1
EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") by and between Colorado Prime
Corporation, a Delaware corporation (the "Company") and a wholly-owned
subsidiary of Colorado Prime Holdings Inc. ("CPH"), a Delaware corporation, CPH,
and Xxxxxxx X. Xxxxxxxxx ("Employee") is hereby entered into and effective as of
the 9th day of May, 1997.
R E C I T A L S
The following statements are true and correct:
On this day the Company, CPH and certain other parties consummated a transaction
contemplated by the Merger Agreement dated as of March 25, 1997 (the "Merger
Agreement"), by and between Xxxxxx Equity Investors III, L.P. and the Company's
parent entity, KPC Holdings Corporation.
Employee is employed hereunder by CPH and the Company in a confidential
relationship wherein Employee, in the course of his employment with the Company,
has and will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company, and future plans with
respect thereto, all of which has been and will be established and maintained at
great expense to the Company; this information is a trade secret and constitutes
the valuable good will of the Company.
Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, it is hereby agreed as
follows:
A G R E E M E N T S
1. Employment and Duties.
-1-
2
(a) The Company hereby employs Employee as Chief Executive Officer of the
Company and Chairman of the Board of Directors of the Company and CPH (or such
other comparable positions as shall be given to Employee by the Company's or
CPH's Board of Directors). Employee shall have responsibilities, duties and
authority reasonably accorded to and expected of such positions, including those
set forth in the Company's and CPH's by-laws and as otherwise may be directed
from time to time by the Board of Directors of the Company and CPH (collectively
referred to as the "Board"), it being understood that such duties shall be
reasonably comparable to those duties previously performed by Employee for the
Company. Employee will report directly to the Board. Employee hereby accepts
this employment upon the terms and conditions contained herein and agrees to
devote his full business time, attention and efforts to promote and further the
business of the Company.
(b) Employee faithfully shall adhere to, execute and fulfill all policies
established by the Company.
(c) Employee shall not, during the Term of his employment hereunder (as
defined in Section 5 hereof), be engaged in any other business activity pursued
for gain, profit or other pecuniary advantage if such activity interferes with
Employee's duties and responsibilities hereunder without the prior consent of
the Board. However, the foregoing limitations shall not be construed as
prohibiting Employee from making personal investments in such form or manner as
will neither require his services in the operation or affairs of the companies
or enterprises in which such investments are made nor violate the terms of
Section 3 hereof.
2. Compensation. For all services rendered by Employee in any capacity
required hereunder, the Company shall compensate Employee as follows:
(a) Base Salary. Effective on the date hereof through the end of the
Company's current fiscal year ending September 26, 1997, the base salary payable
to Employee shall be $420,000 per year, payable on a regular basis in accordance
-2-
3
with the Company's standard payroll procedures but not less frequently than
monthly. Such base salary shall, in the sole discretion of the Board, be subject
to an annual increase; provided that, at the beginning of the Company's fiscal
year, Employee's base salary shall be adjusted to reflect any increase during
the prior fiscal year in the consumer price index for All Urban Consumers, All
Items for Xxx Xxxx-Xxxxxxxxx Xxx Xxxxxx-Xxxx Xxxxxx, XX-XX-XX (0000-00 = 100),
published by the United States Bureau of Labor Statistics.
(b) Incentive Bonus Plan. Not later than June 30, 1997, the Board will
develop a written Annual Incentive Bonus Plan (the "Incentive Bonus Plan")
setting forth the criteria under which Employee and other officers and key
employees will be eligible to receive year-end bonus awards based upon
individual performance and the achievement by the Company of the prior year
projections. The Incentive Bonus Plan will provide for Employee's bonus as set
forth in Schedule 1 hereto.
