Pre-Effective Amendment to Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SB-2/A Pre-Effective Amendment to Registration of 115 527K
Securities by a Small-Business Issuer
2: EX-1.1 Underwriting Agreement 32 144K
3: EX-1.2 Underwriting Agreement 16 32K
4: EX-2.1 Plan of Acquisition, Reorganization, Arrangement, 4 18K
Liquidation or Succession
5: EX-3.1 Articles of Incorporation/Organization or By-Laws 7 31K
6: EX-3.2 Articles of Incorporation/Organization or By-Laws 12 46K
7: EX-4.5 Instrument Defining the Rights of Security Holders 13 56K
8: EX-5 Opinion re: Legality 3 15K
9: EX-10.2 Material Contract 14 64K
10: EX-10.3 Material Contract 2 12K
11: EX-10.8 Material Contract 7 30K
12: EX-21 Subsidiaries of the Registrant 1 6K
13: EX-23 Exhibit 23.2 1 9K
14: EX-27 Financial Data Schedule 1 10K
15: EX-99.B1 Miscellaneous Exhibit 1 8K
EX-10.8 — Material Contract
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EMPLOYMENT AGREEMENT
Agreement made as of this 3rd day of September, 1997, by and
between Phoenix Preschool Holdings, Inc. a Delaware corporation (the "Company"),
and Michael C. Koffler, an individual (the "Executive").
BACKGROUND
The Executive is currently employed by the Company in the
position of Chief Executive Officer and President. The Company and the Executive
desire to provide for the future employment of the Executive as more fully set
forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, the parties agree as
follows:
1. Duties. During the Term (as hereinafter defined), the Executive
shall be the Chief Executive Officer and President of the Company, shall have
such executive duties as are reasonably determined from time to time by the
Company's Board of Directors, and shall be entitled to the powers and authority
normally incident to the office of Chief Executive Officer and President. The
Executive shall devote substantial time and attention to the business of the
Company and use his best efforts to promote the interests of the Company. The
principal place of business of the Executive shall be located within 20 miles of
150 East 58th Street, New York City, New York.
2. Term.
(a) This Agreement shall continue for a period beginning on the date
hereof and ending on the earliest of the following dates (the "Term"): (i) the
date the Executive dies or becomes permanently disabled (as hereinafter
defined); (ii) the date of termination of the Executive's employment with the
Company for cause (as hereinafter defined); (iii) the date of the voluntary
termination by the Executive of the Executive's employment with the Company by
resignation as provided in Section 5 hereof; (iv) the date the Executive reaches
70 years of age; or (v) three years after the date hereof.
(b) For purposes of this Agreement the Executive shall be deemed to be
disabled upon his failure, even after reasonable accommodation, to render
services of the character which he had previously rendered to the Company
because of his physical or mental illness or other incapacity beyond his control
for a continuous period of twelve months or for shorter periods aggregating
twelve months in any two year period);
(c) For purposes of this Agreement, the term "cause" shall mean (i)
conviction of the Executive for any felony, fraud or embezzlement or (ii) the
Executive being guilty of willful or malicious misconduct in connection with the
performance of his duties for the Company and the
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Executive continues such misconduct within twenty days after receiving written
notice from the Company's Board of Directors specifying such misconduct.
3. Compensation. During the Term, the Executive shall be entitled to an
annual salary equal to at least 5% of the Company's earnings before giving
effect to interest, taxes, depreciation and amortization. In addition,
immediately prior to the effective date for the contemplated firm-commitment
underwritten initial public offering of the common stock of the Company, the
Company shall issue to the Executive a non-qualified stock option to acquire up
to 1,000,000 shares of common stock at an exercise price of $4.20 per share. The
Executive shall also be entitled to such cash or other bonuses, stock options
and other incentive payments as are determined from time to time by the
Company's Board of Directors.
4. Other Benefits. During the Term, in addition to the compensation set
forth in Section 3 hereof, the Executive shall be entitled, at a minimum, to the
following benefits from the Company:
(i) a leased car at a rental cost to the Company not exceeding
$1,000 per month (as adjusted for changes in the cost of living as
provided in Section 3 hereof) plus insurance, gasoline and maintenance
costs (it being understood that the Executive may choose to contribute
to any cost exceeding such figure);
(ii) doctor, hospital, life and disability insurance for
Executive and his family which are no less than the amount of these
benefits received by the Executive immediately prior to the date
hereof; and
(iii) reimbursement for all reasonable expenses incurred by
the Executive in the performance of his duties under this Agreement.
