Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is being made as of this 1st
day of June, 1996 between InnoPet Brands Corp. (formerly known as InnoPet
Products Corp.), a Delaware corporation (the "Company"), having its principal
offices at Xxx Xxxx Xxxxxxx Xxxxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx, and Xxxxx Xxxxxx
(the "Employee"), an individual residing at ___________________________________
________________________________________________________________.
W I T N E S S E T H:
WHEREAS, the Company desires to employ Employee and Employee
desires to be employed by the Company as its Vice President and Chief Financial
Officer upon the terms and conditions contained herein.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements contained herein, and intending to be legally bound hereby,
the parties hereto agree as follows:
1. Nature of Employment; Term of Employment. The Company
hereby employs Employee and Employee agrees to serve the Company as its Vice
President and Chief Financial Officer upon the terms and conditions contained
herein, for a term commencing as of June 1, 1996 and continuing until the close
of business on May 31, 1999, (the "Employment Term"). This Agreement will
automatically renew for one additional term of one year if notice of termination
is not given by either party at least forty-five (45) days prior to the end of
the Employment Term.
2. Duties and Powers as Employee. During the Employment
Term, Employee agrees to devote all of his full working time, energy, and
efforts to the business of the Company. The Employee's duties shall include,
without limitation, those normally performed by a chief financial officer of a
corporation including the supervision of all matters of finance relating to or
involving the Company and calling for action or inaction on its part and related
areas of responsibility. In performance of his duties, Employee shall be subject
to the direction of the Chief Executive Officer of the Company. Employee shall
be available to travel as the needs of the business require.
3. Compensation.
(a) As compensation for his services hereunder, the
Company shall pay Employee a salary, payable in equal semi-monthly installments,
at the annual rate of $85,000. Additionally, Employee shall participate in the
present or future employee benefit plans of the Company provided that he meets
the eligibility requirements therefor.
(b) Employee shall be eligible to receive raises each
year of the Employment Term at a minimum to reflect cost of living increases,
if any, and merit raises, subject to satisfactory performance as determined by
the Board of Directors.
(c) Upon execution of this Agreement and the Note,
defined below, the Employee shall purchase 43,497 shares (the "Shares") of
common stock of the Company at a purchase price of $139,190. The Shares shall
be purchased by a note (the "Note") in the form attached hereto as Exhibit A.
The Employee shall also execute a Stock Subscription and Security Agreement and
a proxy in the forms attached hereto as Exhibits B and C, respectively.
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(d) The Shares shall be held by the Company as security
for the repayment of the Note. The Company shall hold the Shares until the Note
is repaid in full. The Employee shall also execute a stock power with respect
to such shares in the form attached hereto as Exhibit D.
4. Expenses; Vacations. Employee shall be entitled to
reimbursement for reasonable travel and other out-of-pocket expenses necessarily
incurred in the performance of his duties hereunder, upon submission and
approval of written statements and bills in accordance with the then regular
procedures of the Company. Employee shall be entitled to thirty (30) days paid
vacation time in accordance with then regular procedures of the Company
governing executives as determined from time to time by the Company's Board of
Directors.
5. Representations and Warranties of Employee. Employee
represents and warrants to the Company that (a) Employee is under no contractual
or other restriction or obligation which is inconsistent with the execution of
this Agreement, the performance of his duties hereunder, or the other rights of
the Company hereunder; and (b) Employee is under no physical or mental
disability that would hinder his performance of duties under this Agreement.
6. Non-Competition.
(a) The Employee agrees that during the Employment Term
he will not engage in, or otherwise directly or indirectly be employed by, or
act as a consultant, or be a director, officer, employee, owner, agent, member
or partner of, any other business or organization that is or shall then be
competing with the Company.
