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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of this 1st day of January, 1998, by and
between EPL TECHNOLOGIES, INC., a Colorado corporation (hereinafter called
"Company"), and XXXXXXX X. XXXXX, an individual (hereinafter called "Employee").
W I T N E S S E T H:
WHEREAS, Company wishes to employ Employee and Employee wishes to enter into the
employ of Company on the terms and conditions contained in this Agreement.
NOW, THEREFORE, in consideration of the facts, mutual promises and
covenants contained herein and intending to be legally bound hereby, Company and
Employee agree as follows:
1. Employment. Company hereby employs Employee and Employee hereby
accepts employment by Company for the period and upon the terms and conditions
contained in this Agreement.
2. Office and Duties.
(a) Employee shall serve Company generally as Senior Vice
President, Science and Technology, reporting to the Chief Executive Officer, or
such other person as may be designated by Company's Board of Directors, and
shall have such authority and such responsibilities as Company reasonably may
determine from time to time. Employee shall perform any other duties reasonably
required by Company and, if requested by Company, shall serve as an officer or
director of Company without additional compensation. Company can change the role
and title of Employee during the term of this Agreement, so long as the new role
carries a similar level of responsibility and compensation as included in this
Agreement.
(b) Throughout the term of this Agreement, Employee shall
devote his entire working time, energy, skill and best efforts to the
performance of his duties hereunder in a manner which will faithfully and
diligently further the business and interests of Company and shall not, during
the term of this Agreement, actively engage in any other business activity,
whether or not for profit; provided, however, that Employee may engage in such
other business activity as is set forth in Exhibit A attached hereto; provided,
further, to the extent such activity, in the aggregate, does not, in the
reasonable judgment of Company, interfere with Employee's duties at the Company
or compete with any aspect of the Company's business.
3. Term. This Agreement shall commence as of 8:00 a.m., January 1, 1998
and shall continue for a term of two years, ending on December 31, 1999 (the
"Initial Term"); provided that (a) this Agreement shall terminate prior to such
date upon Employee's resignation, death or disability, and (b) This Agreement
may be terminated by Company at any time prior to such date for Cause (as herein
after defined). During the Initial Term or any renewal term of this Agreement,
Employee may resign, or Company may terminate Employee without Cause, in either
case by giving the other party
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six (6) months' written notice. If Employee resigns during the Initial Term, no
bonus (pursuant to Section 4(b)) shall be earned after the date of resignation
and any bonus earned or accrued but unpaid at the date of resignation shall be
forfeited unless Employee shall continue to serve Company as described in
subparagraphs (a) and (b) during the entire notice period, or for such shorter
period of time as may be determined by Company in its sole discretion. Unless
either party elects to terminate this Agreement at the end of the Initial Term
or any renewal term by giving the other party notice of such election at least
sixty (60) days before the expiration of the then current term, this Agreement
shall be deemed to have been renewed for an additional term of one (1) year
commencing on the day after the expiration of the then current term.
4. Compensation.
(a) For all of the service rendered by Employee to Company,
Employee shall receive an annual base salary of One Hundred and Twenty Thousand
Dollars ($120,000.00) for the Initial Term, payable in installments in
accordance with Company's regular payroll practices in effect from time to time,
but not less frequently than monthly. Subsequent to the Initial Term, on an
annual basis, the Board of Directors of the Company shall review Employee's
performance under this Agreement for the purpose of considering a raise in his
current base salary. The Board of Directors may award such a raise, in any
amount, or no raise whatsoever, in its sole discretion.
(b) In addition to Employee's base salary, Employee may be
entitled to certain bonuses based on agreed objectives as set forth on Exhibit B
attached hereto. Employee may be entitled to additional future bonuses, if, as,
and only to the extent, agreed and determined by the Board of Directors of the
Company, in its sole discretion.
(c) Throughout the term of this Agreement and as long as they
are kept in force by Company, Employee shall be entitled to participate in and
receive the benefits of any profit sharing or retirement plans and any health,
life, accident, disability insurance or sick leave plans or programs made
available to other similarly situated employees of Company.
