EMPLOYMENT AGREEMENT
THIS
AGREEMENT is made as of this 9th day of October, 2006, by and
between The
Banker’s Store, Inc.,
a New
York corporation (the "Company"), and Xxxxxx
X. Xxxxx, a
Kentucky resident ("Executive Officer").
RECITALS
WHEREAS,
the Company desires to employ Executive Officer as its Chief Financial Officer
and Executive Officer desires to be employed by the Company as Chief Financial
Officer; and
WHEREAS,
Executive Officer and the Company have reached an agreement with respect to
the
terms and conditions of said employment, including compensation, which are
hereinafter set forth.
NOW,
THEREFORE, the Company and Executive Officer, in consideration of the mutual
promises hereinafter set forth, agree as follows:
ARTICLE
I
Employment
The
Company shall employ Executive Officer and Executive Officer shall serve the
Company as its Chief Financial Officer. Executive Officer shall devote his
full
business time and attention to the Company and have such authority, powers,
functions, duties and responsibilities as are customarily possessed by persons
serving in similar corporate positions, subject to the provisions of applicable
law and the Company’s Certificate of Incorporation and Bylaws. Company shall
elect Executive Officer to the Board of Directors of Company.
ARTICLE
II
Term
The
term
of employment of Executive Officer by the Company under this Agreement shall
commence as of the date hereof and shall continue until the second anniversary
of the date hereof unless terminated prior thereto in accordance with the
provisions of Paragraphs 4.1and
4.2,
below
(“Initial Term”). The term hereof shall be automatically extended for one (1)
additional year at the end of the Initial Term (“Extension Period”) and for an
additional one(1) year period at the end of each Extension Period, unless either
party shall have given notice to the other party at least sixty (60) days prior
to the end of the Initial Term (or the end of the applicable Extension Period)
that the Agreement shall not be so extended.
ARTICLE
III
Compensation
In
consideration of his services to the Company hereunder, Executive Officer shall
be compensated as follows:
3.1 Base
Salary.
The
Company shall pay to Executive Officer during the term hereof an annual base
salary of One Hundred Two Thousand Dollars ($102,000) payable in accordance
with
its regular payroll practices.
3.2 Stock
Option.
The
Company shall grant Executive Officer the following options (“Options”) to
purchase an aggregate of Four Hundred Fifty Four Thousand, Five Hundred
Forty-Five (454,545) shares of the Company’s common stock: (a) an Option to
purchase Two Hundred Fifty Thousand (250,000) shares of the Company’s common
stock to be granted within 30 days of the date on which Executive Officer’s
employment commences with the Company; (b) an Option to purchase One Hundred
Two
Thousand Two Hundred Seventy Three (102,273) shares of the Company’s common
stock to be granted on the first anniversary of the date of this Agreement;
and
(c) an Option to purchase One Hundred Two Thousand, Two Hundred Seventy Two
(102,272) shares of the Company’s common stock to be granted on the second
anniversary of the date of this Agreement. Each of the Options shall have a
term
of five (5) years, shall vest in three equal annual installments commencing
on
the first anniversary of the date of grant and have an exercise price equal
to
the fair market value of a share of the Company’s common stock on the date of
grant (as determined in good faith by the Company’s Board of Directors). Each
Option shall be evidenced by an option agreement, the terms of which shall
be
consistent with the terms and conditions set forth in this Agreement, terms
and
conditions deemed advisable by the Company’s Board of Directors and applicable
laws and regulations.
3.3 Withholding.
The
Company shall deduct from the payments to be made to Executive Officer under
this Agreement any federal, state or local withholding or other taxes or charges
which the Company is from time to time required to deduct under applicable
laws
and regulations and all amounts payable to Executive Officer under this
Agreement are stated herein before any such deduction. The Company shall have
the right to rely upon a written opinion of legal counsel if any questions
should arise as to any such deductions.
3.4 Bonus.
Executive Officer shall be considered for a bonus annually by the Board of
Directors based upon his performance during the preceding year. Bonuses may
be
paid in cash or stock or a combination thereof at the discretion of the
Board.
ARTICLE
IV
Termination
4.1 Termination.
Notwithstanding anything contained herein to the contrary, the employment of
Executive Officer under this Agreement shall terminate upon the occurrence
of
any of the following:
(a) The
death
of Executive Officer.
2
(b) In
the
event of Executive Officer's disability. For purposes hereof, Executive Officer
shall be considered to be disabled if he is unable to perform his normal duties
under this Agreement for a continuous period of six (6) months by reason of
physical or mental illness or incapacity or if Executive Officer is unable
to
perform his normal duties under this Agreement for periods of physical or mental
illness or incapacity aggregating six (6) months during the term of this
Agreement. If there is any dispute as to whether Executive Officer is or was
physically or mentally unable to perform his duties under this Agreement such
questions shall be submitted to a licensed physician agreed upon by the parties.
