Exhibit 10.1
EMPLOYMENT AND
NON-COMPETITION AGREEMENT
BY AND BETWEEN
NICHOLAS A. COCCO
AND
MIDNIGHT HOLDINGS GROUP, INC
AND ITS SUBSIDIARY COMPANIES
i
EMPLOYMENT
AND NON-COMPETITION AGREEMENT
THIS EMPLOYMENT AND NON-COMPETITION AGREEMENT (the "Agreement"), is
made and entered into as of January 12, 2007 (the "Effective Date"), by and
between Midnight Holdings Group, Inc, a Delaware corporation and its
Subsidiaries (the "Company"), and Nicholas A. Cocco ("Executive").
PRELIMINARY RECITALS:
A. Executive is the current President and Chief Executive
Officer of the Company and has extensive knowledge and a unique understanding of
the operation of the Company's business.
B. Company wishes to employ Executive and Executive wishes to
continue his employment with the Company on the following terms.
NOW, THEREFORE, in consideration of the premises and mutual covenants
of the parties hereinafter set forth, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
hereby agree as follows:
1. EMPLOYMENT.
1.1 ENGAGEMENT OF EXECUTIVE. The Company agrees to employ
Executive and Executive agrees to accept employment as the President and Chief
Executive Officer of the company, all in accordance with the terms and
conditions of this Agreement.
1.2 DUTIES AND POWERS. During the Employment Period,
Executive will serve as the Company's President and Chief Executive Officer,
will have such responsibilities, duties and authorities, and will render such
services of an executive and administrative character or act in such other
executive capacity for the Company and its affiliates as the Company's board of
directors (the "Board") shall from time to time direct, which duties and
responsibilities shall be consistent with those held by Executive previously.
Executive shall devote his best efforts, energies and abilities and his full
business time, skill and attention (except for permitted vacation periods and
reasonable periods of illness or other incapacity) to the business and affairs
of the Company. Executive acknowledges that his duties and responsibilities will
require his full-time business efforts and agrees that during the Employment
Period he will not engage in any other business activity or have any business
pursuits or interests which materially interfere or conflict with the
performance of Executive's duties hereunder, provided, that nothing in this
Section 1.2 shall be deemed to prohibit Executive from making Permitted
Investments (as hereinafter defined).
1.3 EMPLOYMENT PERIOD. Executive's employment under this
Agreement shall begin on the date hereof and shall continue through and until
the third anniversary of the date hereof (the "Initial Period") unless extended
as provided in this Section 1.3. This Agreement shall be automatically extended
for additional consecutive one (1) year periods ("Renewal Periods") unless
either party delivers to the other party written notice of such party's election
not to renew this Agreement at least ninety (90) days prior to the expiration of
the Initial Period or any Renewal Periods. The Initial Period and the Renewal
Periods are
Employment Agreement - Nicholas A. Cocco
hereinafter referred to collectively as the "Employment Period." Notwithstanding
anything to the contrary contained herein, the Employment Period is subject to
termination pursuant to Section 1.4 and Section 1.5 below.
1.4 TERMINATION BY THE COMPANY. The Company has the right to
terminate Executive's employment under this Agreement, by notice to Executive in
writing at any time, (i) for Good Cause (as hereinafter defined), (ii) due to
the death or Total Disability (as hereinafter defined) of Executive and/or (iii)
Termination Without Cause Pursuant To A Merger (as hereinafter defined). Any
such termination shall be effective upon the date of service of such notice
pursuant to Section 13. As used herein, "Good Cause" means the occurrence of any
of the following events:
(a) the failure of Executive to perform his duties or
comply with reasonable directions of the Board which continues for a period of
thirty (30) days after the Board has given written notice to Executive
specifying in reasonable detail the manner in which Executive has failed to
perform such duties or comply with such directions;
(b) the determination by the Board in the exercise of
its reasonable judgment that Executive has committed an act or acts constituting
(i) a felony, (ii) dishonesty with respect to the Company, or (iii) fraud with
respect to the Company;
(c) the determination by the Board in the exercise of
its reasonable judgment that Executive suffers from habitual alcohol or drug
abuse that adversely affects his performance hereunder;
(d) a material breach by Executive of any of the terms
and conditions of this Agreement; or
(e) Executive's gross negligence or willful misconduct
in the performance of his duties hereunder.
