Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement"), is effective as of January 1,
2002, (the "Effective Date") between Silver State Vending Corporation (the
"Company"), and Xxxxx Xxxxxxx (the "Executive").
WHEREAS, the Company desires to employ the Executive in an executive
capacity and the Executive desires to accept such employment, all upon the terms
and subject to the conditions set forth in this Agreement; and
WHEREAS the shares of the Company are trading at four cents; and
WHEREAS the Executive has been working industriously and full time:
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants set forth in this Agreement, the Company and the Executive agree as
follows:
1. Recitals. The above recitals are true and correct and are
incorporated herein by reference.
2. Employment; Term. The Company shall employ the Executive, and the
Executive accepts such employment, on the terms and subject to the conditions
set forth in this Agreement, for an initial term commencing on the Effective
Date and expiring on the fifth anniversary of the Effective Date (the "Initial
Term"). The term of this Agreement shall automatically be extended for a period
of two years (a "Renewal Term"), on the fifth anniversary of the Effective Date
and on each subsequent bi-anniversary of the Effective date, unless earlier
terminated in accordance with the provisions of Section 6 Termination. For
purposes of this Agreement, the word "Term" means the Initial Term and all
Renewal Terms. All provisions of this Agreement shall remain in effect during
the Initial Term and all Renewal Terms.
3. Services.
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3.1 Office and Duties. During the Term, the Executive shall
serve as Chief Executive Officer of the Company with such duties, authority and
responsibility as are commensurate with such position, including, without
limitation, responsibility for reviewing and enhancing the profitability and
quality of service of the Company. In exercising his duties and responsibilities
hereunder, the Executive shall have all the power and authority necessary to
fulfill and discharge his duties and responsibilities hereunder. The Executive
shall have the authority to retain legal counsel on behalf of the Company,
including but not limited to retaining the services of the law offices of
Scholl, Ticktin, & Associates, P.A. Notwithstanding the foregoing, the Executive
shall not, in connection with his employment hereunder, cause or permit the
Company or any of its subsidiaries to enter into any agreement, commitment or
arrangement with, or pay any fees or other amounts to any Person not dealing at
arm's length with the Executive without first disclosing the nature of such
relationship to the Board of Director's and obtaining the prior written approval
of the
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Board of Directors to any such agreement, commitment, arrangement or payment.
The Executive shall be responsible for such additional duties commensurate with
his position not materially inconsistent with the foregoing as may be reasonably
determined by Board of Directors from time to time.
3.2 Best Efforts. During the Term, the Executive shall
diligently and competently devote the Executive's best efforts to the business
and affairs of the Company and shall use his best efforts, skills and abilities
to promote the interests of the Company and otherwise to discharge his
obligations under this Agreement. Notwithstanding the provisions contained
herein, the Executive may also maintain his practice of law.
4. Compensation.
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4.1 Salary. During the Term, the Executive shall receive a
base salary paid on a monthly basis on the first business day of each month
("Base Salary"). For the first six months following the Effective Date, the
Executive shall receive a Base Salary of $5,000 per month. For the second sixth
month period following the Effective Date, the Executive shall receive a Base
Salary of $10,000 per month. For the third six month period following the
Effective Date, the Executive shall receive a base salary of $15,000. The Board
of Directors may increase these amounts. After 18 months, the Board of Directors
shall increase the Executive's Base Pay and again each six months commensurate
with the Company's gross profits. Once increased, the Executive's Base Pay shall
not be reduced.
4.2 Initial Stock Options. The Company shall grant to the
Executive options to purchase 5,000,000 shares of common stock of the Company.
The exercise price of the options shall be $.04 per share. The Initial Stock
Options shall have a term equal to the Term of this Agreement, plus two years
after the termination of this Agreement, regardless of the reason for
termination. The stock options shall vest 100% on the Effective Date. Upon the
exercise of the stock options, Executive shall be deemed the owner of the common
stock into which the stock options were exercisable. Upon any change in the
number of outstanding shares of the Company's common stock by reason of a stock
dividend, stock split, recapitalization, merger, consolidation, exchange of
shares, reorganization or other change in the Company's corporate structure or
stock, an appropriate and equitable adjustment will be made in the number of
shares covered by this option and the option prices thereof. Any such adjustment
shall not change the total option price applicable to the unexercised portion of
this option, but will provide for corresponding adjustments in the option price
for each share covered by this option. All adjustments and determinations made
by the Board of Directors of the Company in connection therewith shall be
effective and binding for all purposes of this option. The grant of this option
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or other changes of its capital
or business structure, to merge or consolidate, or to dissolve, liquidate, sell
or transfer all or any part of its business or assets, or to do any other
corporate act, whether of a similar character or otherwise.
