EXHIBIT 6.4.1
EMPLOYMENT AGREEMENT
This Agreement, entered into on the 1 day of May, 1992 (the "Agreement") by and
between VALUESTAR, INC., a California corporation with its principal office in
Alameda, California (the "Company") and XXXXX XXXXX, 0000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxx ("Xxxxx").
1. Employment. The Company hereby employs Xxxxx, and Xxxxx hereby accepts
employment with the Company, upon the terms and conditions set forth herein. The
Company and Xxxxx hereby agree that this Agreement shall hereinafter govern
their relationship and their respective rights and obligations under this
Agreement.
2. Term of Employment. This Agreement will be effective as and from the date
first above written and will, unless otherwise terminated pursuant to the terms
of this Agreement, continue in force for a term of THREE years (the "Term").
Upon expiration of the original Term, this Agreement shall be automatically
renewed for further consecutive terms of ONE year each on the same terms and
conditions contained in this Agreement, unless the Board of Directors of the
Company shall have given to Xxxxx at least 30 days' written notice of
termination prior to the expiration of the Term or of any subsequent one-year
period, unless this Agreement has otherwise been terminated pursuant to Article
9 hereof. The Term hereof includes all extensions.
3. Duties of Xxxxx. Xxxxx will be employed by the Company as its Chief Executive
Officer and President and shall serve as Chairman of the board of directors, and
shall have such duties and shall serve in such capacity and in such other
capacities at the Company or any of its Affiliates as shall be designated, or to
which Xxxxx shall be elected, from time to time, by the Board of Directors of
the Company ("Board"), and in accordance with the bylaws of the Company as in
effect from time to time.
4. Extent of Services; Right to Name, etc. (a) Xxxxx will devote his full time
and attention exclusively to the business of the Company and its Affiliates in
the advancement of the best interests of the Company and such Affiliates. Xxxxx
may, however, devote such time to his personal investments as shall be necessary
and which do not interfere with the performance of his duties hereunder.
(b) Xxxxx hereby grants to the Company and its Affiliates the non-exclusive
right to use his name, picture or other likeness and biographical material
concerning him, in connection with advertising, promotion and publicizing the
Company and its activities, so long as this Agreement is in effect. Such use of
Xxxxx'x name shall be fair and not misleading or unflattering, and Xxxxx will be
allowed to review and approve all such uses prior to actual use or
publicization.
5. Expenses. The Company will reimburse Xxxxx (against receipt vouchers or other
evidence of payment) for all ordinary, necessary and reasonable expenses
incurred by him in the performance of his duties under this Agreement or in
performing such duties prior to execution of this Agreement.
6. Compensation. During the Term of this Agreement, Xxxxx will receive a monthly
salary at the rate of $3,500.(degree)(degree), payable at the end of each month,
to be increased to $5,000.(degree)(degree) beginning August 1, 1992. Subject to
appropriate regulatory approvals, the base salary provided herein may be
increased annually, effective as at each anniversary date of this Agreement. The
amount of such increase will be at the discretion of the Board.
7. Incapacity of Xxxxx. If Xxxxx shall, at any time, be incapacitated or
prevented by physical or mental disability or any other circumstances beyond his
control from performing his duties under this Agreement for a consecutive period
of at least 6 months, the Company may, by written notice to Xxxxx given at any
time after such 6-month period and so long as the incapacity shall continue,
discontinue payment in whole or in part of the compensation provided for herein
from such date as may be specified in the notice until the incapacity of Xxxxx
shall cease. Otherwise, the said payment shall, notwithstanding the incapacity
of Xxxxx, continue to be paid to Xxxxx in accordance with the foregoing
provisions; provided, that if Xxxxx shall receive any amount during the time of
such incapacity by reason of any disability insurance or any other insurance
plan, senior executive loss or income policy, disability policy or any other
plan or scheme of a like nature funded by the Company, the payment above
provided may be reduced by a like amount.
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8. Relationship of the Parties. Xxxxx will perform his duties as an employee of
the Company and is not, nor will he be deemed to be, a joint venturer or partner
with the Company or any Affiliate thereof, and nothing in this Agreement will be
construed so as to make him a joint venturer or partner with the Company or
Affiliate.
