1
EXHIBIT 10.20
EMPLOYMENT AGREEMENT BETWEEN XXXXXXXX.XXX
AND XXXX XXXXXXX
JUNE 1, 1998
2
AGREEMENT
This agreement is made on June 1, 1998 between Xxxx X. Xxxxxxx. (JHM), an
individual residing in California, and XXXXXXXX.XXX (S.C.) a California
Corporation. Xxxx X. Xxxxxxx has accepted the position of President and Chief
Executive Officer of Xxxxxxxx.xxx and Xxxxxxxx.xxx wishes to employ the services
of JHM. NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
ARTICLE I
TERM
1. The term of this agreement shall be for a period of three years
commencing June 1, 1998 and ending on March 31,2001. The contract will
automatically be renewed in one-year increments unless either party
terminates via giving written notice by January 31st each year starting
with January 31, 2001. Employer may terminate this Agreement at any time
for "Cause" with or without notice. For purposes of the Agreement, the
term "Cause" shall mean any of the following:
(i) Employee's willful breach or habitual neglect of the duties and
obligations required of him, either expressly or impliedly by the
terms of the Agreement;
(ii) Employee's failure to perform his duties in a manner consistent
with good business judgment, or in the best interests of
Employer;
(iii) The event of Employee being charged by any federal, state, or
local authority with act of dishonesty, any act involving public
ridicule or moral
3
turpitude, or an act constituting a felony, and Employee either
being convicted or entering a plea of guilty or nolo contendere;
or
(iv) Employee's commission of a fraud, embezzlement, or
misappropriation, whether or not a criminal or civil charge is
filed in connection therewith.
ARTICLE II
SERVICES
JHM shall provide executive management for the promotion, strategic planning,
marketing, geographic expansion, financing, and general management of S.C's
business. JHM will devote substantially all of his business time to the
operation of S.C. JHM shall report directly to the Board of Directors. JHM
agrees to obtain, at S.C's expense, key man life insurance of $1.0 million with
the company as the beneficiary.
ARTICLE III
COMPENSATION
JHM shall receive a bi-weekly base compensation of $6,735 during the period
commencing June 1, 1998 and ending May 31, 1999. For the period commencing June
1, 1999 through May 31, 2000 the bi-weekly base compensation shall be $9,615.
For period commencing June 1, 2000 through May 31, 2001 the bi-weekly base
compensation shall be $11,540. Actual business expenses will be 100% reimbursed
by S.C. JHM will document all expenses on an approved expense form. S.C has
authorized a $1000 per month auto allowance and a twelve month housing allowance
of $1500 per month. S.C agrees to provide health and life insurance at the
company's expense. In
4
addition to the above, JHM will participate in a formula bonus which will
provide for the opportunity to receive an amount equal 100% of JHM base
compensation for exceeding the Xxxxxxxx.xxx annual business plan net profit. The
incentive plan shall be approved annually by the Board of Directors.
ARTICLE IV
NON-DISCLOSURE AND SECRECY
1. JHM agrees that, during the term of this Agreement, and at all times
thereafter, it will keep and cause all S.C. information in strictest
confidence and will not either directly or indirectly use or allow to
be used for personal benefit, or the benefit of others, disseminate or
disclose any Confidential Information or Trade Secrets (as such terms
are defined below) used and/or obtained in providing the Services
hereunder, except to parties to this Agreement, regardless of whether
the Confidential information of Trade Secrets have been conceived or
developed, in whole or in part by JHM. JHM acknowledges and agrees
that the terms "Confidential Information" and "Trade Secrets" as used
in this Agreement include without limitation, the whole or any portion
or phase of any design, process, service, procedure, formula,
improvement, customer list, information with respect to customer
requirements and practices, marketing research and development
information, statistical data, sources of merchandise, technical
information, computer models, and all other information concerning the
industry and business in which the S.C. concept operates and which is
of value in the operation of S.C. business, or is otherwise understood
to be, of a confidential character and which has not been published or
otherwise understood to be, of a confidential character and which has
not been published or otherwise become a matter of general public
knowledge, under circumstances involving no breach of this Agreement.
