EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
this _____ day of October, 1997, by and between L. XXX XXXXXX ("Employee") and
XXX. XXXXXX' ORIGINAL COOKIES, INC., a Delaware corporation (the "Company").
RECITAL
Whereas, the Employee is currently employed as a Senior Executive
Officer of the Company pursuant to that certain Employment Agreement, dated
September 12, 1996 (the "Old Agreement"), by and between the Employee and the
Company; and
Whereas, the Company has determined that it is in the Company's
interest to assure the Employee's continuing employment with the Company beyond
the expiration date in the Employee's Old Agreement; and
Whereas, the Employee has determined that it is in his interest
to continue employment with the Company; and
Whereas, upon the execution of this Agreement, the Old Agreement is
automatically terminated and Employee shall have no rights or claims under that
Old Agreement.
Now, Therefore, in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Employee and the Company hereby agree as
follows:
AGREEMENT
1. DUTIES. The Company does hereby hire, engage, and employ the
Employee as the Senior Vice President, Chief Financial Officer and Secretary of
the Company and Employee does hereby accept and agree to such hiring,
engagement, and employment. Employee shall serve the Company in such position
fully, diligently, competently, and in conformity with provisions of this
Agreement and the corporate policies of the Company as they presently exist, and
as such policies may be amended, modified, changed, or adopted during the Period
of Employment, as hereinafter defined.
During the Period of Employment Employee shall also serve as the Senior
Vice President, Chief Financial Officer and Secretary of each subsidiary or
affiliate of the Company that is now or that becomes a part of the Xxx. Xxxxxx
Company Group. As used in this Agreement, the term the "Xxx. Xxxxxx Company
Group" shall mean and refer to the Company and the Company's subsidiaries and
affiliates from time to time.
Subject to specific elaboration by the Board of Directors of the
Company as to the duties (which shall be consistent herewith and with Employee
offices provided for hereunder) that are to be performed by Employee and the
manner in which such duties are to be performed, the duties of Employee shall
entail those duties customarily performed by a Senior Vice President, Chief
Financial Officer and Secretary of a company with a sales volume and the number
of employees commensurate with those of the Company. Provided, however, that at
all times during the Period of Employment, Employee shall perform those duties
and fulfill those responsibilities and refrain from those activities that are
reasonably prescribed or proscribed by the Board of Directors of the Company to
be performed or refrained from by his consistent with his positions with the
Company.
Employee shall be responsible and report only to the Company's
President and Chief Executive Officer.
Throughout the Period of Employment, Employee shall devote his full
time, energy, and skill to the performance of his duties for the Company and for
the benefit of the Company and the Xxx. Xxxxxx Company Group. The foregoing
notwithstanding, Employee shall be permitted to (i) engage in charitable and
community affairs, (ii) act as a director of any corporations or organizations
outside the Xxx. Xxxxxx Company Group not in competition with the Company or any
member of the Xxx. Xxxxxx Company Group and to manage such investments, not to
exceed three (3) in number, and receive compensation therefore, and (iii) to
make investments of any character in any business or businesses not in
competition with the Company or any member of the Xxx. Xxxxxx Company Group and
to manage such investments (but not be involved in the day to day operations of
any such business), provided, in each case and collectively, that the same does
or do not constitute or involve Employee in a conflict of interest
the Company or any member of the Xxx. Xxxxxx Company Group or
interfere with the performance of Employee's duties under this Agreement.
Employee shall exercise due diligence and care in the performance of
his duties for and the fulfillment of his obligations to the Company under this
Agreement.
The Company shall furnish Employee with office, secretarial and other
facilities and services as are reasonably necessary or appropriate for the
performance of Employee's duties hereunder and consistent with his position as
the Senior Vice President, Chief Financial Officer and Secretary of the Company.
2. PERIOD OF EMPLOYMENT. The Period of Employment (as defined below)
shall, unless sooner terminated as provided herein, be the two (2) year period
commencing on the date of execution of this Agreement.
Unless the Company gives notice of termination as provided under this
Agreement, this Agreement will automatically renew on each annual anniversary
from the execution of this Agreement for a successive two-year period.