Executive shall be deemed to have a "Total Disability" for
purposes of this Agreement if he is unable to perform, by reason of physical or
mental incapacity, his duties or obligations under this Agreement, for a total
period of ninety (90) consecutive or one hundred sixty (160) cumulative days in
any three hundred sixty (360) day period and such incapacity is continuing on
the date of notice of termination. The Board shall determine, according to the
facts then available and based upon the opinion provided to the Board by
Executive's personal physician, whether and when the Total Disability of the
Executive has occurred. Such determination shall not be arbitrary or
unreasonable.
1.5 TERMINATION BY EXECUTIVE. Executive has the right to
terminate his employment under this Agreement upon ninety (90) days prior
written notice to the Company.
2. COMPENSATION AND BENEFITS.
2.1 BASE COMPENSATION. During the Employment Period, the
Company will pay Executive a base salary at a rate of TWO HUNDRED SEVENTY-FIVE
THOUSAND ($275,000) Dollars for the first year of the Employment Period; THREE
Employment Agreement - Nicholas A. Cocco
HUNDRED FIFTY-FIVE THOUSAND ($355,000) for the second year of the Employment
Period; and THREE HUNDRED NINETY-FIVE THOUSAND ($395,000) per annum from the
third year forward (the "Base Salary"). Base Salary shall be payable in equal
installments and in accordance with the Company's regular payroll policy for
salaried employees. Additionally, Executive's Base Salary shall be subject to
review annually by the Company's Board of Directors and may be increased (but
not decreased) based on: (a) salaries being paid to executives at companies
comparable to the Company, and (b) achievement of gross sales targets
established by the Board of Directors.
2.2 BONUS COMPENSATION AND STOCK OPTIONS. In addition to his
Base Salary, during the Employment Period, Executive may receive annual cash
bonuses and a Stock Option (as hereinafter defined) in such amount as determined
by the Board in its reasonable discretion. So long as Executive remains employed
with the Company, Executive shall be entitled to receive the following bonuses:
(i) DISCRETIONARY BONUS. The Board of Directors in
its sole discretion may award cash bonuses to Executive for each fiscal year
during the employment term.
(ii) MINIMUM BONUS. For the fiscal year ending
December 31, 2007, if the Company has Overall System Wide Sales (as hereinafter
defined) of at least $5,800,000, then the Executive shall be entitled to (in
addition to other cash bonuses under this Agreement) a cash bonus equal to fifty
percent (50%) of his Base Salary.
(iii) ADDITIONAL BONUSES. Executive shall be entitled
to (in addition to other cash bonuses under this Agreement) a cash bonus of an
additional fifty percent (50%) of his Base Salary, if each of the following
objectives are met by the Company by the end of fiscal year ending December 31,
2007:
(A) Establish new and/or maintain the
relationships necessary to finance the current operations of the company; and,
(B) Increase the number of All Night Auto
branded facility operations by a minimum of 30%; and,
(C) Increase Overall System Wide Sales by a
minimum of 25%
"Overall System Wide Sales" shall mean that amount as determined by the
Company representing the combined sales of the Company and corporate retail and
service centers operating within the fiscal year.
(iv) EXTRA BONUS. In addition to the cash bonuses
described in clauses (ii) and (iii) above, Executive shall be entitled to (in
addition to other cash bonuses under this Agreement) earn an additional bonus
equal to twenty-five percent (25%) of his Base Salary, if the Company by the end
of fiscal year ending December 31, 2007 meets the following objectives:
(A) Increase Midnight Holdings Group Gross
Revenue (as hereinafter defined) by at least 20%; and,
Employment Agreement - Nicholas A. Cocco
(B) Increase Midnight Auto Franchise Corp.
Revenues (as hereinafter defined) by at least 15%.
"Gross Revenues" shall mean the revenues earned by the Company
during the fiscal year ending December 31, 2007, as computed by the Company's
outside auditors.
"Midnight Auto Franchise Corp. Revenues" shall mean the gross
revenues earned by Midnight Auto Franchise Corp. during the year fiscal ended
December 31, 2007, as computed by the Company's outside auditors.
(v) Cash bonuses for fiscal years ending December 31,
2008 and December 31, 2009 shall be based upon certain financial and business
milestones as established by the Board (or committee thereof) after consultation
with the Executive prior to each anniversary of the Effective Date.
