Exhibit 10.7
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") made as of the ___ day of
February, 1997 between Jazz Photo Corp., a New Jersey corporation (the
"Company"), and Xxxxxxx Xxxxxxx, residing at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxx,
Xxx Xxxxxx 00000, (the "Executive").
WHEREAS, the Company believes it is in the best interests of the Company
to retain the Executive as an executive of the Company on the terms herein
provided; and
WHEREAS, the Executive is desirous of committing himself to serve the
Company on the terms herein provided;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
1. Effectiveness. This Agreement shall be effective as of January 1, 1997
(the "Effective Date") immediately upon the last to occur of (a) the approval by
the Board of Directors of the Company of this Agreement and (b) the execution of
this Agreement by the Company and the Executive.
2. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby accepts such employment, on the terms and conditions set forth
herein for the period commencing on the Effective Date and expiring on the third
anniversary thereof, unless such employment is sooner terminated as hereinafter
set forth (such period is hereinafter sometimes referred to as the "Term of
Executive's Employment").
3. Position and Duties. During the Term of Executive's Employment
hereunder, the Executive shall serve as Vice President, Operations reporting to
the Chief Executive Officer of the Company and the Board of Directors of the
Company, and shall have responsibility for of the Company's operations, and
shall have such other powers and duties as may from time to time be prescribed
by the Chief Executive Officer or by the Board of Directors of the Company. The
Executive shall devote his entire working time and efforts to the business and
affairs of the Company.
4. Compensation.
(a) Executive Base Compensation. During the Term of Executive's
Employment hereunder, the Executive shall receive a base salary at the annual
rate of $104,000.00 (the "Executive Base Compensation"), or such amount in
excess of Executive Base Compensation as the Company shall from time to time
determine in its discretion, payable at such intervals or times as shall accord
with the Company's normal procedure.
(b) Expenses. During the Term of his employment hereunder the
Executive shall be entitled to receive reimbursement for all reasonable expenses
incurred by him (in accordance with the policies and procedures currently in
effect for the senior executive officers of the Company) in performing services
hereunder, provided that the Executive properly accounts therefor in accordance
with Company policy.
(c) Fringe Benefits. The Executive shall be entitled to participate
in or receive benefits under any profit-sharing or pension plan, savings plan,
stock option plan, stock
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purchase plan, life insurance and/or death benefits plan, medical and
health-and-accident plans, or arrangement currently made available by the
Company or to be made available in the future to its executives and key
management employees, including the Company's 1997 Long-Term Incentive Plan, as
currently in effect or any comparable successor plan thereto, subject to and on
a basis consistent with the terms, conditions and overall administration of such
plans and arrangements. Nothing paid to the Executive under any plan or
arrangement presently in effect or made available in the future shall be deemed
to be in lieu of Base Compensation to the Executive hereunder.
(d) Perquisites. The Executive shall be entitled to receive
perquisites appertaining to, and consistent with, the office in accordance with
such practices as may be adopted by the Company from time to time.
(e) Stock Option Grant. The Board of Directors of the Company shall
grant to Executive an option to purchase a total of 15,000 shares of the Class A
Common Stock of the Company (the "Stock Option") in accordance with the terms
and conditions of the Company's 1997 Long-Term Incentive Plan at an exercise
price of $1.50 per share.
5. Offices; Directorships. The Executive agrees to serve on the Board of
Directors of the Company without additional compensation, if elected or
appointed thereto, in one or more offices in, and/or as a director of, the
Company or any subsidiary or affiliate of the Company.
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6. Termination.
(a) Disability. If, based on independent medical advice, from a
physician reasonably acceptable to the Company and Executive, the Board of
Directors determines that, due to physical or mental illness, the Executive has
been unable to perform his duties hereunder for six consecutive months or six
non-consecutive months in any twelve month period, the Company may terminate the
employment of the Executive by delivering a Notice of Termination specifying a
termination date. The return of the Executive to the performance of his duties
in accordance with Section 3 hereof prior to the specified termination date
shall not render such notice ineffective for the purpose of terminating
Executive's employment hereunder.
