EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement"), is' entered into
as of August 27, 1997, by and between Xxxxx X. Xxxxxxx, a natural person
currently residing in the State of Minnesota (the "Employee") and Best, Inc., a
Minnesota corporation ("Best") .
W I T N E S S E T H
WHEREAS, the Employee, Fine Host Corporation ("Fine Host") and
certain other parties have entered into that certain Stock Purchase Agreement,
dated as of August 27, 1997 (the "Purchase Agreement"), pursuant to which Fine
Host has agreed to purchase all of the issued and outstanding capital stock of
Best;
WHEREAS, in order to protect the value of the business
acquired under the Purchase Agreement and to secure for itself the benefit of
the Employee's background, experience, ability and expertise, Best and the
Employee desire to enter into the employment arrangements provided for herein in
consideration of the amounts payable to the Employee pursuant hereto;
WHEREAS, it is a condition to the closing under the Purchase
Agreement that the Employee and Best enter into this Agreement; and
WHEREAS, Best desires to employ the Employee and the Employee
has indicated his willingness to provide his services, on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises,
and of the mutual covenants and agreements set forth herein, the sufficiency of
which is hereby acknowledged by each of the parties hereto, the parties hereby
agree as follows:
A G R E E M E N T:
1. Employment. Best hereby agrees to employ the Employee and
the Employee hereby accepts employment with Best, on the terms and subject to
the conditions hereinafter set forth. Subject to the terms and conditions
contained herein, the Employee shall (i) provide administrative and operating
oversight with respect to the retention of customer accounts existing as of the
date hereof; (ii) assist Fine Host and Best and its authorized representatives
with respect to marketing and sales efforts in connection with obtaining new
customer accounts; (iii) be responsible for the day-to-day operations of Best's
healthcare and corrections divisions; and (iv) perform such other services and
tasks related to the foregoing as may be reasonably requested by the Board of
Directors of Fine Host and Best from time to time (the "Services"), and Best
hereby engages the Employee to provide and perform the same. The Employee shall
have the title of Group President - Healthcare and Corrections and shall report
directly to the President and Chief Operating Officer of Fine Host. The
principal location of the Employee's employment shall be in Minneapolis/St.
Xxxx, Minnesota, although the Employee understands and agrees that he may be
required to travel from time to time for business reasons.
2. Term of Agreement. The term of this Agreement
shall commence on the date of this Agreement and terminate on
August _____, 2000 (the "Initial Term"), unless terminated at an
earlier date pursuant to Section 6 hereof; provided, however, that commencing on
the expiration date of the term of this Agreement, the term of this Agreement
shall be automatically extended for an additional one year period on the terms
set forth in this Agreement unless, not later than ninety (90) days preceding
the expiration date of the term of this Agreement, either party hereto shall
have given written notice to the other that it does not wish to extend the term
of this Agreement. The Initial Term, together with the extension pursuant to
this Section 2, is referred to herein as the "Employee Term".
3. Compensation. (a) As compensation for the performance of the Services
Best shall pay the Employee a salary (the "Salary") of one Hundred Sixty
Thousand Dollars ($160,000) per annum, to be reviewed on an annual basis,
payable in accordance with the payroll practices of Best as the same shall exist
from time to time. Employee shall also be eligible to receive additional
compensation (the "Bonus") in an amount and on terms commensurate with other
Fine Host Group Presidents.
(b) The Employee shall be entitled to participate in such
health, medical, retirement and fringe benefit programs as are generally
available to executives of Best from time to time. In addition, after the
expiration of the term, Employee shall be entitled to participate in such health
and medical programs during the Restricted Period (as hereinafter defined).
(c) The Employee shall be eligible to participate in Fine
Host's Stock Option Plan in accordance with the terms of such plan.
(d) In addition to his Salary, Bonus, if any, and benefits,
the Employee shall be entitled to a monthly car allowance of Eight Hundred Fifty
Dollars ($850) during the Employee Term in accordance with the policy of Best
existing as of the date hereof.
(e) In addition to his Salary, Bonus, if any, and benefits,
Best shall pay the outstanding amount due on Employee's country club initiation
fees, and shall also pay any dues for such country club, which amount shall not
exceed $300 per month, during the Employee Term.
4. Exclusivity. During the Employee Term, the Employee shall
devote his full time to the business of Best, shall faithfully serve Best, shall
in all respects conform to and comply with the lawful and reasonable directions
and instructions given to him by the Board of Directors of Fine Host or Best in
accordance with the terms of this Agreement and shall use his best efforts to
promote and serve the interests of Fine Host and Best.