3. COMPENSATION.
(a) BASE SALARY. During the Period of Employment, the Company
shall pay Employee, and Employee agrees to accept from the Company, in payment
for his services a base salary of One Hundred Seventy-Five Thousand Dollars
($175,000.00) per year ("Base Salary"), payable in equal semi-monthly
installments or at such other time or times as Employee and the Company shall
agree. Upward adjustment to the Base Salary shall be considered by the Company's
Board of Directors not less frequently than annually. The Company's Board of
Directors at any time or times may, but shall have no obligation to, supplement
Employee's salary by such bonuses and/or other special payments and benefits as
the Board of Directors of the Company in its sole and absolute discretion may
determine.
(b) INCENTIVE COMPENSATION. During the Period of Employment, Employee
shall:
(i) participate in any incentive compensation plan adopted by the
Company; or
(ii) if the Company, for any reason, shall not adopt and
implement an incentive compensation plan in replacement of the 1997
Incentive Plan for eligible employees of the Company (including
Employee), Company and Employee agree that this Agreement shall
provide Employee with the opportunity to earn and be paid incentive
compensation to the same extent that he was eligible to earn and be
paid incentive compensation under the incentive compensation plan
under which, pursuant to the provisions of this Section 3(b), Employee
was most recently eligible to earn and be paid incentive compensation
by the Company.
4. FRINGE BENEFITS. During the Period of Employment, Employee shall be
entitled to the following fringe benefits.
(a) BENEFIT PLANS. Employee shall be entitled to participate
in all benefit plans and programs generally available to all other senior
management employees of the Company or to all employees of the Company working
in Salt Lake City, Utah, subject to any restrictions specified in such plans and
to receive such other benefits and conditions of employment as are provided to
all other senior officers or executives of the Company as of the date of this
Agreement.
(b) EQUITY PLAN. Employee shall be entitled to participate in
an equity based plan or arrangement (the "Equity Plan") consistent with the
letter from Xxxxxxx X. Xxxxxxx, Xx. to Xxxxxxxx Xxxxxx, dated August 5, 1996. In
the event that (i) the Company fails to adopt the Equity Plan, Employee may
terminate this Agreement and his employment hereunder with Good Reason, as
hereinafter defined, in accordance with the provisions of Section 9(b)
("Termination by Employee-Termination-With Good Reason"). Employee's right to
terminate this Agreement and his employment hereunder with Good Reason in
accordance with said Section 9(b) shall be Employee's sole and exclusive remedy
for or resulting from the failure, for any reason, of the Company or its Board
of Directors to create or implement the Equity Plan or to take any other action
specified in this Section 4(b).
Anything in this Agreement or in such plan or arrangement to the
contrary notwithstanding, the inclusion in such plan or arrangement of any
provision(s) addressing participation by Employee in such plan or arrangement
for a period of years shall not be interpreted as a promise of continued
employment by the Company for such period of years or any other period of time.
The plan or arrangement to be proposed by Employee shall provide that
any payments made thereunder, in conjunction with any other payments that
constitute "parachute payments" (as defined in Section 280G(b)(A) of the
Internal Revenue Code) (the "Code"), shall be limited such that no such payments
or portions thereof constitute an "excess parachute payment" (as defined in
Section 280G(b)(1) of the Code) or are otherwise nondeductible by the Company
for tax purposes under any other provision of the Code.
(c) VACATION AND OTHER LEAVE. Employee shall be entitled to
such amounts of paid vacation and other leave, but not less than three (3) weeks
vacation per twelve-month period of employment, as from time to time may be
allowed to the Company's senior management personnel generally, with such
vacation to be scheduled and taken in accordance with the Company's standard
vacation policies applicable to such personnel.