(b) If this Agreement is terminated pursuant to Section
9(a), 9(c) or 9(e), Employee, for a period of six (6) months from the date of
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termination, shall not, directly or indirectly, be engaged in the marketing or
manufacturing of (i) any form of pet food for cats, dogs, puppies or kittens;
or (ii) any products for cats, dogs, puppies or kittens similar to those that
he worked on or had knowledge of during the Employment Term.
(c) If this Agreement is terminated pursuant to Section
9(b), Employee, for a period of six (6) months from the date of termination,
shall not, directly or indirectly, compete with or be engaged in the same
business as the company, or be employed by, or act as consultant, or be a
director, officer, employee, owner, agent, member or partner of, any business
or organization which, at the time of such termination, competes with or is
engaged in the same business as the Company. At the end of this period,
Employee, for a period of six (6) months thereafter, shall not, directly or
indirectly, be engaged in the marketing or manufacturing of (i) any pet food to
be given to cats, dogs, puppies or kittens; or (ii) any products for cats, dogs,
puppies or kittens similar to those that he worked on or had knowledge of
during the Employment Term.
7. Inventions; Patents; Copyrights. Any interest in patents,
patent applications, inventions, copyrights, developments, and processes ("Such
Inventions") which Employee now or hereafter during the period he is employed by
the Company under this Agreement may, directly or indirectly, own or develop
relating to the fields in which the Company may then be engaged shall belong to
the Company; and forthwith upon request of the Company, Employee shall execute
all such assignments and other documents and take all such other action as the
Company may reasonably request in order to vest in the Company all his right,
title, and interest in and to Such Inventions, free and clear of all liens,
charges, and encumbrances.
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8. Confidential Information. All confidential information
which Employee may now possess, may obtain during the Employment Term, or may
create prior to the end of the period he is employed by the Company under this
Agreement, relating to the business of the Company or of any customer or
supplier of the Company shall not be published, disclosed, or made accessible
by him to any other person, firm, or corporation during the Employment Term or
any time thereafter without the prior written consent of the Company. Employee
shall return all tangible evidence of such confidential information to the
Company prior to or at the termination of his employment.
9. Termination.
(a) Notwithstanding anything herein contained, if on or
after the date hereof and prior to the end of the Employment Term, Employee is
terminated "For Cause" (as defined below) then the Company shall have the right
to give notice of termination of Employee's services hereunder as of a date to
be specified in such notice, and this Agreement shall terminate on the date so
specified. Termination "For Cause" shall mean Employee shall (i) be convicted
of a felony crime, (ii) commit any act or omit to take any action in bad faith
and to the detriment of the Company, (iii) commit an act of moral turpitude,
(iv) commit an act of fraud against the Company, or (v) materially breach any
term of this Agreement and fail to correct such breach within ten days after
commission thereof. In the event that this Agreement is terminated "For Cause",
pursuant to Section 9(a), then Employee shall be entitled to receive only his
salary at the rate provided in Section 3 to the date on which termination shall
take effect.
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(b) In the event that Employee, prior to the end of the
Employment Term, is terminated by the Company other than pursuant to Section
9(a) hereof, he shall be entitled to receive six (6) months of his annual
salary at the rate provided in Section 3 (the "Severance Payment"). The
Severance Payment shall be paid by the Company in six (6) equal installments
beginning thirty (30) days after the date of termination and every thirty (30)
days thereafter until fully paid. The date of termination shall be specified in
a notice of termination to be provided by the Company.
(c) In the event that Employee shall be physically or
mentally incapacitated or disabled or otherwise unable fully to discharge his
duties hereunder for a period of six (6) consecutive calendar months, then this
Agreement shall terminate upon 90 days' written notice to Employee, and no
further compensation shall be payable to Employee, except as may otherwise be
provided under any disability insurance policy.
(d) In the event that Employee shall die, then this
Agreement shall terminate on the date of Employee's death, and no further
compensation shall be payable to Employee, except as may otherwise be provided
under any insurance policy or similar instrument.
(e) The Employee may terminate this Agreement on sixty
(60) days notice. If the Employee terminates this Agreement pursuant to this
Section 9(e) he shall not be entitled to receive any Severance Payment.
