CONTRACT OF EMPLOYMENT AGREEMENT WITH BRAD BECKSTEAD DATED JULY 25, 2007
EXHIBIT
10.11
CONTRACT
OF EMPLOYMENT AGREEMENT
WITH
XXXX XXXXXXXXX DATED JULY 25, 2007
THIS
EMPLOYMENT
AGREEMENT (this “Agreement”), dated as of July 25, 2007, by and between
Healthy Fast Food, Inc., a Nevada corporation (the “Company”) and Xxxx Xxxxxxxxx
(“Xxxxxxxxx”).
W
I T N E S S E T H
WHEREAS,
the Company
desires to employ Xxxxxxxxx, and Xxxxxxxxx desires to accept such employment,
on
the terms and conditions set forth herein.
WHEREAS,
both parties
acknowledge the inherent risks associated with the office of Chief Financial
Officer (“CFO”) of a SEC-registered public company. The CFO co-signs
with the Chief Executive Officer (“CEO”) all SEC reports certifying the accuracy
and truthfulness of the information contained within the
reports. Material misrepresentations, fraud, and/or material
misstatements may result in shareholder lawsuits and/or regulatory criminal
action against the Company, including the CFO. Both parties
acknowledge that the CFO shall be properly compensated for accepting the risks
that are not shared by other Company management, associates, directors or
officers (with the exception of the CEO).
WHEREAS,
the Company
acknowledges that Xxxxxxxxx will be signing the Company’s SEC registration
statement on short notice and with limited knowledge of the prior history of
the
Company, which increases the inherent risk to Xxxxxxxxx.
WHEREAS,
Xxxxxxxxx
acknowledges the duties and responsibilities as Company CFO and shall act in
the
best interest of the Company at all times.
NOW,
THEREFORE, in
consideration of the mutual promises, representations and warranties set forth
herein, and for other good and valuable consideration, it is hereby agreed
as
follows:
1. Employment. The
Company hereby agrees to employ Xxxxxxxxx, and Xxxxxxxxx hereby accepts such
employment, upon the terms and conditions set forth herein.
2. Position
and Duties.
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(a)
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Xxxxxxxxx
shall serve as the Chief Financial Officer of the Company and shall
perform the duties consistent with such office, as from time-to-time
may
be prescribed by the Company’s Board of Directors and is not managed or
directed by any other party (either internal or external), irrespective
of
their standing with the Company.
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(b) Xxxxxxxxx
shall perform the following enumerated duties:
(i) Xxxxxxxx-Xxxxx
compliance
(ii) All
SEC quarterly and annual filings
(iii) Accounting
and document management oversight
(iv) Development
of accounting policies and procedures
(v) Preparation
of financial statements and footnotes
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(vi)
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Design
and implementation of internal accounting controls in accordance
with SOX
404 regulations
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(vii) Development
of performance benchmarks
(viii) Development
of one-year and five-year forecasting models
(x) Audit
coordination
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(c)
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Xxxxxxxxx
hereby expressly acknowledges that he shall perform only the duties
enumerated above and shall have neither the right nor the obligation
to
perform other duties not enumerated
above.
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3. Term. This
Agreement shall commence on the date hereof and shall end on the third
anniversary hereof, at which time the Agreement shall be renegotiated based
on
the Company’s state of development. In the event the Company
determines that it will not become a SEC reporting company, this Agreement
shall
terminate thirty (30) days from the date of such determination without recourse
by both parties.
4. Compensation.
All
compensation shall be negotiated and approved by the Company’s Board of
Directors and/or the Compensation Committee, if such a committee is
established.
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(a)
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Cash
Compensation. Cash compensation is paid in consideration
for Xxxxxxxxx’x time commitment and the risks associated with the office
of Company CFO. Cash compensation shall be as
follows:
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(i) $84,000
annual cash compensation payable as follows:
A. Salary
of $3,000 per month with all related income tax withholdings; and
B. Rent
of $4,000 per month payable to 61883, LLC (a real estate holding company owned
1% by Xxxxxxxxx and 99% by Xxxxxxxxx’x spouse). Company may use
Xxxxxxxxx’x office for receptionist services and as the corporate mailing
address.
[Note: Both
parties acknowledge that cash compensation is renegotiable any time based on
Xxxxxxxxx’x increased time commitments and/or duties and
responsibilities.]