(d) VESTING ON DEATH OR DISABILITY. Upon any termination of
this Agreement and Employee's employment hereunder by reason of Employee's death
or Permanent Disability, as defined in Section 7(b) ("Death or Disability -
Definition of Permanently Disabled and Permanent Disability"), provided that the
terms and provisions of such plan and applicable law permit, any theretofore
deferred or unvested portion of any award made to Employee in respect of any
retirement, pension, profit sharing, long term incentive, and similar plans
automatically shall become fully vested in Employee and shall be nonforfeitable,
and shall continue in effect and be redeemable by or payable to Employee (or his
designated beneficiary or estate) at the time and on the same conditions as
would have applied had Employee's employment not been so terminated. It is
expressly provided, however, that nothing in this Section 4(d) shall obligate
the Company to provide full vesting upon death or disability in connection with
participation by Employee in the equity plan or arrangement contemplated under
Section 4(b) ("Fringe Benefits-Equity Plan"), further, the provisions governing
payment of any incentive compensation payable to Employee pursuant to the
incentive compensation plan(s) referred to in Section 3(b)
("Compensation-Incentive Compensation") shall govern any payment of incentive
compensation due thereunder in the event of Employee's death or disability.
5. BUSINESS EXPENSES AND AUTOMOBILE ALLOWANCE. During the
Period of Employment, the Company shall pay, or in case paid by Employee in the
first instance, reimburse Employee for, any and all necessary, customary, and
usual expenses incurred by him in connection with the performance of his duties
hereunder, including, without limitation, all traveling expenses, and
entertainment expenses, upon submission of appropriate vouchers and
documentation.
To the extent provided to all other senior officers or executives of
the Company, during the Period of Employment, Employee shall be entitled to
receive an automobile allowance and reimbursement for expenses associated with
the operation and maintenance of an automobile which is comparable to Employee's
current automobile. The Company will reimburse Employee upon presentation of
vouchers and documentation for any such operational and maintenance expenses
which are consistent with the usual accounting procedures of the Company.
6. NO OTHER BENEFITS OR COMPENSATION. Employee, as a result of
his employment by the Company, shall be entitled to only the compensation and
benefits provided for in this Agreement, subject to the terms thereof, and no
others.
7. DEATH OR DISABILITY.
(a) TERMINATION OF EMPLOYMENT. If Employee dies during the Period
of Employment, Employee's employment shall automatically cease and
terminate as of the date of Employee's death.
If Employee becomes Permanently Disabled (as hereinafter
defined) while employed by the Company, (i) Employee's employment and the
Company's obligations hereunder, including the payment of Base Salary pursuant
to Section 3(a) ("Compensation-Base Salary") shall continue for a period of
ninety (90) days from the date on which the Employee is determined to be
Permanently Disabled ("Employee s Disability Date"), and (ii) ninety (90) days
after the Employee's Disability Date, Employee's employment and all obligations
of the Company hereunder shall automatically cease and terminate.
In the case of Employee's death or Permanent Disability (as
hereinafter defined), the Company shall be obligated to pay to Employee (or to
Employee s estate in the case of Employee's death) any Base Salary and any
incentive compensation accrued to Employee as of the date of the Employee's
death, or in the case of Employee's Permanent Disability, as of the Employee's
Disability Date. In the event Employee's employment is terminated on account of
Employee's Permanent Disability, he shall, so long as his Permanent Disability
continues, remain eligible for all benefits provided under any long-term
disability programs of the Company in effect at the time of such termination,
subject to the terms and conditions of any such programs, as the same may be
changed, modified, or terminated for or with respect to all senior management
personnel of the Company.
(b) DEFINITION OF PERMANENTLY DISABLED AND PERMANENT DISABILITY. For
purposes of this Agreement (other than Sections 4 (a) ("Fringe
Benefits-Benefit Plans"), 4 (d) ("Fringe Benefits-Vesting on Death or
Disability"), and the provisions relating to disability insurance contained
in the last sentence of Section 7(a) ("Death or Disability-Termination of
Employment"), the terms "Permanently Disabled" and "Permanent Disability"
shall mean Employee's inability, because of physical or mental illness or
injury, to perform substantially all of his customary duties pursuant to
this Agreement, and the continuation of such disabled condition for a
period of ninety (90) continuous days, or for not less than one hundred
eighty (180) days during any continuous twenty-four (24) month period.
