EXECUTIVE EMPLOYMENT AGREEMENT THIS EMPLOYMENT AGREEMENT (the "Employment Agreement") is made and entered into as of the 15th day of December, 2005 (the "Commencement Date"), by and between Execute Sports, Inc. (the "Company"), and Todd M. Pitcher, an...
Exhibit
10.9
THIS
EMPLOYMENT AGREEMENT (the "Employment Agreement") is made and entered into
as of
the
15th
day of
December, 2005 (the "Commencement Date"), by and between
Execute
Sports, Inc. (the "Company"), and
▇▇▇▇
▇.
▇▇▇▇▇▇▇, an individual ("Employee")
.
WITNESSETH:
WHEREAS, the Company under the name Execute Sports, Inc. (such activities,
together with all other activities of the Company and its subsidiaries, if
any,
as conducted at or prior to the termination of this Employment Agreement, and
any future activities reasonably related thereto which are contemplated by
the
Company and/or its subsidiaries at the termination of this Employment Agreement
identified in writing by the Company to Employee at the date of such
termination, are hereinafter referred to as the "Business
Activities");
WHEREAS,
the Company desires to employ Employee upon the terms and subject to the terms
and conditions set forth in this Agreement.
NOW,
THEREFORE, in consideration of the premises, the mutual promises, covenants
and
conditions herein contained and for other good and valuable considerations,
the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
intending to be legally bound hereby agree as follows:
EMPLOYMENT.
The Company hereby employs Employee, and Employee hereby accepts employment
with
the Company, all upon the terms and subject to the conditions set forth in
this
Employment Agreement.
TERM
OF
EMPLOYMENT. The
term
of employment of Employee by the Company pursuant to this Employment Agreement
shall be for the period (the "Employment Period") commencing on the Commencement
Date and ending on the two year anniversary of the Commencement Date, or such
earlier date that Employee's employment is terminated in accordance with the
provisions of this Employment Agreement; provided however, that the Employment
Period shall automatically be extended for a successive one year period, with
Employee's written consent, unless the Company gives Employee thirty (30) days
written notice prior to the end of such year that it does not intend to extend
the term of the Employment Period.
CAPACITY
AND DUTIES. Employee is and shall be employed in the capacity of President
and
Secretary of the Company and its subsidiaries and shall have such other duties,
responsibilities and authorities as are assigned to him by the Board of
Directors so long as such additional duties, responsibilities and authorities
are consistent with Employee's position and level of authority as President
and
Secretary of the Company. Subject to the advice and general directions of the
Board of Directors, and except as otherwise herein provided, Employee shall
devote substantially all of his business time, best efforts and attention to
promote and advance the business of the Company and its subsidiaries and to
perform diligently and faithfully all the duties, responsibilities and
obligations of Employee to be performed by him under this Employment Agreement.
PLACE
OF
EMPLOYMENT. Employee's principal place of work shall be the corporate
headquarters of the Company, currently located in San Clemente, California
provided that the location of the Company and its offices may be moved from
time
to time in the discretion of the Board of Directors.
COMPENSATION.
During the Employment Period, subject to all the terms and conditions of this
Employment Agreement and as compensation for all services to be rendered by
Employee under this Employment Agreement, the Company shall pay to or provide
Employee with the following:
1. Base
Salary. The Company shall pay to employee a base annual salary at the rate
of
Seventy Two Thousand ($72,000.00) dollars per annum, and any extensions thereof,
payable at such intervals (at least monthly) as salaries are paid generally
to
other employees of the Company. At each anniversary date, the Compensation
Committee shall review employee salary and performance.
2.
