Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and effective the 5th day
of September, 2006, by and between Monterey Gourmet Foods, a California
corporation ("MGF"), and Xxxx Xxxxxxx ("Executive").
I. MGF is engaged in the business of production of fresh refrigerated
gourmet food products.
II. MGF desires to have the services of Executive.
III. Xxxxxxx is willing to be employed by MGF.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment.
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MGF hereby agrees to employ Executive as its President and Chief Executive
Officer (CEO) and Executive hereby accepts such employment in accordance with
the terms of this Agreement and the terms of employment applicable to regular
employees of MGF. In the event of an conflict or ambiguity between the terms of
this Agreement and terms of employment applicable to regular employees, the
terms of this Agreement shall control.
In the event of a change of control of MGF during the term of this
Agreement, through merger, acquisition, or such other event, Executive shall
have the option of continuing on with MGF as an employee in such office or
position as assigned, or ending his employment relationship with MGF pursuant to
Paragraph 6 (A) of this Agreement. For purposes of this section, a "change of
control" shall be defined as the acquisition of a majority of the outstanding
voting shares of MGF by any individual or entity or group of affiliated
individuals or entities in one or a series of related transactions, and shall
include, for purposes of Executive's election hereunder, the commencement of
negotiations reasonably leading to a change of control or proposed change of
control.
2. Duties of Executive.
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The duties of Executive shall include the performance of all duties
typical of the office held by Executive as described in the bylaws of MGF and
such other duties and projects as may be assigned by a superior officer of MGF,
if any, or the board of directors of MGF. Executive shall devote his entire
productive time, ability, and attention to the business of MGF and shall perform
all duties in a professional, ethical, and businesslike manner. Executive will
not, during the term of this Agreement, directly or indirectly engage in any
other business, either as an employer, employee, consultant, director,
principal, officer, advisor or in any other capacity, either with or without
compensation, without to prior written consent of the board of directors of MGF.
3. Compensation.
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Executive will be paid compensation during this Agreement as follows:
A. Salary. An annual base salary of $285,000, payable to Executive in
installments according to MGF's normal and customary payroll schedule. The base
salary may be adjusted at the end of each year of employment at the sole
discretion of the board of directors of MGF.
B. Bonuses. Executive shall be entitled to annual bonus compensation. For
2006, the maximum bonus amount shall be 100% of Executive's base compensation
paid during the fourth quarter. Actual bonus compensation paid to Executive
shall be based on the percentage by which Executive has achieved MGF goals and
benchmarks that are agreed to by Executive and MGF for the remainder of 2006.
Thereafter, and during the remaining term of this Agreement, Executive shall be
entitled to annual bonus compensation in accordance with such plan and
contingent upon the attainment of such goals as to which Executive and the Board
of Directors shall further agree in writing.
C. Stock Option. The Board of Directors grants to Executive, effective as
of the date of this Agreement, an incentive stock option under MGF's 2002 Stock
Option Plan ("Plan") to purchase 150,000 shares of MGF common stock, vesting and
exercisable in installments of 50,000 shares on each of the first, second, and
third anniversaries of this Agreement (the "Option"). The shares of common stock
subject to the Option shall be priced at the closing price of the common stock
on the Nasdaq Global Market on September 15, 2006, and shall be evidenced by and
subject to all of the terms and conditions of MGF's standard form of incentive
stock option agreement under the Plan.
4. Benefits
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Executive shall be provided benefits during this Agreement as follows:
A. Vacation. Executive shall be entitled to four (4) weeks of paid
vacation each year of employment. Without the express consent of MGF, not more
than one week of vacation may be carried over to the following year.
B. Paid Holidays. Executive shall be entitled to paid holidays in
accordance with MGF's annual paid holiday schedule for all regular employees.
C. Sick Leave and Personal Time Off (PTO). Executive shall be entitled to
four (4) paid sick days and one (1) paid day of PTO each year of employment. Not
more than four paid sick days may be carried from year to year.
D. Medical, Dental, Life, Disability Insurance. Executive shall be
entitled to all medical, dental, life and disability insurance benefits which
are made available to all regular employees of MGF.
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E. Pension, Profit Sharing Plans, and 401(k). Executive shall be entitled
to participate in any pension, profit sharing plan, 401(k) plan or other type of
plan adopted by MGF for the benefit of its officers and/or regular employees.
F. Automobile Allowance. Executive shall be entitled to a car allowance of
a $750.00 per month.
G. Expense Reimbursement. Executive shall be entitled to reimbursement for
all reasonable expenses, including travel and entertainment, incurred by
Executive in the performance of Executive's duties. Executive will maintain
records and written receipt as required by MGF policy and reasonably requested
by the board of directors to substantiate such expenses.
5. At-will Employment.
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This Agreement is for no stated period. Executive's employment with MGF is
"at will" and may be terminated at any time.
6. Termination.
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A. Termination by MGF Without Cause. This Agreement and Executive's
employment may be terminated at any time by MGF at its discretion, provided that
in such case, Executive shall be entitled to payment of (i) severance
compensation equal to twelve months of Executive's then applicable base annual
salary, payable in equal monthly installments following termination and subject
to all normal withholdings required by law, and (ii) on a prorated basis, any
bonus compensation which Executive shall have earned, as of the date of
termination, pursuant to any bonus plan agreed to by Executive and the Board of
Directors. In the event of such a discretionary termination by MGF, Executive
shall not be entitled to receive any other compensation or benefit of any kind
then in effect, prorated or otherwise.