Whether Employee is Permanently Disabled shall be certified to the Company
by a Qualified Physician (as hereinafter defined), or if requested by
Employee a panel of three Qualified Physicians. If Employee requests such a
panel, Employee and the Company shall each select a Qualified Physician who
together shall then select a third Qualified Physician. The determination
of the individual Qualified Physician or the panel, as the case may be,
shall be binding and conclusive for all purposes. As used herein, the term
"Qualified Physician" shall mean any medical doctor who is licensed to
practice medicine in the State of Utah and is reasonably acceptable to each
of Employee and the Company. Employee and the Company may in any instance,
and in lieu of a determination by a Qualified Physician or panel of
Qualified Physicians, agree between themselves that Employee is Permanently
Disabled. The terms Permanent Disability and Permanently Disabled as used
herein may have meanings different from those used in any disability
insurance policy or program maintained by Employee or the Company.
8. TERMINATION BY THE COMPANY.
(a) TERMINATION FOR CAUSE. The Company, by
action of its Board of Directors, may, by providing written notice to Employee,
terminate the employment of Employee under this Agreement for "cause" at any
time. The term "cause" for purpose of this Agreement shall mean:
(i) The refusal of Employee to implement or adhere to lawful policies or
directives of the Board of Directors of the Company consistent with this
Agreement; or
(ii) Employee's conviction of or entrance of a plea of nolo
contendere to (A) a felony, (B) to any other crime, which other crime
is punishable by incarceration for a period of one (1) year or longer,
or (C) other conduct of a criminal nature that may have an adverse
impact on the Company s reputation and standing in the community; or
(iii) conduct that is in violation of Employee's common law duty
of loyalty to the Company; or
(iv) fraudulent conduct by Employee in connection with the
business affairs of the Company, regardless of whether said conduct is
designed to defraud the Company or others; or
(v) theft, embezzlement, or other criminal misappropriation of
funds by
Employee, whether from the Company or any other person; or
(vi) any breach of or Employee's failure to fulfill any of
Employee's obligations, covenants, agreements, or duties under this
Agreement.
Provided, however, that "cause" pursuant to clause (i) or (vi) shall not be
deemed to exist unless the Company has given Employee written notice thereof
specifying in reasonable detail the facts and circumstances alleged to
constitute "cause", and thirty (30) days after such notice such conduct or
circumstances has not entirely ceased or been entirely remedied. If Employee's
employment is terminated for "cause," the termination shall take effect upon the
effective date (pursuant to Section 24 ("Notices")) of written notice of such
termination to Employee. In the event Employee's employment is terminated for
"cause," then except for unpaid accrued vacation, the Company shall have no
obligation to pay Employee any amounts, including, but not limited to Base
Salary, for or with respect to any period after the effective date of the
termination of Employee's employment for "cause," including any obligation under
the replacement to the 1994 Incentive Plan or the Equity Plan.
If the Company attempts to terminate Employee's employment pursuant to
this Section 8(a) and it is ultimately determined that the Company lacked
"cause," the provisions of Section 8(b) ("Termination by the Company-Termination
Without Cause") shall apply, and Employee's sole and exclusive remedy for such
breach of this Agreement by the Company and/or any other damages that Employee
shall have suffered or incurred of any nature whatsoever, shall be to receive
the payments expressly called for by Section 8(b) ("Termination by the
Company-Termination Without Cause") with interest on any past due payments at
the rate of eight percent (8%) per year from the date on which the applicable
payment would have been made pursuant to Section 8(b) ("Termination by the
Company-Termination Without Cause") plus Employee's costs and expenses
(including but not limited to reasonable attorneys' fees) incurred in connection
with such dispute.