(vi) GENERAL BONUS PROGRAM. If the Company shall
adopt a bonus program or any other form of profit-sharing participation for
senior executive officers of the Company, Executive shall be eligible to
participate in such program as authorized by the Board, in its sole discretion.
(c) STOCK OPTIONS. Upon the signing of the Employment
Agreement, the Company shall grant Executive an option (the "Stock Option") to
acquire shares of Common Stock in an aggregate amount equal to _____ percent
(__%) of the Company's issued and outstanding stock (computed on a fully diluted
basis) as of the date of this Agreement. The Stock Option shall be governed by
the Company's then effective stock option plan and shall vest, if at all, in
equal proportions over the Initial Period, subject in each case to the
provisions of Section 2.3 below. The Stock Option shall be exercisable for 5
years and shall have an exercise price of 110% of the fair market value per
share. In connection with such grant, the Executive shall enter into the
Company's standard stock option agreement which will incorporate the foregoing
vesting schedule and the Stock Option related provisions contained in Section
2.3 below. Notwithstanding anything to the contrary in this Agreement, the Stock
Option may not be assigned or otherwise transferred by Executive.
(d) VEHICLE. The Company shall provide to Executive a
Company-owned or leased vehicle suitable and appropriate for Executive to
perform his duties hereunder, and Executive shall be permitted to use such
vehicle for personal use so long as it is not used for any purpose that violates
applicable law or is detrimental to the Company. In lieu of the foregoing, but
only with the consent of Executive, the Company may pay an automobile allowance
to Executive in an amount sufficient to meet its obligations in this Section
4(d).
(e) EMPLOYEE BENEFIT PLANS. Executive shall be entitled to
participate in all pension, 401(k), retirement, life, health insurance and
disability insurance currently provided to Executive, hospitalization, major
medical and other employee benefit plans and arrangements, if any (as in effect
and as amended from time to time), to the extent that his position, tenure,
salary, age, health and other qualifications make him eligible to participate,
generally made available by the Company to executive level employees, subject to
an on a basis consistent with the terms, rules and regulations, conditions and
overall administration of such plans and arrangements.
Employment Agreement - Nicholas A. Cocco
(f) VACATION. Executive shall be entitled to 20 Business Days
of paid vacation time in accordance with the policies of the Company applicable
to executive officers of the Company (in addition to any posted national,
religious or local holidays observed by the Company).
(g) INDEMNIFICATION FOR PERSONAL GUARANTEES. As an executive
of the company, it is understood that personal guarantees may need to be
provided by the Executive to various customers, clients, vendors, suppliers and
others (each, a "Guaranteed Party" and collectively, the "Guaranteed Parties")
in order to induce such Guaranteed Parties to initiate or to continue (i)
relations with the Company, (ii) services for the Company, and/or (iii) credit
to or from the Company. Such personal guarantees are considered normal and
customary and as such, require that the Company provide the Executive with full
and complete indemnification. Under no condition shall the Executive be held
liable for such personal guarantees made to Guaranteed Parties on behalf of the
Company, and the Company hereby indemnifies and holds Executive harmless from
and against any losses, claims, damages or liabilities to which the Executive
may become subject under such personal guarantees provided by the Executive to
any Guaranteed Party insofar as such loses, claims damages or liabilities arise
out of a personal guarantee provided to such Guaranteed Party by the Executive.
Further, should the Executive's Employment with the Company be terminated by the
Company for any reason, or, should the Executive leave the employment of the
Company for any reason, the Company shall immediately cause all Guaranteed
Parties to who the Executive provided personal guarantees to release the
Executive from such personal guarantees.
2.3 COMPENSATION AFTER TERMINATION.
(a) If the Employment Period is terminated (i) by the
Company for Good Cause, (ii) by Executive upon proper notice or (iii) upon
expiration of the Employment Period, then the Company shall have no further
obligations hereunder or otherwise with respect to Executive's employment from
and after the termination or expiration date (except payment of Executive's Base
Salary accrued through the date of termination, Stock Options that have vested
through the date of the Executive's termination and any other accrued and unpaid
benefits, if any), and the Company shall continue to have all other rights
available hereunder (including without limitation, all rights under Section 3 at
law or in equity).