(b) Termination by the Executive. The Executive may terminate his
employment hereunder voluntarily, provided that the Executive delivers to the
Company a Notice of Termination specifying a termination date not less than
ninety (90) days subsequent to the date of such Notice of Termination.
(c) Termination by the Company. The Company may terminate the
employment of the Executive, with or without cause, by delivering a Notice of
Termination specifying a termination date not less than ninety (90) days
subsequent to such Notice of Termination, except that, in the case of a
Termination for Cause (as herein defined), a Notice of Termination shall be
effective immediately. A "Termination Without Cause" shall mean a termination of
the Executive's employment hereunder, other than a "Termination for Cause" as
defined herein and other than pursuant to subsections (a), (b) or (d) hereof. A
"Termination for Cause" shall mean, in the context
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of termination of the employment or the directorship of the Executive, any of
the following events or conditions: (i) the Executive's material failure to
perform (other than by reason of disability) his duties and responsibilities as
an employee or director which are not remedied within 30 days after receipt of
written notice thereof from the Company, (ii) fraud, embezzlement or other
material dishonesty with respect to the Company, (iii) conviction of, or plea of
nolo contendere to, any felony or any other crime involving fraud, dishonesty or
moral turpitude, (iv) the Executive shall have materially breached any
confidentiality or non-competition agreement to which the Executive is a party
with the Company directly, or (v) the Executive shall have materially breached
this Agreement, provided, however, with respect to clauses (i) and (v) hereof
Executive shall have received written notice from the Company and such material
failure or material breach shall not have been remedied within 30 days of
receipt of such notice and provided, further, that the termination of the
employment of the Executive shall not be deemed to be a Termination for Cause
unless (1) the written notice of termination indicates the specific termination
provision relied upon and sets forth the facts and circumstances claimed to
provide a basis for termination; (2) an opportunity is provided for the
Executive, together with his counsel, to be heard before the Board of Directors
on the matter of termination; and (3) the Executive receives a letter of
termination from the Board of Directors stating that in the good faith opinion
of the Board, the Executive was guilty of the conduct set forth in clauses (c),
(i), (ii), (iii), (iv), and (v).
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(d) The Executive's employment hereunder shall terminate upon his
death.
(e) Any termination (1) by the Company pursuant to subsections 6(a)
or (c) above or (2) by the Executive pursuant to subsection 6(b) above shall be
communicated by written Notice of Termination ("Notice of Termination") to the
other party hereto. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision
relied upon, and shall set forth the facts and circumstances claimed to provide
a basis for termination of the Executive's employment hereunder.
(f) "Date of Termination" shall mean (i) if the Executive's
employment is terminated by his death, the date of his death, (ii) if the
Executive's employment is terminated under Section 6(a), on the date the
Executive's employment is terminated by the Company in accordance with a Notice
of Termination under Section 6(a), (iii) if the Executive's employment is
terminated pursuant to a Notice of Termination under Section 6(c), the date upon
which such termination becomes effective pursuant to this Agreement and such
Notice of Termination, and (iv) the third [2-second] anniversary of the
Effective Date if the Executive is employed by the Company at such date.
(g) Except in the case of a Termination Without Cause pursuant to
Section 6(c), the Executive shall be paid all amounts earned to the Date of
Termination. In the case of Termination Without Cause during the Executive's
employment under this Agreement pursuant to Section 6(c), the Executive shall be
paid by the Company his Base Compensation for a period commencing on the day
following the Date of
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Termination and ending on the third [second] anniversary of the Effective Date
(as defined in Section 1 of this Agreement). Executive's rights under this
Subsection (g) shall survive the termination of his employment under this
Agreement.
