Exhibit 10.6
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 1st day of January, 2004, between
VITA FOOD PRODUCTS, INC., a Nevada corporation (the "COMPANY"), and XXXXX X.
XXXXXXX (the "EMPLOYEE").
RECITALS
WHEREAS, the Company is engaged in the business of processing and
manufacturing cured and smoked xxxxxxx and salmon products and distributing
other related products and, through its wholly owned subsidiary, Vita Specialty
Foods, Inc. ("Vita Specialty Foods"), processing and marketing honey, salad
dressings, sauces, jams and jellies, gift basket products, beverages and other
specialty food products; and
WHEREAS, the Company has determined that in view of the Employee's
knowledge, expertise and experience in the cured and smoked fish business, the
Employee's services as an executive and an operating officer of the Company will
be of great value to the Company, and accordingly, the Company desires to enter
into this Agreement with the Employee as set forth herein in order to secure
such services; and
WHEREAS, the Employee desires to serve as an executive and an operating
officer of the Company on the terms set forth herein.
NOW, THEREFORE, for and in consideration of the Employee's employment by
the Company, the above premises and the mutual agreements hereinafter set forth,
the Employee and the Company agree as follows:
1. DEFINITIONS.
(a) "CAUSE" means the Employee's (i) commission of any act of fraud
or dishonesty relating to and adversely affecting the business affairs of
the Company; (ii) conviction of any felony in connection with employment
by the Company; or (iii) habitual material failure after written notice
specifying such failure and a reasonable opportunity to cure such failure
to perform his material duties hereunder responsibly.
(b) "CHANGE IN CONTROL EVENT" means any of the following events: the
sale of all or substantially all of the assets of the Company; the failure
of the current members of the Company's Board of Directors (the "BOARD")
to constitute a majority of the Board; or the sale or other transfer of
ownership or voting control of the majority of the voting stock of the
Company to any one entity/individual or to a group of affiliated
entities/individuals.
(c) "TOTAL DISABILITY" means the Employee's inability, through
physical or mental illness or accident, to perform the majority of his
usual duties and responsibilities hereunder (as such duties are
constituted on the date of the commencement of such disability) in the
manner and to the extent required under this Agreement for a period of at
least one hundred eighty (180) consecutive days. Total Disability shall be
deemed to have occurred on the first day following the expiration of such
one hundred eighty (180) day period.
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2. EMPLOYMENT; DUTIES.
(a) The Company agrees to employ the Employee as Executive Vice
President of the Company and Vice Chairman of Vita Specialty Foods, with
the duties and responsibilities generally associated with such positions
and currently performed by the Employee and such other reasonable
additional responsibilities and positions as may be added to the
Employee's duties with his agreement from time to time by the Board
consistent with the Employee's positions.
(b) During the term of employment hereunder, Employee shall (i)
diligently follow and implement all management policies and decisions
communicated by the Board; and (ii) timely prepare and forward to the
Board all reports and accountings as may be requested.
(c) Employee's duties and responsibilities hereunder shall be
modified and/or excused during reasonable periods of absence due to health
or disability or vacation, as provided herein.
3. TERM.
The term hereof shall commence on the date of this Agreement and
shall continue for a period of three (3) years (the "INITIAL TERM").
Thereafter, this Agreement shall be extended for an additional one-year
term commencing on the day immediately following the expiration of the
Initial Term (the "RENEWAL TERM"); provided, however, that, if the Company
desires to terminate Employee's employment under this Agreement at the end
of the Initial Term, the Company may terminate the Employee's employment
by giving written notice of such decision to Employee at least ninety (90)
days prior to the expiration of the Initial Term.
4. COMPENSATION.
(a)(1) Employee shall be paid a base salary of Two Hundred
Sixty-Three Thousand One Hundred Sixty-Seven Dollars and Thirty-Two Cents
($263,167.32) per year (the "BASE SALARY") for the first twelve (12)
months of the Initial Term. The Base Salary shall accrue and be due and
payable in equal, or as nearly equal as practicable, weekly installments
and the Company may deduct from each such installment all amounts required
to be deducted and withheld in accordance with applicable federal and
state income, FICA and other withholding tax requirements. The Base Salary
shall be increased for each additional twelve (12) months of the Initial
Term and for the Renewal Term, if any, by a percentage equal to at least
the percentage increase in the cost of living.
(2) The Base Salary may be increased from time to time and at any
time by the Compensation Committee and approved by the Board, but shall in
no event be reduced or decreased below the highest level attained any time
by Employee.
(3) If the Initial Term or the Renewal Term shall terminate on other
than the last day of a calendar month, Employee compensation for such
month shall be prorated according to the number of days during such month
that occur within the Initial Term or Renewal Term, as the case may be.
