EXHIBIT 10.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st day of
June, 2002 by and between XXXXXXXX FOODS OF DISTINCTION, INC., a Colorado
corporation ("Corporation"), and XXXXXXX X. XXXXXXXX ("Employee") under the
following circumstances:
A. Employee is the President and Chief Executive Officer of
Corporation. Employee and Corporation are currently parties to an Employment
Agreement dated as of January 1, 2000, as amended by an Amendment to
Employment Agreement dated as of January 1, 2001 (the "Existing Agreement").
B. Corporation desires to continue to employ Employee as its
President and Chief Executive Officer because of his knowledge, experience and
expertise with respect to the business of Corporation.
C. The parties hereto desire to set forth in writing the terms and
conditions of the employment relationship to be established and continued.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment.
Corporation shall employ Employee as the President and Chief Executive
Officer of Corporation pursuant to the terms and conditions hereinafter set
forth, and Employee shall perform the duties of such office. Employee shall
also serve as a member of the board of directors of Corporation. Employee
shall perform such duties at the offices of Corporation located in Hayward,
California.
2. Terms of Employment.
Subject to the provisions of paragraph 7, the initial term (the "Term")
of employment shall be two (2) years, commencing at 12:01 a.m. on January 1,
2003 and terminating at midnight on December 31, 2004 (the "Expiration Date").
The Existing Agreement shall terminate as of midnight on December 31, 2002.
3. Duties and Responsibilities.
Subject only to the directives of the Board of Directors of Corporation,
Employee shall be in complete charge of the business operations of Corporation
commensurate with his position as the Chief Executive Officer of Corporation.
Employee agrees to perform his services conscientiously, effectively and to
the best of his ability.
4. Base Salary.
In consideration of Employee's services under this Agreement to
Corporation, Employee's base salary shall be fixed at an annual rate of Two
Hundred Thousand Dollars ($200,000), for the entire term of this Agreement,
payable in accordance with Corporation's normal payroll practices.
Page 1
5. Bonus.
As further consideration for Employee's services under this Agreement,
Corporation shall pay Employee a bonus of up to 25% of Employee's Base Salary
(as reported on Employee's Form W-2 for the applicable year) (the "Maximum
Bonus") determined as follows:
a. 50% of the Maximum Bonus shall be earned by Employee if the
Corporation achieves its board of directors approved budget forecast, of which
(i) 25% of the Maximum Bonus that may be earned will be based on the
Corporation achieving the budget forecast for sales (the "Sales Forecast") and
(ii) 25% of the Maximum Bonus that may be earned will be based on the
Corporation achieving the budget forecast for net income before taxes and
extraordinary items as reported in the Corporation's year end audited
financial statements (the "Income Forecast").
b. An additional 1/2 percentage point of the Maximum Bonus, up to a
maximum of 25% of the Maximum Bonus, may be earned by Employee for each 1% by
which the Company exceeds the Sales Forecast.
c. An additional 1/2 percentage point of the Maximum Bonus, up to a
maximum of 25% of the Maximum Bonus, may be earned by Employee for each 1% by
which the Company exceeds the Income Forecast.
Notwithstanding the above, however, no bonus shall be earned by Employee
unless the Company reports positive net income for the applicable year, except
at the discretion of the board of directors.
In addition to any bonus determined as set forth above, the board of
directors may approve a special bonus for Employee, if in the discretion of
the board of directors, Employee has been instrumental in presenting, securing
or consummating a strategic transaction for the benefit of Corporation and its
shareholders.
6. Benefits.
In consideration for Employee's accepting the employment provided for
herein, Corporation agrees to provide the following benefits:
a. All the standard benefits normally provided to the employees of
Corporation, including, but not limited to, social security benefits, workers'
compensation, life insurance (including life insurance policy No. 5 133 187
issued by Phoenix Life Insurance Company in the face amount of $100,000),
long-term disability insurance, health insurance of various kinds and similar
benefits. In addition, in the event of Employee's disability as a result of
sickness or injury, Corporation shall continue to pay Employee his base salary
for the remaining term of this Agreement, less any amounts received by
Employee as a result of his disability under such long term disability policy.
b. Employee shall be entitled to twenty (20) paid vacation days per
year and shall be entitled to up to ten (10) paid sick days per year.