Stock
Option. Effective upon the Commencement Date, Employee will be granted options
to purchase up to three-hundred thousand (300,000) shares at an exercise price
of $.35 per share; such options will vest ratably, at a rate of 1/24th
per
month provided that Employee is employed on each vesting date and will be fully
vested twenty-four (24) months from the date of grant provided that Employee
has
been continuously employed for the entire twenty four months. In the event
of an
Approved Transaction or Control Purchase of Execute Sports, Inc., Employee
will
have the right to have the options vest immediately, both upon the closing
of
such a Transaction or Purchase. At the end of six months of employment, employee
will be granted an additional option on one-hundred thousand (100,000) shares
at
an exercise price of $.35 per share under the same terms as initial grant,
with
vesting period beginning starting in the seventh month of employment at a rate
of 1/24th
per
month. At the end of twelve months of employment, employee will be granted
an
additional option on one-hundred thousand (100,000) shares at an exercise price
of $.35 per share under the same terms as initial grant, with vesting period
beginning starting in the thirteenth month of employment at a rate of
1/24th
per
month.
"Clawback.
If Employee engages in conduct which constitutes a basis for termination WITH
CAUSE (see definition below) by the Company, Employee agrees that any stock
options granted by the Company shall be rescinded and, upon demand by the
Company, shall be confirmed as having been rescinded. Employee and the
Company agree that this provision is subject to specific performance and gives
rise to injunctive relief."
3.
Bonus.
The Company shall implement a performance-driven bonus structure for employee
based on a percentage of employee’s base salary, which will be determined upon
board review and recommendation by the Compensation Committee no later than
ten
(10) business days after the conclusion of each full year of employment.
Employee will be responsible for providing the Board of Directors and
Compensation Committee with a pro forma budget and accompanying projections
for
the Board’s review and approval, whereupon the said approved budget and
projections shall serve as the basis for the “Cost Control and Budgeting”
component of employee’s bonus review structure.
The
Company and the employee understand that any extraordinary adjustments to the
said approved budget and projections resulting from a directive and/or
resolution from the Board (e.g., such as an increase in expenditures in one
category or another of the Company’s G&A and/or Operating Expenses) shall be
reasonably taken into consideration when evaluating employee’s annual
performance, and in particular, to the employee’s performance as it relates to
the initial budget and projections set forth by the employee and agreed to
in
writing by the Board and incorporated into the Company’s minutes. The Company
agrees not to unreasonably judge employee’s performance based on circumstances
beyond employee’s direct control. In turn, employee and Company hereby agree
that the conclusion as to the employee’s performance and as a direct consequence
of that conclusion, to the employee’s bonus, shall be made at the Board’s sole
discretion. The bonus structure is outlined as follows:
(a)
Year
1:
10% (threshold) / 15% (target) / 30% (outstanding) of base salary
(b)
Year
2:
12.5% (threshold) / 25% (target) / 50% (outstanding) of base salary
|
(c
)
|
Performance
Factors and Weighting. Employee’s performance will be weighted and based
upon certain metrics/benchmarks. In Year 1, the benchmarks and associated
weighting will include:
|
(i)
Cost
Control and Budgeting (50%) - Continuous improvement in cost management through
effective accounting controls and financial management techniques; ensure
efficient and effective cash management; ensure that financial data is recorded
accurately and timely in accordance with applicable accounting principles and
other standards and that financial reports are accurate, timely and reliable;
ensure quality budget formulation and effective budget execution.
(ii)
Administrative and Regulatory Compliance (35%), Workforce management; planning
and implementation of SOX policies;
(iii)
Business Analytics and Strategic Planning (15%) - Understanding and mapping
key
metrics and performance trends; improvement of core financial processes;
implementation and oversight of CRM and related programs; financial modeling
and
analysis of market opportunities.
So,
for
example, if at after the completion of one year of employment and service to
the
Company, the Board determines that employee performed in an Outstanding Capacity
with respect to Cost Control and Budgeting (30% of 50%), and in an Outstanding
Capacity in terms of Administrative and Regulatory Compliance (30% of 35%)
and
in a Target Capacity in terms of Business Analytics and Strategic Planning
(15%
of 15%), then the weighted average would be 27.75%. In which case, employee
would, in this case, receive a bonus of 27.75% of his annual salary, or
$19,980.00.
4. Vacation
and Other Benefits.
(a)
Employee
shall be entitled to Two (2) weeks vacation during the first year of employment.
Employee shall be entitled to three (3) weeks vacation during the second year
of
employment. Vacation days not used during the calendar year may not be carried
into subsequent years.
