EMPLOYMENT AGREEMENT
AGREEMENT, dated as of January 23rd, 1997 between XXXXXXX XXXXXXXXX
XX. DESSERTS AND CAFES, Inc., a New York corporation, (the "Company"), and
XXXXXX XXXXXX (the "Employee"):
W I T N E S S E T H
WHEREAS, the parties wish to make provisions for the employment of the
Employee by the Company upon the terms and conditions hereinafter set forth; and
WHEREAS, the parties recognize and acknowledge that under the terms
and conditions hereinafter set forth, the Employee will be employed for a
specified term, subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual provisions,
representations and warranties set forth below, and for other good and valuable
consideration, it is hereby agreed as follows:
1. Employment. Subject to the terms and conditions of this Agreement,
the Company hereby agrees to the employment of the Employee, and the Employee
hereby accepts such employment, upon the terms and conditions set forth herein.
2. Term. Subject to the provisions of Section 8 hereof, the Employee's
employment under this Agreement shall commence on the date hereof and shall end
on December 31, 1998. Subject to the provisions of Section 8 hereof, after the
expiration of such initial period, this Agreement shall automatically be renewed
for an additional one-year period, and thereafter shall be automatically renewed
for successive one-year periods, on all the remaining terms and conditions set
forth herein, unless either party elects not to renew this Agreement by giving
written notice to the other at least 60 days before a scheduled expiration date.
3. Position and Duties. (a) The Employee shall serve as the Chief
Executive Officer and President of the Company and shall have such other duties,
consistent with such position, as from time to time may be prescribed by the
Board of Directors of the Company (the "Board"). In addition, the Employee shall
be entitled to a seat on the Board of Directors of the Company and each of its
subsidiaries.
(b) During the term of this Agreement (the "Term"), the Employee
shall perform and discharge well and faithfully all duties that may be assigned
to him by the Company from time to time in accordance with this Agreement, and
the Employee shall devote his best talents, efforts and abilities to the
performance of his duties hereunder. The Employee, without the consent of the
Board of Directors, shall not discharge any employee of the Company or its
subsidiaries whose base salary is in excess of fifty thousand dollars ($50,000)
per annum.
(c) During the Term, the Employee shall perform such duties on a
full-time basis and, without the express prior written consent of the Board, the
Employee shall have no other employment or related outside business activities
whatsoever; provided, however, that, subject to the provisions of Section 11,
the Employee shall not be precluded from devoting to personal or business
affairs such time as shall not materially interfere with the performance of his
duties hereunder.
4. Compensation. The Company shall pay the Employee during the Term an
annual salary in respect of each year of the Term (and a pro rata portion of
such amount for any portion of the Term that is less than a calendar year),
payable in accordance with the customary payroll practices of the Company. The
Employee's salary for the period from the date hereof through December 31, 1997
shall be $250,000 per annum. The Employee's salary for the period from January
1, 1998 through December 31, 1998 shall be $150,000 per annum. Such salary shall
thereafter be reviewed, no less frequently than annually, by the Board and shall
be subject to such increases (but no decreases), if any, as the Board, in its
sole discretion, from time to time may determine.
5. Benefit Plans. During the Term, the Employee shall be eligible to
participate, subject to meeting any eligibility requirements, in the Company's
major medical and hospitalization programs and any and all other benefit and
bonus programs made available by the Company to its senior employees. The
Company shall have the right, from time to time, in its discretion, to the
extent permitted by applicable law (but only if all senior employees of the
Company are similarly treated), to supplement, amend, replace or terminate the
foregoing plans, reduce the benefits provided thereunder, or increase the amount
of the Employee's contribution. Any benefits to which the Employee may be
entitled under the foregoing plans (as the same may be supplemented, amended or
replaced, the "Benefit Plans") shall be provided to him in accordance with the
respective terms thereof.
6. Expenses. (a) During the Term, the Company shall pay or reimburse
the Employee for all business expenses actually incurred or paid by the Employee
in the performance of his services hereunder, provided that (i) such expenses
are reasonable and (ii) the Employee submits expense statements or vouchers or
such supporting information as the Company may reasonably require of the
Employee.
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(b) During the Term, the Company shall furnish the Employee with
a monthly allowance of $650.00 before taxes for the use of an automobile by the
Employee in connection with his duties hereunder, and shall reimburse the
Employee for all repairs, registration, insurance and maintenance expenses
incurred by the Employee in connection with his use thereof.