(f) Nothing contained in this Section 9 shall be deemed
to limit any other right the Company may have to terminate Employee's employment
hereunder upon any ground permitted by law.
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10. Merger, Etc. In the event of a future disposition of the
properties and business of the Company, as or substantially as an entirety, by
merger, consolidation, sale of assets, sale of stock, or otherwise, then the
Company may elect to assign this Agreement and all of its rights and obligations
hereunder to the acquiring or surviving corporation; and upon such assignment
Employee's rights and obligations hereunder shall continue with the same force
and effect as if such acquiring or surviving corporation had ab initio been a
party hereto in lieu and stead of InnoPet Brands Corp.
11. Survival. The covenants, agreements, representations,
and warranties contained in or made pursuant to this Agreement shall survive
Employee's termination of employment, irrespective of any investigation made by
or on behalf of any party.
12. Modification. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter hereof,
supersedes all existing agreements between them concerning such subject matter,
and may be modified only by a written instrument duly executed by each party.
13. Notices. Any notice or other communication required or
permitted to be given hereunder shall be in writing and shall be mailed by
certified mail, return receipt requested, or delivered against receipt to the
party to whom it is to be given at the address of such party set forth in the
preamble to this Agreement (or to such other address as the party shall have
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furnished in writing in accordance with the provisions of this Section 13). In
the case of a notice to the Company, a copy of such notice (which copy shall not
constitute notice) shall be delivered to Camhy Xxxxxxxxx & Xxxxx LLP, 0000
Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attn. Xxxxxx X. XxXxxx, Esq.
Notice to the estate of Employee shall be sufficient if addressed to Employee
as provided in this Section 13. Any notice or other communication given by
certified mail shall be deemed given at the time of certification thereof,
except for a notice changing a party's address which shall be deemed given at
the time of receipt thereof.
14. Waiver. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed to be a waiver
of any other breach of such provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict adherence to any
term of this Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
15. Binding Effect. Employee's rights and obligations under
this Agreement shall not be transferable by assignment or otherwise, such rights
shall not be subject to encumbrance or the claims of Employee's creditors, and
any attempt to do any of the foregoing shall be void. The provisions of this
Agreement shall be binding upon and inure to the benefit of Employee and his
heirs and personal representatives, and shall be binding upon and inure to the
benefit of the Company and its successors and those who are its assigns under
Section 10.
16. Headings. The headings in this Agreement are solely for
the convenience of reference and shall be given no effect in the construction
or interpretation of this Agreement.
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17. Counterparts; Governing Law. This Agreement may be
executed in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. It shall be governed by, and construed in accordance with, the laws
of the State of Florida, without given effect to the rules governing the
conflicts of laws.
18. Termination of Contract with InnoPet Inc. The Employee
acknowledges that his employment agreement with InnoPet Inc. is terminated,
except that any options (the "Options") granted thereunder to the Employee will
continue to exist and be subject to the terms of any vesting schedule contained
therein. The Employee also releases InnoPet Inc. from all liabilities and
claims, if any, under such employment agreement. The Company acknowledges that
it has no rights or claims to any of the Options.
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
INNOPET BRANDS CORP.
By: ______________________________________________
Name: Xxxx Xxxx
Title: CEO
__________________________________________________
XXXXX XXXXXX
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EXHIBIT A
PROMISSORY NOTE
Amount: $__________ Ft. Lauderdale, Florida
Interest Rate: 5.75% June 1, 1996
FOR VALUE RECEIVED, the undersigned, _________________________
________________________________________________________________________________
("Maker"), promises to pay to the order of InnoPet Brands Corp. (formerly known
as InnoPet Products Corp.), a Delaware corporation ("Payee"), at Xxx Xxxx
Xxxxxxx Xxxxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000, or at such other place as
Payee may from time to time designate by written notice to Maker, in lawful
money of the United States of America, the sum of ______________________________
Dollars ($____________) plus interest from the date of this Note on the unpaid
balance. All payments of principal and interest are to be made as set forth
below without setoff or counterclaim. Maker further agrees as follows:
Section 1. Interest Rate.