(b) If the Employment Period is terminated by the Company
without Good Cause, the Executive shall be entitled to receive:
(i) Executive's Base Salary for the remainder of the
remainder of any Initial Period or then current Renewal Period to be paid in the
same manner as if Executive had remained employed with the Company;
(ii) Executive's employee benefit plans (as described
Section 2.2(e) above) for the remainder of any Initial Period or then current
Renewal Period to be maintained in the same manner as if Executive had remained
employed with the Company;
Employment Agreement - Nicholas A. Cocco
(iii) An amount equal to Executive's Base Salary for
three (3) months to be paid in cash, in full, within thirty (30) days of the
effective date of Executive's termination; and
(iv) All Stock Options that are scheduled to vest
during the Initial Period shall be accelerated and deemed to have vested as of
the date of the Executive's termination without Good Cause. Stock Options that
have vested (or been deemed pursuant to this Section 2.3(b)(iv) to have vested)
as of the date of such termination shall remain exercisable for a period of
ninety (90) days.
(c) If the Employment Period is terminated by reason of
Executive's death or Total Disability, Executive shall be entitled to receive
Executive's Base Salary accrued through the date of death or Total Disability
and for the six-month period immediately following the date of death or Total
Disability as well as any other accrued and unpaid benefits. All Stock Options
that are scheduled to vest on the next succeeding anniversary of the Effective
Date shall be accelerated and deemed to have vested as of the date of the
Executive's death or Total Disability. Stock Options that have vested (or been
deemed pursuant to this Section 2.3(c) to have vested) as of the Executive's
death or Total Disability shall remain exercisable for one year following such
date. All Stock Options that have not vested (or been deemed pursuant to this
Section 2.4(c) to have vested) as of the date of the Executive's death or
Disability shall be forfeited to the Company as of such date.
(d) If the Employment Period is terminated by the Company by
reason of a Termination Without Cause Pursuant to Merger (as hereinafter
defined), Executive shall be entitled to receive:
(i) All Stock Options that are scheduled to vest during
the Initial Period shall be accelerated and deemed to have vested as of the date
of the Executive's Termination Without Cause Pursuant to Merger. Stock Options
that have vested (or been deemed pursuant to this Section 2.3(d)(i) to have
vested) as of the date of such termination shall remain exercisable for a period
of ninety (90) days.
(ii) Executives' base salary through the date of
termination and for a period of six-months thereafter; and
(iii) An amount equal to the pro rata portion (based
upon a 365 day year) of any cash bonuses which Executive is entitled to receive
hereunder, if any.
"Termination Without Cause Pursuant to Merger" means a termination of
Executive's employment with the Company as a result of a transaction or series
of related transactions in which (i) immediately following the transaction more
than eighty (80%) percent of the voting stock of the Company is transferred or
issued to, or acquired by, persons or entities who are neither the current
holders (nor any of their affiliates) of voting stock of the Company as of the
date hereof, (ii) there is a sale or other disposition of all or substantially
all of the assets of the Company other than to an affiliate of the Company, or
(iii) the separate existence of the Company ceases.
(e) Except as set forth in this Section 2.3, the Company shall
have no other obligations hereunder or otherwise with respect to Executive's
employment from
Employment Agreement - Nicholas A. Cocco
and after the termination or expiration date, and the Company shall continue to
have all other rights available hereunder (including, without limitation, all
rights under Section 3 at law or in equity).
2.4 PROFIT SHARING, PENSION AND SALARY DEFERRAL BENEFITS.
During the Employment Period, Executive shall be entitled to participate in or
accrue benefits under any pension, stock option, salary deferral or profit
sharing plan now existing or hereafter created for employees of the Company upon
terms and conditions equivalent to those which the Company may provide for other
key management employees.
2.5 REIMBURSEMENT OF BUSINESS EXPENSES. The Company shall
reimburse Executive for all reasonable, ordinary and necessary travel,
entertainment, meal and lodging expenses incurred by him on behalf of the
Company during the term of his employment. Executive shall provide the Board of
Directors of the Company with itemized accounts, receipts, and other
documentation for expenses for which he seeks reimbursement, as reasonably
required by the Board.
2.6 TAXES, ETC. All compensation payable to Executive hereunder
is stated in gross amount and shall be subject to all applicable withholding
taxes, other normal payroll deductions and any other amounts required by law to
be withheld.