7. Vacations. The Employee shall be entitled to four (4) weeks paid
vacation during each calendar year of the Term (and a pro rata portion thereof
for any portion of the Term that is less than a calendar year), to be taken at
times as may mutually be agreed upon by the Employee and the Company. In the
event vacation days are not used in a given calendar year, the Employee may
carry over and use these days or be paid for same upon the termination of this
Agreement, as Employee may elect.
8. Termination. (a) In the event the Employee's employment terminates,
whether during the term of the Agreement or following the expiration of the term
of the Agreement, due to either a Without Cause Termination or a Constructive
Discharge, the Company shall, as liquidated damages or severance pay, or both,
continue to pay the Employee's base salary as in effect at the time of such
termination for the greater of (i) the remainder of the then-current term of the
Agreement, or (ii) a period of twelve months from the effective date of such
termination. In the event the Employee's employment terminates, whether during
the term of the Agreement or following the expiration of the term of the
Agreement, due to a Permanent Disability, the Company shall continue to pay the
Employee's base salary as in effect at the time of such termination for a period
of six months from the date of such termination; provided, that such amounts
shall be offset by any amounts otherwise paid to the Employee under the
Company's then-existing disability program. In addition, earned but unpaid base
salary as of the date of termination of employment shall be payable in full and
any incentive compensation bonus, or profit-sharing plan maintained by the
Company had he been employed throughout the year in which such bonus is
calculated shall be payable on a pro-rated basis for the year in which such
termination of employment occurs only. The Employee shall be entitled to
continued group hospitalization, health and dental care insurance for the
periods specified in the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA") upon payment by the Employee of the amounts specified under COBRA. For
purposes hereof, no Without Cause Termination shall be effective until 30 days
after the Company has given notice of termination to the Employee.
(b) In the event that the Employee's employment hereunder
terminates due to a Termination for Cause or the Employee terminates employment
with the Company for reasons other than a Constructive Discharge, Permanent
Disability or retirement pursuant to the Company's retirement plan (the
"Retirement Plan"), earned but unpaid base salary as of the date of termination
of employment shall be payable in full. However, no other payments shall be
made, or benefits provided, by the Company under this Agreement except for
benefits payable under the Retirement Plan and benefits that have already become
vested under the terms of employee benefit programs
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maintained by the Company or its affiliates for its employees and except as
otherwise required by law.
(c) For purposes of this Agreement, the following terms have the
following meanings:
(i) The term "Termination for Cause" means, to the maximum
extent permitted by applicable law, a termination of the Employee's employment
by the Company because the Employee has (a) materially breached or materially
failed to perform his duties under applicable law and such breach or failure to
perform constitutes self-dealing, willful misconduct or recklessness, (b)
committed an act of dishonesty in the performance of his duties hereunder or
engaged in conduct materially detrimental to the business of the Company, (c)
been convicted of a felony involving moral turpitude, (d) materially breached or
materially failed to perform his obligations and duties hereunder, which breach
or failure the Employee shall fail to remedy within 30 days after written demand
from the Company, or (e) violated in any material respect the provisions of
Section 9 or 11 below.
(ii) The term "Constructive Discharge" means a termination
of the Employee's employment by the Employee due to a failure of the Company or
its successors without prior consent of the Employee to fulfill its obligations
under this Agreement in any material respect, including (a) any failure to elect
or re-elect or to appoint or reappoint the Employee to the offices of President
and Chief Executive Officer (or any equivalent titles with substantially similar
duties), which failure the Company shall fail to remedy within 30 days after
written demand from the Employee, or (b) any other material change by the
Company in the functions, duties or responsibilities of the Employee's position
with the Company which would materially reduce the ranking or level, dignity,
responsibility, importance or scope of such position, which change the Company
shall fail to remedy within 30 days after written demand from the Employee.
(iii) The term "Without Cause Termination" means a
termination of the Employee's employment by the Company other than due to a
Permanent Disability, retirement or expiration of the term of the Agreement and
other than a Termination for Cause.
