Exhibit 10.28
NON-COMPETITION, NON-SOLICITATION
AND EMPLOYMENT AGREEMENT
This NON-COMPETITION, NON-SOLICITATION AND EMPLOYMENT AGREEMENT is
made and entered into as of May 21, 2001 by and between Lindley Food
Service Corporation, a Connecticut corporation (the "Company") and James
Hairston (the "Employee").
WHEREAS, Host America Corporation, a Colorado corporation and the
parent corporation of the Company ("Host") has purchased certain assets of
Contra-Pak Inc. and transferred such assets to the Company and Employee is
the former owner of Contra-Pak Inc.
WHEREAS, the Company desires to employ the Employee, and the Employee
desires to accept such employment, on the terms and conditions set forth
herein.
In partial consideration of the Asset Purchase Agreement between the
Host and Contra-Pak as well as the conditions and covenants contained
herein, the parties agree as follows.
1. DEFINITIONS. The following terms shall have the indicated
meanings when used in this Agreement, unless the context requires
otherwise:
a. "Effective Date" shall be immediately upon the execution of
this Agreement by both parties.
b. "Benefit Plan" shall mean each vacation pay, sick pay,
retirement, welfare, medical, dental, disability, life
insurance or other employee benefit plan, program or
arrangement.
c. "Cause" shall mean (i) the conviction of Employee of a
felony, with the exception of any such conviction which may
result from the charges against Employee in case no. F01-
47488, currently pending in Dallas County, (ii) the
admission by Employee of an act of fraud or embezzlement
involving assets of the Company or its customers, suppliers
or affiliates, (iii) the reasonable determination by the
Company communicated by written notice to the Employee that
there has been a material breach by the Employee of any of
his material obligations under this Agreement which results
in a material adverse effect on the Company or (iv) the
rescission of the Asset Purchase Agreement by and between
Contra-Pak and Host dated August 30, 2001, pursuant to
Section 14 thereof; provided that if such conduct is of a
nature subject to cure the Company will have given the
Employee prior written notice of
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such conduct and its intention to terminate his employment
and afforded the Employee a reasonable opportunity to cure
his conduct.
d. "Date of Termination" shall mean (A) if termination of
employment occurs by reason of death, the date of Employees'
death or (B) if termination of employment occurs for any
other reason, the date on which a Notice of Termination is
delivered to the other party.
e. "Notice of Termination" shall mean a written notice, which
shall set forth in reasonable detail the facts, and
circumstances that provided the basis for such termination.
2. EMPLOYMENT. The Company hereby employs Employee, and Employee
hereby accepts employment with the Company, on the terms and
subject to the conditions set forth herein.
The Company hereby agrees to employ and engage the services of the
Employee to act in the capacity of, Director of Sales and Operations
Director of Dallas. Mr. Hairston primary responsibility will be to achieve
sales growth through shelf stable meals. Until the time that a decision is
made upon the production location of meals, Mr. Hairston will also be
responsible for managing the Dallas production facility in an efficient
manner. To aid in the administration functions Lindley Food Service will
assist in the general bookkeeping of the company. As an Executive, the
Employee's duties and authorities will be consistent with such position and
Employee shall be subject to the direction and control of the President of
Lindley Food Service. Employee's authorization levels are attached to this
Agreement as Attachment A. The Employee agrees, during his employment, to
devote substantially his full business time to the business and affairs of
the Company (except for (a) services on Corporate, civic, or charitable
boards or committees, which do not significantly interfere with the
performance of his responsibilities hereunder, (b) such reasonable time as
shall be required for the investment of the Employee's assets, which do not
significantly interfere with the performance of his responsibilities
hereunder, and (c) periods of vacation, personal days and sick leave to
which he is entitled) and to use his best efforts to promote the interests
of the Company and to perform faithfully and efficiently the
responsibilities of an Executive.
3. TERM. This Agreement and Employee's employment will continue for
a term of three (3) years from the date of this Agreement, unless
and until terminated by either party in accordance with the terms
of this agreement.
4. TERMINATION OF SERVICE.
a. TERMINATION UPON DEATH. Employee's employment hereunder
shall terminate upon his death, in which event the Company
shall pay to Employee's estate an amount equal to three
months of salary plus commissions due until termination of
Employment, amounts due under Benefit Plans and any other
benefits through Date of Termination.