7. Confidential Information; Intellectual Property; Restricted Activities.
(a) Confidential Information. Executive acknowledges that Company
and its affiliates continually develop Confidential Information, that the
Executive may develop Confidential Information for the Company or its affiliates
and that the Executive may learn of Confidential Information during the course
of employment. The Executive will comply with the policies and procedures of the
Company and its affiliates for protecting Confidential Information and shall
never disclose to any person or to any governmental agency or political
subdivision of any government (except as required by applicable law or for the
proper performance of his duties and responsibilities hereunder), or use for his
own benefit or gain, any Confidential Information obtained by the Executive
incident to his employment or other association with the Company or any of its
affiliates. The Executive understands that this restriction shall continue to
apply after his employment terminates, regardless of the reason for such
termination.
"Confidential Information" means any and all information of the
Company and its affiliates that is not generally known by others with whom they
compete or do business, or with whom they actively plan to compete or do
business. Confidential Information includes without limitation such information
relating to (i) the development, research, testing, manufacturing, marketing and
financial activities of the Company and its affiliates, (ii) the Products, (iii)
Intellectual Property; (iv) the costs, sources of supply,
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financial performance and strategic plans of the Company and its affiliates, (v)
the identity and special needs of the customers of the Company and its
affiliates; and (vi) the people and organizations with whom the Company and its
affiliates have business relationships and those relationships. Confidential
Information also includes comparable information that the Company or any of its
affiliates have received belonging to others or which was received by the
Company or any of its Affiliates with any understanding, express or implied,
that it would not be disclosed.
(b) Intellectual Property. The Executive hereby assigns and agrees
to assign to the Company (or as otherwise directed by the Company) the
Executive's full right, title and interest in and to all Intellectual Property.
The Executive agrees to promptly and fully disclose all Intellectual Property to
the Company and to execute any and all applications for domestic and foreign
patents, copyrights or other proprietary rights and to do such other acts
(including without limitation the execution and delivery of instruments of
further assurance or confirmation) requested by the Company to assign the
Intellectual Property to the Company and to permit the Company to enforce any
patents, copyrights or other proprietary rights to the Intellectual Property.
The Executive will not charge the Company for time spent in complying with these
obligations. All copyrightable works that the Executive creates shall be
considered "work made for hire".
"Intellectual Property" means inventions, discoveries, developments,
methods, processes, compositions, works, concepts and ideas (whether or not
patentable or copyrightable or constituting trade secrets) conceived, made,
created,
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developed or reduced to writing by the Executive (whether alone or with others,
whether or not during normal business hours or on or off Company premises)
during the Executive's employment that relate to either the Products or any
activity of the Company or any of its Affiliates which is under active
development.
"Products" mean all products under active development, researched,
developed, tested, manufactured, sold, licensed, leased or otherwise distributed
or put into use by the Company or any of its affiliates, together with all
services provided or under active development by the Company or any of its
affiliates, during the Term of Executive's Employment.
(c) All documents, records, files, tapes and other media of every
kind and description relating to the business, present or otherwise, of the
Company or any of its affiliates and to their customers, prospective customers,
vendors, and any other persons with whom the Company has business dealings,
including, but not limited to, originals and all copies of all correspondence,
soliciting materials, contracts, proposals, analyses, performance data and other
written or computer software, data bases, programs and disks, in whole or in
part, thereof, whether or not prepared by the Executive, are the sole and
exclusive property of the Company and its affiliates ("Documents"). Upon
termination of Executive's employment for any reason, whether during the period
set forth in Section 2 hereof or thereafter, or at such earlier time or times as
the Board may specify, the Executive shall immediately turn over to the Company
all Documents maintained by, or under the control or possession of, the
Executive.
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(d) Restricted Activities.
(i) While the Executive is employed hereunder and for a period
of two (2) years after his employment terminates (the "Non-Competition Period"),
the Executive shall not, directly or indirectly, whether as owner, partner,
investor, consultant, agent, employee, coventurer or otherwise, compete with the
Company or any of its affiliates within the United States or within any country
in which the Company makes sales of products representing 50% or more of its
revenue undertake with any third party any planning for any business competitive
with the Company or any of its affiliates. Specifically, but without limiting
the foregoing, the Executive agrees not to engage in any manner in any activity
that is directly or indirectly competitive with the business of the Company or
any of its affiliates as conducted or under active development at any time
during the Term of Executive's Employment. For the purposes of this Section 7,
the business of the Company and its affiliates shall include all Products and
the Executive's undertaking shall encompass all items, products and services
that may be competitive with Products.