3. COVENANT NOT TO COMPETE; CONFLICTS OF INTEREST; INVENTIONS.
3.1 EXECUTIVE'S ACKNOWLEDGMENT. Executive agrees and
acknowledges that in order to assure the Company that it will build, maintain
and retain its value and that of the Company's business as a going concern, it
is necessary that Executive undertake not to use his special knowledge of the
Company's business and his relationships with customers and suppliers to compete
with the Company in the manner prohibited hereby. Executive further acknowledges
that:
(a) as of the date hereof, the Company is engaged in
the business of automotive retail and services distribution;
(b) Executive has occupied a position of trust and
confidence with the Company prior to the date of this Agreement and, during such
period of Executive's employment under this Agreement, Executive has become
familiar with the Company's trade secrets and with other proprietary and
confidential information concerning the Company and the Company's business;
(c) the agreements and covenants contained in this
Section 3 are essential to protect the Company and the goodwill of the Company's
business; and
(d) Executive's employment with the Company has special,
unique and extraordinary value to the Company and the Company would be
irreparably damaged if Executive were to provide services to any person or
entity in violation of the provisions of this Agreement.
3.2 NON-COMPETE. Executive hereby agrees that for a period
commencing on the date hereof and ending one (1) year following the termination
of his
Employment Agreement - Nicholas A. Cocco
employment with the Company (the "Restricted Period"), he will not, directly or
indirectly, as employee, agent, consultant, stockholder, director, co-partner or
in any other individual or representative capacity, own, operate, manage,
control, engage in, invest in or participate in any manner in, act as a
consultant or advisor to, render services for (alone or in association with any
person, firm, corporation or entity), or otherwise assist any person or entity
(other than the Company) that engages in or owns, invests in, operates, manages
or controls any venture or enterprise that directly or indirectly engages or
proposes to engage in the automotive repair business, or the sale of automotive
aftermarket parts or accessories (the "Business") anywhere within the
continental United States, Alaska or Hawaii (the "Territory"); PROVIDED,
HOWEVER, that nothing contained herein shall be construed to prevent Executive
from investing in the stock or other securities of any competing corporation or
entity listed on a national securities exchange or traded in the
over-the-counter market, but only if Executive is not actively involved in the
business of said corporation or entity and if Executive and his associates (as
such term is defined in Regulation 14(A) promulgated under the Securities
Exchange Act of 1934, as in effect on the date hereof), collectively, do not own
more than an aggregate of five (5%) percent of the stock of such corporation
("Permitted Investments"). Executive acknowledges and agrees that (i) the
Company is building a nationwide network of automotive repair centers and retail
stores focused on the automotive aftermarket and automotive accessories
segments; (ii) the Company is continuously investigating potential new
geographic markets in which to introduce its business model; and (iii) in light
of (i) and (ii), the covenant against competition provided for pursuant to this
Section 3.2 is reasonable with respect to its scope, the Restricted Period, and
the Territory.
3.3 BLUE-PENCIL. If any court of competent jurisdiction shall
at any time deem the Restricted Period too long, the scope or the Business too
broad, or the Territory too extensive, the other provisions of this Section 3
shall nevertheless stand, the Restricted Period shall be deemed to be the
longest period permissible by law under the circumstances, the scope of the
Business shall be deemed to be the broadest scope permissible by law under the
circumstances and the Territory shall be deemed to comprise the largest
territory permissible by law under the circumstances. The court in each case
shall reduce the Restricted Period, scope and/or Territory to permissible
duration or size.
3.4 CONFLICTS OF INTEREST. While employed by the Company,
Executive shall not, directly or indirectly, unless approved in writing by the
Company's Board of Directors, which approval may be granted or withheld in its
sole discretion:
(a) participate in any way in the benefits of
transactions between the Company and its suppliers or customers or have personal
financial transactions with any of the Company's suppliers or customers,
including, without limitation, having a financial interest in the Company's
suppliers or customers, or making loans to, or receiving loans from, the
Company's suppliers or customers;
(b) realize the personal gain or advantage from a
transaction in which the Company has an interest or use information obtained in
connection with Executive's employment with the Company for the Executive's
personal advantage or gain; or
(c) accept any offer to serve as an officer, director,
partner, consultant, agent or manager with, or to be employed in a technical or
sales capacity by, a person or entity which does business with the Company.