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b. TERMINATION UPON DISABILITY. If, as a result of a complete
mental or physical disability, Employee shall have been
absent from his duties hereunder on a full-time basis for
three (3) consecutive months, ("Disability") and, within 30
days after the Company notifies Employee in writing that it
intends to replace him, Employee shall not have returned to
the performance of his duties on a full-time basis, the
Company shall be entitled to terminate Employee's
employment. In addition, Employee shall, upon his
Disability, have the right to terminate his employment with
the Company. If such employment is terminated (whether by
the Company or by Employee as a result of Employee's
Disability, the following shall apply:
c. The Company shall continue to pay Employee the Base Salary
to which he would otherwise be entitled through the
remainder of the calendar month during which such
termination is effective.
d. TERMINATION FOR CAUSE. The Company shall be entitled to
terminate Employee's employment for Cause, in which event
the Company shall continue to pay Employee the Base Salary
and Commissions earned to which he would otherwise be
entitled through the Date of Termination.
e. TERMINATION BY EMPLOYEE. Any termination of employee's
employment by the Company shall be communicated by a Notice
of Termination to the Employee.
In the event of a termination of this agreement by Employee resulting
from a breach described in Section 4.d. above, the provisions of Section 9
of this Agreement shall also be terminated as the date of termination of
this Agreement.
f. NOTICE OF TERMINATION. A Notice of Termination to the other
Party shall communicate any termination of Employee's
employment by the Company or Employee.
5. COMPENSATION AND OTHER BENEFITS.
a. BASE SALARY. During each Contract Year of the term hereof,
the Company will pay to the Employee for services rendered
by him to the Company compensation at a rate of $90,000.00
per year (the "Base Salary") to be paid weekly. If the
sales of shelf stable meals fall below $800,000.00 or the
Net Income Before Taxes fall below ten (10) per cent, the
company will have the right to re-negotiate the salary. So
long as the Employee remains employed by the Company, the
compensation rate shall be increased annually by five (5)
percent.
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b. COMMISSIONS: The company shall provide an incentive to the
Employee to be compensated for achieving new sales growth.
Once sales reach a minimum of $1,000,000 and up to and
including $1,499,999.00, the Employee will receive 30% of
the profits. Once sales reach $1,500,000.00 and up to and
including $1,999,999.00, the Employee will receive 25% of
the profits. Once sales reach a minimum of $2,000,000.00
and above the Employee will receive 20% of the profits. See
the attached Exhibit B.
c. EXPENSES. The Company shall continue to provide Employee
with a corporate credit card to be utilized by the Employee
for business expenses incurred by him in the performance of
his duties hereunder. Employee shall be entitled to keep and
utilize all membership rewards awarded in connection with
Employee's use of the corporate credit card. Further,
Employee shall be entitled to receive prompt reimbursement
for all documented business expenses incurred by him in the
performance of his duties hereunder, provided that Employee
properly accounts therefore in accordance with the Company's
reimbursement policy; provided, however, that the amounts
available for such travel or other expenses may be fixed in
advance by the Company.
d. BENEFIT PLANS. Employee shall be entitled to participate in
and receive benefits under all of the Company's Benefit
Plans or programs generally available to senior management
of the Company, including, any 401 K Plan, retirement,
disability insurance plans and all other plans or programs.
Nothing paid to Employee under any Benefit Plan presently in
effect or made available in the future shall be deemed to be
in lieu of compensation payable to Employee hereunder. The
Company shall pay the full premium applicable to any such
benefits for the Employee and his dependents.
(i) VACATIONS. During the term hereof, Employee shall be
entitled to up to five (5) days of sick leave, up to
five (5) paid personal days and up to three (3) weeks
paid vacation during each Contract Year as Employee
deems reasonable. Any vacation time that is not taken
in a given Contract Year shall be carried forward to
the following Contract Year or Contract Years, as the
case may be but in no event more than two (2) weeks, on
a cumulative basis.
6. COMPANY AUTOMOBILE. The Company will reimburse the Employee
exactly $700.00 dollars per month for automobile expenses.
7. DEDUCTIONS. The Employee authorizes the Company to make such
deductions and withholdings from his compensation as are required
by law or as reasonable
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directed by the Company for its Employees generally, which
deduction will include, without limitation, deductions for
federal and state income taxes and Social Security.