(c) Performance Based Bonus Plan. Except in the case of a termination of
this Agreement pursuant to Section 5(a) or 5(c), for a period of five years
following the consummation of the transactions contemplated in the Merger
Agreement, the Employee, along with the Company's Chief Operating Officer, Chief
Financial Officer, and Vice President for Marketing (collectively, the "Senior
Executive Officers"), shall participate in a performance based bonus plan (the
"Performance Bonus Plan") in which each of the Senior Executive Officers will
receive an aggregate of 25% of the excess EBIT (after Incentive Bonus Plan
bonuses are awarded) for each fiscal year above EBIT projected for such year in
the Xxxxxxx, Xxxxx & Co. Confidential Memorandum dated December 1996 (the
"Xxxxxxx, Sachs Memorandum") or another mutually agreed-upon alternative profit
target. The maximum aggregate amount that the Senior Executive Officers shall be
entitled to receive under the term of the Performance Bonus Plan shall be
$750,000. The Board shall develop and approve the Performance Bonus Plan no
later than June 30, 1997.
-3-
4
(d) Executive Perquisites, Benefits and Other Compensation. Employee
shall be entitled to receive additional benefits and compensation from the
Company in such form and to such extent as specified below:
(1) Reimbursement of all premiums incurred by Employee to maintain
health insurance pursuant to the Employee's directly owned health
insurance policy.
(2) Reimbursement for all business travel and other out-of-pocket
expenses reasonably incurred by Employee in the performance of his
services pursuant to this Agreement. All reimbursable expenses
shall be appropriately documented in reasonable detail by Employee
upon submission of any request for reimbursement, and in a format
and manner consistent with the Company's expense reporting policy.
(3) Reimbursement for all expenses associated with the Employee's
Rowayton, Connecticut office.
(4) Payment of car and driver expenses for Employee's transportation
to and from work.
(5) An annual payment by CPH of $35,000, paid monthly, for consultant
and director services provided to CPH.
(6) The Company shall provide Employee with other executive
perquisites as may be available to or deemed appropriate for
Employee by the Board and shall allow Employee to participate in
all other Company-wide employee benefits, including the Company's
defined contribution pension plan and 401(k) Plan, as may be made
available generally to employees of either from time to time. Such
perquisites shall be at least comparable to the Company's policies
with respect thereto prior to the consummation of the Merger
Agreement.
-4-
5
3. Non-Competition Agreement.
(a) Employee shall not, during the period of his employment by or with
the Company and for a two (2) year period following the termination of his
employment under Section 5(c) hereto, or for a one (1) year period following the
termination of his employment other than under Section 5(c) hereto, for any
reason whatsoever, for himself or on behalf of or in conjunction with any other
person, persons, company, partnership, corporation or business of whatever
nature:
(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer, trustee, or in a managerial capacity, whether as an
employee, independent contractor, agent, consultant or advisor, or as a
sales representative, in any business selling any products or services in
direct competition with the Company;
(ii) call upon any person who is, at that time, an employee of the
Company in a managerial capacity for the purpose or with the intent of
enticing such employee away from or out of the employ of the Company;
(iii) call upon any person or entity which is, at that time, or
which has been, within one year prior to that time, a customer of the
Company for the purpose of soliciting or selling products or services in
competition with the Company; or
(iv) call upon any prospective acquisition candidate, on the
Employee's own behalf or on behalf of any competitor of the Company,
which candidate was either called upon by the Company or for which the
Company made an acquisition analysis, for the purpose of acquiring
such entity.
For purposes of this Section and for purposes of Sections 5, 6, 7, 8 and
16, the term "Company" shall be deemed to include all direct and indirect
subsidiaries, and affiliates of the Company. Notwithstanding the above, the
foregoing covenant shall not be deemed to prohibit Employee from
-5-
6
acquiring as an investment not more than five percent (5%) of the capital stock
of a competing business, whose stock is publicly traded on a national securities
exchange or on the over-the-counter market.
(b) Because of the difficulty of measuring economic losses to the Company
as a result of a breach of the foregoing covenant, and because of the immediate
and irreparable damage that could be caused to the Company for which it would
have no other adequate remedy, Employee agrees that the foregoing covenant may
be enforced by the Company in the event of breach by him, by injunctions and
restraining orders.