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(b) The Employee shall have the opportunity to receive: (i) an
annual bonus based on the Company's bonus plan and his individual
performance all as approved by the Compensation Committee and by the Board
(the "BONUS Payment"). All Bonus Payments shall be paid on or before the
15th day of March following the year for which such Bonus Payment was
computed; and (ii) a special bonus for any consulting work developed by
the Employee (the "CONSULTING BONUS") which Consulting Bonus shall be
determined by the net profitability to the Company of such work. The
Consulting Bonus shall be determined by the Board at its meeting following
each quarter in which the consulting fees are earned. All Consulting Bonus
payments shall be paid on or before the fifth day following such Board
meeting.
(c) Employee shall be entitled to the following perquisites, the
total of which shall not exceed $30,000 per year: (i) a car payment
allowance in the amount of approximately $15,000 per year to be paid in
twelve (12) equal monthly installments on the first day of each month;
(ii) reimbursement of country club or health club membership dues and
expenses of approximately $7,500 per year to be paid on the first day of
each month as reimbursement for the previous month's membership dues and
expense xxxx as submitted by the Employee; (iii) the right to designate a
charitable contribution to a charity selected by the Employee to be paid
by the Company in an amount up to $7,500 per year; and (iv) a
non-accountable business expense allowance.
(d) While Employee is performing the services described herein, the
Company shall, upon request, reimburse Employee for all reasonable and
necessary expenses incurred by Employee in connection with the performance
of duties of employment hereunder.
(e) If the Company now maintains or, while Employee renders services
to the Company, establishes an incentive or other compensation plan
(however described or denominated) for the corporate, operating or
executive officers or other management of the Company, or if the Company
now maintains or, while Employee renders services to the Company,
establishes any other benefit program(s) (however described or
denominated) for corporate, operating or executive officers or other
management employees of the Company, Employee shall be eligible to fully
participate in each such plan or benefit program.
(f) During the Initial Term and the Renewal Term, if any, the
Company shall provide health, medical, disability and term life insurance
to Employee in accordance with any group plan which it now maintains or
which may hereafter be established by the Company.
(g) Employee shall receive not less than five (5) weeks paid
vacation during each twelve (12) month period of employment. Such vacation
period may be increased from time to time and at any time by the Board but
shall in no event be shortened to less than the longest period attained by
Employee at any time during his employment.
5. TERMINATION.
(a) Employee's employment may be terminated only as follows:
(1) By the Company: For Cause; or
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(2) By the Employee: (a) because of a breach of this Agreement
by the Company which is not cured within ten (10) days after written
notice of such breach is delivered to the Company; or (b) if a
Change in Control Event occurs;
(3) Upon death of the Employee;
(4) Upon the Total Disability of the Employee; or
(5) By the Company at least ninety (90) days prior to the
expiration of the Initial Term in accordance with Section 3 hereof.
(b) In the event that employment is terminated by Employee if a
Change in Control Event occurs or is terminated due to the Employee's
death or Total Disability, the Company will be obligated to pay to the
Employee the full amount of Base Salary earned by Employee through the
effective date of termination or death, as the case may be.
(c) In the event that employment is terminated by the Company for
Cause, the Company will have no obligations to pay any amount beyond the
effective date of such termination whether as Base Salary, Bonus Payment
or otherwise to provide any benefits arising hereunder or otherwise except
as required by law.
(d) In the event that employment is terminated by the Company in
accordance with Section 3 hereof, the Company will be obligated to pay to
the Employee, on or before January 15, 2007, a lump sum amount equal to
the Employee's Base Salary in effect on the expiration date of the Initial
Term multiplied by .75.
6. CONFIDENTIAL INFORMATION. Employee acknowledges that the nature of his
engagement by the Company is such that Employee shall have access to information
of a confidential and/or trade secret nature which has great value to the
Company. Such information includes financial, manufacturing and marketing data,
business plans and methods, processes, product formulas, developmental work,
work in process, methods, trade secrets (including, without limitation, customer
lists, supplier lists and lists of customer, supplier and food broker sources),
and any other information relating to the products, services, customers, sales
or business affairs of the Company, which has value and is treated as secret
and/or confidential by the Company (the "CONFIDENTIAL INFORMATION"). The Company
has and will also have access to Confidential Information of its suppliers
("SUPPLIERS" means any persons with whom the Company has a co-packing or joint
venture relationship with or who supplies any products or materials to the
Company). Confidential Information includes not only information disclosed by
the Company or its Suppliers to Employee in the course of employment, but also
information developed or learned by Employee during the course of employment
with the Company. Confidential Information is to be broadly defined.
Confidential Information includes all information that has or could have
commercial value or other utility in the business in which the Company or
Suppliers are engaged. Confidential Information also includes all information of
which the unauthorized disclosure could be materially detrimental to the
interests of the Company or Suppliers. Employee agrees to keep all Confidential
Information that could be materially detrimental to the interests of the Company
or Suppliers in confidence during the term of this Agreement and at any time
thereafter and shall not use, disclose, publish or otherwise disseminate any of
such Confidential Information to any other person, except to the extent such
disclosure is (i) necessary to the performance of this Agreement and in
furtherance of the Company's best interests, (ii) required by applicable law,
(iii) lawfully obtainable from other sources, (iv) authorized in writing by the
Company, (v) no longer qualifies as a trade secret or
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confidential information under applicable law, or (vi) necessary to enforce this
Agreement. Upon termination of employment with the Company, Employee shall
deliver to the Company all documents, records, notebooks, work papers, and all
similar material under Employee's direct control containing Confidential
Information, whether prepared by Employee, the Company or anyone else.
