AGREEMENT
This Agreement is executed effective July 31, 1998 between XXXXXXX
XXXXXX, a resident of Florida ("Employee"), and JRECK SUBS GROUP, INC., a
Colorado corporation ("Employer"), who agree as follows:
1. Hiring. Employer hereby hires Employee as, and Employee hereby
agrees to act as, Chief Financial Officer.
2. Duties. Employee shall faithfully and diligently perform the duties
normally performed by a Chief Operating Officer on a full-time basis, devoting
Employee's entire productive time, ability and attention to such duties, except
that Employee may continue to pursue the excluded activities described on
Exhibit A ("Excluded Activities"), so long as the pursuit of such the Excluded
Activities does not interfere with Employee's performance of his duties under
this Agreement.
3. Term. The term of this Agreement shall commence on the date of this
Agreement, and, unless terminated earlier as set forth below, shall expire on
July 30, 2001 (the "Termination Date").
4. Termination. At any time that Good Cause (as defined below) exists
or has arisen, Employer may, at its election, terminate this Agreement by so
notifying Employee in writing (the "Good Cause Notice"). From and after the date
of this Agreement, Employer or Employee may terminate this Agreement by so
notifying the other in writing (the "Termination Notice"), for any reason
whatsoever or for no reason. Upon the earlier of the Termination Date,
immediately after the giving of the Good Cause Notice, or 30 days after the
giving of the Termination Notice, (a) this Agreement shall be deemed terminated,
(b) neither Employee nor Employer shall have any further rights or obligations
under this Agreement (except with respect to Employee's obligations under the
Paragraphs in this Agreement entitled "Confidentiality," and "Competition, " and
except with respect to Employer's obligations under the Paragraph in this
Agreement entitled "Termination Obligations," which obligations shall survive
any such termination), (c) Employee shall return to Employer all property
belonging to Employer, including without limitation all Confidential Material
(as defined below), promotional material, advertising information, samples,
price lists and similar items, and (d) Employer shall have no obligation to make
any further payments to Employee, except for amounts earned pursuant to this
Agreement by Employee prior to such termination and except for Employer's
obligations under the Paragraph in this Agreement entitled Termination
Obligations. For purposes of this Agreement, "Good Cause" shall mean the
existence or occurrence of any of the following:
4.1. If Employee is convicted of a felony, commits theft,
larceny, embezzlement, fraud, any acts of dishonesty, illegality, moral
turpitude or gross mismanagement in connection with the execution of his duties
for Employer, as determined in good faith by an 80% majority of the entire board
of directors of Employer.
4.2. The death of Employee.
4.3. If Employee becomes materially disabled to such an extent
that Employee is precluded from performing the duties set forth in this
Agreement for a period of 90 consecutive days, or 120 days in the aggregate
during any one-year period.
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5. Compensation/Benefits. Employee's total compensation under this
Agreement shall be $125,000.00 per year, subject to annual salary increases
consistent with other executives of Employer, payable on a monthly basis in
accordance with and at the same times as Employer's ordinary payroll procedures
("Base Salary"). Employee shall also be entitled to all benefits generally
available to other employees of Employer.
6. Stock Options. Upon the execution of this Agreement, Employee shall
purchase 500,000 shares (the "Shares") of Employer's common stock at a price of
$1.375 per share. The purchase price for the Shares shall be paid in the form of
the promissory note (the "Note") attached as Exhibit B. At any time within three
years after the date of this Agreement, Employee shall have the right to require
Employer to repurchase the Shares in consideration of the cancellation of the
Note.
7. Termination Obligations. If this Agreement is terminated prior to
the Termination Date, Employee will be entitled to the following termination
benefits:
7.1. If this Agreement is terminated by Employer due to
Employee's death or disability as described in Paragraph 4.3 after giving
Employee the Good Cause Notice, then Employee shall receive a severance benefit
of six (6) months Base Salary (the "Severance Payments"), less any amounts
payable to Employee under any applicable disability insurance maintained by
Employer for the benefit of Employee. The Severance Payments will be payable in
equal consecutive monthly installments commencing with the first of the month
following the effective date of the Good Cause Notice. Employee will also
receive all other benefits generally available to other employees of Employer
during such time as Employee receives the Severance Payments. Notwithstanding
the foregoing, Employee shall not be entitled to any benefits under this
paragraph if Employee accepts any position of employment or consulting at any
time within six (6) months after the effective date of such Good Cause Notice.
Any such benefits previously paid to Employee shall be immediately due and owing
to Employer.
7.2. If this Agreement is terminated by Employer after giving
Employee the Termination Notice, Employer shall continue to pay Employee his
Base Salary until the earlier of such time that Employee finds new employment or
twelve (12) months after the date of such Termination Notice.
