EMPLOYMENT, NONCOMPETITION, AND NONDISCLOSURE AGREEMENTNonDisclosure Agreement NDA |
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Choice Financial Group, Inc | HEARTLAND, INC | Lee Enterprises, Inc | Lee Oil Company, Inc, Lee's Food Marts LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.2
EMPLOYMENT, NONCOMPETITION, AND NONDISCLOSURE
AGREEMENT
THIS
EMPLOYMENT, NONCOMPETITION, AND NONDISCLOSURE AGREEMENT (this Agreement)
is made as of ______ ___, 2008 (the Effective Date), by and
between TERRY LEE (Employee), and HEARTLAND, INC., a Maryland
corporation (the Company). Capitalized terms used
but not defined herein shall have the meanings set forth in the Loan Agreement
(as defined below).
Note: ANY AND ALL PRIOR EMPLOYMENT
AGREEMENTS BETWEEN THE PARTIES ARE TERMINATED AND SUPERCEDED BY THIS AGREEMENT.
RECITALS
1. Employee owns _____ shares
of common stock of the Company representing % of the issued and
outstanding Equity Securities of the Company, and Employee is currently the
Chief Executive Officer and Chairman of the Board of Directors of the Company;
2. Concurrently with the execution
and delivery of this Agreement, the Employee, together with all other
shareholders of Lee Oil Company, Inc., Lees Food Marts LLC, and Lee
Enterprises, Inc, (collectively the Target) are entering into that certain
Securities Purchase Agreement dated the date hereof, by and among the Company,
as purchaser, and Employee and other shareholders of the Target, as seller,
(the Purchase Agreement), pursuant to which the Company is
purchasing all of the shares of the Target, subject to the terms and conditions
of the Purchase Agreement (the Acquisition).
3. Employee owns _____
shares of common stock of the Target representing % of the issued
and outstanding Equity Securities of the Target, and Employee is the President
of each of the entities comprising the Target;
4. Concurrently with the
execution and delivery of this Agreement, the Company is entering into that
certain Loan Agreement (the Loan Agreement) and related Loan
Documents (as defined in the Loan Agreement) dated the date hereof, by and
among Choice Financial Group, Inc., a North Dakota corporation, as lender (Choice),
and the Company, as borrower, pursuant to which Choice is agreeing, subject to
the terms and conditions of the Loan Agreement, to make term loans from time to
time to the Company in an aggregate amount not to exceed $3,250,000 (the Term
Loan);
5. Concurrently with the
execution and delivery of this Agreement, the Employee shall become holder of
that certain Promissory Note (the Lee Promissory Note) dated
the date hereof, and the Company, as borrower, pursuant to which Employee is
agreeing, subject to the terms and conditions of the Loan Agreement, to receive
a portion of the compensation payable by the Company to Employee in the amount
of $1,625,000 in connection with the acquisition of the Target pursuant to the
Purchase Agreement (the Term Loan);
6. The Company is using the
proceeds of the Term Loan to pay a portion of the purchase price of the
Acquisition;
7. In connection with the
Acquisition and a condition precedent to the Companys execution and delivery
of the Purchase Agreement, the Company is issuing 1,250,000 shares of its
ownership interest, representing % of the issued and outstanding
shares of stock interest in the Company as of the Effective Date (the Employee
Equity Interest), to Employee on the Effective Date;
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8. Upon receiving his %
Employee Equity Interest in the Company in connection with the Acquisition,
Employee will receive the benefits of the Acquisition and the Term Loan;
9. This Agreement is
ancillary to, and its execution and delivery by Employee is a condition
precedent of the Companys obligation to execute, the Purchase Agreement;
10. This Agreement is
ancillary to, and its execution and delivery by Employee is a condition
precedent of Choices obligation to execute, the Loan Agreement and the other
Loan Documents;
11. The Company has offered
to employ Employee as the Chief Executive Officer of the Company for the
Employment Term (as defined below), and Employee desires employment as the
Chief Executive Officer of the Company subject to the terms and conditions of
this Agreement;
12. During the term of
Employees employment with the Company, the Company will furnish to Employee
the Confidential Information (as defined below) of the Company, which Employee
will utilize in his employment with the Company; and
13. In consideration for (i)
the Companys execution and delivery of the Purchase Agreement, (ii) the
Companys payment of the Purchase Price for the Purchase Agreement and issuance
of the Employee Equity Interest to Employee, (iii) Choices execution and
delivery of the Loan Documents, (iv) Choices agreement to make the Choice Loan
to the Company, (v) the Companys agreement to employ Employee for the
Employment Term, and (iv) the Companys promise to furnish the Confidential
Information to Employee during the Employment Term, the Employee has agreed to
enter into this Agreement with the Company.