Executive Officer shall submit to such examinations and provide any information
such physician may request. The determination of such physician as to
Executive's physical or mental condition shall be binding and conclusive upon
the parties.
(c) At
the
option of the Company, in the event Executive Officer shall engage in any act
constituting "misconduct" (as hereinafter defined). As used herein, "misconduct"
shall mean (i) any act which is materially injurious to the Company, monetarily
or otherwise, including but not limited to, dishonesty, fraud, theft, illegal
conduct, neglect or misconduct; (ii) chronic absence from work other than by
reason of illness, (iii) use of alcohol or drugs in such a manner as to
interfere with the performance of Executive Officer's duties for the Company,
(iv) commission of a felony or misdemeanor involving moral turpitude, (v)
continued neglect or failure of Executive Officer to perform such duties as
may
be reasonably requested by the Chairman of the Board or the Board of Directors
of the Company consistent with Article I hereof, (vi) violation of the Company’s
employee conduct and/or business ethics policies as they exist during the term
of this Agreement, or (vii) the breach by Executive Officer of any of the
covenants set forth in Articles VI or VII, below.
(d) Notice
and Opportunity to Cure. Notwithstanding the foregoing, it shall be a condition
precedent to the Company's right to terminate Officer's employment "cause"
and
Officer's right to terminate for "cause" that (i) the party seeking termination
shall first have given the other party written notice stating with specificity
the reason for the termination ("breach") and (ii) if such breach is susceptible
of cure or remedy, a period of thirty (30) days from and after the giving of
such notice shall have elapsed without the breaching party having effectively
cured or remedied such breach during such 30-day period, unless such breach
cannot be cured or remedied within thirty (30) days, in which case the period
for remedy or cure shall be extended for a reasonable time (not to exceed an
additional thirty (30) days provided the breaching party has made and continues
to make a diligent effort to effect such a remedy or cure.
4.2 Termination
by Executive Officer for Cause.
Executive Officer shall be entitled to terminate his employment with the Company
“for cause” if; (a) the Company materially breaches any material provision in
this Agreement; or (b) following a Change in Control (as defined below), the
salary of the Executive Officer is reduced or he is removed from the position
of
Chief Financial Officer. For
purposes of this Agreement, a “Change in Control” shall mean:
(a) After
the
date of this Agreement, the Company adopts any plan of liquidation providing
for
the distribution of all or substantially all of its assets;
(b) After
the
date of this Agreement, all or substantially all of the assets or business
of
the Company are disposed of pursuant to a merger, consolidation or other
transaction (unless the shareholders of the Company immediately prior to such
merger, consolidation or other transaction beneficially own, directly or
indirectly, in substantially the same proportion as they owned the voting
securities (“Voting Securities”) of the Company, all of the Voting Securities or
other ownership interests of the entity or entities, if any, that succeed to
the
business of the Company);
3
(c) After
the
date of this Agreement, the Company combines with another company and is the
surviving corporation but, immediately after the combination, the respective
shareholders of the Company immediately prior to the combination hold, directly
or indirectly, 50% or less of the Voting Securities of the combined company;
(d) After
the
date of this Agreement, any event or transaction occurs, immediately after
which
the current shareholders of the Company hold directly or indirectly less than
50% of the respective Voting Securities of the Company, or
(e) The
individuals who, as of the date of this Agreement, are members of the Board
of
Directors of the Company ("Incumbent Board") cease for any reason to constitute
at least a majority of such Board; provided, however, that if any new director
is approved by a vote of at least a majority of the Incumbent Board of the
Company, such new director shall, for all purposes of the Plan, be considered
as
a member of the Incumbent Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened election contest
(as described in Rule14a-1 promulgated under the Securities Exchange Act of
1934) ("Election Contest") or other actual or threatened solicitation of proxies
or consents by or on behalf of any person or entity other than the Board of
the
Company ("Proxy Contest") including by reason of any agreement intended to
avoid
or settle any Election Contest or Proxy Contest.
4.3 Consequences
of Termination.
If
Executive Officer's employment is terminated pursuant to Paragraph 4.1
above,
the Company shall not be obligated to make further payments to Executive
Officer, other than to pay his salary prorated through the week in which such
termination occurs. If Executive Officer's employment hereunder is terminated
(i) by Executive Officer pursuant to Paragraph 4.2
or (ii)
by the Company for any reason other than those described in Paragraph
4.1,
above,
Executive Officer shall be entitled to receive from the Company the monthly
salary to which Executive Officer would have been entitled under Paragraph
3.1,
above,
for a period of twelve (12) months following termination of employment. The
Company shall make such termination payments in accordance with its regular
payroll practices.
ARTICLE
V
Expenses
and Fringe Benefits; Indemnification
5.1 Expenses;
Housing Allowance.