(b) TERMINATION WITHOUT CAUSE. The Company may, with or without reason,
terminate Employee's employment under this Agreement without "cause" at any
time, by providing Employee thirty (30) days prior written notice of such
termination. If Employee's employment is terminated pursuant to this
Section 8(b), Employee shall not be obligated to render services to the
Company following the effective date of such notice (the "Notice Date")
except such services as are requested by the Company pursuant to Section 11
("Transition Period Services"), and as its sole and exclusive obligation
and duty to Employee resulting directly or indirectly from the termination
of Employee's employment with the Company and in full and complete
settlement of any and all claims that Employee may have or claim to have
arising directly or indirectly out of the termination of his employment
with the Company, the Company shall, subject to Section 12 ("Non
Competition") pay Employee, as severance pay, an amount (the "Severance
Amount") equal to the product of multiplying the then current semi-monthly
base salary by thirty-six (36) semi-monthly periods (the "Severance
Period"). The Severance Amount shall be payable by the Company to Employee
in an amount equal to the Base Salary payable in twelve (12) equally
monthly installments commencing on the Notice Date. The Company shall also
pay to the Employee a portion of any discretionary bonus (the "Bonus
Portion"), as determined by the Company's Board of Directors, referred to
in Section 3(a) ("Compensation-Base Salary"), that, but for the termination
of Employee's employment, would have been paid to Employee for or with
respect to the calendar year in which Employee's employment is terminated.
The Bonus Portion shall consist of that percentage of the said
discretionary bonus determined by dividing the number of full or partial
calendar months during the calendar year in which Employee's employment is
terminated that Employee was in the employ of the Company by twelve (12).
Until the end of the Severance Period or until Employee is gainfully
employed by another employer, which ever time period is less, the Company
shall allow Employee to continue participation in the Company s group
health insurance plan at the Company's expense. In accordance with all
applicable laws, Employee shall be extended all COBRA rights and benefits
at the end of the Severance Period.
9. TERMINATION BY EMPLOYEE.
(a) TERMINATION-WITHOUT GOOD REASON. Employee shall have the
right to terminate this Agreement and his employment hereunder at any time upon
thirty (30) days prior written notice of such termination to the Company. Except
as expressly set forth in Section 11 ("Transition Period Services"), upon the
effective date of any such termination all obligations and rights of Employee
and the Company hereunder shall terminate and cease.
(b) TERMINATION-WITH GOOD REASON. If the Company:
(i) requires Employee to relocate his home, without Employee's
consent, to a location which is more than 75 miles from 000 Xxxx
Xxxxxxx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000; or
(ii) fails to provide Employee with the compensation and benefits
called for by this Agreement; or
(iii) assigns Employee to a lower organizational level than the
level at which he is on the date of this Agreement assigned, or
substantially diminishes Employee's assignment, duties,
responsibilities, or operating authority from those specified in
Section 1 ("Duties"); or
(iv) fails to implement an incentive compensation plan required
by Section 3(b) ("Compensation-Incentive Compensation"); or
(v) fails to implement an equity plan or arrangement required by
Section 4(b) ("Fringe Benefits-Equity Plan"); or
(vi) is divested, by sale, closure, liquidation, foreclosure, or
other means, of any substantial part of its assets or business as now
held or conducted; or
(vii) breaches this Agreement and such breach continues for a
period of thirty (30) days after written notice thereof given by
Employee to the Company, then any one or more of such circumstances
shall constitute "Good Reason", and, subject to the provisions of
Section 10 ("Means and Effect of Termination"), Employee shall have
the right to terminate this Agreement and his employment hereunder for
Good Reason, if, thirty (30) days after the effective date of
Employee's notice to the Company of such circumstances constituting
Good Reason, such circumstances continue to exist, and for all
purposes of this Agreement any such termination of this Agreement by
Employee shall have the same effects under this Agreement as the
termination of the Employee's employment under this Agreement by
Company without "cause."
10. MEANS AND EFFECT OF TERMINATION. Any termination of Employee's
employment under this Agreement shall be communicated by written notice of
termination from the terminating party to the other party. The notice of
termination shall indicate the specific provision(s) of this Agreement relied
upon in effecting the termination and shall set forth in reasonable detail the
facts and circumstances alleged to provide a basis for termination, if any such
basis is required by the applicable provision(s) of this Agreement. Any notice
of termination by the Company shall be approved by a resolution duly adopted by
a majority of the directors of the Company then in office. The burden of
establishing the existence of "cause" or Good Reason shall be upon the
terminating party. If Employee's employment is terminated by either party, then
promptly after the effective date of such termination or in the manner and at
the time or times provided in the relevant Section of this Agreement, the
Company promptly shall provide and pay to Employee, or in case of his death his
estate or heirs, all compensation, benefits, and reimbursements due or payable
to Employee for the period to the effective date of the termination. To the
extent permitted by applicable law, the calendar month in which Employee's
employment is terminated shall be counted as a full month in determining amount
and vesting of any benefits under benefit plans of the Company.