(d) Employee shall be entitled to twenty (20) days paid
vacation annually during each year ended December 31 (pro rated for any period
less than 12 months), in addition to all national holidays on which the
principal executive offices of the Company are closed. Accrued but unused
vacation days may be carried forward into the succeeding year with the approval
of the President.
5. Expenses. Company will reimburse Employee for all reasonable
expenses incurred by Employee in connection with the performance of Employee's
duties hereunder upon receipt of itemized accounts of such expenditures and in
accordance with Company's regular reimbursement procedures and practices in
effect from time to time.
6. Grant of Options.
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(a) Employee may be entitled to share options ("Options") for
the common stock ("Common Stock") of Company, if, as, and only to the extent,
agreed and determined by the Compensation Committee of Company, in accordance
with the 1994 Stock Incentive Plan of Company.
(b) Withholding of Taxes. Whenever the Company proposes or is
required to deliver or transfer Options or shares of Common Stock pursuant to
this Agreement or the exercise of any Option, the Company shall have the right
to (i) require Employee to remit to the Company or to withhold from Employee
directly, amounts sufficient to satisfy any federal, State and/or local
withholding tax requirements, prior to the delivery or transfer of any
certificates for such Options or Shares of Common Stock or (ii) take whatever
action it deems necessary to protect its interest with respect to tax
liabilities.
7. Disability. If, because of a disability, Employee cannot perform the
essential functions of his job (as described in this Agreement), with or without
reasonable accommodation, Company, during the period of such disability, will
continue the payment of Employee's base salary at its then current rate for up
to a maximum of thirteen (13) weeks following the date Employee is first unable
to perform his duties due to such disability. If, as a result of such
disability, Employee is unable to perform his duties for a period of thirteen
(13) consecutive weeks or for a cumulative period of twenty-six (26) weeks
during any twelve-month period, Company may terminate this Agreement and Company
shall have no further obligations or liabilities hereunder after the date of
such termination, other than as set forth in Paragraph 11 below.
8. Death. If Employee dies, all payments hereunder shall cease at the
end of the month in which Employee's death shall occur and Company shall have no
further obligations or liabilities hereunder to Employee's estate or legal
representative or otherwise, other than as set forth in Paragraph 11 below.
9. Sale of Company's Business. In the event any of one of the following
actions were to occur: (a) the Company adopts any plan of liquidation providing
for the distribution of all or substantially all of its assets; (b) all or
substantially all of the business of the Company is disposed of pursuant to a
merger, consolidation or other transaction (unless the shareholders of the
Company immediately prior to such merger, consolidation or other transaction
beneficially own, directly or indirectly, in substantially the same proportion
as they owned the voting stock of the Company, all of the voting stock or other
ownership interests of the entity or entities, if any, that succeed to the
business of the Company); or (c) the Company combines with another company and
is the surviving corporation, but immediately after the combination, the
shareholders of the Company, immediately prior to the combination, hold,
directly or indirectly, 50% or less of the voting stock of the combined company
(there being excluded from the number of shares held by such shareholders, but
not from the voting stock of the combined company, any share received by
"affiliates" as such term is defined in the rules of the Securities and Exchange
Commission, of such other company in exchange for the stock of such other
company), the Company or Employee may terminate Employee's employment on four
(4) weeks prior notice, and in such event Company shall pay Employee his then
applicable annual
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base salary, in monthly installments, for a period of twenty four (24) months
after the date on which such termination occurred. In addition, the Company
shall pay any bonus earned or accrued up to that date, together with the average
bonus earned over the last 12 months, both amounts to be paid in monthly
installments over a period of twelve (12) months after the date on which such
termination occurred (collectively the "Termination Payment"). Upon making
Termination Payment in full, Company shall have no further obligations or
liabilities hereunder and Employee shall be released from the restrictions
contained in subparagraphs 13 (a) and 13 (b) hereof.
