EXHIBIT B
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT dated as of
January 1, 2008 (this "Agreement"), by and between MARANI BRANDS,
INC., a Nevada corporation (the "Company"), and ARA H. ZARTARIAN
(the "Executive").
WHEREAS,
the Executive has been employed by a Subsidiary of the Company, as
such Subsidiary's President, and the Company desires to retain and
continue the valuable employment services of the Executive as the
Executive Vice President and Chief Operating Officer of the
Company, which are critical to the Company's ability to meet and
implement its business strategy, on the terms, provisions and
conditions set forth herein; and
WHEREAS
the Executive desires to continue to serve the Company, in the
capacity of Executive Vice President and Chief Operating Officer of
the Company, on the terms, provisions and conditions set forth
herein.
NOW,
THEREFORE, in consideration of these premises and the mutual
covenants contained herein, and another good and valuable
consideration, the receipt and legal adequacy of which is hereby
acknowledged by the parties, the Company and the Executive hereby
agree as follows:
1. Employment . (a) The Company hereby employs the
Executive, and the Executive agrees to serve the Company during the
Employment Term (as hereinafter defined), as the Executive Vice
President and Chief Operating Officer of the Company. As the
Executive Vice President and Chief Operating Officer of the
Company, the Executive will have such duties and responsibilities
as are normally associated with that position as are specified in
the By-laws of the Company, and such other duties and
responsibilities as are assigned to the Executive by the Chief
Executive Officer of the Company and the Board of Directors of the
Company. The Company may request the Executive to serve as an
officer of its Subsidiaries, and if so requested, the Executive
agrees to serve as an officer of such Subsidiaries. The Executive
shall report directly to the Company's Chief Executive Officer.
(b) The Executive shall devote the Executive best efforts and
substantially all of the Executive's business time to the
performance of the Executive's duties and responsibilities to the
Company in accordance with this Agreement and shall perform such
duties and responsibilities, faithfully, diligently and
competently. The Executive shall at all times during the Employment
Term be a director of the Company. The Executive's employment
services shall be performed at the Company's principal offices,
which during the Employment Term shall be maintained in the Los
Angeles, California metropolitan area (or other such location, as
the Executive and the Company may agree upon), subject to travel
reasonably and customarily required by the Company in connection
with the Executive's duties and responsibilities to the
Company.
(c) Notwithstanding the foregoing, during the Employment Term, the
Executive shall be entitled to devote a portion of the Executive's
business time to the Executive's personal investments and to
charitable, social and community activities; provided that doing so
does not materially interfere with the performance of the
Executive's duties to the Company.
2. Employment Term . The period of the
Executive's employment pursuant to this Agreement shall commence on
the date hereof and shall terminate, subject to earlier termination
as expressly provided for herein, three (3) years after the date
hereof on December 31, 2010, as it may be extended as provided in
the immediately following sentence (the "Employment Term"). The
Employment Term shall automatically extend for additional periods
of one (1) year each, on each anniversary date of the commencement
of the Employment Term, unless upon not less than sixty (60) days
prior to such date, the Company notifies the Executive in writing
that the Company does not intend for the Employment Term to
extend.
3. Compensation . In consideration of the performance by the
Executive of the Executive's duties and obligations hereunder, the
Executive shall be entitled to receive the following
compensation:
(a) The Executive shall receive an annual salary of $178,000 (the
"Salary"), for the initial annual period of the Employment Term
(the "Salary"). The Salary shall be payable in accordance with the
Company's regular payroll practices, as in effect from time to
time, but no less frequently than bi-monthly. On each anniversary
date of the Employment Term commencing on January 1, 2009, the
Salary payable to the Executive pursuant to this Section 3(a) shall
be increased by an amount, if any, equal to the greater of (x),
five percent (5%) or (y) the percentage increase in the consumer
price index (the "CPI") for Los Angeles, California for the twelve
(12) month period ending on the preceding December 31, as published
by the Federal Bureau of Labor Statistics (the "Bureau"), or any
successor entity to the Bureau multiplied then by the current
Salary pursuant to this Section 3(a); provided that if the Bureau
no longer publishes the CPI, a comparable index reasonably
acceptable to the Company and the Executive shall be substituted
therefore.