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Upon the exercise of the options, the Company shall immediately register the
opted shares following the Executive's execution of the option.
4.3 Cash Bonus. The Executive shall be entitled to receive an
annual cash bonus based on the Executive's performance during the applicable
year. The amount of the bonus payable in any year shall be determined by
reference to the profitability of the Company and such other measures as the
Board of Directors and the Executive may agree. The terms and conditions
relating to the payment of the bonus shall be negotiated in good faith. The Cash
Bonus shall be no less than 7% of the net profits less all expenses and
repayment of debt.
4.4 Stock Option Bonus. The Executive shall be entitled to
receive an annual stock option bonus based on the Executive's performance during
the applicable year. The amount of the stock option bonus in any year shall be
determined by reference to the profitability of the Company and such other
measures as the Board of Directors and the Executive may agree. The terms and
conditions relating to the stock option bonus shall be negotiated in good faith.
The annual stock option bonus shall have the same price and duration terms as
the grant of Initial Stock Options as set forth above and such bonus stock
options shall be governed by the terms of Section 4.2, in all respects. The
minimum number of shares optioned each year shall be 100,000 shares.
5. Reimbursement of Expenses; Benefits.
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5.1 Reimbursement of Expense. Upon submission of appropriate
documentation and in specific accordance with such guidelines as may be
established from time to time by the Company, the Executive shall be entitled to
reimbursement for all reasonable, out-of-pocket expenses incurred by him during
the Term in connection with the proper and efficient discharge of his duties
hereunder. Such reimbursements shall be subject to review by the Board of
Dirtectors.
5.2 Employee Benefit Plans and Programs. During the Term, the
Executive shall be entitled to participate in all pension, medical and dental
insurance, hospitalization, disability and other similar employee benefit plans
and programs of the Company, subject to eligibility and vesting requirements
from time to time in effect, which at any time during the Term may be offered by
the Company to its executive officers generally. During the Term, the Company
shall pay for 100% of the costs to provide the Executive with "family" coverage
under its medical and dental insurance programs to the extent not otherwise
available.
5.3 Vacations. The Executive shall be entitled to four weeks
of paid vacation during each calendar year, taking into consideration the
business needs of the Company. The Executive may carryover a maximum of two
weeks' unused, accrued vacation to subsequent years.
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5.4 D & O Insurance. The Company shall purchase and maintain
Directors and Officers liability insurance on behalf of the Executive for the
Term. To the extent it is available, the Company shall purchase and maintain D &
O insurance that offers tail coverage, to protect the Executive from actions
brought after the Term but arising from alleged events during the Term.
6. Termination. The Executive's employment under this Agreement may be
terminated prior to the end of the Term by the Company or the Executive without
any breach of this Agreement only under the following circumstances:
6.1 Death. The Executive's employment under this Agreement
shall terminate upon the Executive's death.
6.2 Disability. In the event of the Executive's "Disability"
(as defined below) the Company may terminate employment of the Executive
hereunder. "Disability," for the purposes of this Agreement, shall be deemed to
have occurred, at the Company's option, in the event the Executive, by reason of
mental or physical disability or illness, is unable to perform his duties as
described in Section 3 for a period (the "Period of Disability") of more than
180 days in any one employment year, upon the Company giving the Executive at
least 30 days' written notice of its intention to so terminate; provided,
however, that if the Executive shall resume his duties within 30 days following
the receipt of such notice and shall adequately perform such duties for 90 out
of 120 consecutive days thereafter, the employment term shall continue in full
force and effect and the notice of intention to terminate shall have no further
force or validity. Termination due to Disability shall be deemed to have
occurred upon the first day of the month following the determination of
Disability as defined in the preceding sentence. Notwithstanding the provisions
contained herein, the Company shall afford the Executive all rights provided by
the Americans with Disabilities Act.
6.3 Bankruptcy. The Board of Directors may terminate the
Executive's employment hereunder if the Company shall become bankrupt or
insolvent or if any proceedings for relief under any bankruptcy law or any law
providing for the relief of debtors or any proceeding for the dissolution of the
Company shall be instituted by or against the Company and such proceedings shall
be unstayed and in effect for a period of 90 consecutive days.