11. TRANSITION PERIOD SERVICES. In the event Employee's employment is
terminated by the Company pursuant to section 8(b) ("Termination by the
Company-Termination Without Cause") or by Employee pursuant to Section 9(a)
("Termination by Employee-Without Good Reason"), if requested by the Company in
writing, Employee shall render such services, on a part-time basis for a period
not to exceed sixty (60) days after the effective date of the notice of
termination (whether given by the Company or by Employee), as the Company's
Board of Directors reasonably requests for transition purposes. Employee shall
receive no compensation for such services, other than the payment of Base Salary
as provided in Section 8(b) ("Termination by the Company-Termination Without
Cause") and reimbursement for expenses incurred by Employee in providing such
services as provided in, and subject to the provisions of, Section 5 ("Business
Expenses and Automobile Allowance")
12. NON COMPETITION. For a period of one year from the date of the
termination of Employee's employment hereunder, Employee shall not become an
employee, owner (except for passive investments of not more than three percent
(3%) of the outstanding shares of, or any other equity interest in, any company
or entity listed or traded on a national securities exchange or in an
over-the-counter securities market), officer, agent or director of any firm or
person which either directly competes with a line or lines of business of the
Company accounting for ten percent (10%) or more of the Company's gross sales,
revenues or earnings before taxes. If, in any judicial proceeding, a court shall
refuse to enforce all of the separate covenants deemed included in this
paragraph, the parties intend that those of such covenants which, if eliminated,
would permit the remaining separate covenants to be enforced in such proceedings
shall, for the purpose of such proceedings, be deemed eliminated from the
provisions of this Section 12.
In addition to any other remedies that may otherwise be available for a
breach of Section 12 hereof by Employee, Employee agrees that in the event of
such breach he shall irrevocably forfeit any right he may have to any remaining
severance payment to be made under Section 8(b) ("Termination by the
Company-Termination Without Cause") subsequent to such breach.
13. ASSIGNMENT. This Agreement is personal in its nature and neither of
the parties hereto shall, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder; provided, however, that,
in the event of the merger, consolidation, or transfer or sale of all or
substantially all of the assets of the Company with or to any other individual
or entity, this Agreement shall, subject to the provisions hereof, be binding
upon and inure to the benefit of such successor and such successor shall
discharge and perform all the promises, covenants, duties, and obligations of
the Company hereunder.
14. GOVERNING LAW. This Agreement and the legal relations hereby
created between the parties hereto shall be governed by and construed under and
in accordance with the internal laws of the State of Utah, which internal laws
exclude any law or rule of the State of Utah, or any interpretation thereof,
that would require or call for the application of the laws of any other state or
jurisdiction hereto.
15. ENTIRE AGREEMENT. Except with respect to final agreement regarding
those open incentive compensation matters described in Section 3(b)
("Compensation-Incentive Compensation") and the equity plan or arrangement
contemplated under Section 4(b) ("Fringe Benefits-Equity Plan"), this Agreement
embodies the entire agreement of the parties hereto respecting the matters
within its scope. This Agreement supersedes all prior agreements of the parties
hereto on the subject matter hereof. Any prior negotiations, correspondence,
agreements, proposals, or understandings relating to the subject matter hereof
shall he deemed to be merged into this Agreement and to the extent inconsistent
herewith, such negotiations, correspondence, agreements, proposals, or
understandings shall be deemed to be of no force or effect. There are no
representations, warranties, or agreements, whether express or implied, or oral
or written, with respect to the subject matter hereof, except as set forth
herein.
This Agreement shall not be modified by any oral agreement, either
express or implied, and all modifications hereof shall be in writing and be
signed by the parties hereto. The provisions of this and the immediately
preceding sentence themselves may not be modified, either orally or by conduct,
either express or implied, and it is the declared intention of the parties
hereto that no provision of this Agreement, including said two sentences, shall
be modifiable in any way or manner whatsoever other than through a written
document signed by the parties hereto.