10. Discharge for Cause, etcetera. Company may discharge Employee at
any time for "Cause" immediately upon written notice by Company to Employee. For
the purposes of this Agreement, "Cause" for termination shall, without
limitation, be deemed to exist for any of the following: (i) criminal conduct
(whether or not related to Employee's employment), (ii) material and persistent
failure, inability or negligence in performing his duties hereunder, (iii)
intoxication, (iv) drug addiction, (v) insubordination, (vi) gross negligence,
(vii) any violation of any express direction or any reasonable rule or
regulation established by Company from time to time regarding the conduct of its
business, (viii) refusal by Employee to comply with reasonable directives of the
Board of Directors of the Company, (ix) any misrepresentation made in this
Agreement, or (x) any violation by Employee of the terms and conditions of this
Agreement including without limitation Paragraphs 12 and 13 below. In any such
event, Company shall have no further obligations or liabilities hereunder after
the date of such discharge, and Employee shall forfeit any bonus earned or
accrued but unpaid as of the date of termination.
11. Severance Payments. If this Agreement is terminated pursuant to
Paragraphs 7 and 8 at any time prior to December 31, 1999, Company shall pay
Employee, after such termination, for an additional period of six (6) months
after the month in which such termination occurs, additional monthly
installments of his then applicable annual base salary and upon completion of
such six monthly payments, Company shall have no further liabilities or
obligations to Employee hereunder, other than with respect to any bonus earned
through the date of termination as set forth in Paragraph 4(b) above.
12. Company Property. All advertising, sales, manufacturers' and other
materials or articles or information, including without limitation data
processing reports, customer sales analyses, invoices, price lists or
information, samples, costs, customer lists, supply information, internal
business procedures, market studies, information concerning pending or
contemplated acquisitions or expansion plans of Company or its affiliates, or
the existence of negotiations concerning the same, and similar non-public
information relating to the internal operations, technical information,
processes, procedures, techniques, manufacturing, business plans, policies or
practices of Company or its affiliates, samples, or any other materials or data
of any kind furnished to Employee by Company or developed by Employee on behalf
of Company or at Company's direction or for Company's use or otherwise in
connection with Employee's employment hereunder, are and shall remain the sole
and confidential property of Company, as shall any other books, documents, lists
and records pertaining to the business of Company or its affiliates
(collectively, the "Records"), whether the Records are written, typed, printed,
contained on microfilm, computer disc or tape, or are set forth in some other
medium of expression. Upon termination of Employee's employment with Company,
for any reason, or if Company requests the return of such materials or Records
at any time during Employee's
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employment, Employee shall immediately deliver the same to Company.
13. Noncompetition, Trade Secrets, Etc.
(a) During the term of this Agreement and for a period of two
(2) years after the termination of his employment with Company for any reason
whatsoever, Employee shall not directly or indirectly induce or attempt to
influence any employee of Company to terminate their employment with Company and
shall not engage in (as a principal, partner, director, officer, agent,
employee, consultant or otherwise) or be financially interested in any business
operation within the continental United States, which is involved in business
activities, which are the same as, similar to or in competition with specific
business activities carried on by Company involving EPL's core technologies of
processing aids and perforated flexible packaging, at the time of the
termination of Employee's employment. However, nothing contained in this
Paragraph 13 shall prevent Employee from holding for investment no more than
five percent (5%) of any class of equity securities of a company whose
securities are traded on a national securities exchange or from engaging in the
activities described in Exhibit A attached hereto.
(b) During the term of this Agreement and at all times
thereafter, Employee shall not use for his personal benefit, or disclose,
communicate or divulge to, or use for the direct or indirect benefit of any
person, firm, association or company other than the Company, any material
referred to in Paragraph 12 above or any information regarding the business
methods, business policies, procedures, techniques, research or development
projects or results, trade secrets, or other knowledge or processes of or
developed by the Company or its affiliates or any names and addresses of
customers or clients or any data on or relating to past, present or prospective
customers or clients or any other confidential information relating to or
dealing with the business operations or activities of Company or its affiliates,
made known to Employee or learned or acquired by Employee while in the employ of
Company.
