EXHIBIT 10.36
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of December 8, 1998, is made by and between OPTA
FOOD INGREDIENTS, INC., a Delaware corporation (the "Company"), and
XXXXX X. XXXXX, III (the "Employee").
1. FREEDOM TO CONTRACT.
The Employee represents that he is free to enter into this Agreement, and
that he has not made and will not make any agreements in conflict with this
Agreement. The Employee will not, and the Company will not require the Employee
to, disclose to the Company, or use for the Company's benefit, any trade secrets
or confidential information now or hereafter in the Employee's possession which
is the property of any other party.
2. EMPLOYMENT.
The Company hereby employs the Employee, and the Employee hereby accepts
his employment by the Company, upon the terms and conditions set forth herein.
3. EFFECTIVE DATE AND TERM.
This Agreement shall take effect as of January 1, 1999 (the "Effective
Date"), and shall continue in full force and effect for twelve (12)
months, expiring December 31, 1999 (the "Term"); provided, however, that the
Term shall be extended automatically for additional one (1) year periods
thereafter, unless terminated in accordance with the provisions hereof, or
Employee or the Company shall have given written notice of non-renewal to the
other party at least one hundred (100) days prior to the expiration of the Term
or such additional one year period.
4. TITLE AND DUTIES.
The Employee shall promote the business and affairs of the Company as
President and Chief Executive Officer of the Company, with responsibility for
performing such duties consistent with such position as the Board of Directors
of the Company may from time to time designate. Without limiting the generality
of the foregoing, the Employee shall be responsible for both strategy and
day-to-day operations and shall emphasize maintaining the continuity of the
executive team. Except as otherwise provided in this Agreement and except for
vacations and absences due to temporary illness, the Employee shall devote his
full time and efforts to the business and affairs of the Company; provided that,
with the Company's prior written consent, the Employee may engage in such other
business activities outside the scope of his employment hereunder as in the
reasonable judgement of the Company will not materially adversely affect the
Employee's ability to perform his obligations under this Agreement.
5. COMPENSATION AND FRINGE BENEFITS.
5.1 Base Salary. In consideration of the services rendered by the
Employee under this Agreement, the Company shall pay the Employee a base salary
(the "Base Salary") at the rate of Two Hundred Thirty-Five Thousand Dollars
($235,000.00) per annum from the Effective Date of this Agreement through
December 31, 1999; provided, further that the Base Salary for each additional
one year extension of the Term shall be such amount as approved by the Board of
Directors of the Company. The Base Salary shall be payable in accordance with
the Company's normal payroll as in effect from time to time.
5.2 Fringe Benefits. The Employee shall be entitled to such life
insurance, health insurance and other fringe benefits as may be offered or
generally made available by the Company to its executive officers from time to
time.
5.3 Performance Bonus. In addition to his Base Salary, upon the
attainment of performance goals to be mutually agreed upon between the Board of
Directors and the Employee, the Employee shall be entitled to a cash bonus, up
to a percentage of his Base Salary determined annually by the Board of Directors
or a Compensation Committee thereof (which percentage shall be 45% for 1999),
for each calendar year of service rendered to the Company pursuant to the terms
and provisions of this Agreement. The Board of Directors (or a compensation
committee thereof) shall, as soon as practicable after completion of each
calender year of service rendered, evaluate the attainment of the performance
goals and determine the amount of any performance bonus payable hereunder. Any
such performance bonus shall be due and payable within one hundred twenty (120)
days after the end of the year to which it relates.
5.4 Acceleration of Options. In the event the Company is to be consolidated
with or acquired by another entity in a merger, sale of all or substantially all
of the Company's assets or otherwise (an "Acquisition"), the vesting schedule of
all stock options held by Employee for the purchase of Opta Common Stock shall
be accelerated such that, in addition to the number of shares vested under each
such option prior to the Acquisition, each such option shall become immediately
exercisable for the greater of (i) such additional number of shares as would
have vested under each such option on each of the two (2) vesting dates (or such
lesser number of vesting dates as then remain under such option) occurring
immediately subsequent to the closing date of the Acquisition or (ii) such
additional number of shares as would be vested under each such option pursuant
to the terms of the Acquisition.