8. Confidentiality. Employee hereby acknowledges that Employer has made
(or may make) available to Employee certain customer lists, product design
information, performance standards and other confidential and/or proprietary
information of Employer or licensed to Employer, including without limitation
trade secrets and copyrighted materials (collectively, the "Confidential
Material"). Except as essential to Employee's obligations under this Agreement,
neither Employee nor any agent, employee, officer, or independent contractor of
or retained by Employee shall make any disclosure of this Agreement, the terms
of this Agreement, or any of the Confidential Material. Except as essential to
Employee's obligations under this Agreement, neither Employee nor any agent,
employee, officer, or independent contractor of or retained by Employee shall
make any duplication or other copy of any of the Confidential Material.
Immediately upon request from Employer, Employee shall return to Employer all
Confidential Material. Employee shall notify each person to whom any disclosure
is made that such disclosure is made in confidence, that the Confidential
Material shall be kept in confidence by such person, and that such person shall
be bound by the provisions of this Paragraph.
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9. Competition. During the term of this Agreement, Employee shall not
own an interest in, operate or participate in, or be connected as an officer,
director, employee, agent, independent contractor, partner, shareholder or
principal of any business entity or person producing, designing, providing,
soliciting orders for, selling, distributing, or marketing products, goods,
equipment and/or services which compete with Employer's products, goods,
equipment and/or services.
10. Injunctive Relief. Each of Employer and Employee hereby acknowledge
(a) the unique nature of the provisions set forth in the Paragraphs of this
Agreement entitled "Confidentiality," and "Competition," (b) that Employer will
suffer irreparable harm if Employee breaches any of such provisions, and (c)
that monetary damages will be inadequate to compensate Employer for such breach.
Therefore, if Employee breaches any of such provisions, then Employer shall be
entitled to injunctive relief (in addition to any other remedies at law or
equity) to enforce such provisions.
11. Survival. The representations, warranties and covenants of the
parties in this Agreement shall survive any termination of this Agreement.
12. Governing Law. This Agreement is governed by and construed in
accordance with the laws of the State of Florida, irrespective of Florida's
choice-of-law principles.
13. Further Assurances. Each party to this Agreement shall execute and
deliver all instruments and documents and take all actions as may be reasonably
required or appropriate to carry out the purposes of this Agreement.
14. Venue and Jurisdiction. All actions and proceedings arising in
connection with this Agreement must be tried and litigated exclusively in the
State and Federal courts located in the county of Employer's business, which
courts have personal jurisdiction and venue over each of the parties to this
Agreement for the purpose of adjudicating all matters arising out of or related
to this Agreement. Each party authorizes and accepts service of process
sufficient for personal jurisdiction in any action against it as contemplated by
this paragraph by registered or certified mail, return receipt requested,
postage prepaid, to its address for the giving of notices set forth in this
Agreement.
15. Counterparts and Exhibits. This Agreement may be executed in
counterparts, each of which is deemed an original and all of which together
constitute one document. All exhibits attached to and referenced in this
Agreement are incorporated into this Agreement.
16. Time of Essence. Time and strict and punctual performance are of
the essence with respect to each provision of this Agreement.
17. Attorney's Fees. The prevailing party(ies) in any litigation,
arbitration, mediation, bankruptcy, insolvency or other proceeding
("Proceeding") relating to the enforcement or interpretation of this Agreement
may recover from the unsuccessful party(ies) all costs, expenses, and actual
attorney's fees (including expert witness and other consultants' fees and costs)
relating to or arising out of (a) the Proceeding (whether or not the Proceeding
proceeds to judgment), and (b) any post-judgment or post-award proceeding
including, without limitation, one to enforce or collect any judgment or award
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resulting from the Proceeding. All such judgments and awards shall contain a
specific provision for the recovery of all such subsequently incurred costs,
expenses, and actual attorney's fees.
18. Modification. This Agreement may be modified only by a contract in
writing executed by the party to this Agreement against whom enforcement of the
modification is sought.
19. Indemnification. Employee hereby indemnifies Employer against all
Claims (as defined below) and all costs, expenses and attorneys' fees incurred
in the defense of any such Claims or any action or proceeding brought on any
such Claims. For purposes of this Paragraph, "Claims" shall mean all
liabilities, damages, costs, expenses, attorneys' fees and claims, arising from
any activity, work or thing done, permitted or suffered by Employee or by any
agent, employee, officer, or independent contractor of or retained by Employee
in connection with the Excluded Activities. If any action or proceeding is
brought against Employer by reason of any such Claims, Employee upon notice from
Employer shall defend such action or proceeding at Employee's sole cost by
counsel reasonably satisfactory to Employer.
20. Headings. The paragraph headings in this Agreement: (a) are
included only for convenience, (b) do not in any manner modify or limit any of
the provisions of this Agreement, and (c) may not be used in the interpretation
of this Agreement.