(c) Any and all writing, inventions, improvements, processes,
procedures and/or techniques which Employee may make, conceive, discover or
develop, either solely or jointly with any other person or persons, at any time
during the term of this Agreement, whether during working hours or at any other
time and whether at the request or upon the suggestion of the Company or its
affiliates or otherwise, which relate to or are useful in connection with any
business now or hereafter carried on or contemplated by the Company or its
affiliates, including developments or expansions of its present field of
operations, shall be the sole and exclusive property of Company. Employee shall
make full disclosure to Company of all such writings, inventions, improvements,
processes, procedures and techniques, and shall do everything necessary or
desirable to vest the absolute title thereto in Company. Employee shall write
and prepare all specifications and procedures regarding such inventions,
improvements, processes, procedures and techniques and otherwise aid and assist
Company so that Company can prepare, at the Company's expense, and present
applications for copyright or Letters Patent therefore and can secure such
copyright or Letters Patent wherever possible, as well as reissues, renewals,
and extensions thereof, and can obtain the record title to such copyright or
patents so that Company shall be the sole and absolute owner thereof in all
countries in
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which it may desire to have copyright or patent protection. Employee shall not
be entitled to any additional or special compensation or reimbursement regarding
any and all such writings, inventions, improvements, processes, procedures and
techniques.
(d) Employee acknowledges (i) that the trade secrets and
confidential information of Company and its affiliates relate to the conduct of
Company's business, are of independent economic value to Company because they
are not generally known and are the subject of efforts by Company to maintain
their secrecy, (ii) that the right to maintain the secrecy of the trade secrets
and confidential information of Company and its affiliates constitutes a
proprietary right that Company and its affiliates are entitled to protect, (iii)
that the restrictions contained in the foregoing subparagraphs (a), (b) and (c),
in view of the nature of the business in which Company and its affiliates are
engaged, are reasonable and necessary in order to protect the legitimate
interests of Company and (iv) that any violation of such restrictions would
result in irreparable injuries to Company. Employee therefore acknowledges that,
in the event of his violation of any of these restrictions, Company shall have
the right to obtain from any court of competent jurisdiction preliminary and
permanent injunctive relief as well as damages and an equitable accounting of
all earnings, profits and other benefits arising from such violation, which
rights shall be cumulative and in addition to any other rights or remedies to
which Company may be entitled.
(e) If the period of time or the area specified in
subparagraph (a) above should be adjudged unreasonable in any proceeding, then
the period of time shall be reduced by such number of months or the area shall
be reduced by the elimination of such portion thereof or both so that such
restrictions may be enforced in such area and for such time as is adjudged to be
reasonable. If Employee violates any of the restrictions contained in the
foregoing subparagraph (a), the restrictive period shall not run in favor of
Employee from the time of the commencement of any such violation until such time
as such violation shall be cured by Employee to the satisfaction of Company.
14. Prior Agreement. Employee represents to Company (a) that there are
no restrictions, agreements or understandings whatsoever to which Employee is a
party which would prevent or make unlawful his execution of this Agreement or
his employment hereunder, (b) that his execution of this Agreement and he
employment hereunder shall not constitute a breach of any contract, agreement or
understanding, oral or written, to which he is a party or by which she is bound
and (c) that he is free and able to execute this Agreement and to enter into
employment by Company.
15. Miscellaneous.
(a) Indulgences, Etc. Neither the failure nor any delay on the
part of either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
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(b) Controlling Law. This Agreement and all questions relating
to its validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania,
and without the aid of any canon, custom or rule of law requiring construction
against the draftsman.
(c) Notices. All notices, request, demands and other
communications required or permitted under this Agreement shall be in writing
and may be given by (i) personal delivery, (ii) first-class United States mail,
postage prepaid, registered or certified, (iii) overnight delivery service,
charges prepaid, or (iv) telecopy or other means of electronic transmission, if
confirmed promptly by any of the methods specified in clauses (i) - (iii) of
this sentence, and will be deemed to have been duly given or made when delivered
personally, when mailed first class, postage prepaid, registered or certified
mail, when delivered to the overnight delivery company, charges prepaid, or when
sent by electronic transmission, to the respective parties, as follows :
(i) If to Employee:
Xxxxxxx X. Xxxxx
000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
(ii) If to Company:
EPL Technologies, Inc.