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(b)
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Stock
Options. Stock options are paid by the Company as
incentive to Xxxxxxxxx to accept the duties and responsibilities
and
inherent risks associated with being the Company’s CFO, and as incentive
to remain committed to the Company for the duration of the
Term. The Company shall xxxxx Xxxxxxxxx 70,000 stock options on
the signing date of this Agreement, exercisable at $4.40 per share,
and
issueable on an “earn-out” basis as
follows:
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(i)
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50%
as a signing bonus which vest at a rate of 25% per quarter for the
first
year
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(ii)
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25%
on the first anniversary date from the date of employment which vest
at a
rate of 25% per quarter
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(iii)
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25%
on the second anniversary date from the date of employment which
vest at a
rate of 25% per quarter
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[Note:
35,000 options (50% of 70,000) would be issued for year one with 8,750 options
vesting per quarter. 17,500 (25% of 70,000) options would be issued
for years two and three with 4,375 options vesting per quarter.]
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(c)
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Bonuses. Cash
and/or option bonuses are payable at the discretion of the Company’s Board
of Directors.
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5. Time
Commitment. Xxxxxxxxx shall initially devote a minimum of
twenty-five (25) hours per week to the position of CFO. The time
commitment may be reassessed at any time based on the demands of the position
and the needs of the Company.
6. Termination. The
employment of Xxxxxxxxx may be terminated prior to the expiration of the Term
in
the manner described in this section. For purposes of this paragraph,
“cause” shall exist if, and only if, Xxxxxxxxx has been indicted for committing
a crime which constitutes a felony or misdemeanor involving moral turpitude
under applicable law or has entered a plea of guilty or nolo contendere with
respect thereto; has violated securities laws, rules or regulations; has
committed any act which constitutes fraud or negligence under applicable
law,
has
breached any of the material terms of this Agreement; or upon Xxxxxxxxx’x
death.
(a) Termination
by Company With Cause shall void all terms of the Employment Agreement
except for any cash compensation due as of the date of termination.
(b) Termination
by Company Without Cause shall result in the escalation of cash
compensation for a twelve (12) month period.
(c) Resignation
by Xxxxxxxxx With Good Reason shall result in the escalation of cash
compensation for a twelve (12) month period. For purposes of this
paragraph, “good reason” shall mean any material diminution in Xxxxxxxxx’x
title, reporting relationship or duties and responsibilities as contemplated
by
this Agreement or failure by Company to pay or provide the compensation under
this Agreement; provided that, in any such event, Xxxxxxxxx shall give Company
written notice thereof which shall specify in reasonable detail an circumstances
constituting good reason, and there shall be no good reason with respect to
any
such circumstance cured by Company within thirty (30) days after such
notice.
(d) Resignation
by Xxxxxxxxx Without Cause shall void all terms of the Employment Agreement
except for any cash compensation due as of the date of resignation.
(e) The
Company’s Options upon Disability. If Xxxxxxxxx becomes
physically or mentally disabled during the Term and any extension thereof so
that he is unable to perform the services required of him pursuant to this
Agreement for a period of two successive months, or an aggregate of two months
in any 12-month period, the Company shall have option, in its discretion, to
terminate this Agreement with cause by giving written notice
thereof.
[Note: Termination
treatment terms of all options are covered under the Company’s Stock Option
Plan.]
7. Indemnity
Agreement. Both parties shall sign an indemnity agreement with
mutually-agreeable terms exclusive of the Employment Agreement.
8. D&O
Insurance. The Company shall maintain proper D&O insurance
covering Xxxxxxxxx at all times. Lapse in D&O insurance coverage
for any reason can be grounds for Xxxxxxxxx’x resignation “with good
reason.”
9. Change
in Company Control. A change in Company control, other than the
anticipated IPO, shall result in the escalation of cash compensation for a
twelve (12) month period. For purposes of this paragraph, “change in
Company control” means the occurrence of any of the following (A) the
acquisition, following the Company’s anticipated IPO, directly or indirectly (in
one or more
related
transactions) by any person (other than Xxxxxxxxx), or two or more persons
acting as a group, of beneficial ownership (as that term is defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended) of more than 50%
of
the outstanding voting capital stock of the Company; (B) the merger or
consolidation of the Company with one or more other corporations as a result
of
which the holders of the outstanding voting capital stock of the Company
immediately before the merger hold less than 50% of the voting capital stock
of
the surviving or resulting corporation; (C) the sale of all or substantially
all
of the assets of the Company or its subsidiaries taken as a whole, and this
Agreement is not assumed by the acquiring person in connection therewith; or
(D)
the Company or any of its members enters into any agreement providing for any
of
the foregoing and the transaction contemplated thereby is ultimately
consummated.