AGREEMENT
The
Company and Employee (each a Party and collectively, the Parties
to this Agreement), intending to be legally bound, agree as follows:
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1. |
EMPLOYMENT |
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(a) |
Employment. The Company hereby agrees to employ Employee and Employee hereby accepts such employment upon the terms and conditions hereinafter set forth. |
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(b) |
Duties. Employee shall serve as the Chief Executive Officer of the Company and shall carry out (i) the duties that Employee has historically carried out in the ordinary course of business of Company and (ii) such other duties as are typical, customary and consistent with the historical practices for such position, as assigned to him from time to time by the Board of Directors. During the Employment Term, the parties understand and agree that the Employee will be engaged in other employment activities for other direct and indirect remuneration without the written consent of the Company. |
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(c) |
Compensation. |
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(i) |
In consideration for the services to be rendered by Employee hereunder and for all rights and covenants granted herein, Company shall pay to Employee an annual salary in the amount of $140,000. This salary shall be paid in accordance with the customary payroll practices of the Company and subject to such deductions, if any, as are required by applicable law and regulations. |
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(ii) |
Employee shall be entitled to participate in the Companys various benefit plans on terms similar to those received by other key employees and management of the Company. |
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(iii) |
Company shall reimburse Employee for reasonable travel, entertainment, and similar expenses that Employee incurs in promoting Companys business, subject to policies, directives, and approval from Company. |
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(iv) |
Employee shall be entitled to vacation time, no less than 3 weeks per year and otherwise pursuant to Companys vacation policy in effect from time to time. |
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(v) |
Company shall provide Employee with such facilities, equipment, supplies and services as are suitable to his position, for the performance of his duties. |
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(vi) |
The Company shall issue the Employee Equity Interest to Employee, being 1,250,000 shares of common stock of the Company on the date of execution hereof. |
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(vii) |
The Company hereby grants to Employee an option to purchase up to 364,501 additional shares of common stock of the Company at the price of $0.33 per share, which may be exercised by Employee over the next twelve years. |
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(viii) |
The Company hereby grants to Employee an option to purchase up to 1,458,004 additional shares of common stock of the Company at the price of $0.33 per share, which shall be exercisable on a cashless basis and vest quarterly on a pro-rata basis over a period of four years commencing on the date hereof. Upon vesting, this option may be exercised by Employee over the next twelve years. In the event Employee becomes terminated from the Company for any reason, the unvested portion of the 1,458,004 additional shares of common stock of the Company will vest immediately. |
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(ix) |
The Company shall issue to Employee 150,000 shares of common stock of the Company on the date of execution hereof as a signing bonus. |
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(x) |
The Company may further grant to Employee additional options to purchase additional shares of common stock of the Company as the Board of Directors deem advisable. |
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(d) |
Term. Unless earlier terminated by the Company or Employee in accordance with this Agreement, the employment of Employee hereunder shall commence on the date first set forth above and continue until the five (5) year anniversary of the Effective Date (the Employment Term); provided, that the Employment Term shall automatically be extended for an additional period of five (5) years on such five (5) year anniversary of the Effective Date, unless the Employee gives written notice to the Company of his termination of the Employment Term at least thirty (30) days prior to such anniversary date. Notwithstanding the foregoing, the Company may terminate its employment of the Employee for Cause prior to the expiration of the Employment Term. For purposes hereof, Cause shall include, without limitation: |
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(i) |
Employees material breach of this Agreement and Employees failure to cure such breach within thirty (30) days after receipt of written notice thereof (the Notice and Cure Period) setting forth in detail the nature of such alleged breach by Employee and the requirement to cure; or |
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(ii) |
Employee shall have been convicted of (or plead guilt or nolo contendre to) any felony. |
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(e) |
Termination for Cause. For Cause as identified and consistent with paragraph 1 (d) hereinabove, the Company may terminate its employment of the Employee prior to the expiration of the Employment Term upon providing written notice to Employee. Upon such termination, Employee shall be entitled to his unpaid salary, if any, up to the date of such termination, together with the accelerated and full payment of the outstanding balance at termination date of the Lee Promissory Note. Upon payment of the Lee Promissory Note, Employee shall remain bound by his covenants in Section 3 and Section 4 after termination for Cause. |
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(f) |
Termination Without Cause. If the Company terminates its employment of the Employee without Cause prior to the expiration of the Employment Term, or if Employee dies, Employee shall be entitled to receive a severance payment from the Company (the Severance Payment) in an amount equal to the Employees salary for the remainder of the Employment Term, together with the accelerated and full payment of the outstanding balance at termination date of the Lee Promissory Note. |
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2. |
ACKNOWLEDGMENTS BY EMPLOYEE |
Employee acknowledges that he has occupied a position of trust with Company prior to the Effective Date and will continue to occupy a position of trust and confidence with the Company after the Effective Date. Employee acknowledges that the Company has furnished and the Company will continue to furnish, and Employee has had and will continue to have access to and knowledge of the following documents and data, any and all of which constitutes confidential information (collectively, the Confidential Information) of the Company: (a) any and all trade secrets concerning the business and affairs of the Company and/or the Company, product specifications, data, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current and planned research and development, current and planned manufacturing and distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, computer software and programs (including object code and source code), database technologies, systems, structures, architectures, processes, improvements, devices, discoveries, concepts, methods, sales scripts and methodologies and any other information of the Company and/or the Company, however documented, that is a trade secret under applicable law; (b) any and all information concerning the business and affairs of the Company and/or the Company (which includes but is not limited to historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, contractors, agents, suppliers and potential suppliers, personnel training methods and materials, techniques and materials and purchasing methods and techniques), however documented; and (c) any and all notes, analyses, compilations
