EXHIBIT 10.5
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this "AGREEMENT")
is entered into as of June 2, 1999, by and between ENDLESS YOUTH PRODUCTS,
INC., A NEVADA CORPORATION ("COMPANY"), and XXXX X. XXXXXXX ("EMPLOYEE"), to
amend and restate the Employment Agreement dated as of July 31, 1996 betwen
the Company and Employee, and is entered into with reference to the following
facts:
Company and Employee wish to enter into this Agreement to assure Company
of the services of Employee and to set forth the rights and duties of the
parties.
NOW THEREFORE, the parties agree as follows:
1. EMPLOYMENT.
(a) Company hereby employs Employee as its Chief Executive
Officer, and Employee hereby accepts and agrees to said employment by the
Company for the purpose of rendering on behalf of Company services as a Chief
Executive Officer, upon the terms and conditions set forth herein.
(b) Employee shall perform such services and duties with the
Company as are usually associated with the position of Chief Executive
Officer and as otherwise decided upon by the Board of Directors of the
Company. Employee shall report directly to the Board of Directors of Company.
Employee further agrees that, except during vacation periods or in accordance
with Company's personnel policies covering leaves of absence and reasonable
periods of illness or other incapacitation, Employee shall devote sufficient
time and services to the business and interests of the Company. Employee
shall also be permitted to serve on the boards of directors of other business
corporations and may participate in charitable, cultural, professional, civic
and business association activities. Employee shall perform the duties of his
position and those assigned to him by the Company's Board of Directors with
fidelity, to the best of his ability, in the best interests of the Company,
in a professional manner and at all times in compliance with all laws, rules
and regulations. Employee agrees that to the best of his ability and
experience he will at all times loyally and conscientiously perform all of
the duties and obligations required of him either expressly or implicitly by
the terms of this Agreement. Additionally, Employee agrees to comply with
corporate policies, standards and regulations adopted by the Company from
time to time to the extent the same are reasonable and not in violation of
law.
2. TERM OF EMPLOYMENT. Employee's term ("TERM") of employment by the
Company as set forth herein shall commence as of the date of this Agreement,
June 2, 1999 (the "EFFECTIVE DATE") and shall continue thereafter for a
period of five years unless otherwise terminated pursuant to the provisions
of Section 7 below. Notwithstanding the foregoing, upon expiration of each
year of the Term, the Term shall automatically be renewed, upon the same
terms and conditions contained herein, for consecutive periods of one year
each (a "RENEWAL TERM"), such that there shall be at all such times five
years remaining in the Term, unless and until either party elects not to so
renew this Agreement by delivering written notice to the other party not less
than thirty (30) days prior to the expiration of the then year of the Term,
or any then existing
Renewal Term, as the case may be. Nothing in this Section shall be deemed or
construed as limiting or waiving any of the rights of Company or Employee set
forth in Section 7.
3. COMPENSATION.
(a) FIXED COMPENSATION - Upon the Effective Date, the Company
shall pay Employee a base salary ("BASE SALARY") at the annual rate equal to
One Hundred Twenty Thousand Dollars ($120,000). Employee's Base Salary shall
be paid pursuant to Company's normal payroll practices. Company shall have
the right to deduct from the compensation due to Employee hereunder any and
all sums required for social security and withholding taxes, and for any
other federal, state or local charge and/or tax which may now be in effect or
is hereafter enacted or required as a charge on the compensation of Employee.
Employee has the option to take all or part of his monthly salary in stock of
the Company to be valued at the average "Bid" price of the shares for such
period.
(b) CONTINGENT COMPENSATION - In addition to Base Salary,
Employee shall be paid, as additional compensation, a bonus based upon the
annual gross operating income of Company during each 12 month period during
the Term in accordance with the schedule attached hereto as Schedule 1 and
made a part hereof.
(c) BENEFITS - Employee shall be entitled to the following
benefits provided by the Company: (i) a suitable office and furnishings
commensurate with Employee's position and such related facilities as are
necessary for the performance of Employee's duties,(ii) life, medical,
accident and dental insurance, and any short term, long-term or permanent
disability programs and plans, providing coverage on terms no less beneficial
than those afforded other senior executives employed by the Company, (iii) an
automobile allowance (which includes lease payment, insurance, repairs,
gasoline) in the amount of $1000 per month, (iv) membership dues in an
athletic and country club facility of Employee's choice (v) five weeks of
paid vacation per year, and (vi) minimum three weeks paid sick-leave for
illness (additional paid sick leave shall be afforded to Employee for any
illness). Any unused vacation or minimum three week sick-leave period may be
carried over from year to year hereunder and all such unused vacation and/or
sick leave at the end of the Term shall not be forfeited by Employee but
Employee shall be paid for such vacation and/or sick leave by Company based
upon Employee's then current Base Salary. Employee acknowledges and agrees
that some of the benefits provided to Employee by Company hereunder may be
taxable to Employee, and that Company may be required to make payroll
withholdings in respect of such taxable benefits.
