EMPLOYMENT AGREEMENT
XXXX-XXXXXXXXX FOODS CO.
XXXXXXXX X. XXXXXXX
This Employment Agreement ("Agreement") is made as of August 7, 1996
by and between XXXX-XXXXXXXXX FOODS CO., a Delaware corporation, ("CGF")
and XXXXXXXX X. XXXXXXX.
Recitals
--------
A. CGF is a corporation organized under the laws of Delaware. It is
engaged in the business of marketing food and drug products.
B. CGF desires to employ Xx. Xxxxxxx as President and Chief Executive
Officer of CGF to manage the business and affairs of CGF. Xx. Xxxxxxx
desires to be so employed and act in such capacities.
Accordingly, the parties agree as follows:
1. Employment - CGF will employ Xx. Xxxxxxx, and Xx. Xxxxxxx will be
employed by CGF, as the President and Chief Executive Officer of CGF. Xx.
Xxxxxxx shall assume that position on August 10, 1996. Xx. Xxxxxxx shall
serve at the will of the Board of Directors. Xx. Xxxxxxx shall be accorded
the authority by the Board of Directors commensurate with his position as
Chief Executive Officer of CGF, and he shall make a good faith effort act
in the best interests of CGF and perform those duties reasonably assigned
to him by the Board of Directors. Xx. Xxxxxxx will devote himself full-time
to the interests of CGF and shall not accept other employment, including
service as a consultant or director of any other business or organization,
except volunteer service for local charitable organizations which service
does not materially interfere with his work at CGF.
2. Location of Employment - Xx. Xxxxxxx'x principal place of employment
shall be at the executive offices of CGF in Anchorage, Alaska or at such
other location as mutually agreed upon by the parties.
3. Compensation
a. Salary - CGF shall pay Xx. Xxxxxxx a salary at the annual rate of
$325,000, less normal withholdings, for each calendar year, pro-rated for
any portion thereof, payable in substantially equal installments in
accordance with CGF's usual payroll practice, but in no event less
frequently than monthly.
Employment Contract
Xxxxxxxx Xxxxxxx
Page 2 of 5
b. Bonus - Xx. Xxxxxxx shall participate in the Bonus Plan for the
most senior executives of CGF, subject to the following. Xx. Xxxxxxx shall
be eligible for an annual bonus of up to 60% of his annual salary,
depending upon the financial performance of CGF. Xx. Xxxxxxx shall be
guaranteed a bonus for fiscal year 1996 of no less than $50,000.
c. Stock Options
i) Xx. Xxxxxxx currently holds options to purchase up to 100,000
shares of CGF common stock. The purchase price of 65,000 of these
shares is $2.88. The purchase price of 35,000 of these shares is
$5.25. As of the date of this Agreement, the purchase price of the
$5.25 shares shall be reduced to $3.62, which is the closing market
price of such common stock on the NYSE as of this date.
ii) Effective this date, CGF shall award Xx. Xxxxxxx an option to
purchase up to 28,000 shares of CGF common stock at a purchase price
of $3.62. The option shall vest immediately, but any stock purchased
pursuant to such option may not be sold or transferred by Xx. Xxxxxxx
for six months from the option award date.
iii) CGF shall award Xx. Xxxxxxx an option to purchase up to
172,000 shares of CGF common stock at a purchase price of $3.62
d. Other Benefits - Xx. Xxxxxxx shall receive other benefits such as
vacation, personal and sick leave, insurance and other benefits consistent
with the then-current policies of CGF and equal to those benefits extended
to the most senior executives of CGF. Xx. Xxxxxxx will be provided with
office facilities, secretarial support, and business expense reimbursement
consistent with the policies of CGF with respect to its most senior
executives.
e. Travel - CGF shall provide Xx. Xxxxxxx with a non-business travel
allowance of up to $15,000 each fiscal year, which travel allowance may be
utilized at Xx. Xxxxxxx'x discretion. There shall be no carryover or
accumulation of this benefit from year to year.
