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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this
1/st/ day of June, 2000, by and between GRAND HAVANA ENTERPRISES, INC.
("Company"), a Delaware corporation, and STANLEY SHUSTER ("Employee"), with
reference to the following facts:
WHEREAS, Company wishes to continue to employ Employee as a full-time
employee of Company, and Employee wishes to accept such employment, upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the terms and conditions and the
mutual agreements and covenants set forth herein, the parties hereto agree as
follows:
1. SCOPE OF EMPLOYMENT; TERMINATION OF PRIOR AGREEMENT.
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1.1 Capacity. Company hereby agrees to continue to employ Employee,
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and Employee hereby accepts such employment, as President and Chief Executive
Officer of Company during the term of this Agreement. Employee shall report to
the Board of Directors of Company and perform the services and duties
customarily incident to such office and as otherwise decided upon by the Board
of Directors.
1.2 Devotion of Services. Employee shall be a full-time employee of
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Company during the term of this Agreement. Employee shall not participate in
any activities which may interfere with his duties hereunder and/or which are
competitive with Employer's activities. Employee shall perform and discharge
well and faithfully those duties assigned him by Company.
1.3 Prior Agreements. This Agreement supersedes any and all prior
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employment agreements entered into between Company and Employee ("Prior
Employment Agreements") and the parties hereby agree that the Prior Employment
Agreements are hereby terminated.
2. TERM. Subject to Section 5 herein, the term of this Agreement
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shall commence as of June 1, 2000, and shall continue and remain in full force
and effect for a period of three (3) years. However, in the event that Company
thereafter continues to employ Employee, this Agreement shall be deemed
automatically renewed upon the same terms and conditions set forth herein except
(a) that the parties may mutually agree to revise any of the terms set forth
herein, and (b) the employment relationship will be on an "at will" basis, which
means that, subject to Section 5.4 herein, either Company or Employee may elect
to terminate the employment relationship at any time for any reason whatsoever,
with or without cause.
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3. COMPENSATION.
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3.1 Salary and Bonus. In consideration of the services to be
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rendered by Employee hereunder, including without limitation any services
rendered as an officer or director of Company or any subsidiary or affiliate
thereof, during the term of this Agreement Company shall pay to Employee the
following:
(a) A salary in the amount of $185,000.00 per annum. The Board
of Directors may, at its sole and absolute discretion, increase Employee's
salary; provided, however, Employee's annual salary shall be increased at the
end of each twelve (12) month period by at least 10% over the previous year.
(b) The Company's Board of Directors may, but shall not be
obligated to, award bonuses to Employee based upon his performance and the
Company's profitability.
(c) All payments to Employee shall be subject to the regular
withholding requirements of all appropriate governmental taxing authorities.
3.2 Other Benefits. Employee shall be entitled to participate
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in any medical and insurance plan which Company is presently providing or may
provide to its senior executives. Employee acknowledges that the terms of such
plans may change from time to time.
3.3 Expenses. Company will advance to or reimburse Employee for
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all reasonable travel and entertainment required by Company and other reasonable
expenses incurred by Employee in connection with the performance of his services
under this Agreement in accordance with Company policy as established from time
to time. In addition, Employee shall receive an automobile lease allowance of
$600.00 per month. Employee shall be responsible for and shall pay for
insurance, gas, maintenance and repairs of said automobile.
4. CONFIDENTIALITY.
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4.1 Restrictions on Use of Trade Secrets and Records. During
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the term of his employment, Employee will have access to and become acquainted
with various trade secrets of Company, consisting of formulas, patterns,
devices, secret Inventions, processes, compilations of information, records and
specifications (collectively "Trade Secrets"), all of which are owned by Company
and used in the operation of Company's business. Additionally, Employee will
have access to and may become acquainted with various files, records, customer
lists, documents, drawings, specifications, equipment and similar items relating
to the business of Company (collectively "Confidential Information"). All such
Trade Secrets and Confidential Information, whether they are designed, conceived
or prepared by Employee or come into Employee's possession or knowledge in any
other way, are and shall remain the exclusive property of Company and shall not
be removed from the premises of Company under any circumstances whatsoever
without the prior written consent of Company. Employee promises and agrees that
he will not use for himself
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or for others, or divulge or disclose to any other person or entity, directly or
indirectly, either during the term of his employment by Company or at any time
thereafter, for his own benefit or for the benefit of any other person or entity
or for any reason whatsoever, any of the Trade Secrets or Confidential
Information described herein, which he may conceive, develop, obtain or learn
about during or as a result of his employment by Company unless specifically
authorized to do so in writing by Company.