6.4 Cause. The Company may terminate the Executive's
employment under this Agreement for "Cause" (as hereinafter defined). "Cause"
shall mean: (A) committing or participation in an injurious act of fraud, gross
neglect, wilful misconduct, recklessness, embezzlement or dishonesty against the
Company or any of its affiliates; (B) engaging in a criminal enterprise
involving moral turpitude; (C) conviction of an act or acts (1) constituting a
felony under the laws of the United States or any state thereof, or (2) if
applicable, loss of any state or federal license required for the Executive to
perform the Executive's material duties or responsibilities for the Company;
provided however that this Section 6.4(C)(2) shall not be applicable if such
loss of license shall be a result of any
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actions or inactions outside the Executive's control; (D) habitual neglect of
duty, gross incompetence, or wilful disobedience of the reasonable and lawful
orders of the Board of Directors or the Company which are not inconsistent with
the provisions of this Agreement or the Executive's duties and authority as
provided in this Agreement; or (E) breach of or failure to observe any of the
material terms or conditions of this Agreement. In the event that the event
constituting "Cause" is a criminal offense which the Executive contests by
appropriate pleas and proceedings, then at the Company's option the Executive
may be suspended from his office (and his compensation shall continue to be paid
to him during the period of such suspension). If the Executive is acquitted or
the charges against him are withdrawn, then the Executive shall be restored to
office. Upon any disposition of the Executive's case that is not an acquittal or
withdrawal of charges, the Executive shall be deemed terminated for Cause as of
the date of the crime, all compensation paid to him from the date of his
suspension shall be forfeited and refunded by the Executive to the Company,
provided, however, that (i) the Executive's implementation in good faith of
decisions made by the Board of Directors or the Company shall not constitute
"Cause," and (ii) if an event constituting "Cause" under Sections (A) (with
respect to gross neglect only), (D) or (E) is curable, then the Executive shall
have the opportunity to cure the same within 30 days after receipt of written
notice from the Company setting forth the conduct committed in reasonable detail
and that the Company intends to terminate the Executive for "Cause" if the
breach is not timely cured.
6.5 Good Reason. The Executive may resign his employment
hereunder for "Good Reason" (as hereinafter defined). "Good Reason" shall mean
the Company's breach of or failure to observe any of the material terms or
conditions of this Agreement and the Company's failure to cure the same within
30 days after its receipt of written notice from the Executive, specifying the
nature of the breach in reasonable detail and that the Executive will terminate
his employment hereunder for Good Reason if the breach is not timely cured.
6.6 "Cure" Opportunity. In the event there is a breach or
other event giving the Executive or the Company the right to terminate this
Agreement after the lapse of a cure period in Section 6.4 or Section 6.5 above,
which is capable of being cured and cannot be cured by payment of money and
cannot be reasonably cured within the 30 day period applicable under either
Section 6.4 or Section 6.5 above, then the cure period shall be extended for up
to 90 days after the expiration of the applicable 30 day period, so long as the
Executive or the Company has commenced the cure within the applicable 30 day
period and thereafter diligently prosecutes it to completion.
6.7 Change in Control. For purposes of this Agreement, a
"Change in Control" means any one of the following events:
(a) The acquisition, at any time after the date
hereof, by any person, group, or entity of beneficial ownership of 50% or more
of the outstanding shares of Common Stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote generally in
election of directors; or
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(b) All or any of the individuals who, as the first
business day following signature of this Agreement by all parties, constitute
the full Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any person becoming a
director subsequent to this Agreement whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or
(c) Approval by the shareholders of the Company of
(i) a reorganization, merger, or consolidation with respect to which persons who
were the shareholders of the Company immediately prior to such reorganization
thereafter, own more than 50% of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities; (ii) a liquidation or
dissolution of the Company; or (iii) the sale of all or substantially all of the
assets of the Company, unless the approved reorganization, merger,
consolidation, liquidation, dissolution or sale is subsequently abandoned.
7. Payments to Executive after Termination of Employment.
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7.1 Payments After Death. If the Executive's employment is
terminated under Section 6.1 above, the Executive's designate beneficiary, or,
in the absence of such designation, the estate or other legal representative of
the Executive (the "Representative"), shall be entitled to (i) all Base Salary,
at the rate in effect immediately prior to death, for a period of one year after
the date of death, (ii) the cash equivalent of all unused, accrued vacation, and
(iii) a pro rata share of the annual cash and annual stock option bonuses to
which the Executive otherwise would have been entitled.