(b)
Health
Plan. Company shall underwrite a mutually agreed upon health benefits plan
for
Employee that Employee is responsible for administrating.
EXPENSES.
The Company shall reimburse Employee for all reasonable, ordinary and necessary
expenses including, but not limited to, automobile and other business travel
and
customer entertainment expenses (no prior approval from direct report required
up to $500 per month) incurred by him in connection with his employment
hereunder in accordance with the written policy and guidelines established
by
the Company for employee reimbursement, provided, however, Employee shall render
to the Company a complete and accurate accounting of all such expenses in
accordance with the substantiation requirements of the Internal Revenue Code,
as
amended (the "Code"), as a condition precedent to such reimbursement.
ADHERENCE
TO STANDARDS. Employee shall comply with the written policies, standards, rules
and regulations of the Company from time to time established for all executive
officers of the Company consistent with Employee's position and level of
authority.
REVIEW
OF
PERFORMANCE. The Board of Directors shall periodically review and evaluate
the
performance of Employee under this Employment Agreement with
Employee.
TERMINATION
WITH CAUSE BY THE COMPANY. This Employment Agreement may be terminated with
Cause (as hereinafter defined) by the Company provided that the Company
shall:
1. Give
Employee the Notice of Termination (as hereinafter defined) and
2. Pay
Employee his annual base salary through the Date of Termination (as hereinafter
defined) at the rate in effect at the time the Notice of Termination is given
plus any bonus or incentive compensation which has been earned or has become
payable pursuant to the terms of any compensation or benefit plan as of the
Date
of Termination, but which have not yet been paid.
TERMINATION
WITHOUT CAUSE BY THE COMPANY OR FOR GOOD REASON BY EMPLOYEE. This Employment
Agreement may be terminated by the Company:
1. At
the
end of the Term of Employment,
2. During
the Term of Employment without cause as hereinafter defined, or
3. By
reason
of death or Disability (as hereinafter defined) provided that the Company shall
continue to pay to Employee (or the estate of Employee in the event of
termination due to the death of employee) the compensation and other benefits
described in the Section entitled Compensation of this Employment Agreement,
except for annual cash bonuses or incentive compensation for six (6) months
from
the Date of Termination. Employee's right to terminate his employment for Good
Reason shall not be affected by his incapacity due to physical or mental
illness. In the event of termination by the Company by reason of Employee's
death or Disability, medical, hospitalization or disability benefits coverage
comparable to that provided by the Company during Employee's lifetime shall
be
provided to Employee, his spouse and dependents for six (6) months from the
Date
of Termination, and for six (6) months from the Date of Termination with respect
to medical and hospitalization benefits for the Employee and his family. The
benefits provided under this Section shall be no less favorable to Employee
in
terms of amounts, deductibles and costs to him, if any, than such benefits
provided by the Company to him and shall not be interpreted so as to limit
any
benefits to which Employee, as a terminated employee of the Company, or his
family may be entitled under the Company's life insurance, medical,
hospitalization or disability plans following his Date of Termination or under
applicable law.
In
the
event of Termination by the Employee for Good Reason, the Company shall continue
to pay to Employee the compensation and other benefits described in the Section
entitled Compensation of this Employment Agreement, except for annual cash
bonuses or incentive compensation for two (2) months from the Date of
Termination, and shall continue to provide medical, hospitalization or
disability benefits coverage to Employee, his spouse and dependents for two (2)
months from the Date of Termination.
In
the
event that within a period of one (1) year(s) of a Change in Control (as
hereinafter defined), this Employment Agreement is terminated by the Company
for
any reason other than for cause (or the Company gives notice that it is not
renewing the Employment Agreement pursuant to the Section entitled Term Of
Employment), the Company shall continue to pay to Employee the compensation
and
other benefits described in the Section entitled Compensation of this Employment
Agreement, except for annual cash bonuses or incentive compensation for six
(6)
months from the Date of Termination.
DEFINITIONS.