16. WAIVER. Failure to insist upon strict compliance with any of the
terms, covenants, or conditions hereof shall not be deemed a waiver of such
term, covenant, or condition, nor shall any waiver or relinquishment of, or
failure to insist upon strict compliance with, any right or power hereunder at
any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.
17. NUMBER AND GENDER. Where the context requires, the singular shall
include the plural, the plural shall include the singular, and any gender shall
include all other genders.
18. SECTION HEADINGS. The section headings in this Agreement are for
the purpose of convenience only and shall not limit or otherwise affect any of
the terms hereof.
19. DISPUTE RESOLUTION.
(a) NEGOTIATION AND MEDIATION. In the event any dispute arises
hereunder, the parties shall first attempt to resolve the dispute by negotiation
in good faith. If the dispute cannot be timely resolved through negotiation, the
parties will, before resorting to any of their remedies at law or in equity, try
to settle the dispute in good faith by mediation in Salt Lake City, Utah or such
other location as the parties may agree, under the then operative mediation
rules of the American Arbitration Association or such other mediation tribunal
or private mediator or medication services provider as the parties agree. The
mediator shall be such person as the parties mutually agree, but if the parties
have failed to agree on a mediator within seven (7) days after the date on which
any party demands that the parties proceed to mediation, the mediator shall be
selected by the American Arbitration Association or such other mediation
services provider as the parties agree.
(b) OTHER REMEDIES. Failing settlement of the dispute by
negotiation or mediation, the parties shall, unless they mutually agree to
resolve the dispute finally by arbitration, be entitled to pursue their legal
and equitable remedies (subject to the provisions of Section 20 ("Liquidated
Damages-Breach by the Company") in any court having jurisdiction.
20. LIQUIDATED DAMAGES-BREACH BY THE COMPANY. Because the damages
suffered by Employee in such an event would be difficult or impossible to
estimate, establish, ascertain, or prove, and in order to provide Employee with
a remedy in such an event without the necessity and associated cost of Employee
having to establish or prove the damages suffered by Employee as a result
thereof (which remedy the parties hereto have and do agree would be appropriate
and adequate compensation to Employee in such event), in the event that this
Agreement and Employee's employment hereunder shall be terminated (whether by
the Company or Employee) and thereafter Employee shall prevail in any dispute
between Employee and the Company relative to, involving, or concerning the
legality of or justification for the termination of this Agreement and
Employee's employment hereunder and any other issues or matters directly or
indirectly arising out of or in connection with such termination and Employee's
employment by the Company, subject to Section 12 ("Non Competition") Employee
shall be entitled to the continued payment of the Base Salary as provided in
Section 8(b) ("Termination by the Company-Termination Without Cause") as
liquidated and exclusive damages and not as a penalty, and in such case this
Agreement and Employee's employment hereunder, shall for all purposes be treated
as having been terminated by the Company without "cause" pursuant to Section
8(b) ("Termination by the Company-Termination Without Cause").
In the event Employee files any claim, complaint, charge, action, or
lawsuit against the Company or its employees, agents, officers, directors, or
any other person affiliated or associated with the Company, with any
governmental agency, any state or federal court, or any mediation or arbitration
body or group, for or with respect to a matter, claim, or incident, known or
unknown, which has occurred or arisen or which shall hereafter occur or arise
relative to, involving, or concerning the termination of this Agreement and
Employee's employment hereunder (whether as a result of action of Employee or
the Company) and any other issues or matters directly or indirectly arising out
of or in connection with such termination and Employee's employment by the
Company, and in such claim, complaint, action, charge, or lawsuit, Employee
alleges or asserts the right to recover, receive, or be awarded damages from the
Company or its employees, agents, officers, directors, or any other person
affiliated or associated with the Company in addition to or in lieu of the
liquidated damages expressly provided for in this Section 20, Employee hereby
stipulates, agrees, and consents to the dismissal or withdrawal, with prejudice,
of any such claim, complaint, action, charge, or lawsuit (collectively, a
"Dismissable Claim"). In the event that Employee files any Dismissable Claim,
Employee shall be liable to the party or parties against whom the Dismissable
Claim is filed (the "Nonfiling Party") and shall indemnify and save the
Nonfiling Party harmless from all costs and expenses, including, but not limited
to, attorneys fees, incurred by the Nonfiling Party and/or the Nonfiling Party s
officers, agents, employees, directors, and/or any other person affiliated or
associated with the Nonfiling Party, if any, in defending or responding to any
such Dismissable Claim, regardless of whether such defense or response is before
a state or federal court or administrative agency or a mediation or arbitration
body and regardless of who might ultimately be deemed to be the prevailing party
as to any such Dismissable Claim.