B. Termination by Executive. This Agreement may be terminated by Executive
at Executive's discretion by providing at least thirty (30) days advance written
notice to the board of directors of MGF. In the event of termination by
Executive pursuant to this subsection, MGF may immediately relieve Executive of
all duties and immediately terminate this Agreement, provided that MGF shall pay
to Executive at his then applicable annual base salary rate to the termination
date included in Executive's original notice of termination.
C. Termination for Cause. MGF may terminate Executive's employment at any
time with Cause. As used in this Agreement, "Cause" shall mean any of the
following: (i) a material failure of Executive to execute MGF plans and
strategies, which failure is not the result of unanticipated facts or
circumstances not caused by any act of Executive and not reasonably within the
power of Executive to correct, and that is not corrected to the reasonable
satisfaction of the Board of Directors within fifteen (15) days after written
notice to Executive of said failure; (ii) an act of fraud or embezzlement of
money or tangible or intangible assets or property of MGF; (iii) repeated
absenteeism which is not rectified to the reasonable satisfaction of the Board
of Directors of the Company within fifteen (15) days after written notice to
Executive of such absenteeism; (iv) the conviction of Executive of a felony
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involving fraud or dishonesty or of a felony that results in material injury to
MGF; or (v) breach of any material term of this Agreement that is not cured to
the reasonable satisfaction of the Board of Directors within fifteen (15) days
after written notice to Executive of said breach, or willful or habitual neglect
by Executive of the duties which he is required to perform under the terms of
this Agreement that is not cured to the reasonable satisfaction of the Board of
Directors within fifteen (15) days after written notice to Executive of said
neglect. In the event of a termination pursuant to this Section, the Company
shall pay Executive's unpaid base salary owing to Executive up through and
including the date of Executive's termination. In the event of termination of
this Agreement pursuant to this subsection, Executive shall not be paid any
other compensation or benefit, prorated or otherwise.
7. Notices.
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Any notice required by this Agreement or given in connection with it shall
be in writing and shall be given to the appropriate party by personal delivery
or by certified mail, postage prepaid, or recognized overnight delivery
services, or by confirmed fax;
If to MGF:
Attention: Xxxxx Xxxxxxx, Secretary and CFO
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Fax: 000-000-0000
If to the Executive:
Attention: Xxxx Xxxxxxx
0000 000xx Xxxx XX
Xxxxxxxx, XX. 00000
or to Executive's updated address as listed in MGF's personnel records.
Such addresses may be changed from time to time by either party by providing
written notice in the manner set forth above.
8. Entire Agreement.
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This Agreement contains the entire agreement of the parties and there are
no further promises or conditions in any other agreement whether oral or
written. This Agreement supersedes any prior written or oral agreements between
the parties.
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9. Governing Law.
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The parties acknowledge and agree that this Agreement and any and all
issues of any kind relating to Executive's employment or separation from
employment shall be governed and construed in accordance with the laws of the
State of California.
10. Attorney's Fees and Costs.
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The parties hereto agree that, should either of them seek the
interpretation or enforcement of this Agreement, or assert by way of defense in
any lawsuit or other proceeding, any covenant, representation or other term or
provision of this Agreement, the prevailing party shall be awarded his or their
reasonable attorney's fees and costs incurred in such proceeding.
11. Severability.
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The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision, and all
other provisions shall remain in full force and effect. This Agreement contains
the entire agreement between the parties as to matters governed by this
Agreement. This Agreement may not be amended or modified except by a writing
signed by the party against whom enforcement is sought.
12. No Assignment.
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Neither this Agreement nor any interest in this Agreement may be assigned
by Executive without the prior express written approval of MGF, which approval
may be withheld by MGF at MGF's absolute discretion.
13. Counterparts.
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This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which counterpart, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same agreement.
MONTEREY GOURMET FOODS
By: /s/ XXX XXXXXXXX Date: September 20, 2006 with effect as
--------------------------- of September 15, 2006
Its: Chairman of the Board
AGREED TO AND ACCEPTED.
EXECUTIVE:
Date:
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Xxxx Xxxxxxx
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9. Governing Law.
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The parties acknowledge and agree that this Agreement and any and all
issues of any kind relating to Executive's employment or separation from
employment shall be governed and construed in accordance with the laws of the
State of California.
10. Attorney's Fees and Costs.
-------------------------------
The parties hereto agree that, should either of them seek the
interpretation or enforcement of this Agreement, or assert by way of defense in
any lawsuit or other proceeding, any covenant, representation or other term or
provision of this Agreement, the prevailing party shall be awarded his or their
reasonable attorney's fees and costs incurred in such proceeding.
11. Severability.
------------------
The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision, and all
other provisions shall remain in full force and effect. This Agreement contains
the entire agreement between the parties as to matters governed by this
Agreement. This Agreement may not be amended or modified except by a writing
signed by the party against whom enforcement is sought.
12. No Assignment.
-------------------
Neither this Agreement nor any interest in this Agreement may be assigned
by Executive without the prior express written approval of MGF, which approval
may be withheld by MGF at MGF's absolute discretion.
13. Counterparts.
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This Agreement may be executed in any number of counterparts and by
different parties on separate counterparts, each of which counterpart, when so
executed and delivered, shall be deemed to be an original and all of which
counterparts, taken together, shall constitute one and the same agreement.
MONTEREY GOURMET FOODS
By: Date:
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Its:
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AGREED TO AND ACCEPTED.
EXECUTIVE:
/s/ XXXX XXXXXXX Date: September 15, 2006
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Xxxx Xxxxxxx
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