(a) Interest shall accrue at a rate equal to five and
three-quarters percent (5.75%) per annum.
(b) Interest shall be computed on the basis of a year of 365
days for the actual number of days elapsed. After maturity (whether by
acceleration or otherwise, and before as well as after judgments), all unpaid
principal and interest shall bear interest until it is paid at a rate equal to
the highest rate allowed by law.
Section 2. Payments.
(a) Together with each payment of principal of this Note there
shall also be due and payable and paid the amount of accrued unpaid interest on
said payment. All references herein to the unpaid portion of this Note shall be
deemed and treated as referring to and including both the then unpaid principal
EXH. A-1
of this Note and the then accrued unpaid interest thereon. The unpaid portion
of the Note may be paid in dollars or in property, including, without
limitation, all or any part of the Shares, as defined below. If the Note is paid
by Shares then their value shall be equal to their Fair Market Value, as
defined herein. Fair Market Value shall mean the average closing bid price as
reported by the Nasdaq SmallCap Market (or such other exchange or quotation
system that is the then primary forum for trading the Shares) for the five (5)
trading days immediately preceding the day payment of the Note is made by
presentment of the Shares provided, however, that in no event shall the Shares
be deemed to have a Fair Market Value of less than $1.55 per share.
(b) Upon the sale of any shares of common stock (the "Shares")
of Payee issued originally by Payee to Maker against delivery to Payee of this
Note, and upon receipt by Payee of the proceeds from such sale, the Maker shall
promptly pay to Payee an amount equal to $3.20 per share sold and the then
unpaid portion of this Note shall be correspondingly reduced.
(c) The then unpaid portion of this Note shall be due and
payable on June 1, 1999.
(d) Maker shall have the right to prepay the unpaid portion
of this Note in full or in part at any time, without premium or penalty. All
prepayments shall be applied first to the then accrued unpaid interest and then
to the unpaid principal.
Section 2. Security.
This Note is secured by the Shares owned by the Maker.
EXH. A-2
Section 3. Recourse.
Until June 1, 1998, the obligations of the Maker under this
Note shall be recourse against the Maker. Thereafter, the obligations of the
Maker under this Note shall be non-recourse and the Payee's sole recourse for
payment of this Note shall be the Shares (or any other property then pledged as
security for repayment of the Note).
Section 4. Default.
It shall be an event of default ("Event of Default"), and the
then unpaid portion of this Note shall become immediately due and payable, at
the election of Payee, upon the occurrence of any of the following events:
(a) any failure on the part of Maker to make any payment
hereunder when due, whether by acceleration or otherwise, and the continuation
of such failure for a period of ten (10) days after written notice thereof from
Payee;
(b) any failure on the part of Maker to keep or perform any of
the terms or provisions (other than payment) of this Note or the Stock
Subscription and Security Agreement executed herewith, or any amendments
thereof, and the continuation of such failure for more than ten (10) days after
written notice thereof from Payee.
(c) any failure on the part of Maker to pay any debt within
sixty (60) days of its due date (except where contested in good faith);
(d) Maker shall commence (or take any action for the purpose
of commencing) any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, moratorium or similar law or statute;
EXH. A-3
(e) a proceeding shall be commenced against Maker under any
bankruptcy, reorganization, arrangement, readjustment of debt, moratorium or
similar law or statute and relief is ordered against him, or the proceeding is
controverted but is not dismissed within sixty (60) days after the commencement
thereof;
(f) Maker consents to or suffers the appointment of a
receiver, trustee or custodian of any substantial part of his assets that is not
vacated within thirty (30) days;
(g) any information furnished to Payee by or on behalf of
Maker shall be false or misleading in any material respect.