21. Prior Understandings. This Agreement and all documents specifically
referred to and executed in connection with this Agreement: (a) contain the
entire and final agreement of the parties to this Agreement with respect to the
subject matter of this Agreement, and (b) supersede all negotiations,
stipulations, understandings, agreements, representations and warranties, if
any, with respect to such subject matter, which precede or accompany the
execution of this Agreement.
22. Partial Invalidity. Each provision of this Agreement is valid and
enforceable to the fullest extent permitted by law. If any provision of this
Agreement (or the application of such provision to any person or circumstance)
is or becomes invalid or unenforceable, the remainder of this Agreement, and the
application of such provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, are not affected by such invalidity
or unenforceability unless such provision or the application of such provision
is essential to this Agreement.
23. Successors-in-Interest and Assigns. Employee may not voluntarily or
by operation of law assign, hypothecate, delegate or otherwise transfer or
encumber all or any part of its rights, duties or other interests in this
Agreement without the prior written consent of Employer, which consent may be
withheld in Employer's sole and absolute discretion. Any such transfer in
violation of this paragraph is void. Subject to the foregoing and any other
restrictions on transferability contained in this Agreement, this Agreement is
binding upon and inures to the benefit of the successors-in-interest and assigns
of each party to this Agreement, including without limitation any person that
acquires a controlling interest in Employer.
24. Notices. Each notice and other communication required or permitted
to be given under this Agreement ("Notice") must be in writing. Notice is duly
given to another party upon: (a) hand delivery to the other party, (b) receipt
by the other party when sent by facsimile to the address and number for such
party set forth below (provided, however, that the Notice is not effective
unless a duplicate copy of the facsimile Notice is promptly given by one of the
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other methods permitted under this paragraph), (c) three business days after the
Notice has been deposited with the United States postal service as first class
certified mail, return receipt requested, postage prepaid, and addressed to the
party as set forth below, or (d) the next business day after the Notice has been
deposited with a reputable overnight delivery service, postage prepaid,
addressed to the party as set forth below with next-business-day delivery
guaranteed, provided that the sending party receives a confirmation of delivery
from the delivery-service-provider.
To: Xxxxxxx Xxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000
(000) 000-0000
To: JRECK SUBS GROUP, INC.
0000 Xxxx Xxxxx Xxxx 000
Xxxxx 000
Xxxxxxxx, XX 00000
(000) 000-0000
Each party shall make a reasonable, good faith effort to ensure that it will
accept or receive Notices to it that are given in accordance with this
paragraph. A party may change its address for purposes of this paragraph by
giving the other party(ies) written notice of a new address in the manner set
forth above.
25. Waiver. Any waiver of a default or provision under this Agreement
must be in writing. No such waiver constitutes a waiver of any other default or
provision concerning the same or any other provision of this Agreement. No delay
or omission by a party in the exercise of any of its rights or remedies
constitutes a waiver of (or otherwise impairs) such right or remedy. A consent
to or approval of an act does not waive or render unnecessary the consent to or
approval of any other or subsequent act.
26. Drafting Ambiguities. Each party to this Agreement has reviewed and
revised this Agreement and has had the opportunity to have such party's legal
counsel review and revise this Agreement. The rule of construction that
ambiguities are to be resolved against the drafting party or in favor of the
party receiving a particular benefit under an agreement may not be employed in
the interpretation of this Agreement or any amendment to this Agreement.
27. ARBITRATION OF DISPUTES. ANY CONTROVERSY OR CLAIM RELATING TO THIS
AGREEMENT SHALL BE SETTLED IN ORLANDO, FLORIDA BY ARBITRATION IN ACCORDANCE WITH
THE NATIONAL RULES FOR THE RESOLUTION OF EMPLOYMENT DISPUTES OF THE AMERICAN
ARBITRATION ASSOCIATION, AND JUDGMENT UPON THE AWARD RENDERED BY THE
ARBITRATOR(S) MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. THE ARBITRATOR(S)
SHALL NOT HAVE THE AUTHORITY TO AWARD PUNITIVE DAMAGES AGAINST ANY PARTY(IES) TO
THIS AGREEMENT.
NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE
ARISING OUT OF THIS AGREEMENT DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY
FLORIDA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE
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DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALING IN THE SPACE BELOW YOU
ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL. IF YOU REFUSE TO
SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO
ARBITRATE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.
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WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING
OUT OF THIS AGREEMENT TO NEUTRAL ARBITRATION.
Employer's Initials: ________ Employee's Initials: __________
-------------------------------
XXXXXXX XXXXXX
JRECK SUBS GROUP, INC.,
a Colorado corporation
By:____________________________
Xxxxxxxxxxx Xxxxxx, President/
Chief Executive Officer
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Exhibit A
EXCLUDED ACTIVITIES
1. Corporate clients:
a.
b.
c.
2. Professional Group:
3. Mortgage Brokerage Firm:
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Exhibit B
PROMISSORY NOTE
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