(b) Prior to any extension of the Employment Term beyond December
31, 2012, the Company and the Executive shall negotiate in good
faith and attempt to agree upon an appropriate increase in the
Salary payable to the Executive pursuant to Section 3(a) hereof,
taking into account, among other things, comparable salaries for
executives performing similar services in the businesses in which
the Company is engaged and the experience and expertise of the
Executive. If the Company and the Executive are unable to agree
upon a new base Salary, the Salary for such an extension shall be
fifteen percent (15%) higher than the Salary payable to the
Executive during the year immediately preceding the extension, as
adjusted for changes in the CPI as provided for herein.
(c) The Executive shall be entitled to earn and receive an
incentive bonus, based upon the annual Net Sales (as hereinafter
defined) of the Company, equal to one percent (1%) of Net Sales
(the "Incentive Bonus"). The Incentive Bonus will be payable if the
Net Sales for a fiscal year exceed the amount set forth in the
Company's budget (as approved by the Board of Directors of the
Company), for such fiscal year. For purposes hereof, "Net Sales"
shall mean gross sales, less credits and returns, as determined by
the Company in good faith. The Incentive Bonus shall be payable to
the Executive within thirty (30) days of the completion of the
audit of the Company's financial statements for the applicable
fiscal year of the Company. Notwithstanding the foregoing, in no
event shall the Incentive Bonus exceed one hundred percent (100%)
of the Executive's Salary pursuant to Section 3(a) hereof for the
first two (2) years of the Employment Term and two hundred percent
(200%) of the Executive's Salary pursuant to Section 3 (a) hereof
for any of the other remaining years of the Employment Term.
(d) The Company hereby grants to the Executive options (the
"Options") to purchase 5,000,000 shares of the Company's common
stock at an exercise price equal to $0.25 per share, which Options
shall be exercisable into shares of the Public Company (as
hereinafter defined).
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The Options shall vest (and become exercisable) as
to thirty-three and one-third percent (33 1/3%) of the underlying
shares of common stock on the first anniversary date of the Option
grant and ratably each month thereafter during the next two (2)
years of the Employment Term. The Options shall become fully vested
and exercisable upon the Company's termination of the Executive's
employment hereunder Without Cause (as hereinafter defined) or the
termination of such employment by the Executive For Good Reason (as
hereinafter defined) or upon the Company's termination of the
Executive's employment hereunder due to death or Disability (as
hereinafter defined). The Options shall have a term of ten (10)
years and may be exercised to the extent vested, (i) by the
Executive at any time during such ten (10) year period, if the
Executive's employment is terminated Without Cause or For Good
Reason or due to Disability or if the Employment Term expires and
the Executive does not continue to be employed by the Company, (ii)
by the Executive's personal representative within one (1) year
following the date of the Executive's death, if the Executive's
employment with the Company is terminated due to the Executive's
death, and (iii) by the Executive, if the Executive's employment
terminates for any other reason, (other than the expiration of the
Employment Term) by the Executive, within ninety (90) days
following the Executive's termination of employment. The Options
shall be granted pursuant to a stock option plan to be adopted by
the Company (the "Plan") and shall by subject to such other terms
as provided in the Plan (it being understood that the Plan will
have customary provisions permitting the Company to cash-out stock
options in connection with a sale of substantially all of the
Company's assets, a merger, a recapitalization or a similar
transaction). If there is any inconsistency or conflict between the
terms and provisions of the Plan and this Agreement, the terms and
provisions of this Agreement shall govern and control.
4. Fringe Benefits; Expenses . During the Employment
Term:
(a) The Executive shall be entitled to receive all health, medical,
insurance and pension benefits provided by the Company to any of
its senior executives and to all other fringe benefits and benefit
plans provided by the Company to its executives as a group.