6. TERMINATION.
6.1 Termination of Employment. The Employee's hereunder shall terminate
upon the Employee's death or Permanent Disability. For purposes of this
Agreement, "Permanent Disability" shall mean the Employee's inability to perform
his duties hereunder for a continuous period of three (3) months by reason of
his physical or mental illness or incapacity. In the event of any dispute
concerning the existence of a Permanent Disability, such question shall be
determined by a licensed physician selected by the Company and reasonably
acceptable to the Employee, whose determination shall be final and binding upon
the parties. The Employee
shall submit to such examinations and furnish such information as such physician
may reasonably request. The Employee's employment hereunder may also be
terminated as follows:
(a) By the Employee at any time upon at lease ninety (90) days prior
written notice to the Company; or
(b) By the Company at any time upon at least ninety (90) days prior
written note to the Employee; or
(c) By the Employer at any time for cause, including but not limited to:
(i) the Employee's gross negligence or willful misconduct
with respect to the business and affairs of the Company; or
(ii) the Employee's material breach of this Agreement not
cured within ten (10) days after receipt of written notice thereof from the
Company; or
(iii) the commission by the Employee of an act involving
moral turpitude or fraud; or
(iv) the Employee's conviction of any felony.
The provisions of Sections 6.2, 7, 8, 9, and 10 shall survive any termination of
the Employee's employment hereunder and shall continue in effect until such time
as all obligations of the parties described therein have been satisfied.
6.2 Compensation Following Termination; Severance Pay.
(a) If the Employee voluntarily terminates his employment hereunder
pursuant to Section 6.1(a) hereof, or if such employment is terminated by the
death or Permanent Disability of the Employee, or if the Company terminates the
employment of the Employee pursuant to Section 6.1(b) hereof, the Employee shall
be entitled to severance pay in an amount equal to 1.25 times his Base Salary
(as in effect on the date upon which he ceases to be employed hereunder (the
"Employment Termination Date"), payable in equal monthly installments, provided
that the Employee shall use reasonable efforts to secure new employment at a
level of responsibility substantially equivalent to his responsibilities
hereunder (as in effect on the Employment Termination Date) and provided,
further, that upon such new employment of the Employee, the Employee's right to
severance pay hereunder shall terminate. In addition, the Employee shall be
entitled to the fringe benefits provided hereunder for the period during which
he is receiving severance payments as provided in the foregoing sentence. The
performance bonus for the then current calendar year shall be determined and
paid as provided in Section 5.3 hereof, provided that the amount of such bonus,
if any, shall be reduced pro rata to exclude events subsequent to the Employment
Termination Date.
(b) If the Company terminates the employment of the Employee for cause
pursuant to Section 6.1(c) hereof, the Employee shall not be entitled to
compensation, performance bonus or fringe benefits hereunder beyond the
Employment Termination Date.
7. INTELLECTUAL PROPERTY MATTERS.
7.1 Inventions. All discoveries, inventions, improvements, techniques,
trademarks and innovations, whether or not patentable or subject to copyright
protection (including all data and records pertaining thereto), which the
Employee may invent, discover, originate or make during the term of his
employment with the Company either alone or with others and whether or not
during working hours or by the use of facilities of the Company, and which
relate to, or are, or may likely be useful in connection with the business of
the Company ("Inventions"), shall be the exclusive property of the Company. The
Employee shall promptly and fully disclose Inventions to the Company and shall
promptly record Inventions in such form as the Company may request.