JHM agrees that all Trade Secrets and Confidential Information are and
shall be the
5
property of S.C. regardless of whether conceived or developed by JHM
pursuant to the Services. To that end, JHM hereby assigns to S.C. all
rights and all Trade Secrets and proprietary information developed by
JHM in providing the Services.
2. Upon termination or earlier expiration of this Agreement JHM shall
surrender to S.C. at any time of such expiration or termination of
this Agreement or upon demand by S.C. at any time all material of a
confidential and secret nature, including without limitation, the
Confidential Information and Trade Secrets, and any other documents of
a proprietary nature as may then be in JHM (s) possession or control.
ARTICLE V
MISCELLANEOUS
1. INJUNCTIVE RELIEF JHM acknowledges and agrees that any breach of
obligations to be performed by and pursuant to Article IV is likely to
result in irreparable harm to S.C and JHM therefore consents and agrees
that if it violates any such obligations, S.C shall be entitled, among
and in addition to any other rights and remedies available under this
Agreement or otherwise, to temporary and permanent injunctive relief to
prevent JHM from committing or continuing a breach of such obligations.
2. ENTIRE AGREEMENT This agreement constitutes the whole Agreement
between the parties hereto and there are no other terms other than those
contained herein. This Agreement supersedes any prior contract or
understanding related to retaining JHM.
3. AMENDMENT No variation of this Agreement shall be deemed valid unless
in writing and signed by the parties hereto.
6
4. GOVERNING LAW This agreement shall be construed and enforced in
accordance with the laws of California.
5. SEVERABILITY Each provision of this Agreement is intended to be
severable from the other so that if any provision or term hereof is
illegal or invalid for any reason whatsoever, such illegality or
invalidity shall not effect the validity of the remaining provisions and
terms hereof.
6. INDEMNITY AND HOLD HARMLESS S.C agrees to indemnify and does hold
harmless JHM from and against any and all liabilities, claims, demands,
damages, costs and expenses (including attorney's fees) resulting from,
arising out of, or occasioned by any S.C business related activity.
7. ASSIGNMENT This Agreement may not be assigned by JHM to any other
person or party without S.C's prior written consent which may be
withheld in S.C's sole discretion. Notwithstanding the forgoing, S.C may
assign this Agreement to any successor corporation, affiliated company
of subsidiary. In the case of assignment by S.C, Assignee shall assume,
in writing, S.C obligations.
8. REPRESENTATION AND WARRANTY JHM hereby agrees that any documents
produced with respect to the business of S.C shall be marked
"Confidential" and "Property of Xxxxxxxx.xxx" whether those documents
are produced by JHM or by a vendor or party chosen by JHM.
9. CAPTIONS Captions used in this Agreement are used for convenience
only and are not intended to, nor are they to be construed to, have any
substantive meaning or control in the construction of the Agreement.
10. NOTICES Any Notice given by one party to any other party hereunder
shall be delivered to the party at the address indicated below that
party's signature
7
to this Agreement. Such notice shall be given to U.S. Mail, certified,
and shall be deemed delivered on the date of actual receipt or the date
of first refusal to accept delivery.
11. REPRESENTATION BY COUNSEL Each party agrees and acknowledges that it
has had the opportunity to consult with independent legal, tax and
financial counsel of each party's choice in order to be advised with
respect to the effect of this Agreement.
12. CONSTRUCTION Any issues with respect to construction or
interpretation of this Agreement are to be resolved without resort to
the presumption that any ambiguities in this Agreement should be
contrued against the drafter.
Agreed to:
Date: May 29, 1998 /s/ XXXX X. XXXXXXX
--------------------------------
Xxxx X. Xxxxxxx
/s/ XX XXXXXXX /s/ XXXXX X. XXXXX
------------------------------ --------------------------------
Xxxxxxxx.xxx Xxxxxxxx.xxx
By: Xx Xxxxxxx By: Xxxxx X. Xxxxx
/s/ XXXXXXXX X. XXXXXXX
-----------------------------
Xxxxxxxx.xxx
By: Xxxxxxxx X. Xxxxxxx
