EMPLOYMENT AGREEMENT
This Agreement is made as of the 1st day of December, 1997, between Quest
Products Corporation, Inc., a Delaware corporation, with offices at 0000 Xxxxxxx
Xxxxxxxx, Xxxxxxx, Xxx Xxxx (the "Company") and Xxxxxx X. Xxxxxxxxx, an
individual residing at 000 Xxxxxx Xxxxxx Xxxx, Xxxxxx Xxxxxx, Xxx Xxxx 00000
(the "Employee").
RECITALS
The Company desires to secure the services and employment of the Employee
on behalf of the Company, and the Employee desires to be employed by the
Company, upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agrees as follows:
1. EMPLOYMENT. The Company hereby employs the Employee as the Chairman
of the Board and Chief Executive Officer of the Company, and the Employee
accepts such employment for the term of employment specified in Section 3
below (the "Employment Term"). During the Employment Term, the Employee
shall serve as the Chairman of the Board and Chief Executive Officer of the
Company, performing such duties as shall be reasonably required of an
executive-level employee of the Company, reporting only to the Board of
Directors of the Company (the "Board"). In addition, Employee shall have
such other powers and perform such other additional executive duties as may
from time to time be assigned to him by the Board including:
(a) Managing day-to-day operations;
(b) Hiring and firing of all employees and independent
contractors;
(c) Managing the marketing and sales of the Company;
(d) Managing the operations of the company in full conformity
with all state and federal laws.
3
2. PERFORMANCE. The Employee will serve the Company faithfully and to
the best of his ability and will devote such time and energy to his
employment as is reasonably necessary to perform his employment duties.
3. EMPLOYMENT TERM. The Employment Term shall begin on the date of
this Agreement and continue for a five (5) year term until December 1, 2002
(the "Employment Term"). Employment during the Employment Term shall be
subject to termination only in accordance with the terms of this Agreement.
The Employment Term shall be automatically renewable for successive one (1)
year terms ("Renewal Term") provided that at the end of the Employment Term
and any Renewal Term the Employee is not in breach of this Agreement.
4. COMPENSATION.
4.1 Salary. During the Employment Term, and any Renewal Term, the
Company shall pay the Employee a base salary at the annual rate of
$150,000 per year payable in equal, monthly installments, subject to
withholding and other applicable taxes.
4.2 Accrual of Salary. If at the time required for payment of any
of the monthly installments of salary set forth in paragraph 4.1
above, the Company does not have sufficient cash flow to pay the base
salary to Employee as set forth above than in such case the Employee
agrees that such salary in whole or in part shall be deferred and
accrued until such time as the Corporation is reasonably able to pay
all or part of the deferred and accrued salary.
4.3 Bonus Compensation. In addition to the base compensation set
forth in paragraph 4.1 above Employee shall be entitled to receive
bonus compensation which shall be equal to 10% of the annual
consolidated pre-tax profits realized by the Company after the first
$750,000 in profits. The $750,000 threshold before calculation of
bonus shall be a one time threshold and shall not be included in
subsequent bonus calculations once the initial profit threshold is
realized by the Company. Notwithstanding this paragraph, total
compensation in any given year shall not exceed the sum of $500,000.
4.4 Stock Options. The Company will grant the Employee options to
purchase 7,500,000 shares of its common stock pursuant to a stock
option plan to be adopted by the Company. The exercise price of the
options shall be [$.03] per share. All such options shall vest
immediately. Options must be exercised within 5 years.
4.5 Additional Benefits. In addition to the other compensation
payable to the Employee hereunder, during the Employment Term, the
Company shall provide Employee with health, life and disability
insurance and with a reasonable monthly allowance for automobile
expenses.
5. EXPENSES. The Employee shall be reimbursed by the Company for all
reasonable expenses incurred by him in connection with the performance of
his duties hereunder in accordance with policies established by the Board
of Directors from time to time and upon receipt of appropriate
documentation.
6. AGREEMENT NOT TO COMPETE. The Employee agrees that during the
Noncompetition Period (defined below) he will not in any capacity, either
separately, jointly or in association with others, directly or indirectly,
as an officer, director, consultant, agent, employee, owner, partner,
stockholder or otherwise, engage or have a financial interest in any
business which competes with the Company or with any affiliate of the
Company in the United States; provided, however, that the record of
beneficial ownership by the Employee of not more than five percent (5%) of
the outstanding publicly traded securities of any class of any such
business shall not be deemed to be in violation of this Section 6, provided
that the Employee is not an officer, director, consultant, or employee of
such business. The "Noncompetition Period" shall mean the period ending
three years after the termination of his employment hereunder for any
reason, other than a termination upon the expiration of the term of this
Agreement and any renewal term. The Employee further agrees that during the
Noncompetition Period, except in connection with the performance of
services hereunder, he will not in any capacity, either separately, jointly
or in association with others, directly or indirectly, solicit or contact
with regard to a business competitor of the Company any of the Company's
employees, consultants, agents, customers or prospects, as shown by the
Company's records, that were employees, consultants, agents, customers or
prospects of the Company at any time during the two years immediately
preceding termination of employment hereunder or that become such at any
time during the Noncompetition Period.
If a court determines that the foregoing restrictions are too broad or
otherwise unreasonable under applicable law, including with respect to the
duration, scope or geographic area, the court is hereby requested and
authorized by the parties hereto to revise the foregoing restrictions to
include the maximum restrictions allowed under the applicable law. The
Employee expressly agrees that breach of the foregoing would result in
irreparable injuries to the Company, that the remedy at law for any such
breach will be inadequate and that upon breach of this provision, the
Company, in addition to all other available remedies, shall be entitled as
a matter of right to injunctive relief in any court of competent
jurisdiction without the necessity of proving the actual damage to the
Company.