7.2 Assignment. The Employee shall assign to the Company all right,
title and interest to all Inventions reduced to writing, drawings or practice by
or for the Employee during the term of his employment. The Employee shall
execute upon the Company's request at any time, and at the Company's sole
expense, any applications, assignments and other documents that the Company may
deem necessary or desirable to protect or perfect its rights including any
patent rights to Inventions, and shall assist the Company, at the Company's sole
expense, in obtaining, defending and enforcing its rights hereon. The Employee
hereby appoints the Company his attorney-in-fact for purposes of effecting any
or all of the foregoing.
7.3 Confidential Information. The Employee acknowledges that all
information acquired by the Employee from the Company, its customers, suppliers
or others, or developed by the Employee alone or in conjunction with others
during the term of his employment with the Company which relates directly or
indirectly to the present or potential business of the Company, including any
ideas, formulae, processes, know-how, data, test results, raw materials,
prospective products or services, techniques, models, computer programs, plans,
schedules, sketches, notebooks, drawings, process sheets, customer or supplier
lists, and financial information ("Confidential Information"), is a valuable and
unique asset of the Company for the Company's sole benefit. The Employee shall
not, at any time during or after the term of his employment, use for himself or
others, or disclose or communicate to any person, firm, corporation,
association, or other entity for any reason or purposes whatsoever (other than
to Directors, officers and employees of the Company in the regular course of the
Company's business or to others subject to appropriate confidentiality
restrictions), any Confidential Information without the prior written consent of
the Company; provided, however, that the confidentiality and nondisclosure
provisions of this Section 7.3 shall not apply to (i) a disclosure of any
Confidential Information which, as of the time of such disclosure, shall have
previously become a part of the public knowledge through no fault of the
Employee, (ii) a disclosure of Confidential Information by the Employee to a
governmental entity in fulfilment of a legal obligation of the Employee or the
Company to such governmental authority, (iii) Confidential Information that the
Employee can establish was lawfully in his possession at the time of disclosure
by the Company, and (iv)
Confidential Information which the Employee lawfully receives from a third
party, provided, however, that such Confidential Information was not obtained by
said third party directly or indirectly from the Company.
7.4 Proprietary Items. All originals, copies, and summaries of manuals,
memoranda notes, photographs, notes, photographs, notebooks, records, records,
reports, plans, drawings and other documents or items of any kind concerning any
matters affecting or relating to the present or potential business of the
Company, whether or not they contain Confidential Information, are, and shall
continue to be, the property of the Company, and all of such documents or items
in the possession or control of Employee shall be delivered to the Company by
the Employee immediately upon the Company's request or termination of the
Employee's employment hereunder.
8. AGREEMENT NOT TO COMPETE.
In view of the unique nature of the business of the Company and the
need of the Company to maintain its competitive advantage in the industry
through the protection of its trade secrets and proprietary information, the
Employee agrees that during the term of his employment with the Company and for
a period of one (1) year thereafter, the Employee shall not, directly or
indirectly, within the United States of America or its territories or
possessions, or within any other country in which the Company conducts or plans
to conduct its business or distributes any of its products or renders any
services (determined in each case as of the Employment Termination Date), engage
in business with, own an interest in, be employed by, or consult or advise for,
any person or entity (except as a holder of not more than a five percent (5%)
equity interest in a publicly-traded entity) which engages in significant
activities in competition with the business of the Company, provided that the
foregoing shall not preclude the Employee's employment by any multi-divisional
employer having a division which engages in activities in competition with
the business of the Company so long as the Employee shall not be involved
in the operations or management of such competitive division. If at any time the
foregoing provisions shall be deemed to be invalid or unenforceable or are
prohibited by the laws of the state or place where they are to be performed by
reason of being vague or unreasonable as to duration or place of performance,
this section shall be considered divisible and shall become and be immediately
determined to be reasonable and enforceable by the court or other body having
jurisdiction over this Agreement; and the Employee and the Company expressly
agree that this section, as so amended, shall be valid and binding as though any
invalid or unenforceable provision had not been included herein. The Employee
further agrees that he shall not solicit any other employee of or consultant or
advisor to, or client, supplier, customer or partner of the Company to terminate
his or her relationship with the Company for a period of at least one (1) year
after the Employment Termination Date.