Employment Agreement - Nicholas A. Cocco
3.5 INVENTIONS.
(a) The Executive agrees that all inventions,
discoveries, improvements and patentable or copyrightable works ("INVENTIONS")
initiated, conceived or made by him, either alone or in conjunction with others,
during the Employment Period shall be the sole property of the Company to the
maximum extent permitted by applicable law and, to the extent permitted by law,
shall be "works made for hire" as that term is defined in the United States
Copyright Act (17 U.S.C.A., Section 101). The Company shall be the sole owner of
all patents, copyrights, trade secret rights, and other intellectual property or
other rights in connection therewith. The Executive hereby assigns to the
Company all right, title and interest he may have or acquire in all such
Inventions; provided, however, that the Board may in its sole discretion agree
to waive the Company's rights pursuant to this Section 3.5 with respect to any
Invention that is not directly or indirectly related to the Company's business.
The Executive further agrees to assist the Company in
every proper way (but at the Company's expense) to obtain and from time to time
enforce patents, copyrights or other rights on such Inventions in any and all
countries, and to that end the Executive will execute all documents necessary:
(i) to apply for, obtain and vest in the name
of the Company alone (unless the Company otherwise directs) letters patent,
copyrights or other analogous protection in any country throughout the world and
when so obtained or vested to renew and restore the same; and
(ii) to defend any opposition proceedings in
respect of such applications and any opposition proceedings or petitions or
applications for revocation of such letters patent, copyright or other analogous
protection.
(b) The Executive acknowledges that while performing the
services under this Agreement the Executive may locate, identify and/or evaluate
patented or patentable inventions having commercial potential in the fields of
automotive repair or retail sales of automotive aftermarket products and other
fields which may be of potential interest to the Company or one of its
affiliates (the "THIRD PARTY INVENTIONS"). The Executive understands,
acknowledges and agrees that all rights to, interests in or opportunities
regarding, all Third-Party Inventions identified by the Company, any of its
affiliates or either of the foregoing persons' officers, directors, employees
(including the Executive), agents or consultants during the Employment Period
shall be and remain the sole and exclusive property of the Company or such
affiliate and the Executive shall have no rights whatsoever to such Third-Party
Inventions and will not pursue for himself or for others any transaction
relating to the Third-Party Inventions which is not on behalf of the Company
unless the Company has expressly abandoned its interest in such Third Party
Inventions in writing.
(c) The Executive agrees that he will promptly disclose
to the Company, or any persons designated by the Company, all improvements,
Inventions made or conceived or reduced to practice, either alone or jointly
with others, during the Employment Period.
Employment Agreement - Nicholas A. Cocco
4. CONFIDENTIAL INFORMATION. During the term of this Agreement and
continuously thereafter, Executive shall keep secret and retain in strictest
confidence, and shall not, without the prior written consent of the Board,
furnish, make available or disclose to any third party or use for the benefit of
himself or any third party, any Confidential Information, except as may be
necessary to carry out his duties hereunder or as may legally be required. As
used in this Section 4, "Confidential Information" shall mean any information
relating to the business or affairs of the Company or the Business, including,
but not limited to, information relating to financial statements, customer
identities, potential customers, employees, suppliers, servicing methods,
equipment, programs, strategies and information, analyses, profit margins or
other proprietary information used by the Company in connection with the
Business; provided, however, that Confidential Information shall not include any
information which is in the public domain or becomes known in the industry
through no wrongful act on the part of Executive. Executive acknowledges that
the Confidential Information is vital, sensitive, confidential and proprietary
to the Company.
5. INTERFERENCE WITH RELATIONSHIPS. During the Restricted Period,
Executive shall not, directly or indirectly, as employee, agent, consultant,
stockholder, director, co-partner or in any other individual or representative
capacity without the prior written consent of the Company (i) employ or engage,
recruit or solicit for employment or engagement, any person who is (or was
within six months of the date such employment, engagement or solicitation
commences or occurs, as the case may be) employed or engaged by the Company, or
otherwise seek to influence or alter any such person's relationship with the
Company, or (ii) solicit or encourage any present or future customer or supplier
of the Company to terminate or otherwise alter his, her or its relationship with
the Company.
6. EFFECT ON TERMINATION. If the Company or the Executive should terminate
Executive's employment pursuant to Section 1 above for any reason, then,
notwithstanding such termination, those provisions contained in Section 2.3, 3,
4, 5, 6,7, 8, 9, 10, 11, 12, 13, 14, 15 and 16 hereof shall remain in full force
and effect for the duration of the Restricted Period.
