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EXHIBIT 10.17
AGREEMENT OF EMPLOYMENT
AGREEMENT, made this ___ day of August, 1999, between Humboldt
Industries, Inc., a Pennsylvania business corporation ("Humboldt") and Xxxx
Xxxxx ("Xxxxx").
WITNESSETH:
WHEREAS, Humboldt and Xxxxx desire to enter into an Agreement relating
to the employment of Xxxxx by Humboldt.
NOW, THEREFORE, the parties hereby agree as follows:
1. EMPLOYMENT. Humboldt hereby agrees to hire Xxxxx and Xxxxx hereby
agrees to accepts employment by Humboldt, upon the terms and conditions set
forth herein.
2. EFFECTIVE DATE. The effective date of this Agreement shall be
August 30, 1999. This Agreement shall continue in full force and effect for 12
months or until terminated or amended by the parties hereto. Notwithstanding
anything contained herein to the contrary, Xxxxx may commence his employment
with Humboldt prior to the effective date of this Agreement and be compensated
in accordance with this Agreement if he is available to commence his duties and
obligations under this Agreement prior to the effective date, but such early
employment shall not affect the effective date or the termination date of this
Agreement.
3. DUTIES. Xxxxx shall be appointed as the Executive Vice President of
the Catalog Division of Humboldt and as such he shall devote his full time and
attention to Humboldt's business of catalog sales and direct marketing of pet
supplies, as an officer and employee of Humboldt, and Xxxxx shall not, without
the written consent of the Board
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of Directors of Humboldt, either directly or indirectly, engage in any other
profession or business activity, whether or not such professional or business
activity is pursued for gain, profit or other pecuniary advantage; provided,
however, that Xxxxx may engage in personal non-financial pursuits that do not
substantially interfere with the performance of his duties under this Agreement
and nothing contained herein shall be construed as preventing Xxxxx from
investing his assets in such form or manner as will not require him services in
the operation of the affairs of the company or companies in which such
investment or investments are made.
Xxxxx shall abide by all of the rules, regulations and policies
established or promulgated by Humboldt. Xxxxx shall devote such time to the
administration and operation of the business of Humboldt as Humboldt shall
determine.
4. DIRECTION OF SERVICES. Humboldt shall direct, control and supervise
the duties and work of Xxxxx; provided, however, that Humboldt shall not impose
employment duties or constraints of any kind which would require Xxxxx to
infringe the ethics of his profession or violate any ordinance or law.
5. RELATIONSHIP OF PARTIES. The relationship between Xxxxx and
Humboldt shall be that of officer/employee and company/employer. Xxxxx, by
virtue of this relationship, shall not have any interest in Humboldt's tangible
or intangible assets.
6. COMPENSATION.
A. Salary: Xxxxx shall have and receive, subject to
withholding and other applicable employment taxes a yearly salary of
One Hundred and Thirty-Five Thousand Dollars ($135,000), payable in
bi-weekly installments of Five Thousand, One Hundred and Ninety-Two
Dollars and Thirty-One Cents
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($5,192.31). Such yearly salary is based upon Two Thousand (2,000)
hours per average minimum work year, and may be raised by written
agreement of the Board of Directors of Humboldt, but it shall not be
reduced under the amount set forth herein, unless by written agreement
of Xxxxx.
B. Moving Allowance: Humboldt shall, upon presentation of
acceptable receipts or documentation, reimburse Kelly's actual Moving
Expenses (as hereinafter defined) to relocate his family and household
from Rochester, New York to Hazleton, Pennsylvania. "Moving Expenses"
shall include (i) all out-of-pocket expenses Xxxxx incurs to move his
household goods and personal effects from his former residence to his
new residence and the costs of traveling (including lodging and
temporary housing) from the former residence to the new residence; and
(ii) all closing costs incurred in purchasing the new residence.
"Moving Expenses" shall not include any expenses for meals. From the
time Xxxxx moves into his new residence until he sells his former
residence, Humboldt shall pay the lowest of Kelly's two monthly
payments for the mortgage on his former residence or the mortgage on
his new residence. In addition, Humboldt shall reimburse Xxxxx for any
loss he incurs upon the sale of his former residence, upon the
condition that before Xxxxx xxxxx his former residence at a loss for
which he expects to Humboldt to reimburse him, Xxxxx offers to sell
the former residence to Humboldt upon the same terms and conditions.
For the purposes of the preceding sentence, loss is defined as the
difference between the current sale price of the former residence and
Kelly's purchase price for the former residence when he acquired it.
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C. Other Expenses: Humboldt shall upon presentation of
acceptable receipts, reimburse Xxxxx for all travel and other expenses
related to his carrying out his duties under this Agreement. This
shall include, but is not limited to lodging, transportation, meals,
entertaining of suppliers and potential suppliers, gratuities, and all
other customary expenses.