(c) It is agreed by the parties that the foregoing covenants in this
Section 3 impose a reasonable restraint on Employee in light of the activities
and business of the Company on the date of the execution of this Agreement and
the Company's current plans; but it is also the intent of the Company and
Employee that such covenants be construed and enforced in accordance with the
changing activities, business and locations of the Company throughout the term
of this covenant.
(d) The covenants in this Section 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant.
(e) All of the covenants in this Section 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement of such covenants; provided, however, that the
Company's continued failure to make payments to Employee under Section 2 of this
Agreement shall constitute such a defense.
(f) Notwithstanding any of the foregoing, if any applicable law shall
reduce the time period during which Employee shall be prohibited from engaging
in any competitive activity described in Section 3(a) hereof, the period of time
for which Employee shall be prohibited pursuant to Section 3(a) hereof shall be
the maximum time permitted by law.
-6-
7
4. Place of Performance.
(a) Employee understands that he may be requested by the Board to
relocate from his present residence to another geographic location in order to
more efficiently carry out his duties and responsibilities under this Agreement.
In such event, if Employee agrees to relocate, the Company shall pay all
reasonable relocation costs to move Employee, his immediate family and their
personal property and effects. Such costs may include, by way of example, but
are not limited to, pre-move visits to search for a new residence, investigate
schools or for other purposes; temporary lodging and living costs prior to
moving into a new permanent residence; duplicate home carrying costs; all
reasonable closing costs on the sale of Employee's present residence and on the
purchase of a comparable residence in the new location; and added income taxes
that Employee may incur if, but only to the extent that, any such relocation
costs are not deductible for tax purposes. The general intent of the foregoing
is that Employee shall not personally bear any out-of-pocket cost as a result of
the relocation, with an understanding that Employee shall use his best efforts
to incur only those costs which are reasonable and necessary to effect a smooth,
efficient and orderly relocation with minimal disruption to the business affairs
of the Company and the personal life of Employee and his family.
(b) Notwithstanding the above, if Employee is requested by the Board to
relocate and Employee refuses, such refusal shall not constitute "cause" for
termination of this Agreement under the terms of Section 5(c) and, if Employee
is terminated for such refusal, Employee shall be entitled to receive all
payments under this Agreement as if he were terminated by the Company without
cause.
5. Term; Termination; Rights on Termination. The term of this Agreement
shall begin on the date hereof and continue for one year (the "Initial Term"),
and, unless terminated as herein provided, shall be extended at the end of the
Initial Term and ongoing successive terms, for a period of one year on the same
terms and conditions contained herein (the "Term"), provided, however, that with
each successive Term, Employee's
-7-
8
compensation shall be adjusted in accordance with Section 2 hereof. This
Agreement and Employee's employment may be terminated in any one of the
followings ways:
(a) Death. The death of Employee shall immediately terminate the
Agreement with no severance compensation due to Employee's estate.
(b) Disability. If, as a result of incapacity due to physical or mental
illness or injury, Employee shall have been absent from his full time duties
hereunder for four (4) consecutive months, then thirty (30) days after written
notice to the Employee (which notice may occur before or after the end of such
four (4) month period, but which shall not be effective earlier than the last
day of such four (4) month period), the Company may terminate Employee's
employment hereunder provided Employee is unable to resume his full-time duties
at the conclusion of such notice period. Also, Employee may terminate his
employment hereunder if his health should become impaired to an extent that
makes the continued performance of his duties hereunder hazardous to his
physical or mental health or his life, provided that Employee shall have
furnished the Company with a written statement from a qualified doctor to such
effect and provided, further, that, at the Company's request made within thirty
(30) days of the date of such written statement, Employee shall submit to an
examination by a doctor selected by the Company who is reasonably acceptable to
Employee or Employee's doctor and such doctor shall have concurred in the
conclusion of Employee's doctor. In the event this Agreement is terminated as a
result of Employee's disability, Employee shall receive from the Company the
base salary at the rate then in effect for a period of eight (8) months from the
date of such termination (the "Disability Period"); provided that, such amounts
shall be offset by any amounts otherwise paid to the Employee under any
disability program then maintained by the Company. During the Disability Period,
Employee shall also receive all benefits to which Employee would otherwise be
entitled. In addition, earned but unpaid base salary as of the date of such
termination shall be paid in full and any bonus award to which the Employee
would have been entitled under the Incentive Bonus Plan had he been employed
throughout
-8-
9
the year in which such bonus is calculated shall be payable on a prorated basis
for the year in which such termination occurs only.