(ii) The Executive agrees that, during his employment
hereunder, he will not undertake any outside activity, whether or not
competitive with the business of the Company or any of its affiliates, that
could reasonably give rise to a conflict of interest or otherwise interfere with
his duties and obligations to the Company or any of its affiliates.
(iii) The Executive further agrees that while he is employed
by the Company hereunder and during the Non-Competition Period, the Executive
will not
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hire or attempt to hire any employee of the Company or any of its affiliates to
perform services for any Person, assist in such hiring by any Person, encourage
any such employee to terminate his or her relationship with, the Company or any
of its affiliates, or solicit or encourage any customer or vendor of the Company
or any of its affiliates to terminate or diminish its relationship with them or,
in the case of a customer, to conduct with any Person any business or activity
which such customer conducts or could conduct with the Company or any of its
affiliates.
"Person" means an individual, a corporation, an association, a
partnership, an estate, a trust and any other entity or organization, other than
the Company or any of its affiliates.
8. Enforcement. The Executive recognizes that his agreement to the terms
and conditions of this Section 8 represents a material inducement to the Company
to employ the Executive. The Executive acknowledges that irreparable injury may
result to the Company and that the Company will have no adequate remedy at law
in the event that the Executive breaches any of the provisions of Section 7
hereof. Accordingly, the Executive agrees that in the event of a breach by the
Executive of any of the provisions of Section 7, the Company shall, in addition
to all other rights and remedies, be entitled to injunctive relief with respect
to such breach and/or to a decree for specific performance of the terms of such
Section, in each instance without the necessity of showing any irreparable
injury or special damages.
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9. Successors.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
executes and delivers the Agreement provided for in this Section 9 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
(b) In the event Executive's employment under this Agreement shall
terminate for any reason while any amounts have been earned but not paid as of
the applicable Date of Termination as defined herein or are otherwise due the
Executive under the terms of Section 6 hereof or by reference thereto, then the
right to receive such amount shall survive and be enforceable after the
termination of Executive's employment hereunder by the Executive, his
successors, assigns, executors, administrators, heirs, legatees, devisees or
legal representatives.
10. Notices. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when mailed by United States registered or
certified mail,
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return receipt requested, postage prepaid, transmitted by facsimile transmission
or delivered by messenger addressed as follows:
If to the Executive:
Xxxxxxx Xxxxxxx
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
If to the Company:
JAZZ Photo Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxx, XX O7065agreement
with a copy to: Xxxxxxx X. Xxxx, Esq.
Xxxxxxxxx & Kahr
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as any such person may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
11. Amendment and Waiver. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and duly authorized officer of the Company.
No waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
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12. Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
Jersey without reference to conflicts of laws.
13. Severability; Survivability. It is the intent of the parties hereto
that in case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect the
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein. The provisions of Sections 6(g), 7, 8 and 9(b) of this Agreement shall
survive the expiration or termination of Executive's employment hereunder,
whether during the period set forth in Section 2 of this Agreement or
thereafter, and the termination of this Agreement.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. Only Employment Agreement. From and after the Effective Date, this
Agreement shall supersede any and all prior employment agreements between the
parties.
16. Future Negotiations. If the Executive is employed by the Company six
(6) months prior to the third anniversary of the Effective Date then the Company
and the Executive shall commence good faith negotiations for the purpose of
determining whether, and on what basis, if any, they can agree that Executive
may be employed by
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the Company after the third anniversary of the Effective Date. The Executive
shall have no obligation under this Section 16 to remain in the employ of the
Company and the Company shall have no obligation hereunder to employ the
Executive after the second anniversary of the Effective Date.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
JAZZ PHOTO CORP.
By: /s/ Xxxx Xxxxx
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Xxxx Xxxxx, President
/s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx
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