D. Withholding: Humboldt shall be responsible for all
withholding of taxes and other such expenses, including federal,
states and local taxes.
E. Health Plan: Humboldt shall, at its expense, if Xxxxx
elects, include Xxxxx and his family, as participants in the group
health plan currently provided to Humboldt employees. Kelly's rights
and entitlements with respect to any such benefits will be subject to
the provisions of the relevant contracts, policies or plans providing
such benefits. Nothing contained herein shall be deemed to impose any
obligation on Humboldt to maintain any such plan.
F. Other Plans: In addition to the items listed here, Xxxxx
shall receive all benefits to which other full time employees of
Humboldt are entitled.
G. Stock Grants: Xxxxx shall receive 50,000 shares of common
stock of PetQuarters, Inc. ("PetQuarters"), pursuant to the terms and
conditions of the Restricted Stock Agreement attached hereto as
Exhibit A, upon the effective date of this Agreement and conditioned
upon his extension of this Agreement for at least a one-year period
after the termination of this Agreement. Xxxxx shall receive an
additional grant of 25,000 shares of common stock of PetQuarters at
the end of his second year of employment by Humboldt if he shall
extend this Agreement for a third year. In the event of a change of
ownership of
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PetQuarters, Xxxxx shall be immediately fully vested in all shares
previously granted to him pursuant to this Agreement . In the event
Xxxxx is terminated for cause, all shares granted to but not vested in
Xxxxx shall revert to PetQuarters and these grants shall be deemed
null and void.
7. VACATION. Xxxxx shall be entitled to fifteen (15) working days of
vacation with pay during the term of this Agreement. Such vacation to be taken
by Xxxxx at such time or times as shall be approved by the Board of Directors
of Humboldt. In addition, Xxxxx shall be entitled to such holidays as the Board
of Directors of Humboldt may approve. Unused days of vacation may not be
carried over from one fiscal year to another.
8. TERMINATION OF EMPLOYMENT. This Agreement, and Kelly's employment
hereunder, shall not be terminated prior to August 27, 1999. In addition, this
Agreement shall not be terminated in the event of a change in ownership of
Humboldt or PetQuarters. Nevertheless, notwithstanding anything contained
herein to the contrary, this Agreement and Kelly's employment hereunder shall
be terminated immediately upon the happening of any of the following events:
A. The death or disability of Xxxxx. For purposes of this
Agreement, "disability" shall mean a physical or mental disability of
Xxxxx that results in his absence from work for One Hundred Twenty
(120) days during any Six (6) month period.
X. Xxxxx'x being convicted for the commission of a felony
under any federal or state law.
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C. Immediate termination by Humboldt with "good cause" upon
the giving of written notice. For the purpose of this Agreement, "good
cause" shall include, alcohol or drug abuse, proven dishonesty, theft,
fraud, embezzlement, conviction of a felony, or other actions by Xxxxx
which cause material harm to, or publicly defame the name of, Humboldt
or PetQuarters.
Upon any such termination of this Agreement, Kelly's employment shall
terminate and Xxxxx shall be entitled to receive his monthly salary prorated
through the date of such termination. Xxxxx shall not be entitled to receive
any severance pay or other additional compensation, unless Humboldt, in the
sole discretion of the Board of Directors, shall so elect.
Xxxxx shall own no interest in the accounts receivable of Humboldt and
shall not be entitled to receive any payment from or on account of any such
accounts receivable. In the event of such termination, Xxxxx shall immediately
pay any indebtedness owed to Humboldt, and shall reimburse Humboldt for any
unearned prepaid expenditures incurred on behalf of or for the benefit of
Xxxxx. Humboldt may, in its sole discretion, deduct or offset any such amounts
owed to it by Xxxxx from any amounts that may otherwise be due to Xxxxx from
Humboldt. All amounts due to Xxxxx under the provisions of this Paragraph 8
shall be determined by the accountant or the accounting firm then employed by
Humboldt and the determination of such accountant or accounting firm shall be
conclusive and binding on the parties hereto. Following termination, Xxxxx
shall fully cooperate with Humboldt and all matters relating to the winding up
of his pending work on behalf of Humboldt and the orderly transfer of any such
pending work to other employees of Humboldt.