5. Expenses. While this Agreement is in effect and the
Employee is properly performing the Services in accordance with the terms and
conditions of this Agreement, Best agrees to pay or reimburse the Employee for
all reasonable and proper out-of-pocket business expenses incurred or paid by
the Employee on behalf of Best in furtherance of the Services in accordance with
Best's expense reimbursement policy, as the same may be modified from time to
time; provided, however, that any expense which individually is in excess of
$1,000 must be approved by Fine Host's President and Chief operating Officer in
writing prior to being incurred by the Employee. Any expenses which Best shall
be expected to pay or to reimburse the Employee for shall be paid only upon
receipt by Best of timely and accurate itemized receipts and statements for all
expenses incurred by the Employee in accordance with the financial policy of
Best, as in effect from time to time.
6. Termination and Default.
(a) Death. This Agreement shall automatically
terminate upon the death of the Employee and upon such event, the Employee's
estate shall be entitled to receive the amounts specified in Section 6(d) below.
(b) Disability. If the Employee is unable to perform
the duties required of him under this Agreement because of illness, incapacity,
or physical or mental disability, this Agreement shall remain in full force and
effect and Best shall pay all compensation required to be paid to the Employee
hereunder, unless the Employee is unable to perform the duties required of him
under this Agreement for an aggregate of 120 days (whether or not consecutive)
during any 12-month period during the term of this Agreement, in which event
this Agreement (other than Sections 6(d), 7, 8, 9, 10 and 14 hereof), including,
but not limited to, Best's obligations to pay any Salary or to provide any
privilege under this Agreement, shall terminate.
(c) Just Cause. Best may terminate this Agreement (other
than Sections 6(d), 7, 8, 9, 10 and 14 hereof) for "Just Cause." For purposes of
this Agreement, "Just Cause,, shall mean: (i) the Employee's failure, neglect-or
refusal to perform his duties hereunder which failure, neglect or refusal shall
not have been corrected by the Employee within 30 days of receipt by the
Employee of written notice from Best of such failure, neglect or refusal, which
notice shall specifically set forth the nature of said failure, neglect or
refusal; (ii) any willful or intentional act of the Employee that has the effect
of injuring the reputation or business of Best or its affiliates in any material
respect; (iii) use of illegal drugs by the Employee or repeated drunkenness;
(iv) conviction of the Employee for the commission of a felony; or (v) the
commission by the Employee of an act of fraud or embezzlement against Best. If
the Employee's employment hereunder is terminated for Just Cause, the Employee
shall be entitled to receive the amounts specified in Section 6(d) below. In the
event of termination pursuant to this Section 6(c), Best shall deliver to the
Employee written notice setting forth the basis for such termination, which
notice shall specifically set forth the nature of the Just Cause which is the
reason for such termination. Termination of the Employee's employment hereunder
shall be effective upon delivery of such notice of termination.
(d) Payments. In the event that the Employee's employment
hereunder terminates for any reason, Best shall pay to the Employee all amounts
accrued but unpaid hereunder through the date of termination in respect of wages
or unreimbursed expenses. Amounts owed by Best in respect of the consideration
or reimbursement for expenses under the provisions of Sections 3 and 5 hereof
shall, except as otherwise set forth in this Section 6(d), be paid promptly upon
any termination. Upon any termination of this Agreement, all of the rights,
privileges and duties of the Employee hereunder shall cease, except for his
rights under this Section 6(d) and his obligations under Sections 7, 8, 9, 10
and 14 hereunder.
7. Secrecy and Non-Competition.
(a) Non-Competition. The Employee acknowledges that the
agreements and covenants contained in this Section 7 are essential to protect
the value of Best's business and assets and by virtue of his current and future
relationship with Best, the Employee has obtained and will obtain such
knowledge, contacts, know-how, training and experience and there is a
substantial probability that such knowledge, know-how, contacts, training and
experience could be used to the substantial advantage of a competitor of Best
and to Best's substantial detriment. The Employee also acknowledges that Fine
Host has purchased all of the outstanding Shares of Best in reliance on the
covenants made by the Employee in this Section 7, and that Fine Host would not
have acquired the Shares of Best from the Employee in the absence of the
covenants made by the Employee in this Section 7. Therefore, the Employee agrees
that for the period commencing on the date of this Agreement and ending on the
fourth anniversary of the termination of the Employee Term (such period is
hereinafter referred to as the "Restricted Period") with respect to the one
hundred mile radius around any city in which, or any location at which, Fine
Host, Best or any of their subsidiaries or affiliates is actively providing
services or otherwise doing business on the date of the termination of the
Employee Term hereunder, the Employee shall not participate or engage, directly
or indirectly, for himself or on behalf of or in conjunction with any person,
partnership, corporation or other entity, whether as an employee, agent,
officer, director, shareholder, partner, joint venturer, investor or otherwise,
in any food service management business if such activity consists of any
activity undertaken by Fine Host, Best or any of their subsidiaries or
affiliates; provided that the Employee (i) may be a shareholder and director of
Cura Hospitality, Inc. and (ii) may, following the termination of the Employee
Term, provide consulting services to nursing homes that elect to self-operate
their food service operations.