8. NON-DISCLOSURE OF CONFIDENTIAL, PROPRIETARY AND TRADE SECRET
INFORMATION.
a. "Confidential, Proprietary and Trade Secret Information"
shall mean any secret or information of a secret,
proprietary, or confidential nature relating to the Company
and/or any client which is known to the Employee as a result
of his employment with the Company or originated by the
Employee, including, without limitation, all methods,
processes, products, techniques, know-how, marketing
strategies and plans, data, financial statements and
projections, business plans, inventions, improvements, or
discoveries (whether or not patenable or copyrightable),
price lists, forecasts, customer lists, customer files, and
customer requirements, unless such information is in the
public domain to such an extent as to be readily available
to competitors.
b. The Employee acknowledges that the Confidential, Proprietary
and Trade Secret Information constitutes a valuable and
unique asset of the Company with independent economic value.
The Employee agrees that he will not, directly or
indirectly, use, communicate, disclose, disseminate, or put
in the public domain, any Confidential, Proprietary and
Trade Secret Information or any other information of a
secret, proprietary, confidential, or generally undisclosed
nature relating to the business of the Company. The Employee
hereby assigns any rights he may otherwise possess in any
Confidential, Proprietary and Trade Secret Information to
the Company.
c. This section shall survive the termination of the Employee's
employment.
d. Nothing in this Agreement is intended to limit the Company's
rights under an applicable trade secrets statute.
e. Employee understands that a violation of this Agreement may
result in disciplinary action, including possible
termination, and/or legal action.
9. NON-SOLICITATION AND COVENANT NOT TO COMPETE. In consideration
of the Employee's employment by the Company as an Executive and
because the Employee shall have access to Confidential,
Proprietary and Trade Secret Information, the Employee hereby
covenants as follows:
For a period of four (4) years from the Effective Date or one (1) year
from the termination of Employee's employment, whichever is longer, the
Employee agrees that, within the territory defined below, he shall not
directly or indirectly, personally, by agency, as an
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employee, through a corporation, partnership, limited liability company, or
by any other artifice or device, provide or attempt:
a. to provide any services in the food service industry (other
than in connection with a restaurant, private catering
business, fast food business or a company providing produce,
seafood or beverages).
b. to provide any services in the food service industry (other
than in connection with a restaurant, private catering
business, fast food business or a company providing produce,
seafood or beverages) to any of the Company's clients to
which, within one year prior to the termination of this
Agreement, the Employee has provided services in any
capacity on behalf of the Company, or the Employee has been
introduced or about which the Employee has received
information through the Company or through any Client for
which the Employee has performed services in any capacity on
behalf of the Company.
c. to retain or attempt to retain for himself or any other
party, the services of any person, including any of the
Company's employees or consultants, who have provided
services to or on behalf of the Company within one year
prior to the termination of the Employee's employment, and
to whom the Employee has been introduced or about whom the
Employee has received information through the Company or
through any Client for which the Employee has performed
services in any capacity on behalf of the Company.
d. to utilize Confidential, Proprietary or Trade Secret
Information to solicit any suppliers or customers of the
Company or in any way induce them not to continue in their
relationship with the Company. Furthermore, Employee
covenants and agrees not to disrupt, damage, impair or
interfere with the business or operations of the Company,
including by way of disrupting its relationships with
customers, agents, representatives, vendors, or otherwise.
The term "territory" means the geographic area within a one hundred
(100) mile radius of a facility or location of the Company's operations and
any account that the Company/Contra-Pak provided services or solicited.
The Employee acknowledges that irreparable harm to the Company will
result from the breach of the Covenant Not to Compete. Notwithstanding
anything to the contrary herein contained, in the event of a material
breach by the Company of its obligations under this Agreement, which breach
is continuing and remains uncured for a period of ninety (90) days and so
long as the Employee is not in material breach of his obligations under
this Agreement, then the provisions of this section 9 shall be
unenforceable.
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10. RIGHTS AND BENEFITS PERSONAL. Except as herein otherwise
specifically provided, the rights and benefits of the Employee
under this Agreement are personal to him and no such rights or
benefits will be subject to voluntary or involuntary alienation,
assignment, or transfer.