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9. CONFIDENTIALITY AND NONDISCLOSURE AGREEMENT. Xxxxx acknowledges
that, as an employee of Humboldt, Xxxxx will be in a position to receive or
have access to confidential information (as hereafter defined) regarding the
business carried on by Humboldt through its employees. Xxxxx hereby agrees
that, except with the prior written consent of Humboldt, Xxxxx will not, during
the course of employment with Humboldt or at any time thereafter, directly or
indirectly use, disclose or disseminate (in any manner) to any other person
(including any individual or entity) any Confidential Information, which is
hereby defined for this purpose to mean all financial information regarding or
relating (directly or indirectly) to the business of Humboldt. In the event
Kelly's employment with Humboldt terminates or is terminated for any reason,
Xxxxx agrees to return to Humboldt all documentation pertaining or relating to
any Confidential Information.
Xxxxx also recognizes and agrees that in the event of Kelly's breach
or violation of any provisions of this paragraph, Humboldt may suffer
irreparable injury that cannot adequately be compensated for monetary damages
and agrees that Humboldt shall have the immediate right to obtain a preliminary
or final injunction against Xxxxx issued by a court of competent jurisdiction
enjoining any breach or violation of this paragraph.
10. COVENANT NOT TO COMPETE. To induce Humboldt to employ Xxxxx, Xxxxx
agrees, commencing on the date of Kelly's termination of employment for any
reason except if Xxxxx is terminated by Humboldt without cause, and continuing
a period of one year, he shall not solicit, accept business, or in any way
compete with Humboldt, whether on his own account or as a shareholder, partner,
joint venturer, employee, consultant, advisor and/or agent of any person, firm,
corporation or other entity.
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Humboldt and Xxxxx recognize, accept and agree that, for the purposes of this
covenant not to compete, Humboldt is in the business of selling, via catalogs
and the internet, and distributing pet supplies. Xxxxx acknowledges, represents
and warrants to Humboldt that the covenant of Xxxxx hereunder is reasonably
necessary for the protection of Humboldt's interest and is not unduly
restrictive upon Xxxxx.
Xxxxx also recognizes and agrees that in the event of Kelly's breach
or violation of any provisions of this paragraph, Humboldt may suffer
irreparable injury that cannot adequately be compensated for monetary damages
and agrees that Humboldt shall have the immediate right to obtain a preliminary
or final injunction against Xxxxx issued by a court of competent jurisdiction
enjoining any breach or violation of this paragraph.
11. ANNOUNCEMENT. Neither party hereto shall make any public
announcement concerning this Agreement or Humboldt's employment of Xxxxx for a
period of at least seven (7) days following both parties signing of this
Agreement.
12. BENEFIT. This Agreement shall bind all parties, the respective
heirs, executors, administrators and assigns, but nothing contained herein
shall be construed as an authorization or right of any party to assign his
rights or obligations hereunder.
13. WAIVER OF BREACH OR VIOLATION NOT DEEMED CONTINUING. The waiver by
either party of a breach or violation of any provision of this Agreement shall
not operate as or be construed to be a waiver of any subsequent breach hereof.
14. NOTICES. Any and all notices required or permitted to be given
under this Agreement will be sufficient if, in the case of the Xxxxx, furnished
in writing and sent by registered mail to the Kelly's last known residence or,
in the case of the Humboldt PetQuarters or PQ, to PetQuarters' principal office
in Lonoke, Arkansas.
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15. AUTHORITY. The provisions of this Agreement required to be
approved by the Board of Directors have been so approved and authorized.
16. GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the State of Arkansas.
17. FORCE MAJEURE. Xxxxx, Humboldt and PetQuarters shall be excused
for the period of any delay in the performance of any obligations under this
Agreement when prevented from performing such obligations by cause or causes
beyond their reasonable control, including, without limitation, civil
commotion, war, invasion, rebellion, hostilities, military or usurped power,
sabotage, pestilence, riots, fire or other casualty or acts of God.
18. SURVIVAL. The covenants contained in or liabilities accrued under
this Agreement which, by their terms, require their performance after the
expiration or termination of this Agreement shall be enforceable
notwithstanding the expiration or other termination of this Agreement.
19. PARAGRAPH HEADINGS. The paragraph headings contained in this
Agreement are for convenience only and shall in no manner be construed as part
of this Agreement.
20. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
21. ENTIRE AGREEMENT. This instrument contains the entire agreement of
the parties and may not be changed except by a writing signed by the party
against whom the enforcement of any waiver, change, modification or discharge
is sought.
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IN WITNESS WHEREOF, Humboldt has hereunto caused this Agreement to be
executed by its duly authorized officers and the Xxxxx has hereunto set his
hand, all being done in duplicate originals with One (1) original being
delivered to each party on the day and year first above written.
HUMBOLDT INDUSTRIES, INC.
Attest:
By:
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Xxxxx Xxxxxxx, President
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Xxxx Xxxxxxx, Secretary
XXXX XXXXX:
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Xxxx Xxxxx
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