EMPLOYMENT AGREEMENT
BETWEEN
MEDI-HUT CO., INC.
AND
LAURENCE SIMON
November 1, 2001
DATED: _________________
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made this 1st day of November, 2001 between
MEDI-HUT CO., INC. a New Jersey Corporation, located at 1935 Swarthmore
Avenue, Lakewood, New Jersey 08701 (the "Company") and LAURENCE SIMON, located
at, 6 Woodruff Court, Englishtown, New Jersey 07726 (the "EMPLOYEE").
W I T N E S S E T H:
WHEREAS, EMPLOYEE desires employment as a Chief Financial Officer (CFO)
of the COMPANY; and
WHEREAS, at the date of this Agreement COMPANY is currently in need of a
CFO to oversee financial and related aspects of the COMPANY's business; and
WHEREAS, the Board of Directors desires to obtain the benefits of the
services of EMPLOYEE in the capacity of CFO for the COMPANY; and
WHEREAS, the parties hereto desire to enter into an Agreement of
Employment mutually beneficial to said parties, and for the purpose of
defining the rights, duties and obligations of each of the parties hereto; and
WHEREAS, each of the parties hereto acknowledges that they have read
this Agreement and that they understand the same and that
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this Agreement shall constitute the final and entire Agreement between said
parties; and
WHEREAS, the parties hereto have determined that it is in the best
interest of the employment relationship existing between them that this
Agreement be executed; and
NOW, THEREFORE, in consideration of the sum of ONE ($1.00) DOLLAR each
to the other paid, receipt of which is hereby acknowledged, and in further
consideration of the following mutual premises and covenants and of other good
and valuable consideration, the parties hereto agree as follows:
1. EMPLOYMENT.
1.1 Engagement. The COMPANY hereby employs the EMPLOYEE for the
term (as hereinafter defined) to render services to the COMPANY as CFO of the
COMPANY, subject to the direction of the COMPANY, and, in connection
therewith, to perform such duties as he shall reasonably be directed to
perform by the COMPANY.
1.2 Scope of Employment. EMPLOYEE has to be employed in the
capacity of CFO for the COMPANY, with all duties attendant and incident
thereto, including those as set forth in the job description annexed hereto as
Schedule A. Further the EMPLOYEE agrees to well and faithfully render,
perform, carry out and conduct such other duties as shall be delegated to him
in the sole discretion of the Board of Directors of the COMPANY, mindful,
nevertheless, of the stature and benefits normally associated with the
position of Chief Financial Officer for the COMPANY. EMPLOYEE understands and
agrees that he is
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employed to actively pursue the business and best interest of the COMPANY and
the EMPLOYEE shall devote his full time and energy to the discharge of his
duties hereunder. EMPLOYEE agrees that he shall not engage in any other
employment which shall require time or energy in the discharge of any
obligations thereunder. Notwithstanding anything herein to the contrary
contained, EMPLOYEE reserves the right to make investments in other business
ventures, with the exception of those entities which might be contrary to the
interest, welfare or benefit of the COMPANY.
EMPLOYEE also reserves the right, if invited to do so, to
participate on the Board of Directors of another company providing that the
inviting company's business does not compete with the COMPANY'S products or
services and providing that participating as a board member does not interfere
with EMPLOYEE'S ability to fulfill his duties and obligations to the COMPANY.
2. TERM OF EMPLOYMENT. The term of the EMPLOYEE'S employment under this
Agreement (the "Term") shall commence November 1, 2001 and be two (2) years,
two (2) months. The initial two (2) month period from November 1, 2001 to
December 31, 2001 shall be a "Trial Period". Any termination of this
Agreement during the Trial Period, by either party, shall not trigger the
buy-out terms enumerated herein at paragraph 4.3.
3. COMPENSATION AND BENEFITS.
3.1 Base Salary. As full compensation for all services rendered
pursuant to this Agreement, the COMPANY agrees to pay the
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EMPLOYEE, during the Term, as salary at the fixed rate of $100,000 per annum,
payable less deductions or amounts withheld as shall be required by applicable
law and regulations.
EMPLOYEE shall also receive 20,000 stock options with an exercise
price of $6.75 per share. Vesting will be as follows: 3,680 at December 31,
2001 and 680 per month for the period January 1, 2002 through December 31,
2003. All options shall vest immediately and in full upon a buy-out, hostile
take over or other merger or sale of the company, or a substantial amount of
assets.
EMPLOYEE shall also receive fully paid for health benefits, life
insurance, disability insurance, dental insurance and Directors and Officers'
liability insurance.