In addition to the words and terms elsewhere defined in this Employment
Agreement, certain capitalized words and terms used in this Employment Agreement
shall have the meanings given to them by the definitions and descriptions in
this Section entitled Definitions unless the context or use indicates another
or
different meaning or intent, and such definition shall be equally applicable
to
both the singular and plural forms of any of the capitalized words and terms
herein defined. The following words and terms are defined terms under this
Employment Agreement:
1. "Disability"
shall mean a physical or mental illness which, in the judgment of the Company
after consultation with the licensed physician attending Employee, impairs
Employee's ability to substantially perform his duties under this Employment
Agreement as an employee and as a result of which he shall have been absent
from
his duties with the Company on a full-time basis for one (1) entire
month.
2. A
termination with "Cause" shall mean a termination of this Employment Agreement
by reason of a good faith determination by the Board that Employee:
(a) Failed
to
substantially perform his duties with this Company (other than a failure
resulting from his incapacity due to physical or mental illness) after a written
demand for substantial performance has been delivered to him by the Board,
which
demand specifically identifies the manner in which the Board believes he has
not
substantially performed his duties;
(b) Has
engaged in conduct the consequences of which are materially adverse to the
Company, monetarily or otherwise; or
(c) Has
materially breached the terms of this Employment Agreement. No act, or failure
to act, on Employee's part shall be grounds for termination with Cause unless
he
has acted or failed to act with an absence of good faith or without a reasonable
belief that his action or failure to act was in or at least not opposed to
the
best interests of the Company. Employee shall not be deemed to have been
terminated with cause unless there shall have been delivered to Employee a
letter setting forth the reasons for the Company's termination of the Employee
with cause.
3. "Good
Reason" shall mean the occurrence of any of the following events without
Employee's prior express written consent:
(a) Any
material change in Employee's status, title, authorities or responsibilities
under this Employment Agreement which represents a demotion from such status,
title, position or responsibilities which are materially inconsistent with
his
status, title, position or work responsibilities set forth in this Employment
Agreement, or any removal of Employee from, or failure to appoint, elect,
reappoint or reelect Employee to, any of such positions, except in connection
with the termination of his employment with Cause, or as a result of his death
or Disability, provided, however, that no change in title, authorities or
responsibilities customarily attributable solely to the Company ceasing to
be a
publicly traded corporation shall constitute Good Reason hereunder;
(b) The
failure by the Company to continue in effect any incentive, bonus or other
compensation plan in which Employee participates, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to the failure to continue such plan, or the failure by the
Company to continue Employee's participation therein, or any action by the
Company which would directly or indirectly materially reduce his participation
therein or reward opportunities thereunder; provided, however, that Employee
continues to meet all eligibility requirements thereof;
(c) The
failure by the Company to continue in effect any employee benefit plan
(including any medical, hospitalization, life insurance or disability benefit
plan in which Employee participates), or any material fringe benefit or
prerequisite enjoyed by him unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to the
failure to continue such plan, or the failure by the Company to continue
Employee's participation therein, or any action by the Company which would
directly or indirectly materially reduce his participation therein or reward
opportunities thereunder, or the failure by the Company to provide him with
the
benefits to which he is entitled under this Employment Agreement; provided,
however, that Employee continues to meet all eligibility requirements
thereof;
(d) Any
other
material breach by the Company of any provision of this Employment
Agreement;
(e) The
failure of the Company to obtain a satisfactory agreement from any successor
or
assign of the Company to assume and agree to perform this Employment Agreement,
as contemplated in the Section entitled Indemnification Agreement
hereof;
(f) Any
purported termination of employee's employment which is not effected pursuant
to
a Notice of Termination satisfying the requirements of this Employment
Agreement; and for purposes of this Employment Agreement, no such purported
termination shall be effective; or
(g) Any
Change of Control (as defined herein) of the Company.
4. Change
of
Control. "Change of Control" shall be deemed to have occurred when:
(a) Securities
of the Company representing 50% or more of the combined voting power of the
Company's then outstanding voting securities are acquired pursuant to a tender
offer or an exchange offer by a person or entity which is not a wholly-owned
subsidiary of the Company or any of its affiliates;
(b) A
merger
or consolidation is consummated in which the Company is a constituent
corporation and which results in less than 50% of the outstanding voting
securities of the surviving or resulting entity being owned by the then existing
stockholders of the Company;
(c) A
sale is
consummated by the Company of substantially all of the Company's assets to
a
person or entity which is not a wholly-owned subsidiary of the Company or any
of
its affiliates; or
(d) During
any period of two consecutive years, individuals who, at the beginning of such
period, constituted the Board cease, for any reason, to constitute at least
a
majority thereof, unless the election or nomination for election for each new
director was approved by the vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period.