(d) BONUSES - Employee shall be entitled to receive bonuses from
time to time in such amounts, as the Company's Board of Directors may
determine in its sole and absolute discretion.
4. EMPLOYEE EXPENSES. Subject to Company's prior approval, and upon
submission of a detailed accounting supported by receipts, Company shall
reimburse Employee for all expenses incurred by Employee at Company's
specific request or as are reasonably incurred in the performance of
Employee's duties herein described. Company shall pay Employee a monthly
amount up to $2000 to defray expenses of hotel/food, if Employee performs
Company business in the best interest of the Company at a facility separate
from Company's corporate office for extended periods of time.
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5. TERMINATION.
(a) Company may terminate this Agreement and Employee's
employment at any time prior to the expiration of the Term or any Renewal
Term for cause. For the purposes of this Agreement, "CAUSE" shall mean:
(i) Employee's continued willful and habitual neglect of
his duties following notification of such neglect by Company's Board of
Directors and failure by Employee to cure such neglect within 30 days after
such notification.
(ii) Employee's conviction, after the date hereof, of a
felony which, by its nature, would materially injure the reputation of
Company as determined by Company's Board of Directors acting in good faith
and upon reasonable grounds.
(iii) Death of the Employee.
(b) Company shall have no right to terminate Employee's
employment for any reason other than for cause as defined hereinabove.
(c) At any time during the Term or any Renewal Term, and
notwithstanding anything to the contrary contained herein (including the
length of time of the Term or a Renewal Term), Employee may terminate this
Agreement for any reason whatsoever, with or without cause, upon thirty (30)
days written notice to Company.
(d) If during the term of this Agreement, there shall be a change
in control of the Company, and Employee elects to terminate this agreement
pursuant to Section 5(b) within 30 days after such change in control, then
the Employee shall be entitled to receive a cash termination payment equal to
ten times the Base Salary. Such payment shall be made in cash within 10 days
after Employee notifies the Company of his election to terminate. A "CHANGE
IN CONTROL" shall be demed to occur if any person or group of persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) shall acquire beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under such Act) of 20
percent or more of the outstanding shares of common stock of the Company; or,
during any period of twelve consecutive calendar months, individuals who were
directors of the Company on the first day of such period shall cease to
constitute a majority of the board of directors of the Company.
6. REASONABLENESS. The parties recognize that this Agreement
contains conditions, covenants, and time limitations that are reasonably
required for the protection of the confidential information, trade secrets
and business of the parties or a particular party. If any limitation,
covenant or condition shall be deemed to be unreasonable and unenforceable by
a court or arbitrator of competent jurisdiction, then this Agreement shall
thereupon be deemed to be amended to provide for modification of such
limitation, covenant and/or condition to such extent as the court or
arbitrator shall find to be reasonable and such modification shall not affect
the remainder of this Agreement.
7. RESTRICTIONS. Employee covenants not to disclose to or use with any
third party, any technical, commercial, financial, legal or other information
of a confidential nature obtained about the
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Company during the course of the Employee's employment, except for such
information, if any, which becomes part of the public record.
8. INDEMNIFICATION. Subject to the provisions of all applicable
laws, the Company, hereby agrees to indemnify and save the Employee harmless
from and against all reasonable costs, charges and expenses including,
without limitation, (i) any amount paid to settle an action or satisfy a
judgment, reasonably incurred by him in respect of any civil, criminal or
administrative action or proceeding to which the Employee is made a party by
reason of having been a director or officer of the Company and (ii) all
reasonable fees and disbursements of attorneys and other advisors incurred by
Employee by reason of his having been a director or officer of the Company.
To the extent permitted by applicable law, the Company will do, execute,
file, or will cause to be done, executed and filed, all such further acts,
documents and things as the Employee may reasonably require for purposes of
giving effect to the provisions of this Section including, without
limitation, the amendment of any and all certificates of Incorporation and
by-laws of the Company to comply with all applicable laws. The Company hereby
represents and warrants that the provisions of this Section do not violate or
conflict with any such applicable laws or the respective Certificate of
Incorporation and by-laws of the Company.
9. REMEDIES. No remedy conferred by any of the specific provisions
of this Agreement is intended to be exclusive of any other remedy given
hereunder or hereafter existing at law or in equity. The election of any one
or more remedies by any party shall not constitute a waiver of the right to
pursue other available remedies.