(c) Good Cause. The Company may terminate the Agreement immediately upon
written notice to Employee for good cause, which shall be: (1) Employee's
willful misconduct or gross negligence in the performance or intentional
nonperformance (continuing for ten (10) days after receipt of written notice of
need to cure) of any of Employee's material duties and responsibilities
hereunder; (2) Employee's willful dishonesty, fraud, alcohol or illegal drug
abuse, or misconduct with respect to the business or affairs of the Company,
which materially and adversely affects the operations, prospects or reputation
of the Company; or (3) Employee's conviction of a felony or other crime
involving moral turpitude. In the event of a termination for good cause, as
enumerated above, Employee shall have no right to any severance compensation.
(d) Without Cause. At any time after the commencement of employment, the
Company may, without cause, terminate this Agreement and Employee's employment,
effective thirty (30) days after written notice is provided to the Employee.
Should Employee be terminated by the Company without cause, or if this Agreement
is not renewed pursuant to Section 5 hereof, Employee shall receive from the
Company the base salary at the rate then in effect for one year from the date
Employee's employment is terminated, payable over such time period, and any
other benefits to which Employee would otherwise be entitled. If Employee
resigns or otherwise terminates his employment for any reason other than Good
Reason as defined in Section 5(e), Employee shall receive no severance
compensation.
(e) Termination by Employee for Good Reason. The Employee may terminate
his employment hereunder for "Good Reason." As used herein, "Good Reason" shall
mean the continuance of any of the following after ten (10) days prior written
notice by Employee to the Company and to CPH, specifying the basis for such
Employee's having Good Reason to terminate this Agreement:
-9-
10
(i) a material adverse change in Employee's status, title,
position or responsibilities;
(ii) the assignment to Employee of any duties materially and
adversely inconsistent with the Employee's position as specified in
Section 1 hereof (or such other position to which he may be promoted),
including status, offices, responsibilities or persons to whom the
Employee reports as contemplated under Section 1 of this Agreement, or
any other action by the Company which results in a material and adverse
change in such position, status, offices, titles or responsibilities;
(iii) Employee's removal from, or failure to be reappointed or
reelected to, Employee's position under this Agreement, except as
contemplated by Sections 5(a), (b) and (c); or
(iv) any other material breach of this Agreement by the Company,
including the regular failure to pay Employee on a timely basis the
amounts to which he is entitled under this Agreement.
In the event of any termination by the Employee for Good Reason, Employee shall
be entitled to receive from the Company the base salary at the rate then in
effect for one year from the date Employee's employment is terminated, payable
over such time period, and any other benefits to which Employee would otherwise
be entitled.
(f) Payment Through Termination. Upon termination of this Agreement for
any reason provided above, Employee shall be entitled to receive all
compensation earned and all benefits and reimbursements (including payments for
accrued vacation and sick leave) due through the effective date of termination.
Additional compensation subsequent to termination, if any, shall be due and
payable to Employee only to the extent and in the manner expressly provided
above. All other rights and obligations under this Agreement shall cease as of
the effective date of termination, except that the Company's obligations under
Section 9 herein and Employee's
-10-
11
obligations under Sections 3, 6, 7, 8 and 10 herein shall survive such
termination in accordance with their terms.
6. Inventions. Employee shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Employee,
solely or jointly with another, during the period of employment and which are
directly related to the business or activities of the Company and which Employee
conceives as a result of his employment by the Company. Employee hereby assigns
and agrees to assign all his interests therein to the Company or its nominee.