9. Termination of Agreement. (a) The Company may terminate this Agreement prior
to the end of the Term because of (i) a material breach of a provision of this
Agreement by Xxxxx and Xxxxx'x failure to correct such breach within 20 days
after notice thereof by the Company, (ii) conviction of Xxxxx of an indictable
offense; (iii) absence of Xxxxx from the performance of his duties hereunder for
any reason other than contemplated in Section 7 hereof for a period in excess of
40 working days total in any six-month period; or (iv) death of Xxxxx. Any such
termination shall be effective only if written notice, setting forth cause and
date of notice and effective date of termination, is given to Xxxxx not later
than 10 days following the event, transaction or occurrence giving rise to such
right of termination, or, if later, 10 days after the Company first discovers
that such event, transaction or occurrence has taken place (except in case of
his death).
(b) Xxxxx may terminate this Agreement prior to the end of the Term upon 90
days' written notice to the Company setting forth the date of such notice and
the effective date of such termination.
(c) If the Company terminates this Agreement other than pursuant to Section 9(a)
of this Agreement, the Company shall within 30 days thereof pay to Xxxxx, as
liquidated damages for the loss of reputation and standing in the business
community and other damages suffered by Xxxxx as a result of the termination and
in discharge of all obligations of the Company to Xxxxx under this Agreement,
the sum of Fifteen Thousand ($15,000.(degree)(degree)) Dollars.
(d) Upon termination of this Agreement or upon receipt of such monies as may
become payable to him pursuant to Section 9(c) hereof, Xxxxx shall immediately
resign all offices held with the Company and all Affiliates thereof, and, except
as set forth in Section 9(c) hereof, Xxxxx shall not be entitled to receive any
termination or severance payment or compensation for loss of office or
otherwise. If Xxxxx fails to immediately resign as herein provided, then Xxxxx
irrevocably appoints the Secretary of the Company in his name and on his behalf
to sign any resignation confirmation or do anything necessary or requisite to
give effect to such resignation(s). In such event, so long as Xxxxx continues to
own at least fifteen percent (15~o) of the Company's outstanding shares and is
not in competition with the Company or its Affiliates, Xxxxx shall be entitled
to examine, at the Company's offices, the Company's financial information in the
form available to the Board, upon at least 48 hours' notice to the Secretary of
the Company.
(e) On the effective date of termination of this Agreement, Xxxxx will deliver
to the Company, in a reasonable state of repair, all property of the Company,
both real and personal owned, leased or bailed to Xxxxx and used by or in the
possession of Xxxxx.
10. Indemnification of Xxxxx. Should the Company, during the term of this
Agreement, fail to deduct, withhold, remit or pay an amount of tax for a
taxation year as required under applicable tax legislation, and should Xxxxx, by
reason of his position as a Director of the Company, be jointly and severally
liable by a court of a competent jurisdiction to pay that amount and any
interest or penalties relating thereto, then the Company will hold harmless and
indemnify Xxxxx from and against all obligations, commitments, liabilities,
causes of action, claims, debts, losses, damages, expenses and demands for any
such tax and any interest or penalties relating thereto whatsoever. The Company
will, at the Company's own cost and expense, defend any such obligation,
commitment, liability, cause of action, claim, debt, loss, damage, expense or
demand for any tax and any interest or penalty and will pay to Xxxxx the amount
of any such tax and any such interest or penalty incurred by Xxxxx within 45
days after such tax and any interest or penalty is so incurred. Every such
indemnification shall be to the maximum extent allowable under applicable law.
In addition, Xxxxx shall be indemnified to the full extent now or hereafter
permitted under the Company's articles of incorporation and bylaws, as they may
be amended, and as otherwise may now or hereafter be permitted under applicable
law.
11. Confidential Information. Xxxxx will not, during or after the Term of this
Agreement, disclose to any firm or person any confidential or non-public
information, except as otherwise required by law, as necessary in the ordinary
course of the Company's business, or with prior written consent of the Company,
including but not limited to information about the Company or any Affiliate, and
the operations, products, assets, and customers
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thereof, to which Xxxxx has gained or gains excess by reason of his position as
an employee of the Company or an Affiliate. Xxxxx shall not use for his own
purposes, or for any purpose other than those of the Company or an Affiliate,
any information he may acquire with respect to the Company's or an Affiliate's
affairs.