7. REMEDIES. Executive acknowledges and agrees that the covenants set
forth in Section 3, 4, and 5 of this Agreement (collectively, the "Restrictive
Covenants") are reasonable and necessary for the protection of the Company's
business interests, that irreparable injury will result to the Company if
Executive breaches any of the terms of the Restrictive Covenants, and that in
the event of Executive's actual or threatened breach of any such Restrictive
Covenants, the Company will have no adequate remedy at law. Executive
accordingly agrees that in the event of any actual or threatened breach by him
of any of the Restrictive Covenants, the Company shall be entitled to seek
immediate temporary injunctive and other equitable relief, without the necessity
of showing actual monetary damages, subject to hearing as soon thereafter as
possible. Nothing contained herein shall be construed as prohibiting the Company
from pursuing any other remedies available to it for such breach or threatened
breach, including the recovery of any damages which it is able to prove. In the
event of a breach by the Company hereunder, Executive shall be entitled to
pursue all remedies available to him, whether at law or in equity (including
specific performance), any and all of which may be cumulative and which are not
exclusive.
Employment Agreement - Nicholas A. Cocco
8. INCOME TAX TREATMENT. Executive and the Company acknowledge that it
is the intention of the Company to deduct all amounts paid under Section 2
hereof as ordinary and necessary business expenses for income tax purposes.
Executive agrees and represents that he will treat all amounts paid hereunder as
ordinary income for income tax purposes, and should he report such amounts as
other than ordinary income for income tax purposes, he will indemnify and hold
the Company harmless from and against any and all taxes, penalties, interest,
costs and expenses, including reasonable attorneys' and accounting fees and
costs, which are incurred by Company directly or indirectly as a result thereof.
9. ASSIGNMENT. This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. The Company may
assign its rights, together with its obligations, hereunder in connection with
any sale, transfer or other disposition of all or substantially all of its
business or assets.
10. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
11. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same Agreement.
12. DESCRIPTIVE HEADINGS: INTERPRETATION. The descriptive headings in
this Agreement are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement. The use of the word "including" in this Agreement shall be by way of
example rather than by limitation.
13. NOTICES. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been duly given if (i) delivered personally
to the recipient, (ii) sent to the recipient by reputable express courier
service (charges prepaid) or mailed to the recipient by certified or registered
mail, return receipt requested and postage prepaid, or (iii) transmitted by
telecopy to the recipient with a confirmation copy to follow the next day to be
delivered by overnight carrier. Such notices, demands and other communications
shall be sent to the addresses indicated below:
(a) If to Executive:
Nicholas A. Cocco
22 Evergreen
Harrison Township, MI 48045
(b) If to the Company:
Richard D. Pulford
Board of Directors
8355 Tamarron Drive
Commerce Township, MI 48382
Employment Agreement - Nicholas A. Cocco
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party. Date
of service of such notice shall be (w) the date such notice is personally
delivered, (x) three days after the date of mailing if sent by certified or
registered mail, (y) one day after the date of delivery to the overnight courier
if sent by overnight courier or (z) the next business day after the date of
transmittal by telecopy.
14. PREAMBLE; PRELIMINARY RECITALS. The Preliminary Recitals set forth
in the Preamble hereto are hereby incorporated and made part of this Agreement.
15. ENTIRE AGREEMENT. Except as otherwise expressly set forth herein,
this Agreement sets forth the entire understanding of the parties, and
supersedes and preempts all prior oral or written understandings and agreements,
with respect to the subject matter hereof.
16. GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Agreement shall be governed by, the laws
of the State of Michigan, without giving effect to provisions thereof regarding
conflict of laws.
17. SUBSIDIARIES OF COMPANY. Midnight Holdings Group, Inc. hereby
causes its subsidiaries to be co-obligors with it under this Employment
Agreement.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.)
Employment Agreement - Nicholas A. Cocco
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
COMPANY:
MIDNIGHT HOLDINGS GROUP, INC.
By:
---------------------------------------
Richard D. Pulford
Its: Directors
EXECUTIVE:
---------------------------------------
Nicholas A. Cocco
Employment Agreement - Nicholas A. Cocco