Employee agrees that all such materials which he develops or conceives and/or
documents during such period shall be deemed works made-for-hire for the Company
within the meaning of the copyright laws of the United States or any similar or
analogous law or statute of any other jurisdiction and accordingly, the Company
shall be the sole and exclusive owner for all purposes for the distribution,
exhibition, advertising and exploitation of such materials or any part of them
in all media and by all means now known or which may hereafter be devised,
throughout the universe in perpetuity. Employee agrees that in furtherance of
the foregoing, he shall disclose, deliver and assign to the Company all such
conceptions, ideas, improvements and discoveries and shall execute all such
documents, including patent and copyright applications, as the Company
reasonably shall deem necessary to further document the Company's ownership
rights therein and to provide the Company the full and complete benefit thereof.
Should any arbitrator or court of competent jurisdiction ever hold that the
materials derived from Employee's contributions to the Company do not constitute
works made-for-hire, Employee hereby irrevocably assigns to the Company, and
agrees that the Company shall be the sole and exclusive owner of, all right,
title and interest in and to all such materials, including the copyrights and
any other proprietary rights arising therefrom. Employee reserves no rights with
respect to any such materials, and hereby acknowledges the adequacy and
sufficiency of the compensation paid and to be paid by the Company to Employee
for the materials and the contributions he will make to the
-11-
12
development of any such information or materials. Employee agrees to cooperate
with all lawful efforts of the Company to protect the Company's rights in and to
any or all of such information and materials and will at the request of the
Company execute any and all instruments or documents necessary or desirable in
order to register, establish, acquire, prosecute, maintain, perfect or defend
the Company's rights in and to such information materials.
7. Confidential Information and Trade Secrets. Employee acknowledges and
agrees that all Confidential Information, Trade Secrets and other property
delivered to or compiled by Employee by or on behalf of the Company or its
representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company and be subject at all
times to its discretion and control. Employee agrees that he shall maintain
strictly the confidentiality of, and shall not, during or after the term of this
Agreement with the Company, disclose, any such Confidential Information or Trade
Secrets.
For purposes hereof, the parties agree that "Confidential Information"
means and includes
- All business or financial information, plans, processes and
strategies, market research and analyses, projections,
financing arrangements, consulting and sales methods and
techniques, expansion plans, forecasts and forecast
assumptions, business practices, operations and procedures,
marketing and merchandising information, distribution
techniques, customer information and other business
information, including records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and
other documentation respecting the Company;
- All information and materials which are proprietary and
confidential to a third party and which have been provided
to the Company
-12-
13
by such third party for the Company's use; and
- All information derived from such Confidential Information.
Confidential Information shall not include information and materials that
are already, or otherwise become, known by or generally available to the
public without restriction on disclosure, other than as a result of an
act or omission by the Employee in breach of the provisions of this
Agreement or any other applicable agreement between the Employee and the
Company.
For purposes hereof, the term "Trade Secret" shall have the
meaning given in the Delaware enactment of the Uniform Trade Secrets Act,
and shall include, without limitation, the whole or any portion or phase
of any scientific or technical information, design, process, formula,
concept, data organization, manual, other system documentation, or any
improvement of any thereof, in any case that is valuable and secret (in
the sense that it is not generally known to the Company's competitors).
8. Return Of Company Property; Termination of Employment. At such time,
if ever, as Employee's employment with the Company is terminated, he shall be
required to participate in an exit interview for the purpose of assuring a
proper termination of his employment and his obligations hereunder. On or before
the actual date of such termination, Employee shall return to the Company all
records, materials and other physical objects relating to his employment with
the Company, including, without limitation, all Company credit cards and access
keys and all materials relating to, containing or derived from any Trade Secrets
or Confidential Information.
9. Indemnification. If Employee is made a party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by the Company against
Employee), by reason of the fact that he is or was performing services under
-13-
14
this Agreement or as an officer or director of the Company (and whether or not
the basis of such action is the Employee's action in such official capacity),
then the Company shall indemnify Employee against all expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement, as actually
and reasonably incurred by Employee in connection therewith to the fullest
extent permitted by applicable law, and such indemnification shall continue as
to Employee even if he has ceased to be an employee, officer or director of the
Company and shall inure to the benefit of his heirs and estate. The Company
shall advance to Employee all reasonable costs and expenses directly related to
the defense of such action, suit or proceeding within twenty days after written
request therefore by the Employee to the Company, provided that such request
shall include an undertaking by the Employee to repay such advances if it shall
ultimately be determined that Employee is or was not entitled to be indemnified
by the Company against such costs and expenses. If both Employee and the Company
are made a party to the same third-party action, complaint, suit or proceeding,
the Company agrees to engage competent legal representation, and Employee agrees
to use the same representation, provided that if counsel selected by the Company
shall have a conflict of interest that prevents such counsel from representing
Employee, Employee may engage separate counsel and the Company shall pay all
attorneys' fees of such separate counsel. Further, while Employee is expected at
all times to use his best efforts to faithfully discharge his duties under this
Agreement, Employee cannot be held liable to the Company for errors or omissions
made in good faith where Employee has not exhibited gross, willful or wanton
negligence or misconduct or performed criminal or fraudulent acts which
materially damage the business of the Company. The provisions of this Section 9
are in addition to, and not in derogation of, the indemnification provisions of
the Company's By-laws.
10. No Prior Agreements. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Employee agrees to
-14-
15
indemnify the Company for, and hold the Company harmless from and against, all
claims, including, but not limited to, attorneys' fees and expenses of
investigation, by any such third party that such third party may now have or may
hereafter come to have against the Company based upon or arising out of any
noncompetition agreement, invention or secrecy agreement between Employee and
such third party which was in existence as of the date of this Agreement.
11. Binding Effect; Assignment. This Agreement shall be binding upon,
inure to the benefit of and be enforceable by the parties hereto and their
respective heirs, legal representatives, successors and assigns. Employee
understands that he has been selected for employment by the Company on the basis
of his personal qualifications, experience and skills. Employee agrees,
therefore, that he cannot assign all or any portion of his performance under
this Agreement.
12. Complete Agreement. This Agreement is not a promise of future
employment. Employee has no oral representations, understandings or agreements
with the Company or any of its officers, directors or representatives covering
the same subject matter as this Agreement. This written Agreement is the final,
complete and exclusive statement and expression of the agreement between the
Company and Employee and of all the terms of this Agreement, and it cannot be
varied, contradicted or supplemented by evidence of any prior or contemporaneous
oral or written agreements.
-15-
16
13. Notice. Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To the Company: Colorado Prime Corporation
0 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, X.X. 00000
Attention: Secretary
to CPH: Colorado Prime Holdings Inc.
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attn: V. Xxxxx Xxxxxx
To Employee: Xxxxxxx X. Xxxxxxxxx
0 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000
Notice shall be deemed given and effective three (3) days after the deposit in
the U.S. mail of a writing addressed as above and sent first class mail,
certified, return receipt requested, or when actually received, if earlier.
Either party may change the address for notice by notifying the other party of
such change in accordance with this Section 13.
14. Severability; Headings. It is the intention of the parties that the
provisions herein shall be enforceable to the fullest extent permitted under
applicable law, and that the unenforceability of any the provision or provisions
hereof, or any portion thereof, shall not render unenforceable or otherwise
impair any other provisions or portions thereof. If any provision of this
Agreement is determined by a court of competent jurisdiction to be
unenforceable, void or invalid in whole or in part, this Agreement shall be
deemed amended to delete or modify, as necessary, the offending provisions or
portions thereof and to alter the bounds thereof, including specifically, any
time, place and manner restrictions contained in any of the restrictive
covenants contained herein, in order to render it valid and enforceable. In any
event, the balance of this Agreement shall be enforced to the fullest extent
possible without regard to such unenforceable, void or invalid provisions or
part thereof. The Section
-16-
17
headings herein are for reference purposes only and are not intended in any way
to describe, interpret, define or limit the extent or intent of the Agreement or
of any part hereof.