12. Non-Competition Covenant. While this Agreement is in full force and effect
and has not expired, has not been terminated or otherwise been canceled or
annulled and for a period of 2 years following the termination of this
Agreement, Xxxxx shall not, directly or indirectly, whether individually or as
controlling owner, officer, director, employee, shareholder, investor,
consultant, agent or in any other capacity whatsoever, own, manage, work for,
participate in the activities of, any person, firm, business or venture or any
part thereof in the United States of America which competes with the Company or
any Affiliate of the Company in its or their capacity as a research company,
rating company or licensor of certification marks. If the scope of this Section
(covering the entire United States of America) shall be deemed too broad or
otherwise impermissible by any court of competent jurisdiction or arbitration
panel, then the area subject to this non-competition covenant shall be deemed
limited to the Standard Metropolitan Statistical Areas in which the Company or
any Affiliate is carrying on operations.
Xxxxx acknowledges that this covenant is valid, necessary and fundamental to the
protection of the Company and its Affiliates, and is reasonable in the
circumstances, including the fact that the Company intends for itself and its
Affiliates to operate nationwide and establish is services and trademarks and
service marks nationwide. The salary payable to Xxxxx as provided for herein
includes the entire consideration for Xxxxx'x covenant in this Section.
13. Right to Injunctive Relief. Xxxxx acknowledges that the Company will suffer
irreparable injury, not readily susceptible of valuation in monetary damages, if
Xxxxx breaches any of his obligations under Sections 11 or 12 above.
Accordingly, Xxxxx agrees that the Company will be entitled to injunctive relief
against any breach or prospective breach by Xxxxx of Xxxxx'x obligations under
Sections 11 or 12 in any Federal or State court of competent jurisdiction
sitting in the State of California. Xxxxx hereby submits to the jurisdiction of
such courts for the purposes of any actions or proceedings instituted by the
Company to obtain such injunctive relief, and agrees that the process may be
served on Xxxxx by registered mail, addressed to the last address of Xxxxx known
to the Company, or in any other manner authorized by law.
14. Notices. Any notice under this Agreement must be given in writing and must
be delivered by a messenger or courier service which retains its delivery
receipts, sent by telex, telegram or facsimile transmission ("fax") or mailed by
first class mail, postage prepaid, and addressed to the party to which notice is
to be given at such party's address indicated below or at such other address as
may be hereafter designated in writing to the other party in accordance with the
notice provisions herein contained. If notice is sent by telex, telegram or
facsimile transmission, it will be deemed to have been given at the time of
transmission, and if by delivery, at the time delivered. If notice is mailed, it
will be deemed to have been received 5 business days following the date of
mailing of the notice. Notice should be sent to
if to the Company: 0000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000-0000
Attention: Secretary
if to Xxxxx: 0000 Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxx 00000
with a copy to: Xxxxx Xxxxxxx, Esq.
Xxxx, Xxxxx & Xxxx
0 Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
16. No Assignment. This Agreement may not be assigned in whole or in part by any
party without the written consent of the other party, which consent may not be
unreasonably withheld.
17. Miscellaneous.
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(a) Xxxxx represents and warrants to the Company that there is no restriction or
limitation, by reason of any agreement or otherwise, upon Xxxxx'x right or
ability to enter into this Agreement and fulfill his obligations under this
Agreement.
(b) The provisions of Sections 10, 11, 12 and 13 will survive the termination or
expiration of this Agreement. All other obligations of the Company and Xxxxx
will cease on termination or expiration of this Agreement, except that the
Company and Xxxxx remain liable for obligations which accrued before termination
or expiration of this Agreement (including Xxxxx'x right to be indemnified or
paid or reimbursed for services rendered and expenses incurred before
termination or expiration of this Agreement).
(c) This Agreement sets forth the entire understanding of the parties and may
not be varied by any statement, representation, warranty or covenant not set
forth in this Agreement.
(d) This Agreement may not be modified or amended except by an instrument in
writing signed by the parties to this Agreement or, where applicable, by their
heirs, representatives, successors or permitted assigns.
(e) This Agreement will be governed by and construed in accordance with the laws
of the State of California and the parties agree that the courts of such state
shall have exclusive jurisdiction to determine any disputes arising hereunder.
(f) This Agreement shall be binding upon and enure to the benefit of the parties
hereto and their respective heirs, executors, successors, administrators and
permitted assigns.
(g) The term "Affiliate" as used herein shall mean every parent and subsidiary
corporation of the Company, and every corporation or other entity which owns
thirty percent or more of the Company or of which the Company owns thirty
percent or more, of the equity ownership interest.
IN WITNESS WHEREOF the parties hereto have hereunto affixed their respective
hands and seals as of the day and year first above written.
VALUESTAR, INC. XXXXX XXXXX
/s/ XXXXX XXXXX /s/ XXXXX XXXXX
By Xxxxx Xxxxx, President Signature
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