Section 5. Jurisdiction and Service of Process.
Maker irrevocably consents to the jurisdiction of the courts
of the State of Florida and of any federal court located in such State in
connection with any action or proceeding arising out of or relating to this Note
or a breach of this Note. Maker waives, to the full extent permitted by law, any
objection which it may now or hereafter have to the laying of venue of any
action or proceeding arising out of or relating to this Note brought in the
State of Florida, and further irrevocably waives, to the full extent permitted
by law, any claim that any such action or proceeding brought in such State has
been brought in an inconvenient forum. In any such action or proceeding, Maker
waives, to the full extent permitted by law, personal service of any summons,
complaint, or other process and agrees that service thereof may be made on Maker
by certified or registered U.S. mail or by personal delivery. Within thirty (30)
days after such service, or such other time as may be mutually agreed upon in
XXX. X-0
writing by the attorneys for the parties to such action or proceeding Maker
shall appear or answer such summons, complaint, or other process. Should Maker
so served fail to appear or answer within such thirty (30)-day period or such
extended period, as the case may be, Maker shall be deemed in default and
judgment may be entered by Payee against Maker for the amount as demanded in
any summons, complaint, or other process so served.
Section 6. Waivers.
(a) Maker waives demand, presentment, protest, notice of
protest, notice of dishonor, and all other notices or demands of any kind or
nature with respect to this Note.
(b) Maker agrees that a waiver of rights under this Note shall
not be deemed to be made by Payee unless such waiver shall be in writing, duly
signed by Payee, and each such waiver, if any, shall apply only with respect to
the specific instance involved and shall in no way impair the rights of Payee or
the obligations of Maker in any other respect at any other time.
(c) Maker agrees that in the event Payee demands or accepts
partial payment of this Note, such demand or acceptance shall not be deemed to
constitute a waiver of any right to demand the entire unpaid portion of this
Note at any time in accordance with the terms of this Note.
(d) In any action or proceeding arising out of or relating to
this Note, Maker waives (to the full extent permitted by law) all right to a
trial by jury or to plead as a defense any statute of limitations or any other
similar law or equitable doctrine.
EXH. A-5
Section 7. Collection Costs.
Maker will upon demand pay to Payee the amount of any and all
reasonable costs and expenses, including, without limitation, the reasonable
fees and disbursements of its counsel (whether or not suit is instituted) and of
any experts and agents, which Payee may incur in connection with the following:
(i) the enforcement of this Note; and (ii) the enforcement of payment of all
obligations of Maker by any action or participation in, or in connection with, a
case or proceeding under Chapters 7, 11, or 13 of the Bankruptcy Code, or any
successor statute thereto.
Section 8. Assignment of Note.
Maker may not assign or transfer this Note or any of its
obligations under this Note in any manner whatsoever without the prior written
consent of Payee which shall not be unreasonably withheld. The Note may be
assigned at any time by Payee. Maker agrees not to assert against any assignee
of this Note any claim or defense which Maker may have against any assignor of
this Note.
Section 9. Miscellaneous.
(a) This Note may be altered only by prior written agreement
signed by the party against whom enforcement of any waiver, change,
modification, or discharge is sought. This Note may not be modified by an oral
agreement, even if supported by new consideration.
(b) This Note shall be governed by, and construed in
accordance with, the laws of the State of Florida, without giving effect to
such state's principles of conflict of laws.
EXH. A-6
(c) Subject to Section 8, the covenants, terms, and conditions
contained in this Note apply to and bind the heirs, successors, executors,
administrators and assigns of the parties.
(d) If any provision or any word, term, clause, or other part
of any provision of this Note shall be invalid for any reason, the same shall
be ineffective, but the remainder of this Note shall not be affected and shall
remain in full force and effect.
(e) All notices, consents, or other communications provided
for in this Note or otherwise required by law shall be in writing and may be
given to or made upon the respective parties at the following mailing addresses:
Payee: InnoPet Brands Corp.