10. Services
Rendered Prior to Date of Agreement. Company acknowledges that
Xxxxxxxxx has performed services prior to the date of this Agreement, and that
compensation for services performed in July of 2007 will include the hours
rendered by Xxxxxxxxx prior to the date hereof at the hourly rate of $70.00/hour
[Calculated as $7,000/month divided by 100 hours/month.] For example,
if Xxxxxxxxx rendered 20 hours of services prior to the date hereof, then July’s
total compensation would include 20 hours at $70.00/hour plus the agreed upon
compensation for the 25 hours/week commitment from the Official Start date
through the end of the month.
11. Confidential
Matters. Xxxxxxxxx shall keep secret all confidential matters of
Company, and shall not disclose them to anyone outside of Company, either during
or after the Xxxxxxxxx’x employment with Company, except that disclosure of
confidential matters will be permitted: (i) to the Company, its
affiliates and their respective advisors; (ii) if such confidential matters
have
previously become available to the public through no fault of Xxxxxxxxx; (iii)
if required by any court or governmental agency or body or is otherwise required
by law; (iv) if necessary to establish or assert the rights of Xxxxxxxxx
hereunder or under the Company’s By-Laws; or (v) if expressly consented to by
the Company. Xxxxxxxxx shall deliver promptly to Company upon
termination of his employment, or at any time Company may request, all
confidential memoranda, notes, records, reports and other documents (and all
copies thereof) relating to the business of Company which Xxxxxxxxx may then
possess or have under his control.
12. Complete
Understanding. This Agreement sets forth the complete and
exclusive agreement and understanding of the parties hereto, and supersedes
and
terminates any and all prior agreements, arrangements and understandings whether
written or oral, express or implied. No representation, promise or
inducement has been made by either party that is not embodied in this Agreement,
and neither party shall be bound by or liable for any alleged representation,
promise or inducement not herein set forth.
Employment
Agreement Private and Confidential
p.
5
13. Mutual
Representations.
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(a)
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Xxxxxxxxx
represents and warrants to the Company that the execution and delivery
of
this Agreement and the fulfillment of the terms hereof (i) will not
constitute a default under or conflict with any agreement or other
instrument to which he is a party or by which he is bound and (ii)
do not
require the consent of any person.
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(b)
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The
Company represents and warrants to Xxxxxxxxx that this Agreement
has been
duly authorized, executed and delivered by the Company and that the
fulfillment of the terms hereof (i) will not constitute a default
under or
conflict with any agreement or other instrument to which it is a
party or
by which it is bound and (ii) do not require the consent of any
person.
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(c)
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Each
party hereto warrants and represents to the other that this Agreement
constitutes the valid and binding obligation of such party enforceable
against such party in accordance with its
terms.
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13. Governing
Law; Jurisdiction. This Agreement shall be governed by and
construed according to the laws of the State of Nevada as applicable to
agreements executed in and to be wholly performed within such
State. In the event of any dispute arising under this Agreement, the
parties hereto hereby irrevocably submit to the exclusive jurisdiction of the
Federal and State courts located in the State of Nevada and each waives any
objection thereto based on lack of venue, forum non conveniens or any
similar-type grounds.
IN
WITNESS WHEREOF,
the Company has caused this Agreement to be duly executed in its corporate
name
by one of its officers duly authorized to enter into and execute this Agreement,
and Xxxxxxxxx has manually signed his name hereto, all as of the day and year
first written above.
| HEALTHY FAST FOOD, INC.: | XXXXXXXXX: | |||
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/s/
Xxxxx
Xxxxxxxxxx
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/s/
Xxxx
Xxxxxxxxx
7/25/07
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Xxxxx
Xxxxxxxxxx
7/25/07
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Xxxx
Xxxxxxxxx,
CPA
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Chief
Executive Officer
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