If the Executive becomes permanently disabled (as defined in Section
2(b) hereof) during the Term, the Company shall pay to the Executive (even
though the Term of this Agreement has otherwise expired) during the period of
such disability but not beyond the date the Executive reaches age 65, monthly
disability benefits in an amount computed as follows: (i) compute the
Executive's base annual salary immediately prior to such disability; (ii) divide
the figure set forth in clause (i) by 12; (iii) reduce the result of clause (ii)
by the amount of the monthly disability benefits received by the Executive under
any disability insurance paid for in whole or in part by the Company.
5. Voluntary Resignation. The Executive may not voluntarily resign at
any time during the first year of the Term. The Executive may voluntarily resign
at any time after the first year of the Term, by giving the Company sixty (60)
days prior written notice.
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6. Confidentiality and Non-Competition.
(a) The Executive covenants and agrees that, so long as the Company
complies with its obligations hereunder, he will not, during the Term or at any
time thereafter, except with the express prior written consent of the Company or
pursuant to the lawful order of any judicial or administrative agency of
government, directly or indirectly, disclose, communicate or divulge to any
person, or use for the benefit of any person, any knowledge or information with
respect to the conduct or details of the Company's business which he, acting
reasonably, believes or should believe to be of a confidential nature and the
disclosure of which not to be in the Company's interest.
(b) The Executive covenants and agrees that, so long as the Company
complies with its obligations hereunder, he will not, during the Term except
with the express prior written consent of the Company, directly or indirectly,
whether as employee, owner, partner, consultant, agent, director, officer,
shareholder or in any other capacity, engage in or assist any person to engage
in any act or action which he, acting reasonably, believes or should believe
would be harmful or inimical to the interests of the Company.
(c) The Executive covenants and agrees that, so long as the Company
complies with its obligations hereunder, he will not, during the Term except
with the express prior written consent of the Company, in any capacity
(including, but not limited to, owner, partner, shareholder, consultant, agent,
employee, officer, director or otherwise), directly or indirectly, for his own
account or for the benefit of any person, engage or participate in or otherwise
be connected with any competitor, except that the foregoing shall not prohibit
the Executive from owning as a shareholder less than 1% of the outstanding stock
of an issuer whose stock is publicly traded.
(d) The Company may elect to extend the period of the covenants set
forth in Section 6(b) and Section 6(c) for a period ending one year after the
last day of the Term, provided the Company has previously complied with the
provisions of this Agreement and provided the Company during such one year
period continues to pay to the Executive the highest annual compensation
(consisting of annual base salary and cash bonus) the Executive previously
received for any fiscal year during the Term.
(e) The parties agree that any breach by the Executive of any of the
covenants or agreements contained in this Section 6 will result in irreparable
injury to the Company for which money damages could not adequately compensate
the Company and therefore, in the event of any such breach, the Company shall be
entitled (in addition to any other rights and remedies which it may have at law
or in equity) to have an injunction issued by any competent court enjoining and
restraining the Executive and/or any other person involved therein from
continuing such breach. The existence of any claim or cause of action which the
Executive may have against the Company or any other person (other than a claim
for the Company's breach of this Agreement for failure to make payments
hereunder) shall not constitute a defense or bar to the enforcement of such
covenants. In the event of an alleged breach by the Executive of any of the
covenants or agreements contained in
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this Section 6, the Company shall continue any and all of the payments due the
Executive under this Agreement until such time as a Court shall enter a final
and unappealable order finding such a breach; provided, that the foregoing shall
not preclude a Court from ordering the Executive to repay such payments made to
him for the period after the breach is determined to have occurred or from
ordering that payments hereunder be permanently terminated in the event of a
material and willful breach.
(f) If any portion of the covenants or agreements contained in this
Section 6, or the application hereof, is construed to be invalid or
unenforceable, the other portions of such covenant(s) or agreement(s) or the
application thereof shall not be affected and shall be given full force and
effect without regard to the invalid or enforceable portions to the fullest
extent possible. If any covenant or agreement in this Section 6 is held
unenforceable because of the area covered, the duration thereof, or the scope
thereof, then the court making such determination shall have the power to reduce
the area and/or duration and/or limit the scope thereof, and the covenant or
agreement shall then be enforceable in its reduced form.
(g) For purposes of this Section 6, the term "the Company" shall
include the Company, any successor to the Company under Section 7 hereof, and
all present and future direct and indirect subsidiaries and affiliates of the
Company.
7. Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon any corporate or other successor of the Company which will
acquire, directly or indirectly, by merger, consolidation, purchase, or
otherwise, all or substantially all of the assets of the Company, and shall
otherwise inure to the benefit of and be binding upon the parties hereto and
their respective heirs, executors, administrators, successors and assigns.
Nothing in the Agreement shall preclude the Company from consolidating or merger
into or with or transferring all or substantially all of its assets to another
person. In that event, such other person shall assume this Agreement and all
obligations of the Company hereunder. Upon such a consolidation, merger, or
transfer of assets and assumption, the term "the Company" as used herein, shall
mean such other person and this Agreement shall continue in full force and
effect.
8. Withholding. The Company may withhold from any benefits payable
under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
9. (a) Nonassignability. Neither this Agreement or any right or
interest hereunder shall be assignable by the Executive or his legal
representatives without the Company's prior written consent.
(b) Attachment. Except as required by law, the right to receive
payments under this Agreement shall not be subject to anticipation, sale,
encumbrance, charge, levy, or similar process or assignment by operation of law.
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10. Waivers Not to be Continued. Any waiver by a party of any breach of
this Agreement by another party shall not be construed as a continuing waiver or
as a consent to any subsequent breach by the other party.
11. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered by hand or mailed, certified or registered mail, return receipt
requested, with postage prepaid, to the following addresses or to such other
address as either party may designate by like notice:
A. If to the Executive, to:
Michael C. Koffler, Chairman
Phoenix Preschool Holdings, Inc.
150 East 58th Street - 31st Floor
New York, New York 10155
B. If to the Company, to:
Phoenix Preschool Holdings, Inc.
150 East 58th Street - 31st Floor
New York, New York 10155
Attn: Board of Directors
With a copy to: Frederick D. Lipman, Esquire
Blank Rome Comisky & McCauley
One Logan Square
18th & Cherry Streets
Philadelphia, PA 19103-6998
and to such other or additional person or persons as either party shall have
designated to the other party in writing by like notice.
12. Jurisdiction. Company and the Executive consent to the exclusive
jurisdiction of the courts of the State of New York and the United States
District Court for the Southern District of New York in any and all actions
arising hereunder and irrevocably consent to service of process as set forth in
Section 11 hereof.
13. Acceleration. If the Company fails to pay the Executive any of the
amounts due to him under Sections 3 or 4 hereof, thirty (30) days after having
received written notice from the Executive of such failure to pay, the Executive
shall have the right to accelerate future payments of all sums due the Executive
under Sections 3 or 4 hereof, without discount.
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14. Indemnity; No Mitigation. If the Company fails to pay the Executive
any of the amounts due to him under Sections 3 hereof or fails to provide the
Executive with any of the benefits due to him under Section 4 hereof, thirty
(30) days after having received written notice from the Executive of such
failure, the Executive shall be entitled to full reimbursement from the Company
for all costs and expenses (including reasonable attorneys fees) incurred by the
Executive in enforcing his rights under this Agreement, plus interest at the
rate of 9% per annum on the improperly withheld amounts or improperly withheld
benefits due to the Executive under Sections 3 or 4 hereof. In the event of a
material breach of this Agreement by the Company, the Executive shall have no
duty to mitigate damages and any income earned by the Executive from other
employment after such breach shall not reduce the damages otherwise due to the
Executive by reason of such breach.
15. General Provisions.
(a) This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof, and supersedes and replaces
all prior agreements between the parties. No amendment, supplement, waiver or
termination of any of the provisions hereof shall be effective unless in writing
and signed by the party against whom it is sought to be enforced. Any written
amendment, supplement, waiver or termination hereof executed by the Company and
the Executive shall be binding upon them and upon all other persons, without the
necessity of securing the consent of any other person and no person shall be
deemed to be a third party beneficiary under this Agreement.
(b) The term "person" as used in this Agreement means a natural
person, joint venture, corporation, sole proprietorship, trust, estate,
partnership, cooperative, association, non-profit organization or any other
legally cognizable entity.
(c) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which taken together shall
constitute one and the same Agreement.
(d) No failure on the part of any party hereto to exercise and no
delay in exercising any right, power or remedy hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other rights, power or remedy.
(e) The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall in no way restrict or
modify any of the terms or provisions hereof.
(f) This Agreement shall be governed and construed and the legal
relationships of the parties determined in accordance with the laws of the State
of New York applicable to contracts executed and to be performed solely in the
State of New York.
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PHOENIX PRESCHOOL HOLDINGS,
(Corporate Seal) By:_________________________________
Witness:_________________________
____________________________________
MICHAEL C. KOFFLER
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