(b) Nondisclosure of Confidential Information. The Employee,
except in connection with his employment hereunder, shall not disclose to any
person or entity or use, either during the Employee Term or at any time
thereafter, any information not in the public domain or generally known in the
industry, in any form, acquired by the Employee while performing the Services
for Best or any predecessor to Best's business or, if acquired following the
Employee Term, such information which, to the Employee's knowledge, has been
acquired, directly or indirectly, from any person or entity owing a duty of
confidentiality to Fine Host or Best or any of their subsidiaries or affiliates,
relating to Fine Host or Best, their subsidiaries or affiliates, including but
not limited to information regarding customers, vendors, suppliers, trade
secrets, training programs, manuals or materials, technical information,
contracts, systems, procedures, mailing lists, know-how, trade names,
improvements, price lists, financial or other data (including the revenues,
costs or profits associated with any of the products or services of Fine Host or
affiliates thereof (including Best)), business plans, code books, invoices and
other financial statements, computer programs, software systems, databases,
discs and printouts, plans (business, technical or otherwise), customer and
industry lists, correspondence, internal reports, personnel files, sales and
advertising material, telephone numbers, names, addresses or any other
compilation of information, written or unwritten, which is or was used in the
business of Fine Host or Best, or any subsidiaries or affiliates thereof. The
Employee agrees and acknowledges that all of such information, in any form, and
copies and extracts thereof, are and shall remain the sole and exclusive
property of Best, and upon termination of this Agreement, the Employee shall
return to Best the originals and all copies of any such information provided to
or acquired by the Employee in connection with the performance of the services,
and shall return to Best all files, correspondence and/or other communications
received maintained and/or originated by the Employee during the Employee Term.
(c) No Interference. During the Restricted Period, the
Employee shall not, whether for his own account or for the account of any other
individual, partnership, firm, corporation or other business organization (other
than Fine Host or Best), directly or indirectly solicit, endeavor to entice away
from Best, its affiliates or subsidiaries, or otherwise directly interfere with
the relationship of Best, its affiliates or subsidiaries with any person who, to
the knowledge of the Employee, is employed by or otherwise engaged to perform
services for Best, its affiliates or subsidiaries (including, but not limited
to, any independent sales representative or organizations) or who is, or was
within the then most recent twelve-month period, a customer or client, of Best,
its predecessors or any of its subsidiaries or affiliates. The placement of any
general classified or "help wanted" advertisements and/or general solicitations
to the public at large shall not constitute a violation of this Section 7(c)
unless the Employee's name is contained in such advertisements or solicitations.
(d) Inventions, etc. The Employee hereby sells, transfers and
assigns to Best, or to any person or entity designated by Best, all of the
right, title and interest of the Employee in and to all inventions, sales
approaches or materials, software, ideas, training materials, disclosures and
improvements, whether patented or unpatented, and copyrightable material, made
or conceived by the Employee, solely or jointly, in whole or in part, during the
Employee Term which are not generally known to the public or the industry or
recognized as standard practice and which (i) relate to services, trade names,
methods, ideas, apparatus, designs, products, processes or devices which may be
sold, leased, used or under construction or development by Best, its
subsidiaries or affiliates or any franchise affiliated with Best and (ii) arise
(wholly or partly) from the efforts of the Employee during his employment with
Best (an "Invention"). The Employee shall communicate promptly and disclose to
Best, in such form as Best requests, all information, details and data
pertaining to any such Invention. The Employee hereby irrevocably appoints the
President and Chief Operating Officer of Fine Host as his true and lawful
attorney to execute and deliver, with respect to any Invention, such form of
transfers and assignments and such other papers and documents as reasonably may
be required to permit Best or any person or entity designated by Best to file
and prosecute patent applications and, as to copyrightable material, to obtain
copyrights thereon. Best shall pay all costs incident to the execution and
delivery of such transfers, assignments and other documents. Any Invention by
the Employee within twelve (12) months following the termination of this
Agreement shall be deemed to fall within the provisions of this Section 7(d)
unless the Employee bears the burden of proof of showing that the Invention was
first conceived and made following such termination.