5. Notice
of
Termination. "Notice of Termination" shall mean a written notice which shall
indicate the specified termination provision in this Employment Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Employee's employment under the
provision so indicated; provided, however, no such purported termination shall
be effective without such Notice of Termination; provided further, however,
any
purported termination by the Company or by Employee shall be communicated by
a
Notice of Termination to the other party hereto in accordance with the Section
entitled Notices of this Employment Agreement.
6. Date
of
Termination. "Date of Termination" shall mean the date specified in the Notice
of Termination (which, in the case of a termination pursuant to the Section
entitled Termination Without Cause By The Company Or For Good Reason By Employee
of this Employment Agreement shall not be less than sixty (60) days, and in
the
case of a termination pursuant to this Section, entitled Definitions, of this
Employment Agreement shall not be more than sixty (60) days, from the date
such
Notice of Termination is given); provided, however, that if within thirty (30)
days after any Notice of Termination is given the party receiving such Notice
of
Termination notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date finally determined by
either mutual written agreement of the parties or by the final judgment, order
or decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been taken).
FEES
AND
EXPENSES. The Company shall pay all legal fees and related expenses (including
the costs of experts, evidence and counsel) incurred by Employee as a result
of
a contest or dispute over Employee's termination of employment only if such
contest or dispute is resolved in Employee's favor.
NOTICES.
For the purposes of this Employment Agreement, notices and all other
communications provided for in the Employment Agreement shall be in writing
and
shall be deemed to have been duly given when personally delivered or sent by
certified mail, return receipt requested, postage prepaid, or by expedited
(overnight) courier with established national reputation, shipping prepaid
or
billed to sender, in either case addressed to the respective addresses last
given by each party to the other (provided that all notices to the Company
shall
be directed to the attention of the Chairman with a copy to the Secretary of
the
Company) or to such other address as either party may have furnished to the
other in writing in accordance herewith. All notices and communication shall
be
deemed to have been received on the date of delivery thereof, or on the second
day after deposit thereof with an expedited courier service, except that notice
of change of address shall be effective only upon receipt.
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LIFE
INSURANCE. The Company may, at any time after the execution of this Employment
Agreement, apply for and procure as owner and for its own benefit, life
insurance on Employee, in such amounts and in such form or forms as the Company
may determine. Employee shall, at the request of the Company, submit to such
medical examinations, supply such information, and execute such documents as
may
be required by the insurance company or companies to whom the Company has
applied for such insurance. Employee hereby represents that to his knowledge
he
is in excellent physical and mental condition and is not under the influence
of
alcohol, drugs or similar substance.
PRIOR
EMPLOYMENT AGREEMENTS. Employee represents and warrants that Employee's
performance of all the terms of this Employment Agreement and as an employee
of
the Company does not, and will not, breach any employment agreement, arrangement
or understanding or any agreement, arrangement or understanding to keep in
confidence proprietary information acquired by Employee in confidence or in
trust prior to Employee's employment by the Company. Employee has not entered
into, and shall not enter into, any agreement, arrangement or understanding,
either written or oral, which is in conflict with this Employment Agreement
or
which would be violated by Employee entering into, or carrying out his
obligations under, this Employment Agreement.
PROPRIETARY
INFORMATION AND INVENTIONS. Employee understands and acknowledges
that:
1. During
the term of the Employee's employment under this Agreement, the Employee shall
not, directly or indirectly, engage or be interested (as a stockholder,
director, officer, employee, salesperson, agent, broker, partner, individual
proprietor, lender, consultant, or otherwise), either individually or in or
through any person (whether a corporation, partnership, association, or other
entity) which engages, anywhere in the United States, in a business which is
conducted by or competitive to the Company on the date of termination of his/her
employment, except that he/she may be employed by an affiliate of the Company
and hold not more than 2% of the outstanding securities of any class of any
publicly held company which is competitive with the business of the
Company.