(b) The Company shall reimburse the Executive for all reasonable
and necessary expenses (including, without limitation,
entertainment expenses and automobile expenses) incurred by the
Executive in connection with the performance of the Executive's
duties to the Company (it is being agreed that business-class
airfare travel is a reasonable expense for transcontinental and
intercontinental travel), upon submission of receipts and/or
vouchers by the Executive in accordance with the Company's policies
and procedures.
(c) The Company shall pay for the lease of an automobile to be used
for business purposes; provided that the costs of the lease do not
exceed $650 per month. The Company shall also pay for the insurance
and other operating expenses associated with the business use of
such automobile.
(d) The Executive shall be entitled to four (4) weeks of vacation
time annually which shall be taken at times selected by the
Executive which are consistent with the proper performance of the
Executive's duties and responsibilities to the Company. The timing
of the Executive's utilization of vacation time shall be subject to
the reasonable prior approval of the Company's Chief Executive
Officer. The Executive may accrue an unlimited amount of earned but
unused vacation time in accordance with applicable law.
(e) The Company shall pay the costs and expenses of maintaining the
computer equipment and facsimile machines used by the Executive at
the Executive's home office, and the
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Executive's use of a cell phone. Upon the
termination of the Executive's employment with the Company
hereunder for any reason whatsoever, other than for Cause or the
expiration of the Employment Term, the Executive shall have the
right to purchase the computer equipment and facsimile machine used
in the Executive's home office by paying the Company an amount
equal to the amount at which such computer equipment and facsimile
machine are then carried on the books and records of the Company.
Upon termination of the Executive's employment for any reason
whatsoever, the Executive shall be entitled to remove all of the
Executive's personal effects from the Company's premises.
5. Inventions . Any Inventions (as herewith defined)
originated or conceived by the Executive, with the use or
assistance of the facilities, materials or personnel of the Company
or any Affiliate of the Company, either solely or jointly with
others, during the Employment Term shall be the property of the
Company. The Executive hereby irrevocably assigns and transfers to
the Company and agrees to transfer and assign to the Company all of
the Executive's right, title and interest in and to all Inventions,
and to applications for patents and patents granted upon such
Inventions and to all copyrightable material related thereto
developed by the Executive or under the Executive's supervision.
The Executive agrees, upon the written request of the Company and
at the Company's sole cost and expense, to do such acts, to execute
such documents and instruments, to participate in such proceedings
and to take such actions as from time to time may be necessary,
required or useful, in the Company's reasonable opinion, to apply
for, secure, maintain, reissue, extend or defend the worldwide
rights of the Company in the Inventions.
6. Disability or Death . (a) If, as a result of physical or
mental disability (any such disability to be determined by a
competent physician mutually acceptable to the Company and the
Executive), the Executive shall have failed or been unable to
perform the Executive's duties hereunder for a period of one
hundred eighty (180) consecutive calendar days ("Disability"), the
Company may, by written notice to the Executive to terminate the
Executive's employment under this Agreement prior to the end of the
Employment Term, effective as of the date of the notice. If the
Executive's employment is terminated due to Disability pursuant to
this Section 6(a), the Company shall pay to the Executive (in equal
installments every two (2) weeks), (i) for the succeeding twelve
(12) month period, an amount equal to eighty percent (80%) of the
Executive's Salary at the date of termination and (ii) for the
twenty four (24) month period commencing on the date of the last
payment required to be made pursuant to clause (i), an amount equal
to fifty percent (50%) of the Executive's Salary at the date of
termination (all regardless of any payments that the Executive may
be entitled to receive under any disability insurance policy
maintained by the Company or otherwise). In addition, the Company
shall maintain and pay for the Executive's then existing health,
life insurance and other benefits during the time period that any
payments are being made pursuant to this Section 4(a) hereof.