4.2 Non-Interference. Employee recognizes that Company has
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invested substantial effort in assembling its present employees and in
developing its customer base. As a result, and particularly because of Company's
many types of confidential business information, Employee understands that any
solicitation of a customer or employee of Company, in an effort to get them to
change business affiliations, would presumably involve a misuse of Company's
confidences, Trade Secrets and Confidential Information. Employee therefore
agrees that, for a period of one (1) year from the later of the date of
termination of Employee's employment with Company for any reason whatsoever or
the receipt by Employee of any compensation paid to Employee by Company,
Employee will not influence, or attempt to influence, existing employees or
customers of Company in an attempt to divert, either directly or indirectly,
their services or business from Company.
5. TERMINATION OF AGREEMENT.
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5.1 Termination by Company. Company may terminate Employee's
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employment hereunder at any time for cause without payment of severance or
similar benefits. For purposes of this Section 5.1, "cause" shall mean the
following events: (a) any willful breach of duty by Employee in the course of
his employment, (b) the breach of any provision of this Agreement or any
misrepresentation by Employee hereunder, (c) misconduct, neglect or negligence
in the performance of Employee's duties and obligations, (d) disloyal,
dishonest, willful misconduct, illegal, immoral or unethical conduct by
Employee, (e) such carelessness or inefficiency in the performance of his duties
that Employee is unfit to continue in the service of Company, (f) failure of
Employee to comply with the policies or directives of Company and/or failure to
take direction from Company's Board of Directors, or (g) such other conduct
which is substantially detrimental to the best interests of Company. Any such
termination shall become effective upon delivery of written notice to Employee.
5.2 Termination by Employee. Employee may terminate his
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employment hereunder at any time for cause. For purposes of this Section 5.2,
"cause" shall mean the breach of any provision of this Agreement by Company
which is not cured within thirty (30) days after Employee delivers written
notice to the Company's Board of Directors describing such breach. If the breach
is not so cured within such thirty (30) days after delivery of such notice, the
termination of employment shall become effective after the expiration of such
cure period.
5.3 Death or Disability. Employee's employment with Company
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shall cease upon the date of his death. In the event Employee becomes physically
or mentally disabled
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so as to become unable for more than one hundred eighty (180) days in the
aggregate in any twelve (12) month period to perform his duties on a full-time
basis with reasonable accommodations, Company may, at its sole discretion,
terminate this Agreement and Employee's employment.
5.4 Termination Following Automatic Renewal. In the event that
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this Agreement is automatically renewed pursuant to Paragraph 2 herein, either
Company or Employee may terminate Employee's employment hereunder at any time
and for any reason whatsoever, with or without cause, upon thirty (30) days
prior written notice delivered to the other party.
5.5 Effect of Termination. Upon the termination of Employee's
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employment hereunder or the expiration or termination of the Agreement, (a)
Company shall pay Employee all compensation accrued and outstanding as of the
date of such termination or expiration, and (b) notwithstanding anything to the
contrary contained herein, the rights and obligations of each party under
Paragraphs 4 and 7 herein shall survive such termination or expiration.
Notwithstanding anything to the contrary contained in this Agreement, if, prior
to the end of the initial three (3) year term, Employer terminates this
Agreement without cause, Employee shall continue to be entitled to receive all
of the compensation and other benefits provided for in Paragraph 3 for the
remainder of said three (3) year term without any deduction or offset for any
compensation earned or received by Employee from any other sources.
6. EMPLOYEE'S REPRESENTATIONS. As an inducement for Company to
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execute this Agreement, Employee represents and warrants to Company that the
negotiation, execution and delivery of this Agreement by Employee together with
the performance of his obligations hereunder does not breach or give rise to a
breach under any employment, confidentiality, non-disclosure, non-competition or
any other agreement, written or oral, to which Employee is a party.