21. ATTORNEY'S FEES. Employee and the Company agree that in any dispute
resolution proceedings arising out of this Agreement, the prevailing party shall
be entitled to its or his reasonable attorney's fees and costs incurred by it or
his in connection with resolution of the dispute in addition to any other relief
granted.
22. INDEMNIFICATION. If Employee is made a party to, is threatened to
be made a party to, or is otherwise involved in any action, suit, or proceeding,
whether civil, criminal, administrative or investigative (a "Proceeding") by
reason of the fact that he is or was a director, officer, or employee of the
Company or is or was serving at the request of the Company as a director,
officer, employee, or agent of another corporation or of a partnership, joint
venture, trust, or other enterprise, including service with respect to employee
benefit plans, whether before, during or after expiration or termination of this
Agreement, the Company shall indemnify and hold Employee harmless to the fullest
extent authorized by the Delaware General Corporation Law, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Company to provide broader
indemnification rights than such law permitted the Company to provide prior to
such amendment), against all expense, liability, and loss (including attorneys
fees, judgment fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by Employee in connection therewith,
and such indemnification shall continue after Employee ceases to be a director,
officer, employee, or agent of the Company and shall inure to the benefit of
Employee's heirs, executors, and administrators. The right to indemnification
conferred hereby shall include the right to be paid by the Company the
reasonable expenses incurred in defending any Proceeding in advance of its final
disposition as such expenses are incurred. The indemnification provided herein
shall not be deemed exclusive of any other rights to which Employee may be
entitled under the Certificate of Incorporation, Bylaws, any agreement, or vote
of stockholders or disinterested directors of the Company, or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office or position, and shall continue with respect to action in
such capacities even if Employee has thereafter ceased to be a director,
officer, employee, or agent of the Company, and shall inure to the benefit of
Employee's heirs, executors and administrators. Except in the case of fraudulent
conduct or theft, embezzlement, or other criminal misappropriation of funds by
Employee, then nothing in this Agreement waives the Company's obligations under
this paragraph, even if Employee is terminated.
23. SEVERABILITY. In the event that a court of competent jurisdiction
determines that any portion of this Agreement is in violation of any statute or
public policy, then only the portions of this Agreement which violate such
statute or public policy shall be stricken, All portions of this Agreement which
do not violate any statute or public policy shall continue in full force and
effect. Furthermore, any court order striking any portion of this Agreement
shall modify the stricken terms as narrowly as possible to give as much effect
as possible to the intentions of the parties under this Agreement.
24. NOTICES. All notices under this Agreement shall be in writing and
shall be either personally delivered or mailed postage prepaid, by certified
mail, return receipt requested, (a) if to the Company, to it at 000 Xxxx Xxxxxxx
Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 Attention: President or (b) if to Employee to
him at 000 Xxxx Xxxxxxx Xxxxx, Xxxx Xxxx Xxxx, Xxxx 00000 by the same means, or
in either party's case to such other address or to the attention of such person
as the party has specified by prior written notice to the other party. Notice
shall be effective when personally delivered, or five (5) business days after
being so mailed.
25. COUNTERPARTS. This Agreement may be executed in counterparts
collectively containing the signatures of each of the parties.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and Employee has hereunto signed this
Agreement, on the date first written above.
XXX. XXXXXX' ORIGINAL COOKIES, INC.,
a Delaware Corporation (the "Company")
By:/s/Xxxxx X. Xxxxxx
Name:Xxxxx X. Xxxxxx
Its:President/CEO
/s/L. Xxx Xxxxxx
L. XXX XXXXXX ("Employee")