(b) The period of the Executive's employment under this Agreement
shall automatically terminate upon the Executive's death. In the
event of the Executive's death, the Company shall pay to the
beneficiary designated in writing to the Company by the Executive
(or if the Executive fails to designate a beneficiary, to the
Executive's estate), an amount at an annual rate equal to the
Executive's Salary in effect on the date of the Executive's death
for a period of eighteen (18) months from the date of the
Executive's death, payable in equal monthly installments on the
first day of the month next succeeding the date of death and the
first day of each month thereafter.
(c) In addition, if the Executive's employment with the Company is
terminated pursuant to Section 6(a) or 6(b), the Company shall pay
the Executive a pro-rata portion of the Incentive
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Bonus for the year in which such termination occurred, based upon
the number of days during such year that the Executive was
employed.
7. Termination . (a) The Company shall have the right to
terminate the Executive's employment with the Company hereunder (i)
for Cause (as hereinafter defined) or (ii) Without Cause (as
hereinafter defined).
(b) For purposes hereof, the term "Cause" shall mean conduct on the
part pf the Executive which constitutes: (i) misconduct by the
Executive or gross negligence which is or likely to be materially
injurious to the Company; (ii) misappropriation of the Company's
assets on the usurpation of a business opportunity of the Company;
(iii) breach of any fiduciary duty (as determined by a final
judgment of a court of competent jurisdiction from which no appeal
may be taken); (iv) a material violation by the Executive of any of
the written policies of the Company or any provision of any "code
of ethics", as from time to time in effect; (v) the Executive
engaging in an act of unlawful employment discrimination,
including, but not limited to, sexual, racial, religious, or other
forms of harassment; (vi) conduct on the part of the Executive
which the Company in good faith determines has reflected so
seriously on the Company's public reputation as to materially
prejudice the Company or its business; (vii) the conviction of, or
plea or guilty or nolo contendere to a criminal violation which
constitutes a felony; or (viii) a breach of any material obligation
of the Executive hereunder which is not cured within thirty (30)
days after written notice of such breach from the Company; provided
that in each case prior to any such termination for Cause, on not
less that ten (10) days prior to such termination, the Executive
shall be given a hearing before the Board of Directors of the
Company (at which an attorney representing the Executive may
attend) to review and give the Executive and opportunity to refute
the grounds for termination.
(c) If the employment of the Executive hereunder is terminated for
Cause, the Company shall not be obligated to make any further
payments to the Executive hereunder (other than for accrued and
unpaid Salary and for accrued vacation and the reimbursement of
expenses incurred in accordance with Section 4(b) hereof, in each
case through the date of termination), or to continue to provide
any benefit to the Executive under this Agreement (other than
benefits which have accrued pursuant to any plan or applicable law
through the date of termination).
(d) If the employment of the Executive is terminated Without Cause
or for Good Reason, (i) the Company shall pay to the Executive the
Salary and the Incentive Bonus, for the remainder of the current
Employment Term, all regardless of the amount of compensation of
the Executive may earn or be able to earn with respect to any other
employment that the Executive may obtain or be able to obtain
(i.e., the Executive shall have no duty to mitigate and the Company
shall have no right to offset), (ii) all of the Executive's Options
to purchase stock shall become fully vested and immediately
exercisable, (iii) the Company shall reimburse the Executive for
all expenses the Executive incurred in accordance with Section 4(b)
hereof, (iv) during the period in which the Executive is receiving
payments pursuant to clause (i) of this Section 7(d), the Company
shall maintain and pay for the Executive's then existing health
insurance, life insurance and other benefits; provided, however,
that the Company's obligations under this clause (iv) shall
terminate to the extent that the Executive is offered and receives
comparable health or life insurance coverage (both as to the cost
and benefits provided when compared to the policies and benefits in
effect prior to termination), as reasonably and in good faith
determined by the Executive and (v) the Company shall pay to the
Executive all accrued and unpaid Salary through the date of
termination.
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(e) For purposes hereof, "Without Cause" shall mean
a termination of the Executive's employment hereunder by the
Company for any reason whatsoever, other than (i) for Cause
pursuant to Se
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