7. EQUITABLE REMEDIES.
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7.1 Injunctive Relief. Employee acknowledges and agrees that the
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covenants set forth in Paragraph 4 herein are reasonable and necessary for
protection of Company's business interests, that irreparable injury will result
to Company if Employee breaches any of the terms of said covenants and that, in
the event of Employee's actual or threatened breach of said covenants, Company
will have no adequate remedy at law. Employee accordingly agrees that in the
event of actual or threatened breach of any of such covenants, Company shall be
entitled to immediate injunctive and other equitable relief, without bond and
without the necessity of showing actual monetary damages. Nothing contained
herein shall be construed as prohibiting Company from pursuing any other
remedies available to it for such breach or threatened breach, including the
recovering of any damages which it is able to prove. Each of the covenants in
Paragraph 4 shall be construed as independent of any other covenants or
provisions of this Agreement. In the event of any judicial determination that
any of the covenants set forth in Paragraph 4 herein or any other provisions of
the Agreement are not fully enforceable, it is the intention and desire of the
parties that
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the court treat said covenants as having been modified to the extent deemed
necessary by the court to render them reasonable and enforceable and that the
court enforce them to such extent.
7.2 Specific Enforcement. Employee agrees and acknowledges that
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he is obligated under this Agreement to render services of a special, unique,
unusual, extraordinary and intellectual character, thereby giving this Agreement
peculiar value, so that the loss thereof could not be reasonable or adequately
compensated in damages in an action at law. Therefore, in addition to other
remedies provided by law, Company shall have the right, during the term of this
Agreement, to obtain specific performance hereof by Employee and to obtain
injunctive relief against the performance of service elsewhere by Employee
during the term of this Agreement.
8. GENERAL.
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8.1 Entire Agreement. This Agreement contains the entire
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understanding between the parties hereto and supersedes all other oral and
written agreements or understandings between them relating to Employee's
employment with Company.
8.2 Amendment. This Agreement may not be modified, amended,
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altered or supplemented except by written agreement between Employee and
Company.
8.3 Counterparts. This Agreement may be executed in two (2) or
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more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
8.4 Jurisdiction. Each party hereby consents to the exclusive
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jurisdiction of the state and federal courts sitting in Los Angeles County,
California, in any action on a claim arising out of, under or in connection with
this Agreement or the transactions contemplated by this Agreement. Each party
further agrees that personal jurisdiction over him may be effected by service of
process by registered or certified mail addressed as provided in Section 8.9
herein, and that when so made shall be as if served upon him personally within
the State of California.
8.5 Expenses. In the event an action at law or in equity is
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required to enforce or interpret the terms and conditions of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees and costs in
addition to any other relief to which that party may be entitled.
8.6 Interpretation. The headings herein are inserted only as a
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matter of convenience and reference, and in no way define, limit or describe the
scope of this Agreement or the intent of any provisions thereof. No provision
of this document is to be interpreted for or against any party because that
party or party's legal representative drafted it.
8.7 Successors and Assigns. This Agreement shall be binding
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upon, and inure to the benefit of, the parties hereto and their heirs,
successors, assigns and personal
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representatives. As used herein, the successors of Company shall include, but
not be limited to, any successor by way of merger, consolidation, sale of all or
substantially all of its assets or similar reorganization. In no event may
Employee assign any rights or duties under this Agreement.
8.8 Controlling Law; Severability. The validity and construction
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of this Agreement or of any of its provisions shall be determined under the laws
of the State of California. Should any provision of this Agreement be invalid
either due to the duration thereof or the scope of the prohibited activity, such
provision shall be limited by the court to the extent necessary to make it
enforceable and, if invalid for any other reason, such invalidity or
unenforceability shall not affect or limit the validity and enforceability of
the other provisions hereof.
8.9 Notices. Any notice required or permitted to be given under
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this Agreement shall be sufficient if in writing and if personally received by
the party to whom it is sent or delivered, or if sent by registered or certified
mail, postage prepaid, to Employee's residence in the case of notice to
Employee, or to its principal office if to Company. A notice is deemed received
or delivered on the earlier of the day received or three (3) days after being
sent by registered or certified mail in the manner described in this Section.
8.10 Waiver of Breach. The waiver by any party hereto of a
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breach of any provision of this Agreement shall not operate or be construed as a
waiver of any subsequent breach.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
GRAND HAVANA ENTERPRISES, INC.
By: /s/ Stanley Shuster
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Stanley Shuster, President
STANLEY SHUSTER, EMPLOYEE
/s/ Stanley Shuster
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