8. Injunctive Relief. Without intending to limit the remedies
available to Best, the Employee acknowledges that a breach of any of the
covenants contained in Section 7 hereof may result in material irreparable
injury to Best or its subsidiaries or affiliates for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or threat thereof Best shall
be entitled to obtain a temporary restraining order and/or a preliminary or
permanent injunction, without the necessity of proving irreparable harm or
injury as a result of such breach or threatened breach of Section 7 hereof,
restraining the Employee from engaging in activities prohibited by Section 7
hereof or such other relief as may be required specifically to enforce any of
the covenants in Section 7 hereof.
9. Extension of Restricted Period. In addition to the remedies
Best may seek and obtain pursuant to Sections 7 and 8 of this Agreement, the
Restricted Period shall be extended by any and all periods during which the
Employee shall be found by a court to have been in violation of the covenants
contained in Section 7 hereof.
10. Audit and Records. The Employee shall keep accurate
records and books of account showing all charges, disbursements, and expenses
made or incurred by the Employee in the performance of the Services. Best shall
have the right, upon reasonable notice, to audit at any time up to one year
after payment of its final invoice, the direct costs, expenses, and
disbursements made with respect to the Services.
11. Assignability. This Agreement shall be binding upon and
inure to the benefit of the parties, their legal representatives, successors,
and assigns. This Agreement may not be assigned, transferred, conveyed, or
encumbered, whether voluntarily or by operation of law, by the Employee without
the prior written consent of Best (which may be granted or withheld in Best's
sole and absolute judgment).
12. Notices, Etc. All notices, demands, and other
communications provided for hereunder shall be in writing (including facsimile
or similar transmission) and mailed (by U.S. certified mail, return receipt
requested, postage prepaid), sent, or delivered (including by way of overnight
courier service), (i) if to the Employee to Xxxxx X. Xxxxxxx, 0000 Xxxxxxxx
Xxxx, Xxxxx, XX 00000, (and in the case of facsimile transmission, to telecopy
no. ]; and (ii) if to Best, to 0 Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxxx
00000, and in the case of facsimile transmission, to telecopy no. (203)
629-5089, in each case to the attention of Xxxxx Xxxxx, Esq.; or, as to each
party, to such other person and/or at such other address or number as shall be
designated by such party in a written notice to the other party. All such
notices, demands, and communications, if mailed, shall be effective upon the
earlier of (i) actual receipt by the addressee, (ii) the date shown on the
return receipt of such mailing or (iii) three (3) days after deposit in the
mail. All such notices, demands, and communications, if not mailed, shall be
effective upon the earlier of (i) actual receipt by the addressee, (ii) with
respect to facsimile and similar electronic transmission, the earlier of (x) the
time that electronic confirmation of a successful transmission is received or
(y) the date of transmission, if a confirming copy of the transmission is also
mailed as described above on the date of transmission, and (iii) with respect to
delivery by overnight courier service, the day after deposit with the courier
service, if delivery on such day by such courier is confirmed with the courier
or the recipient orally or in writing.
13. Amendments; Entire Agreement. This Agreement
constitutes the entire understanding and agreement between the parties and
supersedes all previous understandings, agreements, communications, and
representations, whether written or oral, concerning the treatment of
information and other matters to which this Agreement relates. No modification,
amendment, or waiver of any provision of this Agreement shall be effective
unless the same shall be in writing and signed by each of the parties hereto.
Any waiver of any provision of this Agreement shall be effective only in the
specific instance and for the specific purpose for which given.
14. Severability and Governing Law. The Employee acknowledges
and agrees that the covenants set forth in Section 7 hereof are reasonable and
valid in geographical and temporal scope and in all other respects. If any of
such covenants or such other provisions of this Agreement are found to be
invalid or unenforceable by a final determination of a court of competent
jurisdiction (a) the remaining terms and provisions hereof shall be unimpaired
and (b) the invalid or unenforceable term or provision shall be deemed replaced
by a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision. THIS
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF MINNESOTA WITHOUT GIVING EFFECT TO THE CHOICE OF LAW
PROVISIONS THEREOF.
15. No Waiver; Remedies. No failure on the part of any party
to exercise, and no delay in exercising, any right, power, or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
16. Captions. The captions contained in this Agreement are for convenience
only and shall not affect the construction or interpretation of any provisions
of this Agreement.
17. Counterparts. This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
when taken together shall constitute one and the same instrument. One or more
counterparts of this Agreement may be delivered via telecopier with the
intention that they shall have the same effect as an original executed
counterpart hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
--------------------------------
Xxxxx X. Xxxxxxx
BEST, INC.
By:_____________________________
Name:
Title:
