EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 12th of April 2000, by and between IVC
Industries, Inc., a Delaware corporation (the "Company"), with offices at 000
Xxxxx Xxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, and Xxxxxxx X. Xxxxxx ("Xxxxxx"), 0
Xxxxx Xxxxxxx Xxx, Xxxxxxx, Xxx Xxxxxx 00000 (hereinafter "the Agreement").
WHEREAS, the Company wishes to assure itself of the services of Xxxxxx;
and
WHEREAS, Xxxxxx is willing to enter into this Agreement upon the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
undertakings and agreements set forth herein, the sufficiency of which is
acknowledged by the parties, the Company and Xxxxxx agree as follows:
1. Employment
The Company shall employ Xxxxxx to serve the Company as its Chief
Financial Officer during the Term of Employment as set forth in Paragraph 2 of
this Agreement. Xxxxxx shall report to the Chief Executive Officer of the
Company and/or to any other individual as may be designated by the Board of
Directors of the Company. Xxxxxx'x duties shall be consistent with his title of
Chief Financial Officer. Xxxxxx shall devote his best efforts and his entire
business time to advancing the interests of the Company and in execution of his
duties and obligations to the Company as its Chief Financial Officer. It is
understood that Xxxxxx'x services during the Term of Employment shall be
performed primarily in the Freehold, New Jersey area and/or such other area in
which the Company's headquarters are located, subject to such reasonable travel
outside that area
and in and outside the United States as performance of his duties and the
business of the Company may reasonably require.
2. Term of Employment
"Term of Employment," as such phrase is used throughout this Agreement,
shall mean the period beginning on the effective date of this Agreement as set
forth in Paragraph 14 hereof and ending on the third annual anniversary of such
effective date, unless this Agreement and/or Xxxxxx'x employment with the
Company is terminated earlier thereto in accordance with the terms of Paragraph
4 of this Agreement.
3. Compensation and Other Benefits
(a) The Company shall pay Xxxxxx an annual base salary of $165,000.00 for
Xxxxxx'x Term of Employment under this Agreement, payable in equal installments
in accordance with the Company's customary payroll practices. Annually on or
about October 15th of each year during the Term of Employment, Xxxxxx shall meet
with the Company's Chief Executive Officer and Compensation Committee for a
review and adjustment, if any at the sole discretion of the Chief Executive
Officer and Compensation Committee, of Xxxxxx'x base salary based upon Xxxxxx'x
performance in the year in question, the financial performance of the Company
for the year in question, the current financial condition of the Company and any
and all other factors deemed relevant in the sole discretion of the Chief
Executive Officer and/or Compensation Committee. The first such salary review to
be conducted under the terms of this Paragraph 3(a) shall be on October 15, 2000
and continue annually thereafter for the Term of Employment. Nothing contained
in this Agreement, however, guarantees or requires the Company to increase
Xxxxxx'x base salary at any time during the Term of Employment.
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(b) During the Term of Employment, the Company may in the sole discretion
of the Company's Chief Executive Officer and Compensation Committee pay Xxxxxx
an annual bonus based upon Xxxxxx'x performance during the year in question, the
financial performance of the Company during the year in question, the current
financial condition of the Company and any and all other factors deemed relevant
in the sole discretion of the Chief Executive Officer and/or Compensation
Committee. The first such discretionary bonus review under the terms of this
Paragraph 3(b) shall be on October 15, 2000, and continue annually thereafter
for the Term of Employment. Nothing contained in this Agreement guarantees or
requires the Company to pay Xxxxxx a bonus at any time during the Term of
Employment.
(c) During the Term of Employment, Xxxxxx shall be entitled to participate
and shall be included in any pension, 401(k), stock option and/or other similar
plan or program of the Company as may be in effect from time to time for
executives of the Company and such participation shall be in accordance with the
terms of such plans and/or programs provided by the Company subject to
modification and/or termination by the Company. Nothing contained in this
Agreement obligates and/or requires the Company to create, obtain and/or
maintain any such plans and/or programs. This Agreement merely requires that in
the event the Company has such plans and/or programs in effect, Xxxxxx be
permitted to participate therein.
(d) During the Term of Employment, Xxxxxx shall be entitled to participate
in any group hospitalization, medical, health, accident, and/or disability
insurance plans and/or programs of the Company now existing or hereafter
established for executives of the Company in accordance with the terms of such
plans and/or programs subject to
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modification or termination of such plans and/or programs by the Company.
Nothing contained in this Agreement obligates the Company to create, obtain
and/or maintain group hospitalization, medical, health, accident, and/or
disability insurance plans and/or programs. This Agreement merely requires that
in the event the Company has such plans and/or programs in effect, Xxxxxx be
permitted to participate therein.
(e) During the Term of Employment, the Company shall provide Xxxxxx with a
term life insurance benefit in an amount equal to Xxxxxx'x annual base salary
under Paragraph 3(a) of this Agreement. The Company at its option may elect to
fulfill its obligations under this Paragraph 3(e) by purchasing a term life
policy from a third-party insurance company or by the Company's administration
of a self-insured plan. The beneficiary of such life insurance benefits provided
under this Paragraph 3(e) shall be designated by Xxxxxx in accordance with the
terms and conditions of any such plan and/or policy. Should Xxxxxx fail to
designate a beneficiary, the Company shall be designated as the beneficiary of
any such life insurance benefits provided hereunder.
(f) During the Term of Employment, the Company agrees to reimburse Xxxxxx
for all reasonable business expenses incurred by him in connection with the
performance of his duties hereunder in accordance with the policies of the
Company.
(g) During the Term of Employment, the Company shall furnish Xxxxxx with
office space, administrative support staff, facilities and other similar
accommodations commensurate with his position and reasonably necessary for the
performance of his duties hereunder.
(h) During each year of the Term of Employment, Xxxxxx shall be entitled
to three (3) weeks of paid vacation (in addition to all holidays observed by the
Company) at such
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time or times as may be selected by him, which do not unreasonably interfere
with the proper performance of his duties hereunder. In the event that Xxxxxx
does not use all three (3) weeks of vacation during any year of the Term of
Employment, the Company shall pay Xxxxxx an amount equal to the pro rata daily
compensation rate for Xxxxxx based upon his base salary for such year multiplied
by the number of unused vacation days for such year to which Xxxxxx is entitled
under the terms of this Agreement. Payment shall be made in accordance with the
Company's payroll practices no later than sixty (60) days after the end of each
such year.
(i) The Company shall lease an automobile for Xxxxxx'x use during the Term
of Employment, and the Company shall be responsible to pay any and all monthly
lease charges and expenses up to and not in excess of $1000.00 per month. The
Company shall also be responsible to pay any and all costs, charges and/or
expenses relating to the use and/or maintenance of the vehicle leased for
Xxxxxx'x use as provided under this Paragraph 3(i), including without limitation
lease initiation fees, automobile insurance, service, gasoline, and lease
termination fees, costs, charges, assessments and/or expenses. As soon as
practical after execution of this Agreement, the Company shall take all steps
necessary to assume the obligations under the automobile lease currently in
Xxxxxx'x name individually and shall be responsible to pay any and all expenses
relating to the transfer and/or assignment of such lease to the Company. Xxxxxx
shall fully cooperate with the Company to effectuate the transfer and/or
assignment of such lease. Any and all costs and expenses paid by the Company for
the leased vehicle that are allocated to Xxxxxx'x personal use of the leased
vehicle shall be treated and reported by the Company as W-2 compensation to
Xxxxxx. Xxxxxx shall be responsible to provide the Company
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with an accurate allocation as to the amount of business use versus personal use
of the leased vehicle and shall provide the Company with documentation
supporting such allocation.
4. Termination of Employment
(a) Xxxxxx'x employment shall terminate upon his death and may be
terminated, at the option of the Company, upon written notice to Xxxxxx only (i)
as a result of Xxxxxx'x "disability," as defined in Paragraph 4(b) below, or
(ii) for "cause," as defined in Paragraph 4(c) below. Termination under either
(i) or (ii) of this Paragraph 4(a) shall be effective thirty (30) days after the
Company gives Xxxxxx written notice of termination.
(b) As used herein, "disability" shall mean such physical or mental
disability or incapacity of Xxxxxx, which has substantially prevented him from
performing his principal duties hereunder during any period of 150 consecutive
calendar days or for a total of 180 calendar days (whether or not consecutive)
in any 365-day period of the Term of Employment. During such period of
disability and until notice of termination is given by the Company under
Paragraph 4(a)(i) of this Agreement, Xxxxxx shall continue to receive his base
salary compensation and benefits described in Paragraph 3(a)-(i) of this
Agreement, reduced by the amount, if any, of disability benefits received by
Xxxxxx during this period, including benefits paid by the State of New Jersey
and/or benefits provided under any policy of disability insurance covering
Xxxxxx.
(c) As used herein, "cause" shall mean (i) willful misconduct involving
bad faith by Xxxxxx in respect of his duties and obligations under this
Agreement, which misconduct causes or was intended by Xxxxxx to cause
significant injury to the Company,
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or (ii) commission of a crime involving moral turpitude which would adversely
affect the Company should Xxxxxx continue to serve as an employee of the
Company. "Cause" shall not include a bona fide disagreement over a corporate
policy so long as Xxxxxx does not willfully violate on a continuing basis any
specific written directions from the Company's Board of Directors, Chief
Executive Officer and/or any other individual to whom Xxxxxx reports pursuant to
the direction of the Board of Directors and/or Chief Executive Officer, provided
such directions are consistent with the provisions of this Agreement.
(d) Upon termination of Xxxxxx'x employment as a result of death,
disability or for cause, the Company shall only be required to pay, within ten
(10) business days of the effective date of the termination as provided in
Paragraph 4(a) of this Agreement, to Xxxxxx or to his beneficiaries, personal
representatives or his Estate, as the case may be, any unpaid annual base salary
accrued and unpaid as of the effective date of the termination. All payments
made under the terms of this Paragraph 4(d) shall be in full and complete
satisfaction of any and all claims Xxxxxx may have against the Company, its
officers, directors, employees, shareholders, agents, attorneys and
representatives relating to his employment with the Company and/or the
termination thereof, including without limitation, all claims under this
Agreement and any and all claims under applicable state or federal law.
(e) If Xxxxxx'x employment is terminated by the Company before the
expiration of the Term of Employment for any reason other than death, disability
or cause, then Xxxxxx shall be entitled to receive a Severance Package in an
amount equal to the greater of twelve (12) months base salary or the amount of
base salary for the period of time
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remaining under the Term of Employment as of the effective date of termination.
Such Severance Package shall be paid in accordance with the Company's customary
payroll practices on the dates it would have been paid had Xxxxxx'x employment
not been terminated before the expiration of the Term of Employment. Xxxxxx
shall also continue to participate for twelve months from the effective date of
termination or the period of time remaining under the Term of Employment as of
the date of termination, whichever time period is longer, in all plans and/or
programs of the Company described in Paragraphs 3(c)-(e) of this Agreement that
were in effect as of the date of termination to the extent that such continued
participation is permitted under the terms and provisions of such plans and/or
programs and is not otherwise prohibited by law. In the event Xxxxxx'x continued
participation in any group health, medical, disability and/or life insurance
plan and/or program in effect under Paragraph 3(d)-(e) of this Agreement is
prohibited by the terms of such plans and/or programs or otherwise prevented by
law, then in lieu of such continued participation therein the Company shall pay
to Xxxxxx for the applicable time period described above amounts equal to the
actual out-of-pocket cost (grossed up for tax effect) incurred by Xxxxxx to
participate in plans and/or programs privately obtained by him providing
substantially similar benefits to those under the Company's plan or program
providing health, medical, disability and/or life insurance from which such
participation is barred. All payments made under the terms of this Paragraph
4(e) shall be in full and complete satisfaction of any and all claims Xxxxxx may
have against the Company, its officers, directors, shareholders, agents,
attorneys, employees and representatives relating to his employment with the
Company and/or the termination
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thereof, including without limitation, all claims under this Agreement and any
and all claims under applicable state or federal law.
(f) Xxxxxx shall be permitted, upon not less than thirty (30) days written
notice to the Company, to terminate this Agreement in the event (i) the Company
fails to perform in any material respect its obligations under this Agreement or
shall violate or fail to comply in any material respect with the provisions
hereof or fail in any way to fulfill the obligations contained in this Agreement
and such failure shall continue for thirty (30) days after written notice
thereof is given by Xxxxxx to the Company; or (ii) other than in connection with
termination of Xxxxxx'x employment for death, disability or cause, the Company
removes Xxxxxx from the position of Chief Financial Officer.
(g) If Xxxxxx elects to terminate this Agreement in accordance with the
terms of Paragraph 4(f), Xxxxxx shall be entitled to receive, and the Company
shall be obligated to provide and pay to Xxxxxx the Xxxxxxxxx Package and
benefits in accordance with the terms of Paragraph 4(e) of this Agreement. All
payments made under the terms of this paragraph shall be in full and complete
satisfaction of any and all claims Xxxxxx may have against the Company, its
officers, directors, employees, shareholders, agents, attorneys and
representatives relating to his employment with the Company and/or termination
thereof, including without limitation, all claims under this Agreement and any
and all claims under applicable state or federal law.
5. Restrictive Covenants
(a) Except as required in the performance of his duties to the Company, or
as authorized in writing by the Company, Xxxxxx shall not at any time during or
after the Term of Employment disclose or use, directly or indirectly, any trade
secrets and/or
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confidential or proprietary information (collectively referred to as
"Confidential Information") belonging to or used by the Company or any of its
subsidiaries and of which Xxxxxx shall obtain knowledge by reason of his
employment with the Company. All such Confidential Information shall be retained
by Xxxxxx in trust in a fiduciary capacity for the sole benefit of the Company.
Such Confidential Information includes, but is not limited to, information with
respect to marketing, advertising and sales presentation methods and materials,
customer and supplier lists, external and internal business forms, manuals,
corporate planning, manufacturing, distribution and marketing processes,
procedures, devices and materials utilized by the Company in providing goods to
customers, plans for expansion into new areas or markets and information
regarding internal operations, together with all written and graphic materials
relating to all or any part of the same.
(b) During the Term of Employment and for two (2) years thereafter, Xxxxxx
shall not, directly or indirectly, solicit any person, firm, entity or
corporation who is or was, during Xxxxxx'x Term of Employment, a client/customer
of the Company. Company clients/customers shall mean (1) those actual clients
and customers of the Company, and (2) those active prospective clients or
customers of the Company, both past and present, at any time during the two (2)
year period immediately preceding the termination of Xxxxxx'x employment with
the Company.
(c) Xxxxxx recognizes that the Company's employees are a valuable resource
of the Company. Xxxxxx agrees that during the Term of Employment and for two (2)
years thereafter, he shall not, either alone or in conjunction with any person
or entity, solicit, induce, and/or recruit any Company employee to leave the
employ of the Company.
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(d) Xxxxxx shall not, at any time during or after the Term of Employment,
knowingly disparage in any material manner or in any material respect the
Company and/or any of its subsidiaries, officers and/or directors and/or the
Company's financial soundness, responsibility, personnel, products or practices.
(e) Upon expiration of the Term of Employment, termination of employment,
termination of the Agreement and/or or at any other time as the Chief Executive
Officer and/or Board of Directors of the Company may request, Xxxxxx shall
promptly deliver to the Company all Confidential Information and materials in
his possession, including, but not limited to, sales presentation materials,
other internal and external business forms, manuals, correspondence, notes and
customer and supplier lists together with all copies thereof, and Xxxxxx shall
not make or retain any copy or extract of any of the foregoing.
(f) As a means reasonably calculated to prevent Xxxxxx from disclosing or
making accessible to any person or entity any Confidential Information Xxxxxx
acquired during the Term of Employment which would cause the Company's business
to be prejudiced, and because disclosure or use of such Confidential Information
is difficult to detect and establish, during the Term of Employment and for one
(1) year thereafter Xxxxxx agrees that he will not, without first having
obtained the written consent of the Company, which consent shall not be
unreasonably withheld inconsistent with the protections to be afforded the
Company under this Agreement, enter into the employ of, render services to, or
engage in or become the proprietor, partner, or stockholder (except a
stockholder holding less than five percent (5%) of the outstanding voting shares
of any publicly owned corporation) of any entity doing business in the State of
New Jersey and/or in any
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other state or country in which the Company is licensed to do business which
directly competes with the Company.
(g) Xxxxxx acknowledges that his breach of any of the restrictive
covenants contained in Paragraph 5 of this Agreement can cause irreparable
damage to the Company for which the remedy at law would not be adequate.
Accordingly, in addition to any other remedy provided by law or equity, the
Company shall be entitled to injunctive relief restraining Xxxxxx from any
actual or threatened violation of any of the terms of this Paragraph 5 or any
other appropriate decree of specific performance (without any bond or other
security being required), including, without limitation, an injunction
restraining Xxxxxx from rendering any services to any person or entity in
competition with the then business being conducted by the Company and/or to whom
all or any part of any Confidential Information has been disclosed by Xxxxxx.
6. Notices
Any notice made or to be given under the terms of this Agreement shall be
effective and duly given only if it is in writing and delivered via hand
delivery or by reliable overnight delivery service (e.g. Federal Express) to the
party at its address set forth below or at such other addresses as the parties
may specify by notice to the other in accordance with the terms hereof:
(a) To Xxxxxx -
Xxxxxxx Xxxxxx
0 Xxxxx Xxxxxxx Xxx
Xxxxxxx, Xxx Xxxxxx 00000
Phone No. (000) 000-0000
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(b) To the Company -
E. Xxxxxx Xxxxx
Chief Executive Officer
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Phone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxx X. Xxxxxxxx, Esq.
Xxxxx & Associates, P.C.
P.O. Box 2355
1776 On the Green, 0xx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Phone No.: (000) 000-0000
Fax No.: (000) 000-0000
7. Prior Agreements
This Agreement supersedes and replaces all prior understandings,
arrangements and agreements of employment, if any, between the Company and
Xxxxxx.
8. Assigns and Successors
Subject to the limitations set forth below, this Agreement shall inure to
the benefit of and shall be binding upon the parties hereto and their respective
heirs, representatives and successors. This Agreement shall not be assignable by
Xxxxxx and shall only be assignable by the Company to (i) any corporation or
entity resulting from any reorganization, merger and/or consolidation of the
Company with any other corporation and/or entity; or (ii) any corporation or
entity to which the Company may sell all or substantially all of its assets. In
addition, this Agreement shall remain in full force and effect and shall be
binding upon any corporation or entity resulting from any reorganization, merger
and/or consolidation of the Company with another corporation or
13
entity and/or any corporation or entity that acquires all or substantially all
of the Company's assets.
9. Invalid or Unenforceable Provisions
In the event any provision of this Agreement shall be determined to be
invalid or unenforceable in any respect, the remaining provisions of this
Agreement shall not be affected thereby and shall continue in full force and
effect.
10. Amendment
This Agreement may be amended or modified only by a written instrument
signed by both the Company and Xxxxxx.
11. Construction
This Agreement shall be construed under the laws of the State of New
Jersey. The parties agree and acknowledged that this Agreement is the result of
negotiations between the parties and that the terms hereof shall not be
construed against the party responsible for preparation of this Agreement.
12. Headings
Paragraph headings are for convenience only and shall not be considered a
part of the terms and provisions of the Agreement.
13. Waiver
The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver or deprive that party
of the right to thereafter insist upon strict adherence to that term or any
other term of this Agreement.
14. Effective Date
The Effective Date of this Agreement is April 12, 2000.
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IN WITNESS WHEREOF, the parties hereunto set their hands and seal this
12th day of April 2000.
THE COMPANY
IVC INDUSTRIES, INC.
Attested:
By: /s/ Xxxxxx X. Xxxxxx By: /s/ E. Xxxxxx Xxxxx
-------------------------------- -------------------------------------
Xxxxxx Xxxxxx E. Xxxxxx Xxxxx
Assistant Secretary Chief Executive Officer
Seal
Witnessed by: EMPLOYEE
/s/ G.O. Xxxxxxx /s/ Xxxxxxx X. Xxxxxx
----------------------------------- ----------------------------------------
Notary Public Xxxxxxx Xxxxxx
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