EMPLOYEE shall also receive a company car. The COMPANY will
purchase the EMPLOYEE'S 2001 Toyota Camry CE acquired in January 2001 for
Kelly Blue Book value. COMPANY shall also pay all expenses of EMPLOYEE with
regard to gas, car insurance, repairs and maintenance, and tolls and parking
fees only as these relate to company use. No amounts will be paid for traffic
or moving violation fines.
COMPANY shall also pay all of EMPLOYEE'S professional and
association dues in full, i.e. AICPA, NJSCPA, etc. COMPANY shall also pay
EMPLOYEE'S continuing professional education (CPE) costs and expenses incurred
in maintaining licenses with States in which EMPLOYEE is currently licensed.
EMPLOYEE shall pay for any travel costs incurred in maintaining such licenses.
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3.2 Applicable Law. The provision of this Agreement relating to
the compensation to be paid to the EMPLOYEE shall be subject to and limited by
any applicable provision of law or regulation which may from time to time
restrict or limit the compensation to be paid hereunder.
3.3 Vacations/Holiday Days. EMPLOYEE shall be entitled to one (1)
week regular vacation dates during the Trial Period, then two (2) weeks a year
through December 2003, plus one week personal leave for the length of the
contract to be chosen by the EMPLOYEE. In addition to the foregoing, EMPLOYEE
shall be entitled to any holidays set by the COMPANY.
EMPLOYEE shall also receive two (2) weeks sick leave over the
entire life of the contract.
3.4. COMPANY shall supply EMPLOYEE with a state-of-the-art
computer with internet access, e-mail, necessary software as required for
EMPLOYEE to perform his functions and duties as well as supplies needed to
perform such duties, particularly reporting manuals and others that contribute
to SEC accounting and reporting processes.
4. TERMINATION.
4.1 Death. If the EMPLOYEE shall die during the Term, this
Agreement shall terminate, except that the EMPLOYEE'S legal representatives
shall be entitled to receive the compensation provided for in Section 3.1
hereof to the last day of the month in which his death occurs, as well as any
outstanding bonuses, stock, vacation pay, and/or expenses owed the EMPLOYEE.
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4.2 Breach of Responsibility. In the event of gross neglect by
the EMPLOYEE of his duties hereunder, conviction of the EMPLOYEE of any
felony, or of any lesser crime or offense involving the property of the
COMPANY or any of its subsidiaries or affiliates, willful misconduct by the
EMPLOYEE in connection with the performances of his duties hereunder or any
other conduct on the part of the EMPLOYEE, which would make his continued
employment by the COMPANY prejudicial to the best interests of the COMPANY,
the COMPANY may at any time by written notice with a period of five (5)
business days to cure such a breach, or such longer period as may be
reasonably required by the nature of such a breach, to the EMPLOYEE terminate
the term of the EMPLOYEE'S employment hereunder, with no requirement of any
further compensation under any of the provisions of this Agreement.
4.3 Determination by Board of Directors. In the event of a
determination by the Board of Directors of the COMPANY that the continuation
of the employment arrangement of this Employment Agreement is not in the best
interest of the COMPANY, the COMPANY may, at any time, upon its sole
discretion, terminate this Employment Agreement. In the event of termination
under those circumstances, EMPLOYEE shall receive a "buy-out" of this
Agreement in the amount of twelve (12) months salary equal to the EMPLOYEE'S
rate of pay at the time of such termination, less any applicable taxes. The
COMPANY shall also be entitled to a pro-rata credit for any profession fees,
licenses or other such expenses paid for the benefit of EMPLOYEE.
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EMPLOYEE shall turn over the car and any other property of the COMPANY,
immediately upon such termination.
5. PROTECTION OF CONFIDENTIAL INFORMATION: NON-COMPETITION.
5.1 Confidentiality. In view of the fact that the EMPLOYEE'S
work for the COMPANY will bring him into close contact with many accounts
previously established by the COMPANY the EMPLOYEE agrees:
5.1.1 That the following definitions shall apply:
a. "Confidential Information" means any and all data and
information related to COMPANY projects, including, but not limited to
customer and contact lists, production contacts and pricing, marketing and
financial information, records, business plans, studies, reviews and projects.
b. "Directly or indirectly" shall include, without limitation,
acting as a sole proprietor, partner, joint venturer, beneficiary,
shareholder, director, officer, employee, independent contractor, consultant
or agent, by or through any friend, relative, trustee, intermediary, or other
agent, or in any other manner or capacity.
c. "Person" shall include, without limitation, an in the
singular as well as in the plural, natural persons, proprietorship,
partnerships, joint ventures, corporations, estates, trusts, fellowships,
clubs, societies, leagues, firms, groups, associations, agencies, enterprises,
and all of the entities and organizations.