15. Company Actions. Employee acknowledges that in any action by the
Company to enforce the provisions of Sections 3, 6, 7 or 8 of this Agreement,
claims asserted by Employee against the Company arising out of his employment
with the Company or otherwise shall not constitute a defense to enforcement of
his obligations hereunder; provided, however, that the Company's continued
failure to make payments to Employee under Section 2 of this Agreement shall
constitute such a defense.
16. Arbitration. Any unresolved dispute or controversy arising under or
in connection with this Agreement (excluding specifically, however, claims and
counterclaims of the Company arising out of any breach by Employee of the
provisions of Sections 3, 7 or 8 hereof) shall be settled exclusively by
arbitration, conducted in accordance with the rules of the American Arbitration
Association then in effect, as modified hereby. Notwithstanding anything
contained in the rules to the contrary, however, the arbitrators shall not have
the authority to add to, detract from, or modify any provision hereof nor to
award punitive or special damages to any injured party. Judgment may be entered
on the arbitrators' award in any court having jurisdiction. The arbitration
proceeding shall be held in New York, New York.
17. Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of New York without reference to its
conflicts of laws provisions.
18. Counterparts. This Agreement may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Agreement shall become binding when one or more counterparts
taken together shall have been executed and delivered (which deliveries may be
by telefax) by the
-17-
18
parties. It shall not be necessary in making proof of this Agreement or any
counterpart hereof to produce or account for any of the other counterparts.
20. Modifications. This Agreement may not be changed, waived, discharged
or terminated orally, but only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought, or his or its duly authorized representative or officer. No waiver by
Employee or the Company of any breach of any provision hereof will be deemed a
waiver of any prior or subsequent breach of the same or any other provision. The
failure of Employee or the Company to exercise any right provided herein will
not be deemed on any subsequent occasions to be a waiver of any right granted
hereunder to either of them
21. EMPLOYEE ACKNOWLEDGES THAT, BEFORE SIGNING THIS AGREEMENT, HE WAS
GIVEN AN OPPORTUNITY TO READ IT, CAREFULLY EVALUATE IT, AND ASK ANY QUESTIONS HE
MAY HAVE HAD REGARDING IT OR ITS PROVISIONS. EMPLOYEE ALSO ACKNOWLEDGES THAT HE
HAD THE RIGHT TO HAVE THIS AGREEMENT REVIEWED BY AN ATTORNEY OF HIS CHOOSING AND
THAT THE COMPANY GAVE HIM A REASONABLE PERIOD OF TIME TO DO SO IF HE SO WISHED.
-18-
19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COLORADO PRIME CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Title: Chief Financial Officer
COLORADO PRIME HOLDINGS INC.
By: /s/ V. Xxxxx Xxxxxx
------------------------------------
Title: Treasurer
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxxxx
-19-
20
SCHEDULE 1
================================================================================
(A) (B)
OPERATING PROFIT PERCENTAGE PERCENT OF SALARY
(%)
================================================================================
80 or lower 0
85-89 20
90-94 40
95-99 50
100-104 60
105-109 75
110-114 90
115-119 105
120 or greater 120
The Employee's bonus with respect to any fiscal year shall equal the percentage
of the Employee's base salary set forth in column B that is opposite the
"Operating Profit Percentage" for such year set forth in column A. The
"Operating Profit Percentage" for a fiscal year shall equal the product of (i) a
fraction, the numerator of which equals the Company's operating income for such
fiscal year (without consideration of bonuses awarded under the Incentive Bonus
Plan for such year) calculated on a basis consistent with the Company's current
financial accounting and reporting policies, and the denominator of which equals
the Company's "Projected Operating Income Before Bonus" set forth below for such
fiscal year or another mutually agreed-upon alternative profit target and (ii)
100.
-20-
21
==================================================================
PROJECTED OPERATING INCOME BEFORE BONUS
=======================================
1997 1998 1999 2000 2001 2002
---- ---- ---- ---- ---- ----
20,389 22,936 26,648 30,731 35,505 41,484