7.2 Payments After Termination for Disability. If the
Executive's employment hereunder is terminated under Section 6.2 above, the
Executive shall be entitled to receive (i) the Base Salary, at the rate in
effect immediately prior to the commencement of Disability, for the Term, (ii)
the cash equivalent of all unused, accrued vacation, and (iii) the annual cash
and annual stock option bonuses for the year in which the Executive was
terminated on account of Disability. In addition, the Company shall be
responsible for making payments on behalf of the Executive and his family to
maintain coverage of health and other benefits under COBRA, for the maximum
period allowed. Any amounts provided for in this Section 7.2 shall be in
addition to any other long-term disability benefits received from any source by
the Executive.
7.3 Payments After Termination for Cause. If the Executive's
employment hereunder is terminated under Section 6.4 above, the Executive shall
receive the Base Salary accrued through the date of termination in accordance
with the terms of this Agreement and shall not be entitled to receive any other
payments or compensation from the Company of any nature whatsoever.
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7.4 Payments After Termination for Good Reason, Without Cause
or Change of Control. If the Executive's employment hereunder is terminated by
the Executive under Section 6.5, is terminated for any reason other than Cause
within eighteen months after a Change of Control, or is terminated by the
Company other than under Section 6.1, 6.2, or 6.4 above, then the Executive
shall receive (i) all salary and benefits provided for in Section 4.1, 4.2, 4.3,
and 4.4 above for the Term and (ii) the cash equivalent of any unused, accrued
vacation. In addition, the Company, to the extent permitted by law and contract,
shall maintain coverage for Executive and his family on all employee benefit
plans, as identified in Section 5.2 above, for the Term. If law or contract
prevents the Company from maintaining the Executive's and his family's coverage
on employee benefit plans, then the Company shall be responsible for making
payments on behalf of the Executive and his family to maintain coverage under
COBRA for the maximum period allowed.
8. Withholding. Anything to the contrary notwithstanding, all payments
required to be made by the Company hereunder to the Executive or the Executive's
estate or beneficiaries shall be subject to the withholding of such amounts, if
any, relating to tax and other payroll deductions as the Company may reasonably
determine it should withhold pursuant to any applicable law or regulation. In
lieu of withholding such amounts, the Company at the Executive's request, may,
in its sole discretion, accept other arrangements, provided that: (a) the
Company is satisfied that such other arrangements will satisfy such tax and
other payroll obligations in a manner complying with applicable law or
regulation; and (b) the Executive shall indemnify the Company against all fines,
penalties and costs (including attorneys' fees) in the amount that such other
arrangements do not so comply.
9. Legal Representation and Waiver of Conflicts. The law offices of
Scholl, Ticktin, & Associates, P.A. shall be permitted to represent Xxxx Xxxxxxx
provided that no conflict of interest, as defined by the Florida Rules
Regulating the Bar, exists. To the extent a conflict of interest exists or
appears to exist, Xxxx Xxxxxxx, by signing this Agreement below, hereby waives
any conflict of interest, individually and in all other capacities. Xxxx
Xxxxxxx, individually and in all other capacities, hereby waives any conflict of
interest that may exist in the event that the law offices of Scholl, Ticktin, &
Associates, P.A. subleases office space to the Company at fair market value.
Scholl, Ticktin, & Associates, P.A. may subleases office space to the Company at
fair market value.
10. Notices. All notices, request, demands or other communications by
the terms hereof required or permitted to be given by one party to another shall
be given in writing by personal delivery, by facsimile or by regular mail,
postage prepaid, addressed to such other party or delivered to such other party
as follows:
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If to the Company:
Silver State Vending Corporation
c/o Scholl, Ticktin, & Associates, P.A.
Net First Plaza
0000 Xxxx Xxxxxx Xxxx
Xxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attn: Xxxxxx Xxxxxx
If to the Executive
Xxxxx Xxxxxxx
Scholl, Ticktin, & Associates, P.A.
Net First Plaza
0000 Xxxx Xxxxxx Xxxx
Xxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
or at such other address or facsimile number as may be given by any of them to
the others in writing from time to time and such notices, requests, demands or
other communication shall be deemed to have been received when hand delivered,
on the day after the date sent by facsimile (with receipt confirmed) or, if
mailed, the fourth day following the day of the mailing thereof; provided that
if any such notice, request, demand or other communication shall have been
mailed and if regular mail service shall be interrupted by strikes or other
irregularities, such notice, request, demand or other communication shall be
deemed to have been received on the fourth Business Day following the resumption
of normal mail service.