(iv) The term "Permanent Disability" means permanently
disabled so as to qualify for full benefits under the Company's then-existing
disability insurance policy; provided, however, that if the Company does not
maintain any such policy on the date of termination, "Permanent Disability"
shall mean the inability of the Employee to work for a period of six full
calendar months during any twelve consecutive calendar months due to illness or
injury of a physical or mental nature, supported by the completion of a medical
certification form outlining the disability or treatment issued by (i) the
Employee's attending physician or (ii) an alternate physician chosen by the
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Company as may be necessary in order to comply with the requirements of the
Company's insurance carrier (the costs incurred in connection with the issuance
of such additional medical certification shall be covered by the Company).
9. Trade Secrets; Confidentiality. (a) The Employee recognizes and
acknowledges that, in connection with his employment with the Company, he will
have access to valuable trade secrets and confidential information of the
Company and its Affiliates (as hereinafter defined), including, but not limited
to, operating, technical and marketing methods and that these are special and
unique assets of the Company's business that are made available to the Employee
only in connection with the furtherance of his employment with the Company. The
Employee agrees that he shall not at any time disclose any of such confidential
information or trade secrets of the Company or any of its Affiliates to any
Person (as hereinafter defined), directly or indirectly, or use same for any
reason or purpose whatsoever, except: (i) in connection with the performance of
his duties under this Agreement; (ii) with the express prior written consent of
the Company; or (iii) as required by law to be divulged to a government agency
or pursuant to lawful process.
(b) For purposes of this Agreement:
(i) The term "Affiliate" of any Person means any other
Person directly or indirectly through one or more intermediary Persons,
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" shall mean the power to direct the
management and policies of such Person, directly or indirectly, by or through
stock ownership, agency or otherwise, or pursuant to or in connection with an
agreement, arrangement or understanding with one or more other Persons by or
through stock ownership, agency or otherwise; and the terms "controlling" and
"controlled" shall have meanings correlative to the foregoing.
(ii) The term "Person" means any individual, corporation,
partnership, association, joint-stock company, trust, unincorporated
organization or joint venture.
10. Return of Proprietary Information. In the event of the termination
of the Employee's employment with the Company, regardless of the cause of such
termination, whether voluntary or involuntary, the Employee shall immediately:
(i) return to the Company any original records of the Company and (ii) purge or
destroy any computerized, duplicated or copied records referred to in Section 9
that have been removed from the Company's premises.
11. Restrictive Covenants. (a) During the Term and for a period of
three years immediately following the termination of the Employee's employment,
regardless of the cause of such termination, whether voluntary or involuntary,
the Employee shall not directly or indirectly on his own behalf or on behalf of
any Person
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in an area comprising the states of New Jersey and New York: (i) own, manage,
operate, control, be employed by, participate in, provide consulting services
to, or be connected or associated in any manner with the ownership, management,
operation, or control of any business involving the production, marketing or
distribution of pastries, cakes, pies, cookies, batter and frozen-finished
cakes, brownies, muffins or other assorted desserts, or (ii) persuade or seek to
persuade any supplier, customer, contractor, employee, agent or consultant or
other Person having business relations with the Company to cease such
relationship; provided, however, nothing set forth in this Section 11(a) shall
preclude the Employee from providing consulting services to J.P. Veggies, Inc.
(b) The Employee acknowledges and agrees that the restrictive
covenants set forth in this Section 11 (the "Restrictive Covenants") are
reasonable and valid in geographical and temporal scope and in all other
respects. If any court determines that any of the Restrictive Covenants, or any
part thereof, is invalid or unenforceable, the remainder of the Restrictive
Covenants shall not thereby be affected and shall be given full force and
effect, without regard to the invalid or unenforceable parts.
(c) If any court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable for any reason, such
court shall have the power to modify such Restrictive Covenant, or any part
thereof, and, in its modified form, such restrictive covenant shall then be
valid and enforceable.
12. Equitable Relief. In the event of a breach by the Employee of any
of the covenants contained in Sections 9, 10 or 11 hereof, the Company shall be
entitled to a temporary restraining order, a preliminary injunction and/or a
permanent injunction restraining the Employee from breaching or continuing to
breach any of said covenants. Nothing herein contained shall be construed as
prohibiting the Company from pursuing any other remedies that may be available
to it for such breach including the recovering of damages.
13. Severability. Should any provision of this Agreement be held, by a
court of competent jurisdiction, to be invalid or unenforceable, such invalidity
or unenforceability shall not render the entire Agreement invalid or
unenforceable, and this Agreement and each individual provision hereof shall be
enforceable and valid to the fullest extent permitted by law.