To the
same extent it does so for other executives of similar rank and responsibility,
the Company shall pay or reimburse Executive Officer in accordance with the
Company's past practice, for reasonable travel expenses ordinarily and
necessarily incurred by Executive Officer in furtherance of the business of
the
Company. Executive Officer shall be required to submit on the same basis as
other employees of the Company an itemized account of such expenditures and
such
proof as may be necessary to establish to the satisfaction of the Company that
such expenses are ordinary and necessary expenses incurred by Executive Officer
in furtherance of the business of the Company. The Company agrees to reimburse
Executive Officer the amount of $500 per month during the first year of this
Agreement, for housing expenses.
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5.2 Fringe
Benefits.
Executive Officer shall be entitled to participate in any individual or group
life insurance, health insurance, qualified pension or profit sharing plan
or
any other fringe benefit program which the Company may from time to time make
available to its executive employees, but Executive Officer acknowledges that
he
shall have no vested rights in any such programs except as expressly provided
under the terms thereof and that such programs may be terminated as well as
supplemented. The compensation payable to Executive Officer pursuant to
Paragraph 3.1,
above,
shall be subject to reduction by reason of Executive Officer's participation
in
any fringe benefit program which provides for or allows employee contributions
out of an employee's annual salary or other compensation; provided,
however,
Executive Officer shall have no right to participate in plans which by the
terms
thereof are discretionary in nature and Executive Officer shall have no right
to
continue to participate in any plans after termination, except as required
by
law.
5.3 Vacation
and Sick Days.
Executive Officer shall be entitled to ten (10) vacation days and five (5)
sick
or personal days in every twelve (12) month period under this
Agreement.
5.4 Indemnification;
Directors’ and Officers’ Insurance.
The
Company agrees that if Executive Officer is made a party, or is threatened
to be
made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that he
is or was a director, officer, employee, or representative of the Company or
is
or was serving at the request of the Company as a director, officer, member,
employee, representative, or agent of another corporation, partnership, joint
venture, trust or other enterprise, whether or not the basis of such Proceeding
is Executive Officer’s alleged action in an official capacity while serving as a
director, officer, member, employee or agent, Executive Officer shall be
indemnified and held harmless by the Company to the fullest extent permitted
by
law against all costs, expenses, claims, actions and liabilities (including,
without limitation, reasonable attorney’s fees) reasonably incurred or suffered
by Executive Officer in connection therewith, and such indemnification shall
continue as to Executive Officer even if he has ceased to be a director, member,
employee, representative, or agent of the Company or other entity and shall
inure to the benefit of Executive Officer’s heirs, executors and administrators.
To the extent the Company obtains or maintains a directors’ and officers’
liability insurance policy covering any executive officers of the Company,
the
Company agrees to provide such coverage to Executive Officer and to continue
such coverage or the maximum coverage available during the term of this
Agreement to the extent available at rates not in excess of 125% of current
or
initial rates.
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ARTICLE
VI
Nondisclosure
of Proprietary
Information,
Surrender of Records
6.1 Proprietary
Information.
Executive Officer shall not at any time while he is employed by the Company
or
at any time thereafter disclose any proprietary information (as hereafter
defined) to any individual or entity other than as required in the ordinary
course of business unless such disclosure has been authorized by the Board
of
Directors or by the Chairman of the Board of the Company. For purposes hereof,
the term "proprietary information" shall mean (i) the name or address of any
customer (as hereafter defined) or any information concerning the transactions
of such customer with the Company, (ii) any information relating to the
marketing methods, sources of supply, pricing information, or business plans
of
the Company, (iv) any information which is generally regarded as confidential
in
the Company’s industry, (v) computer programs and software which may be
developed from time to time by the Company and its employees, including
Executive Officer, and (vi) any other information determined to be confidential
or proprietary by resolution of the Board of Directors of the Company and which
at the time of such determination or thereafter is not in the public domain
or
does not enter the public domain without disclosure by Executive Officer. For
purposes hereof, a "customer" of the Company shall mean any individual or entity
who has entered into any transaction with the Company or who has made an inquiry
to the Company concerning its products or services whether through use of the
Company’s website, electronic mail, telephone, mail or personal
contact.
6.2 Confidentiality
and Surrender of Records.
Executive Officer shall not at any time while he is employed by the Company
or
at any time thereafter, without the prior approval of the Chairman of the Board
or the Board of Directors of the Company, give any confidential records (as
hereafter defined) to any individual or entity or permit any inspection or
copying thereof by any individual or entity other than an individual or entity
who during his employment by the Company has a reasonable need to know the
contents of such confidential records in the ordinary course of business or
an
individual or entity providing bona fide consulting, legal or accounting
services to the Company who has a reasonable need to know the contents of such
confidential records in the course of providing services to the Company. For
purposes hereof, "confidential records" mean all correspondence, memoranda,
files, customer lists, electronic or computerized information, and all other
documents of any kind which may be in Executive Officer's possession or under
his control which contain any proprietary information as defined in Paragraph
6.1,
above.