7. NON-COMPETITION. In order to protect the Confidential Information,
Employee agrees that during the term of his employment with the Company, and for
a period of one (1) year thereafter, Employee will not, directly or indirectly,
whether as an owner, partner, shareholder, agent, employee, creditor or
otherwise, promote, participate or engage in any activity or other business
directly competitive with the Company's then existing business if such activity
or other business involves any use of any of the Confidential Information by
Employee.
8. NON-SOLICITATION OF CUSTOMERS OR SUPPLIERS. Employee agrees that for a
period of one (1) year after the termination of his employment with the Company,
Employee will not, on his own behalf or on behalf of an other individual,
association or entity, call on any of the customers or Suppliers of the Company
for the purpose of soliciting or inducing any of such customers to acquire (or
providing to any of such customers) or any of the Suppliers to provide any
product or service provided by or to the Company, nor will Employee in any way,
directly or indirectly, as agent or otherwise, in any other manner solicit,
influence or encourage such customers or Suppliers to take away or to divert or
direct their business away from the Company to Employee or to any other person
or entity with which Employee is employed, associated, affiliated or otherwise
related.
9. NONINTERFERENCE WITH EMPLOYEES. In order to protect the Confidential
Information, Employee agrees that during the term of his employment with the
Company and for a period of one (1) year thereafter, Employee will not, directly
or indirectly, induce or entice any employee of the Company with access to or
possession of Confidential Information, to leave such employment or cause anyone
else to leave such employment.
10. REMEDIES. The parties hereto agree that the services to be rendered by
Employee pursuant to this Agreement, and the rights and privileges granted to
the Company pursuant to this Agreement, are of a special, unique, extraordinary
and intellectual character, which gives them a peculiar value, the loss of which
cannot be reasonably or adequately compensated in damages in any action at law,
and that a breach by Employee of any of the terms of this Agreement will cause
the Company great and irreparable injury and damage. Employee hereby expressly
agrees that the Company shall be entitled to the remedies of injunction,
specific performance and other equitable relief to prevent a breach of this
Agreement by Employee. This Section 10 shall not be construed as a waiver of any
other rights or remedies which the Company may have for damages or otherwise.
11. SEVERABILITY. In case any one or more of the provisions of this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, the same shall not affect any other provision of this Agreement,
but this Agreement shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein.
12. ASSIGNMENT. This Agreement and the rights and obligations of the
parties hereunder may not be assigned by either party hereto without the prior
written consent of the other party hereto.
13. NOTICES. Except as otherwise specifically provided herein, any notice
required
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or permitted to be given to Employee pursuant to this Agreement shall be given
in writing, and personally delivered or mailed to Employee by certified mail,
return receipt requested, at the address set forth below Employee's signature on
this Agreement or at such other address as Employee shall designate by written
notice to the Company given in accordance with this Section 13, and any notice
required or permitted to be given to the Company shall be given in writing, and
personally delivered or mailed to the Company by certified mail, return receipt
requested, addressed to the Company at the address set forth under the signature
of the President of the Company or his designee on this Agreement or at such
other address as the Company shall designate by written notice to Employee given
in accordance with this Section 13. Any notice complying with this Section 13
shall be deemed received upon actual receipt by the addressee.
14. WAIVER. The waiver by either party hereto of any breach of this
Agreement by the other party hereto shall not be effective unless in writing,
and no such waiver shall operate or be construed as the waiver of the same or
another breach on a subsequent occasion.
15. GOVERNING LAW. This Agreement and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws of the State of
Illinois.
16. BENEFICIARY. All of the terms and provisions of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, heirs, executors, administrators and
permitted assigns.
17. ENTIRE AGREEMENT. This Agreement embodies the entire agreement of the
parties hereto relating to Employee's employment by the Company in the
capacities herein stated and, except as specifically provided herein, no
provisions of any employee manual, personnel policies, Company directives or
other agreement or document shall be deemed to modify the terms of this
Agreement. No amendment or modification of this Agreement shall be valid or
binding upon Employee or the Company unless made in writing and signed by the
parties hereto. All prior understandings and agreements relating to Employee's
employment by the Company, in whatever capacity, are hereby expressly
terminated.
18. CONFIDENTIALITY. The terms, conditions and existence of this Agreement
shall be confidential.
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IN WITNESS WHEREOF, Employee and the Company have executed and delivered
this agreement as of the date first shown above.
EMPLOYEE: THE COMPANY:
XXXXX X. XXXXXXX VITA FOOD PRODUCTS, INC.
/s/ XXXXX X. XXXXXXX By: /s/ XXXXXXX X. XXXXX
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Address:___________________________ Xxxxxxx Xxxxx, President
___________________________ Address: 0000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
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