9. REMEDIES.
The Company and Employee agree and acknowledge that the rights and
obligations set forth under this Agreement are of a unique and special nature
and that the Company is, therefore, without an adequate legal remedy in the
event of Employee's violation of the covenants set forth in this Agreement. The
Company and Employee agree, therefore, that the covenants made by the
Employee under this Agreement shall be specifically enforceable in equity, in
addition to all other rights and remedies, at law or in equity or otherwise
(including termination of employment) that may be available to the Company. Such
remedies may be sought in any court of competent jurisdiction.
10. PROVISIONS OR GENERAL APPLICATION.
10.1 Disputes. Except as provided in Section 9, in the event of any
dispute touching or concerning this Agreement, the parties will submit to the
exclusive jurisdiction and venue of any court of competent jurisdiction sitting
in Suffolk County, Massachusetts and the parties agree to comply with all
requirements necessary to give such court jurisdiction over the parties and the
controversy.
10.2 Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be construed, interpreted and determined in accordance
with the laws of The Commonwealth of Massachusetts.
10.3 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which, taken
together, shall constitute one and the same instrument. In making proof of this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart.
10.4 Other Agreements. This Agreement represents the entire understanding
and agreement between the parties as to the subject matter hereof and supersedes
all prior or concurrent oral or written agreements relating thereto.
10.5 Amendment. This Agreement may be amended only by a written instrument
executed i one or more counterparts b the parties hereto.
10.6 Waiver. No consent to or waiver of any breach in the performance of
any obligation hereunder shall be deemed or construed to be a consent to or
waiver of any other breach or default in the performance of any of the same or
any other obligation hereunder. Failure on the part of either party or to
declare the other party in default, irrespective of the duration of such
failure, shall not constitute a waiver of rights hereunder and to waiver
hereunder shall be effective unless it is in writing, executed by the party
waiving the breach of default hereunder.
10.7 Assignment. This Agreement shall be binding and inure to the benefit
of the parties hereto and their successors and assigns. This Agreement may be
assigned by the Company to any Affiliate (as hereinafter defined) and to a
successor of its business to which this Agreement relates (whether by purchase
or otherwise). For purposes of this Agreement, "Affiliate" shall mean any person
on entity which, directly or indirectly, controls or is controlled by or is
under common control with the Company and, for the purposes of this definition,
"control" (including the terms "controlled by" and "under common control with"),
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management
and policies of another, whether through the ownership of voting securities or
holding of office in another, by contract or otherwise. The Employee may not
assign or transfer any of his rights or obligations under this Agreement.
10.8 Headings. The headings of sections and subsections of this Agreement
have been inserted for convenience of reference only and shall not be deemed to
be a xxx of this Agreement or to affect the meaning of any of its provision.
10.9 Severability. If any provision of this Agreement shall, in whole or
in part, prove to be invalid for any reason, such invalidity shall affect only
the portion of such provision which shall be invalid, and in all other respects
this Agreement shall stand as if such invalid provisions, or the invalid portion
thereof.
10.0 Notices and Other Communications. All notices and other communications
required hereunder shall be in writing and delivered or sent by certified or
registered mail, return receipt requested (a) if to the Employee, at 00 Xxxxx
Xxxx, Xxxxxxx, XX 00000; and (b) if to the Company, at 00 Xxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxxxx 00000, or to such other persons or addresses as the
parties hereto may specify by a written notice to the other from time to time.
Such notices shall be effective four (4) business days after so mailed or, if
earlier, upon actual receipt.
IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its
duly authorized officer, and by the Employee, as of the date first above
written.
OPTA FOOD INGREDIENTS, INC. EMPLOYEE:
By: /s/ /s/ Xxxxx X. Xxxxx, III
Name: -----------------------------
Title: Director and Member of Xxxxx X. Xxxxx, III
Compensation Committee