Upon the termination of his employment, Executive Officer shall immediately
surrender to the Company all confidential records in his possession or under
his
control.
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ARTICLE
VII
Covenant
Not to Compete
7.1 Covenant
Not to Compete.
Executive Officer agrees that he shall not at any time while he is employed
by
the Company pursuant to this Agreement or any time for a period of one (1)
year
following the termination of his employment (such period not to include any
period of violation of, or period required for litigation to enforce, the
covenants contained in this Article VII) either directly or indirectly as agent,
stockholder, employee, officer, director, trustee, partner, proprietor or
otherwise (except as the holder of no more than five percent (5%) of the stock
of a publicly held company, provided Executive Officer does not participate
in
the business of such company or render advice or assistance to it), engage
in,
or render advice or assistance to (other than on behalf of the Company), or
be
employed by any person, firm or entity located or engaged in, a business which
competes with the business of the Company in an area within a 50-mile radius
of
any county in which the Company derived 10% or more of its revenues during
the
twelve (12) month period preceding such action.
7.2 Covenant
Not to Solicit Employees.
Executive Officer agrees that he shall not at any time while he is employed
by
the Company pursuant to this Agreement or any time for a period of one (1)
year
following the termination of his employment (such period not to include any
period of violation of, or period required for litigation to enforce, the
covenants in this Article VII), directly or indirectly, solicit or induce,
or
attempt to solicit or induce, any employee of the Company to leave the Company
for any reason whatsoever or hire any individual employed by the Company. For
purposes of this Paragraph 7.2, employee shall mean any individual employed
by
the Company within the three (3) month period prior to, and including, the
last
day of Executive Officer’s employment with the Company.
7.3 Enforcement.
Executive Officer recognizes that irreparable injury may result to the Company,
its business and property, in the event of a breach by him of the restrictions
imposed by this Article and agrees that if he shall engage in any act in
violation of the provisions hereof the Company shall be entitled, in addition
to
such other remedies and damages as may be available, to an injunction
prohibiting him from engaging in any such act. Executive Officer further agrees
that if any court should finally determine that the restriction provided in
this
Article is too broad as to area or time covered, or otherwise, that said area
or
time covered or other restriction may be limited to whatever extent such court
deems reasonable and this Agreement may be enforced as so limited. If any court
should finally determine that conduct of Executive Officer is not in violation
of Article VII, Company shall promptly reimburse Executive Officer for
reasonable legal fees and expenses incurred in such litigation.
ARTICLE
VIII
Miscellaneous
8.1 Notices.
Any
notice required or permitted to be given under this Agreement shall be
sufficient if in writing and personally delivered or sent by registered or
certified mail, postage prepaid (in which case notice will be deemed to have
been given on the third day after mailing), or by overnight delivery by a
reliable overnight courier service (in which case notice will be deemed to
have
been given on the day after delivery to such courier service). Notices shall
be
directed to Executive Officer at the following
address:
illegible
and notices to the Company, shall be directed to the Chairman of the
Board of
the Company, at 0000 Xxxxxxx Xxxxxxxx Xxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000,
as
the case may be, or to such other address as either party hereto shall specify
by notice given as provided herein.
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8.2 Assignment.
This
Agreement shall not be assignable by the Company without Executive Officer's
consent except that if the Company shall merge or consolidate with or into
or
transfer substantially all of its assets, to another corporation or other form
of business organization, this Agreement may be assigned in connection therewith
and shall continue to bind Executive Officer and the successor of the Company
resulting from any such merger, consolidation or transfer. This Agreement shall
not be assignable by Executive Officer, nor may Executive Officer assign, pledge
or encumber his interest in this Agreement or any part hereof without the prior
written consent of the Company.
8.3 Applicable
Law.
This
Agreement and all questions of its interpretation, enforcement and the rights
and remedies of the parties hereto shall be governed and construed in accordance
with the internal laws of the Commonwealth of Kentucky.
8.4 Binding
Effect.
This
Agreement and the terms, covenants and conditions hereof shall be binding upon
and shall inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, successors and assigns, specifically including any successor
to
the Company, whether arising by merger, consolidation or otherwise.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day,
month and year first above written.
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THE
BANKER’S STORE, INC.
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By:
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|
Xxxx
X. Xxxxx
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Title:
|
President
and Chief Executive Officer
|
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EXECUTIVE
OFFICER:
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/s/
Xxxxxx X. Xxxxx
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Xxxxxx
X. Xxxxx
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Address:
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| illegible | ||
| illegible | ||
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