0 Xxxxxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, XX 00000-0000
Attention: Secretary
Any party may alter the address to which
communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this paragraph for the giving of
notice.
(d) Binding Nature of Agreement. This Agreement shall be
binding upon and inure to the benefit of Company and its successors and assigns
and shall be binding upon Employee, his heirs and legal representatives.
(e) Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
as against any party whose signature appears hereon, and all of which shall
together constitute one and the same instrument. This agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
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(f) Provisions Separable. The provisions of this Agreement are
independent of and separable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.
(g) Entire Agreement. This Agreement contains the entire
understanding among the parties hereto with respect to subject matter hereof,
and supersedes all prior and contemporaneous agreements and understanding,
inducements or conditions, express or implied, oral or written, except as herein
contained. The express terms hereof control and supersede any course of
performance and/or usage of the trade inconsistent with any of the terms hereof.
This Agreement may not be modified or amended other than by an agreement in
writing.
(h) Paragraph Headings. The paragraph headings in this
Agreement are for convenience only; they form no part of this Agreement and
shall not affect its interpretation.
(i) Gender, Etc. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context indicates is appropriate.
(j) Number of Days. In computing the number of days for
purposes of this Agreement, all days shall be counted, including Saturdays,
Sundays and holidays; provided, however, that if the final day of any time
period falls on a Saturday, Sunday or holiday on which federal banks are or may
elect to be closed, then the final day shall be deemed to be the next day which
is not a Saturday, Sunday or such holiday.
(k) Survival. Paragraphs 12 and 13 shall survive and continue
in full force in accordance with their terms notwithstanding any termination of
this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered
that Agreement as of the date first above written.
EPL TECHNOLOGIES, INC.
By:_______________________________
Xxxx X. Xxxxxx
President
By:_______________________________
Xxxxxxx X. Xxxxx
Employee
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XXXXXXX X. XXXXX
EXHIBIT A
OTHER BUSINESS ACTIVITIES
PROFILE OF OTHER ACTIVITIES
- Limited in scope and time commitments; employee will give 100% to EPL
- Activities will be predominantly those which were initiated prior to
September 1, 1994. On-going income (e.g. royalties) resulting from
these consulting agreements prior to September 1, 1994 will not be
effected by employment by EPL.
- Additional activities will be those that may lead to contacts,
collaborations, interactions of benefit to EPL.
- Employee respects the needs of "the Company" and will not abuse this
privilege and will keep EPL informed of such activities and their
potential benefit to EPL.
BUSINESS AREAS:
1. CONSULTING a part of obligation to Adjunct Professor positions at Penn State
University and Rutgers University. These are limited to the states of
Pennsylvania and New Jersey. Such consulting is for the purpose of strategic
planning, obtaining grants, and serving population of the state. For example
currently consulting for Rutgers in the general area of medicinal foods; and for
Danish Ministry of Agriculture in conjunction with Penn State.
2. ON-GOING RELATIONSHIPS
a) Agreements with direct competitors will be discontinued. Follow on
financial arrangements will be allowed.
b) Consulting for non-competitors is allowed provided employee meets
requirements of paragraph 2B and no issues are raised by the "Company".
3. FORESEEABLE ACTIVITIES
a) Garden Valley Inc. - Product of peas & beans
b) Special Commodity Services - Transportation of perishable
commodities
c) Xxxx College, Rutgers University - Medicinal Foods
d) Danish Ministry of Agriculture - Strategic Planning, Food Sciences
e) Penn State University - Postharvest preservation
(lecturer/consultant)
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XXXXXXX X. XXXXX
EXHIBIT B
BONUS CRITERIA
YEAR ENDED DECEMBER 31, 1998
It is agreed that the bonus for this period will be based on
specific corporate performance objectives, to be agreed between Xxxxxxx X. Xxxxx
and the President of the Company. It is envisaged that upon meeting these, the
bonus would allow earnings of up to 25% of the base salary.
Any bonus for periods for or after the year ended December 31, 1999
will be discussed and agreed on a year by year basis between Xxxxxxx X. Xxxxx
and the President of the Company.
