 1998, then
this Agreement shall be null and void and of no force and effect whatsoever
against PCI or Xxxxx.
2. Payment. Provided that the contingency in Paragraph 1 is met, PCI
shall pay Xxxxx, within ten (10) business days after the execution of this
Agreement, the sum of Forty Thousand Dollars ($40,000.00) (the "Payment"). The
Payment is an amount which was
negotiated by the Parties in exchange for the release of claims set forth in
paragraph 8 herein and in exchange for the extension of the covenant
not-to-compete in the Employment Agreement.
3. Severance Compensation. Xxxxx acknowledges that he has already been
paid for all amounts owing at his termination, including payment for all
vacation and other benefits. He further acknowledges that he has been paid
$6,461.54 in severance compensation since his termination and that the sole
remaining amount of severance compensation to be paid is $56,538.46, which PCI
shall pay bi-weekly over a period of 35 weeks. PCI shall also pay Xxxxx $73.85
per bi-weekly period until the nine (9) months following his termination is
completed, as a cash payment in lieu of the health insurance premium PCI was
paying for Xxxxx at the time of his termination. Xxxxx will be responsible to
obtain his own health insurance. Xxxxx acknowledges that, except for the
severance compensation described in this Paragraph and the Payment and any
applicable ongoing compensation as a director, he has been paid for all services
rendered to PCI as an employee and has no right to any additional employment
compensation or employment benefits of any kind from PCI. Xxxxx acknowledges
that the payment of severance compensation remains subject to the conditions of
the Employment Agreement, including, without limitation, the conditions of
Paragraph 7 of the Employment Agreement as that Section relates to paragraphs 8,
9 & 10 of the Employment Agreement.
4. Withholding. PCI shall make no deduction or withholding from the
Payment in Paragraph 2 in reliance upon Xxxxx affirmative representation that he
will be solely responsible for any and all taxes and other amounts owed on such
payments. PCI will be required to withhold all taxes and other normal
withholdings from the severance compensation amounts described in Paragraph 3.
5. Employment Agreement.
a. Compensation. Except for the Payment and severance
compensation as described in paragraphs 2 and 3 herein, Xxxxx hereby
waives any and all rights to any monetary or other compensation under
the Employment Agreement, including without limitation, any
compensation pursuant to paragraph 3 of the Employment Agreement or any
severance compensation pursuant to paragraph 7 of the Employment
Agreement. Xxxxx expressly acknowledges that he has been paid in full
for all services rendered to PCI prior to the date of this Agreement
including without limitation wages and vacation pay through the date of
termination.
b. No Options or Bonus. Xxxxx expressly waives any right to
any options or bonuses which have been or may in the future be offered
to any employee of PCI.
c. Continuing Obligations; Extension of Covenant Not To
Compete. Notwithstanding anything contained within this Agreement to
the contrary, Xxxxx expressly acknowledges that his obligations
pursuant to Paragraphs 8, 9, 10 and 13 of the Employment Agreement
relating to Customer Records, Confidential Information and the Covenant
Not To Compete and PCI's remedies under the Employment Agreement for
Xxxxx' violations of said provisions and Miscellaneous Provisions
provided therein
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shall continue and remain in full force and effect for the term set
forth in the Employment Agreement. However, in exchange for the
Payment, the term of the Covenant Not To Compete as set forth in
paragraph 10(b) of the Employment Agreement shall be extended for an
additional six (6) months for a total of 18 months from the date of
Xxxxx' termination from PCI.
6. Status as a Director. This Agreement shall not affect Xxxxx' status
as a director of PCI, and Xxxxx shall be entitled to the compensation paid to,
or options granted to, outside directors and Xxxxx shall be treated as an
outside director effective upon the date of termination of his employment with
PCI.
7. Note; No Defense Related to This Settlement. The Parties agree that
this Agreement shall have no effect upon the principal amount or interest due
under, or due date of, the Note and Xxxxx expressly acknowledges that the Note,
and his obligations thereunder, remain in full force and effect. Xxxxx agrees
that he shall not, directly or indirectly, raise this Agreement, or any of the
terms of this Agreement, or the claims settled hereby, as a defense or offset to
his obligations and liability under the Note.
8. Release of Claims. Except for the obligations created by and the
rights expressly reserved within this Agreement, Xxxxx does hereby and forever
discharge PCI and each of its stockholders, predecessors, successors, assigns,
agents, directors, officers, employees, representatives, consultants,
affiliates, lawyers, and all persons acting by, through, under, or in concert
with them, or any of them, of and from any and all manners of action or actions,
cause or causes of action, in law or in equity, suits, liabilities, claims,
demands, damages, losses, costs or expenses, of any nature whatsoever,
(hereinafter collectively "claims") arising out of or relating to the Employment
Agreement or Xxxxx' employment with PCI. As stated more particularly in
Paragraph 9 herein, both Parties expressly reserve the right to bring an action
to enforce this Agreement and the obligations and rights expressly reserved
herein. It is the Parties intention that the foregoing release shall be
effective as a full and final accord and satisfaction, and as a bar to all
claims against PCI as set forth above, except for an action to enforce this
Agreement or any rights expressly reserved within this Agreement.
9. Further Actions. The Parties may plead this Agreement as a full and
complete defense to, and as the basis for an injunction against, any action,
suit or other proceeding which either Party hereto may institute, prosecute or
attempt in breach of this Agreement.
10. Costs. The Parties will bear their own costs, expenses and
attorneys' fees, whether taxable or otherwise, incurred in or arising out of or
connected with the negotiation of this Agreement and the disputes settled
herein.
11. Construction of this Agreement. This Agreement has been freely
entered into by the Parties, each of whom has been represented by separate
counsel. The validity, effect and performance of this Agreement shall be
governed and construed by the laws of the State of Arizona. This Agreement shall
be construed liberally to effect its purpose, and the Parties waive
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any rule requiring strict construction against or in favor of either Party. The
Agreement shall be construed as if drafted by the Parties jointly.
12. Integration Clause. This Agreement embodies the full and complete
understanding and agreement between the Parties with respect to the matters
addressed herein. This paragraph may be waived or modified only in a writing
signed by the party to be charged.
13. Severability. If any term of this Agreement shall be found invalid,
void or unenforceable, that term shall be severed from this Agreement and the
remaining terms enforced as specified herein.
14. Prevailing Party. In any action arising out of this Agreement, the
prevailing party or parties shall be entitled to an award of reasonable
attorneys' fees and costs incurred in such action, which award shall be made by
the Court, and shall be in addition to any other relief to which such party or
parties are entitled. The Parties expressly consent to the jurisdiction and
venue of Maricopa County, Arizona Superior Court for the resolution of any
future disputes.
15. Binding Effect. This Agreement shall be binding upon, and shall
inure to the benefit of, the Parties, their officers, directors,
representatives, agents, employees, attorneys, heirs, personal representatives,
successors and assigns.
16. No Admission of Liability. The Parties agree that this final
compromise and settlement is not and shall not be used as an admission of
liability or responsibility.
17. Counterparts. This Agreement may be executed in counterparts which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of this ____ day of March, 1998.
PREMIUM CIGARS INTERNATIONAL, LTD.
By /s/ Xxxx X. Xxxxxxxxx /s/ Xxxxx X. Xxxxx
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Xxxx X. Xxxxxxxxx, President Xxxxx X. Xxxxx
and Chief Executive Officer
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