11. NON-ALIENATION. The Employee shall not have any right to pledge,
hypothecate, anticipate, or in any way create a lien or security
interest upon any amounts provided under this Agreement; and no
benefits payable hereunder shall be assignable in anticipation of
payment either by voluntary or involuntary acts, or by operation
of law, except by will or the laws of descent and distribution.
12. ATTORNEYS' FEES. Employee acknowledges that his breach of any of
the provisions of this Agreement could result in irreparable and
unreasonable harm to the Company and that injunctive relief, as
well as damages, would be appropriate for a breach of any of such
provisions. If any action or proceeding is brought because of an
alleged dispute or default in connection with this Agreement, the
prevailing party shall be entitled to recover reasonable
attorneys' fees and costs in connection with such action or
proceeding in addition to all other recovery or relief.
13. SEVERABILITY. Whenever there is any conflict between any
provision of this Agreement and any statute, law, regulation, or
judicial precedent, the latter will prevail, but in each such
event, the provisions of this Agreement thus affected will be
curtailed and limited only to the extent necessary to bring them
within the requirement of law. If any part, section, paragraph,
or clause of this Agreement will be held by a court of proper
jurisdiction to be indefinite, invalid, or otherwise
unenforceable, the entire Agreement will not fail on account
thereof, but the balance of this Agreement will continue in full
force and effect unless such construction would be clearly
contrary to the intention of the parties or would be
unconscionable.
14. ENTIRE AGREEMENT; MODIFICATION; WAIVER. This Agreement together
constitutes the entire Agreement between the parties pertaining
to the subject matter contained in it and supersedes all prior
and contemporaneous agreements, representations, and
understandings of the parties. No supplement, modification, or
amendment of this Agreement will be binding unless executed in
writing by both parties. No waiver of any of the provisions of
this Agreement will be deemed to or will constitute a waiver of
any other provisions, whether or
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not similar, nor will any waiver constitute a continuing waiver.
No waiver will be binding unless executed in writing by the party
making the waiver.
15. NOTICES. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing
and if sent by registered or certified mail to the Employee at
the last address he has filed in writing with the Company or, in
the case of the Company, Attention: President, at its principal
business offices.
16. SUCCESSOR TO THE COMPANY. Except as may be otherwise provided
herein, this Agreement shall be binding upon and inure to the
benefit of the Company and any successor of the Company.
17. JURISDICTION AND VENUE. The parties acknowledge that the
execution of, and substantial performance under, this Agreement
has occurred or will occur in the State of Connecticut. Without
limiting the right of the parties to pursue their rights and
remedies under this Agreement (or under any judgment obtained in
respect thereof) in any appropriate jurisdiction, the parties
hereby irrevocably consent to the jurisdiction and venue of the
courts of the State of Connecticut or any United States court of
competent jurisdiction situated therein, to adjudicate any legal
action commenced by a party and waive any objections they may at
any time have to such jurisdiction and venue.
18. GOVERNING LAW. The provisions for this Agreement for all purposes
will be construed in accordance with the laws of the State of
Connecticut.
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IN WITNESS WHEREOF, the following Agreement was executed as of the
date and year first above written.
LINDLEY FOOD SERVICE CORPORATION, a
Connecticut Corporation
By: ____________________________
______________, President
EMPLOYEE:
__________________________________
James Hairston
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EXHIBIT A
---------
Employee's Authority
--------------------
Pursuant to the terms and conditions of the Employment Agreement to
which this Exhibit A is attached, Employee is hired to solicit shelf stable
meals and any other food service sales as directed by the Company. The
Employee will have the authority to incur expenses and make commitments
within the guidance set forth below. The following actions require the
consent of the Company.
1. Incurring a single general operating expenses above $5,000 (Food
purchase above $35,000).
2. Hiring or terminating employees with total annual compensation
greater than $40,000.
3. Annual base salary increases for employees of 10% or greater and
all bonus payments (subject to any bonus plans in existence or,
in the future) for employees in excess of $10,000 per annum in
the aggregate.
4. Hiring and compensation changes with related party employees.
5. Any capital expenditures.
6. New leases or modifications to existing leases where the
aggregate lease commitment are above $10,000 including van/truck
leases.
7. Engagement of any marketing, management or other business
consultant.
8. Execution of consumer contracts where the expected total revenue
is in excess of $10,000.
All expense reports are to be submitted in accordance with the Company's
policies as in place from time to time.
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