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d. "Trade secret" means information, including a compilation,
program, device, method, technique or process that" (i) derives independent
economic value, actual or potential, from not being generally known to, and
not being readily ascertainable by proper means by other persons who can
obtain economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
5.2 The parties acknowledge and recognize the highly competitive
nature of the COMPANY'S business and the competition between the COMPANY and
its competitors in the industry. The parties further acknowledge that the
accounts for which EMPLOYEE will be responsible constitute confidential
information and proprietary information previously obtained by the COMPANY and
the sole property of the COMPANY and which the EMPLOYEE, but for his
employment with the COMPANY, would have no exposure or contact with.
5.3 To deliver promptly to the COMPANY on termination of his
employment by the COMPANY, or at any time the COMPANY may so request, all
memoranda, notes, records, reports, manuals, drawings, blueprints and other
documents (and all copies thereof) relating to the COMPANY'S business and all
property associated therewith, which he may then possess or have under his
control.
5.4 The parties agree that the compliance with the provisions of
this paragraph 5 are material considerations of this Agreement and that the
COMPANY would not have entered into this Agreement but for such provision.
The parties agree that any
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violation of this paragraph 5 will cause significant and irreparable harm to
the COMPANY for which it has no adequate remedy at law, regardless of the
outcome of any litigation between the parties or money damages awarded
therein. The COMPANY, upon application to a court of competent jurisdiction
shall be entitled to obtain injunctive relief, including but not limited to a
temporary restraining order or temporary, preliminary, or permanent
injunction, without the necessity of a bond, to enforce the provisions of this
Agreement. The COMPANY shall also be entitled to an accounting of and
constructive trust for all profits or other benefits arising out of or related
to any such violation. The COMPANY does not waive its right to and shall be
entitled to any remedy available at law, including monetary remedies,
including the liquidated damages provided for herein for a violation of this
Agreement. The EMPLOYEE agrees that the existence of any claims it has
against the COMPANY shall not constitute a defense to the enforcement of any
of the provisions of the Agreement.
5.5 In addition to any other remedy set forth herein, the parties
acknowledge and agree that the EMPLOYEE shall pay to the COMPANY Twenty-Five
Thousand ($25,000) Dollars for each instance or event of a threatened or
material breach of any of the provisions of this paragraph 5. This amount
shall be liquidated damages and not a penalty. The parties recognize that
actual damages resulting to the COMPANY from such breach would be difficult or
impossible to measure due to the nature of the COMPANY'S business and that
this amount is a reasonable estimate of what such damages would be.
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5.6 To deliver promptly to the COMPANY on termination of his
employment by the COMPANY, or at any time the COMPANY may so request, all
client lists, memoranda, notes, records, reports, manuals, drawings,
blueprints and other documents (and all copies thereof) relating to the
COMPANY'S business and all property associates therewith, which he may then
possess or have under his control
5.7 Restrictive Covenants. During the Term and for a period of
two (2) years following the termination of such period, the EMPLOYEE shall
not, directly or indirectly, enter the employ of, or render any services to,
any person, firm or corporation which is in the competition with the COMPANY
in any way in the capacity of CFO or related position; and he shall not become
interested in any such practice, directly or indirectly, as an individual,
partner, shareholder, director, officer, principal, agent, employee, trustee,
consultant, or any other relationship or capacity; provided, however, that
nothing contained in this Section 5.7 shall be deemed to prohibit the EMPLOYEE
from acquiring, solely as an investment, shares of capital stock of any public
corporation. In the event a court of competent jurisdiction shall
subsequently ascertain that the geographic scope or duration of the within
Restrictive Covenant is unenforceable in any respect, then the parties agree
and consent to the reformation of this clause by such court to provide for the
maximum geographic area and duration then permissible.
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The parties expressly recognize that the geographic scope of
this covenant is substantial in that the nature of the COMPANY'S business is
done on a national level dealing with national accounts, even though
individual customers maybe local and distinct in nature. The parties agree
that the COMPANY'S client lists, financial information, production
information, projections and business plans are an asset of substantial value
and that the COMPANY is entitled to protection of this unique asset.
5.8 Specific Performances. If the EMPLOYEE commits a breach, or
threatens to commit a breach, of any of the provisions of paragraph 5 the
COMPANY shall have the following rights and remedies:
5.8.1 The right and remedy to have the provisions of this
Agreement specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the COMPANY and that money damages will not
provide an adequate remedy to the COMPANY; and
5.8.2 The right and remedy to require the EMPLOYEE, if
directed to do so by any court having equity jurisdiction, to account for and
pay over to the COMPANY all compensation, profits, monies, accruals,
increments or other benefits (collectively "Benefits") derived or received by
the EMPLOYEE as the result of any transactions constituting a breach of any of
the provisions of the preceding paragraph, and the EMPLOYEE hereby agrees to
account for any pay over such Benefits to the COMPANY.