x. Xxxxxxxxx - If Xx. Xxxxxxx'x employment is terminated for any
reason other than Just Cause, CGF shall continue to pay him an amount equal
to his then-current salary, less normal withholdings, at intervals equal to
the salary payments being received by the other most senior executives of
the Company. Such payments shall continue through July 31, 1999 or the
twelve-month period following the termination, whichever is longer;
provided, however, that if Xx. Xxxxxxx becomes an employee, consultant, or
Employment Contract
Xxxxxxxx Xxxxxxx
Page 3 of 5
partner of a company or business entity that directly competes with CGF
after the expiration of the waiting period described in section 10 below,
any severance payments will end as of the date such relationship between
Xx. Xxxxxxx and the competing entity effectively commences. For the purpose
of this section, a termination for "Just Cause" shall mean a termination of
employment for any of the following reasons: (i) an intentional or grossly
negligent violation of any reasonable rule or regulation of the Board of
Directors of the Company that results in damage to the Company or which,
after notice to do so, the actor fails to correct within a reasonable time;
(ii) any willful misconduct or gross negligence in the responsibilities
assigned to the actor; (iii) any wrongful or illegal conduct of the actor
which has an adverse impact on the Company or which constitutes a material
misappropriation of Company assets; or (iv) the performance of services for
any other company, entity, or person which directly competes with the
Company during the time the actor is employed by the Company, without the
written approval of the Board of Directors of the Company.
g. Relocation - In the event CGF terminates Xx. Xxxxxxx'x employment
prior to July 31, 1999 for any reason other than Just Cause, as defined
above, CGF shall pay the reasonable cost, not to exceed $25,000, of moving
Xx. Xxxxxxx'x household possessions to a destination of Xx. Xxxxxxx'x
choice in or about the Pacific Xxxxxxxxx xxxxxx xx xxx xxxxxxxx Xxxxxx
Xxxxxx. For the purposes of this agreement, "household possessions" shall
include a reasonable and ordinary amount of furniture, clothing, and
personal property used in a single family household, including up to two
automobiles. CGF shall not be responsible for premiums associated with the
shipment of extraordinary items such as fine art or animals.
4. Representation of Xx. Xxxxxxx - Xx. Xxxxxxx represents and warrants that
execution or delivery of this Agreement, nor his performance hereunder will
conflict with, or result in a breach of, any obligation, contract,
agreement, covenant or instrument to which he is a party or prospectively a
party.
5. Dispute Resolution - This Agreement shall be interpreted according to
Alaska law. Any disputes arising out of or relating to this Agreement shall
be settled by arbitration held in Anchorage, Alaska in accordance with the
Commercial Rules of the American Arbitration Association and judgment upon
the award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
6. Entire Agreement / Modifications - This document constitutes the entire
agreement of the parties with respect to Xx. Xxxxxxx'x employment with CGF.
It supersedes any prior agreement, statement or representation. It may be
modified only by written instrument executed by the party against which the
modification is asserted. Failure to require performance of any provision
shall not affect the right at a later time to enforce the same.
Employment Contract
Xxxxxxxx Xxxxxxx
Page 4 of 5
No waiver by either party of a breach , whether by conduct or otherwise,
shall be construed as a further or continuing waiver of any such breach.
7. Severability - Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability with
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall no invalidate or render
unenforceable such provision in any other jurisdiction.
8. Survivability - The rights and obligations of the parties of the parties
to this Agreement under Sections 3(f), 4, 5, 9, and 10 shall survive the
termination of this Agreement.
9. Assignability
a) In the event CGF shall merge or consolidate with any other
partnership, limited liability company, corporation, or business entity or
all or substantially all CGF's business or assets shall be transferred in
any manner to any other partnership, limited liability company, corporation
or business entity, such successor shall thereupon succeed to, and be
subject to, all rights, interests, duties, obligations of, and shall
thereafter be deemed for all purposes hereof to be, CGF hereunder.
b) This Agreement is personal in nature and none of the parties hereto
shall, without the written consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder, except by operation of
law or pursuant to the terms of section 10(a) above.
c) Nothing expressed or implied herein is intended or shall be
construed to confer upon or give to any person, other than the parties
hereto, any right, remedy or claim under or by reason of this Agreement or
of any term, covenant or condition hereof.
10. Non-competition - The parties recognize that Xx. Xxxxxxx will have
access to trade secrets and proprietary information of the Company, and
they recognize that should such information be revealed to a competitor,
the Company would be materially damaged in an amount difficult to
calculate. Accordingly, Xx. Xxxxxxx agrees that for one (1) year after
termination of his employment with the Company, regardless of the reason
for such termination, he shall not accept employment with, become a
contractor to, or perform any substantially similar role for any person or
business entity that directly competes with the Company.
The parties hereto execute this Agreement as the day and year first written
above.
Employment Contract
Xxxxxxxx Xxxxxxx
Page 5 of 5
XXXX-XXXXXXXXX FOODS CO. XXXXXXXX X. XXXXXXX
XXXX X. XXXXXX XXXXXXXX X. XXXXXXX
------------------------------ -----------------------------
By: Xxxx X. Xxxxxx
Chairman of the Board of Directors