2. The
Employee shall not, directly or indirectly, either during the term of the
Employee's employment under this Agreement or thereafter, disclose to anyone
(except in the regular course of the Company's business or as required by law),
or use in any manner, any information acquired by the Employee during his/her
employment by the Company with respect to any clients or customers of the
Company or any confidential or secret aspect of the Company's operations or
affairs unless such information has become public knowledge other than by reason
of actions, direct or indirect, of the Employee. Information subject to the
provisions of this paragraph shall include, without limitation:
(a)
Procedures for computer access and passwords of the Company's clients and
customers, program manuals, user manuals, or other documentation, run books,
screen, file, or database layouts, systems flowcharts, and all documentation
normally related to the design or implementation of any computer programs
developed by the Company relating to computer programs or systems installed
either for customers or for internal use;
(b)
Lists
of present clients and customers and the names of individuals at each client
or
customer location with whom the Company deals, the type of equipment or computer
software they purchase or use, and information relating to those clients and
customers which has been given to the Company by them or developed by the
Company, relating to computer programs or systems installed;
(c)
Lists
of or information about personnel seeking employment with or who are employed
by
the Company;
(d)
Prospect lists for actual or potential clients and customers of the Company
and
contact persons at such actual or potential clients and customers;
(e)
Any
other information relating to the Company's research, development, inventions,
purchasing, engineering, marketing, merchandising, and selling.
3. The
Employee shall not, directly or indirectly, either during the term of the
Employee's employment under this Agreement or for a period of one (1) year
thereafter or for six (6) months following the Termination Date if this
Employment Agreement is terminated by the Company other than with Cause or
by
the Employee for Good Reason;
(a)
Solicit, directly or indirectly, the services of any person who was a full-time
employee of the Company, its subsidiaries, divisions, or affiliates, or solicit
the business of any person who was a client or customer of the Company, its
subsidiaries, divisions, or affiliates, in each case at any time during the
past
year of the term of the Employee's employment under this Agreement. For purposes
of this Agreement, the term "person" shall include natural persons,
corporations, business trusts, associations, sole proprietorships,
unincorporated organizations, partnerships, joint ventures, and governments,
or
any agencies, instrumentalities, or political subdivisions thereof.
(b)
Induce employees of the Company to terminate their employment with the Company
or engage in any Competitive Business in the United States; provided, however,
that the ownership of the outstanding capital stock of a corporation whose
shares are traded on a national securities exchange or on the over-the-counter
market or the ownership and/or operation of a franchise under a franchise
agreement with the Company shall not be deemed engaging any Competitive
Business. "Competitive Business" shall mean any other business that is the
same
as or similar to the Company concept as it exists on the date of this Employment
Agreement or on the Termination Date.
4. All
memoranda, notes, records, or other documents made or composed by the Employee,
or made available to him during the term of this Agreement concerning or in
any
way relating to the business or affairs of the Company, its subsidiaries,
divisions, affiliates, or clients shall be the Company's property and shall
be
delivered to the Company on the termination of this Agreement or at any other
time at the request of the Company.
5. During
the employment period:
(a)
The
Employee hereby assigns and agrees to assign to the Company all his rights
to
and title and interest to all Inventions, and to applications for United States
and foreign patents and United States and foreign patents granted upon such
Inventions and to all copyrightable material or other works related
thereto.
(b)
The
Employee agrees for himself and his heirs, personal representatives, successors,
and assigns, upon request of the Company, to at all times do such acts, such
as
giving testimony in support of the Employee's inventorship, and to execute
and
deliver promptly to the Company such papers, instruments, and documents, without
expense to him, as from time to time may be necessary or useful in the Company's
opinion to apply for, secure, maintain, reissue, extend, or defend the Company's
worldwide rights in the Inventions or in any or all United States patents and
in
any or all patents in any country foreign to the United States, so as to secure
to the Company the full benefits of the Inventions or discoveries and otherwise
to carry into full force and effect the text and the intent of the assignment
set out in this Section, Proprietary Information And Inventions.