10. SEVERABLE PROVISIONS. The provisions of this Agreement are
severable, and if any one or more provisions may be determined to be
judicially unenforceable, in whole or in part, the remaining provisions shall
nevertheless be binding and enforceable.
11. BINDING AGREEMENT. The rights and obligations of the parties under
this Agreement shall inure to the benefit of and shall be binding on their
successors and assigns. Notwithstanding the foregoing, Employee may not
assign his rights or obligations hereunder.
12. NOTICES. Any notice to be given to the Company under the terms of
this Agreement shall be addressed to the Company at the address of its
principal place of business, and any notice to be given to Employee shall be
addressed to him at his home address last shown on the records of the
Company, or at such other address as either party may hereafter designate in
writing to the other. All notices shall be in writing and shall be delivered
personally, sent by United States certified or registered mail, return
receipt requested, first class postage prepaid, or by private messenger or
courier service. Any such notice shall be deemed to have been received on the
earlier of (i) five (5) business days after it is mailed or (ii) the date it
is actually received.
13. WAIVER. Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision, or prevent that party thereafter from enforcing each and
every other provision of this Agreement.
14. TITLE AND HEADINGS. Titles and headings to sections in this
Agreement are for the purpose of reference only and shall in no way limit,
define, or otherwise affect the provisions of it.
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15. ATTORNEYS' FEES AND COSTS OF LITIGATION. In any action at law or
in equity to enforce any of the provisions or rights under this Agreement,
the unsuccessful party, as determined by the court in a final judgment or
decree, shall pay the successful party all costs, expenses and attorneys'
fees actually incurred by the successful party (including, without
limitation, the costs, expenses and attorneys fees on any appeal) and if the
successful party shall recover a judgment in any such action or proceeding,
the costs, expenses and attorneys' fees shall be included as part of the
judgment.
16. GOVERNING LAW. The parties hereto agree that it is their intention
and covenant that this Agreement and performance under it, and all suits and
special proceedings that may ensue from its breach, be construed in
accordance with and under the laws of the State of Nevada, and that in any
action, special proceeding, or other proceeding that may be brought arising
out of, in connection with, or by reason of this Agreement, the laws of the
State of Nevada shall be applicable and shall govern to the exclusion of the
law of any other forum, without regard to the jurisdiction in which any
action or special proceeding may be instituted.
17. ENTIRE AGREEMENT. No party has made any representations,
warranties, covenants or promises relating to the subject matter of this
Agreement except as set forth herein, and any prior agreements or
understandings not specifically set forth herein shall be of no force or
effect. This Agreement constitutes the entire agreement of the parties
relative to the subject matter hereof.
18. AMENDMENTS. This Agreement may not be amended, modified or altered
except by a written instrument executed by all parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
"COMPANY" ENDLESS YOUTH PRODUCTS, INC., A
NEVADA CORPORATION
BY: /s/ Xxxx X. Xxxxxxx
-----------------------------------
NAME: Xxxx X. Xxxxxxx
TITLE: Chief Executive Officer
"EMPLOYEE"
/s/ Xxxx X. Xxxxxxx
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XXXX X. XXXXXXX
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SCHEDULE "1"
BONUS TO XXXX XXXXXXX
Annual Gross Operating Income Bonus
----------------------------- -----
$1,000,000 - $1,499,999 $84,000
$1,500,000 - $1,999,999 $144,000
$2,000,000 - $2,999,999 $174,000
$3,000,000 - $3,999,999 $264,000
$4,000,000 - $4,999,999 $354,000
$5,000,000 - $5,999,999 $454,000
$6,000,000 - $6,999,999 $524,000
$7,000,000 - $7,999,999 $594,000
$8,000,000 - $8,999,999 $684,000
$9,000,000 - $9,999,999 $764,000
$10,000,000 - $10,999,999 $824,000
$11,000,000 - $11,999,999 $874,000
$12,000,000 - $12,999,999 $1,004,000
$13,000,000 - $13,999,999 $1,104,000
$14,000,000 - $14,999,999 $1,204,000
$15,000,000 - $15,999,999 $1,304,000
$16,000,000 - $16,999,999 $1,404,000
$17,000,000 - $17,999,999 $1,504,000
$18,000,000 - $18,999,999 $1,604,000
$19,000,000 - $19,999,999 $1,704,000
$20,000,000 - $23,399,999 $1,804,000
$24,000,000 - $26,999,999 $2,104,000
$27,000,000 - $29,999,999 $2,704,000
$30,000,000 $2,804,000
For each $1,000,000 over $30,000,000, said bonus to increase by $100,000
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