7. SECRET PROCESSES AND CONFIDENTIAL INFORMATION. For the Employment
Term and all Renewal Terms and thereafter, (a) the Employee will not
divulge, transmit or otherwise disclose (except as legally compelled by
court order, and then only to the extent required, after prompt notice to
the Company of any such order), directly or indirectly, other than in the
regular and proper course of business of the Company, any confidential
knowledge or information which Employee acquires after the effective date
of this agreement with respect to confidential or secret processes,
services, techniques, customers or plans with respect to the Company and
(b) the Employee will not use, directly or indirectly, any confidential
information for the benefit of anyone other than the Company; provided,
however, that the Employee has no obligation, express or implied, to
refrain from using or disclosing to others any such knowledge or
information which he acquired or possessed before the effective date of
this Agreement or which he brought to the Company or which is or hereafter
shall become available to the public other than through disclosure by the
Employee. All new processes, techniques, know-how, inventions, plans,
products, patents and devices developed, made or invented by the Employee,
alone or with others, while an employee of the Company, shall be and become
the sole property of the Company, unless released in writing by the
Company, and the Employee hereby assigns any and all rights therein or
thereto to the Company.
8. TERMINATION.
8.1 Termination at End Term. The employment of the Employee
hereunder shall automatically terminate at the end of the Employment
Term unless renewed by the Employee in writing for a one (1) year
Renewal Term, at least sixty (60) days prior to expiration of the
Employment Term or a Renewal Term.
8.2 Termination by the Company with Cause. The Company shall have
the right at any time to terminate with Employee's employment
hereunder upon the occurrence of any of the following (any such
termination being referred to as a termination for "Cause"):
8.2.1 the commission by the Employee of any embezzlement or
other deliberate and premeditated act of dishonesty against the
financial or business interest of the Company;
8.2.2 the habitual drug addiction or habitual intoxication
of the Employee;
8.2.3 the conviction by the Employee of, or the pleading by
the Employee of nolo contendere to, a felony;
8.2.4 the unreasonable and willful failure or refusal of the
Employee to perform his material duties hereunder, which failure
or refusal is not cured within ten (10) days subsequent to notice
from the Company to the Employee specifying the nature of such
failure or refusal; or
8.2.5 the breach by the Employee of any terms of this
Agreement, which breach is not cured within ten (10) days
subsequent to notice from the Company to the Employee specifying
such breach.
8.3 Termination Upon Death or Disability. The Employee's
employment hereunder shall automatically terminate upon the Employee's
death or his inability to perform his duties hereunder by reason of
any mental, physical or other disability for a period of at least six
(6) consecutive months, as determined by a qualified physician.
9. EFFECT OF TERMINATION OF EMPLOYMENT.
For Cause; Resignation; Death or Disability. If the Employee's
employment is termination for Cause (pursuant to Section 8.2), if the
Employee's employment is terminated by the death or disability of the
Employee (pursuant to Section 8.2) the Employee's base salary and other
benefits specified in Sections 4.1 and 4.3 shall cease at the time of such
termination.
10. Insurance. The Company may purchase insurance on the life of the
Employee (Key Man Insurance) and, if it does so, the Employee shall
cooperate fully by performing all the requirements of the life insurer
which are necessary conditions precedent to the insurance of the life
insurance policy issued by it.
11. Notice. Any notices required or permitted hereunder shall be in
writing and shall be deemed to have been given when personally delivered or
when mailed, certified or registered mail, postage prepaid, to the
following addresses:
If to the Employee: Xxxxxx X. Xxxxxxxxx
000 Xxxxxx Xxxxxx Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
If to the Company: Quest Products Corporation
0000 Xxxxxxx Xxxxxxxx, Xxxxx 000X
Xxxxxxx, Xxx Xxxx 00000
With a copy to: Xxxxxx X. Xxxxxxxxx, Esq.
Fabricant & Yeskoo LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
12. GENERAL.
12.1 Governing Law. The terms of this Agreement shall be governed
by and construed under the laws of the State of New York without
regard to its principles of conflicts of laws.
12.2 Assignability. The Employee may not assign his interest in
or delegate his duties under this Agreement.
12.3 Enforcement Costs. In the event that either the Company or
the Employee initiates an action or claim to enforce any provision or
term of this Agreement, the costs and expenses (including attorney's
fees) of the prevailing party shall be paid by the other party, such
party to be deemed to have prevailed if such action or claim is
concluded pursuant to a court order or final judgment which is not
subject to appeal, a settlement agreement or dismissal of the
principle claims.
12.4 Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns.
12.5 Entire Agreement; Modification. This Agreement constitutes
the entire agreement of the parties hereto with respect to the subject
matter hereof and may not be modified or amended in any way except in
writing by the parties hereto.
12.6 Duration. Notwithstanding the term of employment hereunder,
this Agreement shall continue for so long as any obligations remain
under this Agreement.
IN WITNESS WHEREOF, the parties hereto, intended to be legally bound, have
hereunto executed this Agreement the day and year first written above. COMPANY:
Quest Products Corporation a New York corporation
BY:
NAME:
TITLE:
EMPLOYEE:
/S/: Xxxxxx X. Xxxxxxxxx