(c)
Notwithstanding any provision of this Agreement to the contrary, the Company
shall have the royalty-free right to use in its business, and to make, have
made, use, and sell products, processes, and services to make, have made, use,
and sell products, processes, and services derived from any inventions,
discoveries, concepts, and ideas, whether or not patentable, including, but
not
limited to, processes, methods, formulas, and techniques, as well as
improvements thereof and know-how related thereto, that are not inventions
as
defined herein, but which are made or conceived by the Employee during his
employment by the Company or with the use or assistance of the Company's
facilities, materials, or personnel. If the Company determines that it has
no
present or future interest in any invention or discovery made by the Employee
under this paragraph, the Company shall release such invention or discovery
to
the Employee within Sixty (60) days after the Employee's notice in writing
is
received by the Company requesting such release. If the Company determines
that
it does or may in the future have an interest in any such invention or
discovery, such information will be communicated to the Employee within the
60-day period described above.
(d)
For
purposes of this Section, Proprietary Information And Inventions, "Inventions"
means inventions, discoveries, concepts, and ideas, whether patentable or not,
including, but not limited to, processes, methods, formulas, and techniques,
as
well as improvements thereof or know-how related thereto, concerning any present
or prospective activities of the Company with which the Employee becomes
acquainted as a result of her employment by the Company.
6. The
Employee acknowledges that the agreements provided in this Section, Proprietary
Information And Inventions, were an inducement to the Company entering into
this
Agreement and that the remedy at law for breach of Employee's covenants under
this Section, Proprietary Information And Inventions, will be inadequate and,
accordingly, in the event of any breach or threatened breach by the Employee
of
any provision of this Section, Proprietary Information And Inventions, the
Company shall be entitled, in addition to all other remedies, to an injunction
restraining any such breach.
TRUST.
Employee's employment creates a relationship of confidence and trust between
Employee and the Company with respect to certain information applicable to
the
business of the Company, its subsidiaries, if any, (collectively, the "Group")
or applicable to the business of any franchisee, vendor or customer of any
of
the Group, which may be made known to Employee by the Group or by any
franchisee, vendor or customer of any of the Group or learned by Employee during
the employment Period.
REMEDIES.
Employee acknowledges and agrees that the Company's remedy at law for a breach
or a threatened breach of the provisions herein would be inadequate, and in
recognition of this Fact, in the event of a breach or threatened breach by
Employee of any of the provisions of this Employment Agreement, it is agreed
that the Company shall be entitled to, equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy which may then be available, without posting
bond
or other security. Employee acknowledges that the granting of a temporary
injunction, a temporary restraining order or other permanent injunction merely
prohibiting Employee from engaging in any Business Activities would not be
an
adequate remedy upon breach or threatened breach of this Employment Agreement,
and consequently agrees upon any such breach or threatened breach to the
granting of injunctive relief prohibiting Employee from engaging in any
activities prohibited by this Employment Agreement. No remedy herein conferred
is intended to be exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to any other remedy given hereunder
now or hereinafter existing at law or in equity or by statute or
otherwise.
INDEMNIFICATION
AGREEMENT. Upon the execution of this Employment Agreement, the Company and
employee shall each execute and deliver to the other an Indemnification
Agreement dated as of the date hereof.
BINDING
EFFECT. This Employment Agreement shall inure to the benefit of and be
enforceable by Employee's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
Employee should die while any amounts would still be payable to him hereunder
if
he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Employment Agreement to
Employee's estate.
MODIFICATION
AND WAIVER. No provision of this Employment Agreement may be modified, waived
or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Employee and such officer as may be specifically designated by
the
Board. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Employment Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at
any
prior or subsequent time.
HEADINGS.
Headings used in this Agreement are for convenience only and shall not be used
to interpret or construe its provisions.
WAIVER
OF
BREACH. The waiver of either the Company or Employee of a breach of any
provision of this Employment Agreement shall not operate or be construed as
a
waiver of any subsequent breach by either the Company or Employee.
AMENDMENTS.