Employee shall not be entitled to accrue more than thirty (30) paid vacation
days (no more than an aggregate of thirty (30) days of which may be carried
over to subsequent years) or more than twenty (20) paid sick days (no more
than an aggregate of twenty (20) days of which may be carried over to
subsequent years). Upon termination of Employee's employment for any reason,
Employee shall not be entitled to payment for any accrued but unpaid sick
days.
Page 2
c. Corporation shall reimburse Employee for reasonable and
necessary expenses incurred by him in the performance of his duties hereunder
upon presentation of vouchers in accordance with Corporation's policy.
Corporation shall also reimburse Employee for seventy-five per cent (75%) of
the cost of Employee's membership in the following clubs or organizations
which Employee uses for business purposes: Green Hills Country Club, Villa
Taverna, St. Xxxxxxx Yacht Club and the World Trade Club.
d. Corporation shall reimburse Employee for automobile expenses
incurred by Employee for his personal automobile as follows: (i) one hundred
percent (100%) of Employee's automobile lease payments; (ii) one hundred
percent (100%) of gas, oil, maintenance and insurance expenses; (iii) one
hundred percent (100%) of business phone use; and (iv) one hundred percent
(100%) of other business related automobile expenses. Employee shall furnish
to Corporation adequate records and other documentary evidence required by
federal and state statutes and regulations for the substantiation of such
payments as deductible business expenses of Corporation and not as deductible
compensation to Employee, provided that reimbursement of such expenses shall
not be dependent on proving deductibility of such expenses for tax purposes.
e. Such other flexible executive perquisites that may be approved
by the Board of Directors of Corporation for the senior management group of
employees of Corporation.
7. Early Termination and Severance.
a. By Corporation. Corporation, acting through its Board of
Directors, may terminate this Agreement immediately upon written notice to
Employee only for "cause." For purposes of this Agreement, such termination
shall be deemed for "cause" only if it is by reason of Employee's commission
of willful and material acts of neglect, dishonesty, fraud or other acts
involving moral turpitude which materially and adversely affect the business
or affairs of Corporation. If such termination is for "cause," then all of
the rights, duties and obligations of the parties under this Agreement shall
cease upon the effective date of termination. If such termination is for any
reason other than for "cause," then all of the rights, duties and obligations
of the parties under this Agreement shall cease upon the effective date of
termination, except that Corporation shall pay to Employee a sum equal to the
greater of (i) twelve months' base salary, or (ii) that number of months of
base salary which is equal to the number of months remaining on the Term of
this Agreement as of the date of termination.
b. By Employee. Employee may terminate this Agreement in his sole
discretion for any reason upon ninety (90) days prior written notice to the
Board of Directors of Corporation. Upon the effective date of such
termination by Employee (except in the event of Employee's death, disability
(which is subject to the provisions of paragraph 6.a.)), all of the rights,
duties, and obligations of the parties under this Agreement shall cease
including Employee's right to his base salary and benefits.
c. This Agreement shall inure to the benefit of and be binding upon
Corporation, its successors and assigns, including but not limited to any
corporation which may acquire all or substantially all of Corporation's assets
or business or with which Corporation may be consolidated or merged.
8. Notices.
Notices required or permitted by this Agreement shall be effective upon
mailing, postage prepaid, or upon personal delivery, to the following address:
Page 3
To Corporation: Xxxxxxxx Foods of Distinction, Inc
00000 Xxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
To Employee: Xxxxxxx X. Xxxxxxxx
000 Xxxx Xxxxxxx Xxxx.
Xxxxxxx Xxxx, XX 00000
9. Miscellaneous Provisions.
a. The law of the State of California shall govern the
interpretation and enforcement of this Agreement.
b. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way.
c. This Agreement contains all of the covenants and agreements
between the parties on the matter stated herein. Each party to this Agreement
acknowledges that no representations, inducements, promises, or agreements,
orally or otherwise, have been made by any party, or anyone acting on behalf
of any party, which are not embodied herein, and that no other agreement,
statement, or promise on the subject matter stated herein not contained in
this Agreement shall be valid or binding.
d. Any modification of this Agreement shall be effective only if it
is in writing and executed by the party or parties to be charged.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date first hereinabove written.
XXXXXXXX FOODS OF DISTINCTION, INC.,
a Colorado corporation
Dated: July 11, 2002 By:/s/ Xxxxxx X. Xxxx
XXXXXX X. XXXX
Its: Chief Financial Officer and
Secretary
"Corporation"
Dated: 7/16/02 /s/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
"Employee"
Page 4