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Each of the rights and remedies enumerated above shall be
independent of the other, and shall be severally enforceable, and all such
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the COMPANY under law or in equity.
5.9 Unenforceability. If any of the covenants contained in
Paragraph 5 hereof, or any part thereof, is hereafter construed to be invalid
or unenforceable, the same shall not affect the remainder of the covenant or
covenants, which shall be given full effect, without regard to the invalid
portions.
If any of the covenants contained in Paragraph 5 or any part
thereof, is held to be unenforceable because of the duration of such provision
or the area covered thereby, the parties agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision and, in its reduced form, said provision shall then be enforceable.
5.10 Costs of Suit. In the event that any action, suit or other
preceding in law or in equity is brought to enforce the covenants contained in
Paragraph 5 or any other provision of this Agreement or to obtain money
damages for the breach thereof, and such action results in the award of a
judgment for money damages or in the granting of any injunction in favor of
the COMPANY, all expenses (including reasonable attorneys fees) of the COMPANY
in such action, suit or other proceeding shall (on demand of the COMPANY) be
paid by EMPLOYEE.
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5.11 Acknowledgment of Proprietary Interest - Customers. The
EMPLOYEE recognizes and agrees (i) that all existing client lists and client
contracts, production information and financial and business plans of the
COMPANY are and shall be the sole and exclusive property of the COMPANY, and
that the EMPLOYEE neither has nor shall have any right, title or interest
therein; (ii) that such lists and information are not readily accessible to
competitors of the COMPANY; and (iv) that the EMPLOYEE'S present and future
business is and will continue to be of a type that depends upon such lists and
information.
5.12 Acknowledgment of Proprietary Interest - Intellectual
Property Rights. The EMPLOYEE recognizes and agrees that any and all
intellectual property arising from the work of EMPLOYEE with the COMPANY will
belong to the COMPANY.
6. INDEMNIFICATION. The COMPANY will indemnify the EMPLOYEE to the
maximum extent permitted by applicable law, against all costs, charges and
expenses incurred or sustained by him in connection with any action, suit or
proceeding to which he may be made a party by reason of his being an officer,
director or EMPLOYEE of the COMPANY or of any subsidiary or affiliate of the
COMPANY, unless fraud, willful and/or wanton negligence or criminal behavior
on the part of the EMPLOYEE is proven in a court of competent jurisdiction.
7. NOTICES. All notices, requests, consents and other communication,
required or permitted to be given hereunder, shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by prepaid
telegram, or mailed first-class, postage
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prepaid, by registered or certified mail (notices sent by telegram or mailed
shall be deemed to have given on the date sent), as follows (or to such other
address as either party shall designate by notice in writing to the other in
accordance herewith):
with a copy to:
MEDI-HUT Company
1935 Swarthmore Avenue
Lakewood, New Jersey 08701
: as to COMPANY
with a copy to:
Mr. Laurence Simon
6 Woodruff Court
Englishtown, New Jersey 07726
: as to EMPLOYEE
8. GENERAL.
8.1 Governing Law. This Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of New Jersey,
applicable to agreements made and to be performed entirely in New Jersey.
8.2 Headings. The article and section headings contained herein
are for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
8.3 Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements
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and understandings, written or oral, relating to the subject matter hereof.
No representation, promise of inducement has been made by either party that is
not embodied in this Agreement, and neither party shall be bound by or liable
for any alleged representation, promise or inducement not so set forth.
8.4 Assignment. This Agreement, and the EMPLOYEE'S rights and
obligations hereunder, may not be assigned by the EMPLOYEE. The COMPANY may
assign its rights, together with its obligations, hereunder in connection with
any sale, transfer or other dispositions of all or substantially all of its
business or assets; in any event the obligations of the COMPANY hereunder
shall be binding on its successors or assigns, whether by merger,
consolidation or acquisition of all or substantially all of its business or
assets.
8.5 Amendment. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof
may be waived, only by a written instrument executed by both of the parties
hereto, or in the case of a waiver, by the party waiving compliance. The
failure of either party at anytime or times to require performance of any
provision hereof shall in no manner affect the right at a later time to
enforce the same. No waiver by either party of the breach of any term or
covenant contained in this Agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or
continuing waiver of any such breach, or a waiver of the breach of any other
term or covenant contained in this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
ATTEST:
MEDI-HUT CO., INC.
/s/ Vincent Sanpietro /s/ Joseph A. Sanpietro
________________________ By: _________________________________
JOSEPH SANPIETRO, President
/s/ Vincent Sanpietro /s/ Laurence M. Simon
________________________ __________________________________
LAURENCE SIMON