No amendments or variations of the terms and conditions of this Employment
Agreement shall be valid unless the same is in writing and signed by all of
the
parties hereto.
SEVERABILITY.
The invalidity or unenforceability of any provision of this Employment
Agreement, whether in whole or in part, shall not in any way affect the validity
and/or enforceability of any other provision contained herein. Any invalid
or
unenforceable provision shall be deemed severable to the extent of any such
invalidity or unenforceability. It is expressly understood and agreed that
while
the Company and Employee consider the restrictions contained in this Employment
Agreement reasonable for the purpose of preserving for the Company the good
will, other proprietary rights and intangible business value of the Company,
if
a final judicial determination is made by a court having jurisdiction that
the
time or territory or any other restriction contained in this Employment
Agreement is an unreasonable or otherwise unenforceable restriction against
Employee, the provisions of such clause shall not be rendered void but shall
be
deemed amended to apply as to maximum time and territory and to such other
extent as such court may judicially determine or indicate to be
reasonable.
GOVERNING
LAW. This Employment Agreement shall be construed and enforced pursuant to
the
laws of the State of California.
ARBITRATION.
Any controversy or claim arising out of or relating to this Employment Agreement
or any transactions provided for herein, or the breach thereof, other than
a
claim for injunctive relief shall be settled by arbitration in accordance with
the commercial Arbitration Rules of the American Arbitration Association (the
"Rules") in effect at the time demand for arbitration is made by any party.
The
evidentiary and procedural rules in such proceedings shall be kept to the
minimum level of formality that is consistent with the Rules. One arbitrator
shall be named by the Company, a second shall be named by Employee and the
third
arbitrator shall be named by the two arbitrators so chosen. In the event that
the third arbitrator is not agreed upon, he or she shall be named by the
American Arbitration Association. Arbitration shall occur in San Diego,
California or such other location agreed to by the Company and Employee. The
award made by all or a majority of the panel of arbitrators shall be final
and
binding, and judgment may be entered in any court of law having competent
jurisdiction. The award is subject to confirmation, modification, correction,
or
vacation only as explicitly provided in Title 9 of the United States Code.
The
prevailing party shall be entitled to an award of pre- and post-award interest
as well as reasonable attorneys' fees incurred in connection with the
arbitration and any judicial proceedings related thereto.
EXECUTIVE
OFFICER STATUS. Employee acknowledges that he may be deemed to be an "executive
officer" of the Company for purposes of the Securities Act of 1993, as amended
(the "1933 Act"), and the Securities Exchange Act of 1934, as amended (the
"1934
Act") and, if so, he shall comply in all respects with all the rules and
regulations under the 1933 Act and the 1934 Act applicable to him in a timely
and non-delinquent manner. In order to assist the Company in complying with
its
obligations under the 1933 Act and 1934 Act, Employee shall provide to the
Company such information about Employee as the Company shall reasonably request
including, but not limited to, information relating to personal history and
stockholdings. Employee shall report to the General Counsel of the Company
or
other designated officer of the Company all changes in beneficial ownership
of
any shares of the Company Common Stock deemed to be beneficially owned by
Employee and/or any members of Employee's immediate family.
PRONOUNS.
All pronouns and any variations thereof shall be deemed to refer to the
masculine, feminine, neuter, singular, or plural, as the identity of the person
or entity may require. As used in this agreement: (1) words of the masculine
gender shall mean and include corresponding neuter words or words of the
feminine gender, (2) words in the singular shall mean and include the plural
and
vice versa, and (3) the word "may" gives sole discretion without any obligation
to take any action.
COUNTERPARTS.
This Employment Agreement may be executed in one or more counterparts, each
of
which shall be deemed to be an original, but all of which together shall
constitute but one document.
EXHIBITS.
Any Exhibits attached hereto are incorporated herein by reference and are an
integral part of this Employment Agreement.
IN
WITNESS WHEREOF, this Employment Agreement has been duly executed by the Company
and the Employee as of the date first above written.
Company:
_____________________________________
Employee:
_____________________________________ Date:
____________
Accepted
by: ___________________________________
Name/Title:
____________________________________ Date:____________