Xxx Xxxx Xxxxxxx Xxxxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Attention: CEO
Maker: _______________________________
_______________________________
_______________________________
Such addresses may be changed by notice given as provided in this subsection.
Notices shall be effective upon the date of receipt; provided, however, that a
notice (other than a notice of a changed address) sent by certified or
registered U.S. mail, with postage prepaid, shall be presumed received not later
than three (3) business days following the date of sending.
(f) Time is of the essence under this Note.
EXH. A-7
IN WITNESS WHEREOF, Maker has executed this Note effective as
of the date first set forth above.
(Sign)_____________________________________________
Print Name:
Print SS#:
EXH. A-8
EXHIBIT B
STOCK SUBSCRIPTION AND SECURITY AGREEMENT
June 1, 1996
To: InnoPet Brands Corp.
_______________ (the "Subscriber") hereby subscribes for
___________ shares (the "Shares") of common stock, par value $.01 per share, of
InnoPet Brands Corp (the "Company").
Subscriber hereby agrees, represents, and warrants that:
(1) Subscriber is acquiring such shares for Subscriber's
own account for investment purposes only and not with a view to the
distribution or resale thereof;
(2) By virtue of its position, Subscriber has access to
the same kind of information which would be available in a registration
statement filed under the Securities Act of 1933;
(3) Subscriber is a sophisticated investor;
(4) Subscriber understands that it may not sell or
otherwise dispose of such shares in the absence of either a registration
statement under the Securities Act of 1933 or an exemption from the registration
provisions under the Securities Act of 1933; and
(5) The certificates representing such shares may
contain a legend to the effect of (4) above.
(6) Subscriber grants the Company a security interest
in the Shares to secure the repayment of a certain note (the "Note") used to
purchase the Shares. The Subscriber agrees that the Company shall hold the
Shares until the Note is paid in full, except that upon written demand of the
Subscriber, his estate or heirs to release all or any part of the Shares to
effect a sale of such Shares by the Subscriber, his estate or heirs, the
Company shall immediately deliver the number of Shares requested to be released
to the transfer agent in escrow so that such sale may occur. The Company shall
have a security interest in the proceeds of the such sale to the extent set
forth in the Note until such proceeds are applied in accordance with the terms
of the Note. If the sale does not occur the Shares shall be immediately
returned to the Company as security for the repayment of the Note.
EXH. B-1
The Subscriber agrees to execute a stock power in blank with respect to the
Shares and that the Company shall also hold such stock power.
(Sign)_____________________________________________
Print Name:
SS#:
Agreed to and Accepted:
INNOPET BRANDS CORP.
________________________
Name: Xxxx Xxxx
Title: CEO
EXH. B-2
EXHIBIT C
IRREVOCABLE PROXY
____________________ (the "Employee"), a stockholder of
InnoPet Brands Corp., hereby irrevocably appoints Xxxx Xxxx as proxy and
attorney-in-fact, with right of substitution, and hereby authorizes him to
represent and vote in his discretion ______________________________ shares of
common stock of InnoPet Brands Corp. owned by Employee at all shareholders
meetings, or any adjournment or adjournments thereof. This proxy is irrevocable
and shall remain in full force and effect until May 31, 1999.
Dated: June 1, 1996
(Sign)_____________________________________________
Print Name:
EXH. C-1
EXHIBIT D
STOCK POWER
FOR VALUE RECEIVED, _________________ hereby sells, assigns and transfers unto
INNOPET BRANDS CORP. shares of Common Stock of the INNOPET BRANDS CORP.
standing in its name on the books of said Corporation represented by
Certificate(s) No.(s). herewith, and do hereby irrevocably constitute and
appoint _______________________________________________________________________
attorney to transfer the said stock on the books of said Corporation with full
power of substitution in the premises.
Dated: June 1, 1996
(Sign)_____________________________________________
Print Name:
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