11. Entire Agreement. This Agreement sets forth the entire agreement
and understanding between the parties, and merge and supersede all prior
discussions, agreements and understandings of every kind and nature among them
as to the subject matter hereof.
12. Amendments to Agreement. This Agreement shall not be amended except
by a writing signed by each party to the Agreement, and this Agreement may not
be discharged except by performance in accordance with its terms or by a writing
signed by each party to the Agreement.
13. U.S. Dollars. All dollar amounts in this Agreement are stated in
United States Dollars.
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14. Governing Law. This agreement and its validity, construction and
performance shall be governed in all respects by the law of the State of
Florida, without giving effect to principles of conflicts of laws.
15. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. This Agreement may not be assigned by the Executive
without the prior written consent of the Company. This Agreement may not be
assigned by the Company in connection with the sale, transfer or other
disposition of all or substantially all of the Company's assets or business
without the prior written consent of the Executive.
16. Pronouns. Whenever the context requires, the use in this Agreement
of a pronoun of any gender shall be deemed to refer also to any other gender,
and the use of the singular shall be deemed to refer also to the plural.
17. Headings. The headings of this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
18. Consent to Jurisdiction and Service of Process. Each party to this
Agreement (a) hereby irrevocably submits to the jurisdiction of, and agrees that
any suit shall be brought only in, the state and federal courts located in Palm
Beach County, Florida for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement or the transactions contemplated
hereby, and (b) hereby waives, to the extent not prohibited by applicable law,
and agrees not to assert, by way of motion, as a defense or otherwise, in any
such proceeding, any claim that it is not subject personally to the jurisdiction
of the above-named courts, that its property is exempt or immune from attachment
or execution that any such proceeding brought in one of the above-named courts
is brought in an inconvenient forum, that the venue of any such proceeding
brought in one of the above-named courts is improper, or that this Agreement, or
the transactions contemplated hereby may not be enforced in or by such court.
19. Attorneys' Fees. If any action or proceeding is brought in any
court by any party to enforce any provision of this Agreement, the prevailing
party shall be entitled to recover from the non-prevailing party all of its
reasonable costs and expenses incurred in connection with such action, including
reasonable attorneys' fees and disbursements.
20. Calculation of Time Periods. When calculating the period of time
within which or following which any act is to be done or step taken pursuant to
this Agreement, the date which is the reference date in calculating such period
shall be excluded.
21. References to Law. All references in this Agreement to any law,
by-law, rule, regulation, order or act of any government, governmental body or
other regulatory body or authority shall be construed as a reference thereto as
amended or re-enacted from time to time or as a reference to any successor
thereto.
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22. Execution in Counterparts. This Agreement may be executed in
several counterparts, by original or facsimile signature, each of which so
executed shall be deemed to be an original and such counterparts together shall
be deemed to be one and the same instrument, which shall be deemed to be
executed as of the date first above written.
23. Further Assurances. The parties hereto shall sign such further
documents and do and perform and cause to be done and performed such further and
other acts and things as may be necessary or desirable in order to give full
effect to this Agreement and every party thereof.
24. Survival. Any termination of this Agreement shall not affect the
ongoing provisions of this Agreement which shall survive such termination in
accordance with their terms.
25. Severability. The invalidity or unenforceability, in whole or in
part, or any covenant, promise or undertaking, or any section, subsection,
paragraph, sentence, clause, phrase or word or of any provision of this
Agreement shall not affect the validity or enforceability of the remaining
portions thereof.
26. Construction. This Agreement shall be construed within the fair
meaning of each of its terms and not against the party drafting the document.
THE EXECUTIVE AND THE COMPANY EACH ACKNOWLEDGES THAT HE OR IT HAS READ
ALL OF THE TERMS OF THIS AGREEMENT, UNDERSTANDS THE AGREEMENT, AND AGREES TO
ABIDE BY ITS TERMS AND CONDITIONS.
IN WITNESS WHEREOF, the parties have executed this Agreement on March
31, 2002.
THE COMPANY:
SILVER STATE VENDING
CORPORATION
By By:
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Its: Its:
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THE EXECUTIVE:
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XXXXX XXXXXXX
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