14. Successors and Assigns. This Agreement and the benefits hereunder
are personal to the Company and are not assignable or transferable by the
Employee. The services or any specified portion thereof to be performed by the
Employee hereunder may be assigned by the Company to any of its Affiliates.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the Company and it successors and assigns and the Employee and his
heirs and legal representatives.
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15. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, without regard to the
conflicts of laws rules thereof.
16. Dispute Resolution. (a) If a dispute arises out of or relates to
this Agreement, or the breach thereof, and if such dispute cannot be settled
through negotiation, the parties agree first to try in good faith to settle the
dispute by mediation administered by the American Arbitration Association under
its Commercial Mediation Rules before resorting to arbitration or some other
dispute resolution procedure.
(b) Except as provided in Section 12 hereof, any dispute or claim
arising out of or relating to this Agreement or the breach thereof will be
settled by arbitration before a single arbitrator in accordance with the rules
of the American Arbitration Association then in effect, and judgment upon the
award rendered by the arbitrator may be entered in any court having
jurisdiction. Any such arbitration will be conducted in New York.
17. Notices. (a) Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally by
hand or by recognized overnight courier, telecopied or mailed as follows:
(i) If to the Company, to:
Xxxxxxx Xxxxxxxxx Xx. Desserts and Cafes, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax No.: (000) 000-0000
Attention: Xxxxxxx Xxxx, Executive Vice President
(ii) If to the Employee, to:
Xxxxxx Xxxxxx
X.X. Specialties
000 Xxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Fax No.: (000) 000-0000
(b) Each such notice or other communication shall be effective
(i) if given by telecopier, when such telecopy is transmitted to the telecopier
number specified in Section 17(a) (with confirmation of transmission) (ii) if
mailed by registered or certified mail, postage prepaid, three (3) business days
after deposit in the mails or (iii) if given by any other means, when delivered
at the address specified in Section 17(a). Any party by notice given in
accordance with this Section 17 to the other party
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may designate another address (or telecopier number) or person for receipt of
notices hereunder. Notices by a party may be given by counsel to such party.
18. Withholding. All payments required to be made by the Company to
the Employee under this Agreement shall be subject to withholding taxes, social
security and other payroll deductions in accordance with the Company's policies
applicable to employees of the Company at the Employee's level and the
provisions of the Benefit Plans.
19. Complete Understanding. This Agreement supersedes any prior
contracts, understandings, discussions and agreements relating to employment
between the Employee and the Company and constitutes the complete understanding
between the parties with respect to the subject matter hereof. No statement,
representation, warranty or covenant has been made by either party with respect
to the subject matter hereof except as expressly set forth herein.
20. Modification; Waiver. (a) This Agreement may be amended or waived
if, and only if, such amendment or waiver is in writing and signed, in the case
of any amendment, by the Company and the Employee or, in the case of a waiver,
by the party against whom the waiver is to be effective. Any such waiver shall
be effective only to the extent specifically set forth in such writing.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
21. Mutual Representations. (a) The Employee represents and warrants
to the Company that the execution and delivery of this Agreement and the
fulfillment of the terms hereof (i) will not constitute a default under or
conflict with any agreement or other instrument to which he is a party or by
which he is bound and (ii) do not require the consent of any Person.
(b) The Company represents and warrants to the Employee that this
Agreement has been duly authorized, executed and delivered by the Company and
that the fulfillment of the terms hereof (i) will not constitute a default under
or conflict with any agreement or other instrument to which it is a party or by
which it is bound and (ii) do not require the consent of any Person.
(c) Each party hereto warrants and represents to the other that
this Agreement constitutes the valid and binding obligation of such party
enforceable against such party in accordance with its terms.
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22. Headings. The headings in this Agreement are for convenience
of reference only and shall not control or affect the meaning or construction of
this Agreement.
23. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by the other party hereto.
IN WITNESS WHEREOF, the Company has caused this Employment
Agreement to be duly executed in its corporate name by one of its officers duly
authorized to enter into and execute this Agreement, and the Employee has
manually signed his name hereto, all as of the day and year first above written.
XXXXXXX XXXXXXXXX XX. DESSERTS
& CAFES, INC.
By: /s/ Xxxxxxx Xxxx
--------------------------
Xxxxxxx Xxxx, President
/s/ Xxxxxx Xxxxxx
--------------------------
Xxxxxx Xxxxxx
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