1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made on the _____ day of __________, 1999,
between VITA FOOD PRODUCTS, INC., a Nevada corporation (the "COMPANY") and XXX
X. XXXXXXX (the "EMPLOYEE").
RECITALS
1. The Company is engaged in the business of processing and manufacturing
cured and smoked xxxxxxx and salmon products and distributing other related
products (the "BUSINESS").
2. The Company has determined that in view of the Employee's past
experience with and services to the Company and his knowledge, expertise and
experience in finance and accounting, the Employee's services as chief
financial officer of the Company will be of great continued value to the
Company, and accordingly, the Company desires to enter into this Agreement with
the Employee as set forth herein in order to secure such continued services.
3. The Employee desires to continue to serve as chief financial officer of
the Company on the terms set forth herein.
CLAUSES
NOW, THEREFORE, for and in consideration of the Employee's employment by
the Company, the above premises and the mutual agreements hereinafter set
forth, the Employee and the Company agree as follows:
1. DEFINITIONS.
(a) "CAUSE" means the Employee's (i) commission of any act of fraud
or dishonesty relating to the business affairs of the Company; (ii)
conviction of any felony in connection with employment by the Company; or
(iii) material failure, after written notice specifying such failure and
a reasonable opportunity to cure such failure, to perform his material
duties or responsibilities hereunder.
(b) "CHANGE IN CONTROL EVENT" means any of the following events: (1)
the sale of all or substantially all of the assets of the Company; or (2)
the sale or other transfer of ownership or voting control of the majority
of the voting stock of the Company to any one entity/individual or to a
group of affiliated entities/individuals who are not presently owners of
at least ten percent (10%) of the outstanding voting stock of the
Company.
(c) "TOTAL DISABILITY" means the Employee's inability, through
physical or mental illness or accident, to perform the majority of his
usual duties and responsibilities hereunder (as such duties are
constituted on the date of the commencement of such disability) in the
manner and to the extent required under this Agreement for a period of at
least one hundred eighty (180) consecutive days or for two hundred
seventy (270) days during a period of three hundred sixty-five (365)
days. Total Disability shall be deemed to have occurred on the first day
following the expiration of such period.
2
2. EMPLOYMENT; DUTIES.
(a) The Company agrees to employ the Employee as Vice President,
Treasurer, Assistant Secretary - Chief Financial Officer of the Company
with the duties and responsibilities generally associated with such
position and currently performed by the Employee and such other
reasonable additional responsibilities and positions as may be added to
the Employee's duties from time to time by the Board consistent with the
Employee's position.
(b) During the term of employment hereunder, Employee shall (i)
diligently follow and implement all management policies and decisions
communicated by the Board; and (ii) timely prepare and forward to the
Board all reports and accountings as may be requested.
3. TERM. The term hereof shall have commenced on October 14, 1998 (the
"EFFECTIVE DATE") and shall continue for a period of two (2) years (the
"TERM").
4. COMPENSATION.
(a)(1) Employee shall be paid a base salary of One Hundred Twenty
Five Thousand Dollars and 00/100 ($125,000) per year (the "BASE SALARY")
for the period beginning on the Effective Date and ending on October 13,
1999. The Base Salary shall accrue and be due and payable in equal, or
as nearly equal as practicable, weekly installments or in the manner and
on the timetable which the Company's payroll is customarily handled or at
such intervals as Company and the Employee may hereafter agree to from
time to time. The Base Salary shall be increased for the twelve (12)
month period beginning on October 14, 1999 and ending on October 13, 2000
by a percentage equal to at least the percentage increase in the cost of
living. The adjustment shall be made by adding to such Base Salary an
amount obtained by multiplying the Base Salary at such time by the
percentage by which the level of the Consumer Price Index for the
Metropolitan Area encompassing the location of Employee's then principal
place of employment as reported on the last day of the preceding calendar
year by the Bureau of Labor Statistics of the United States Department of
Labor has increased over its level as of the Effective Date of this
Agreement.
(2) The Base Salary may be increased from time to time and at any
time by the Compensation Committee and approved by the Board, but shall
in no event be reduced or decreased below the highest level attained at
any time by Employee.
(3) If the Term shall begin on other than the first business day of
a calendar month and if the Term hereof shall terminate on other than the
last day of a calendar month, Employee's compensation for such month
shall be prorated according to the number of days during such month that
occur within the Term.
(b) The Employee shall receive: (1) Guaranteed Bonus ("GUARANTEED
BONUS") of $31,500; and (2) the higher of an annual bonus based on the
Company's Management Bonus Plan, as amended from time to time, only as
approved by the Compensation Committee and by the Board (the "INCENTIVE
BONUS"), whereby Employee shall have the opportunity to earn an Incentive
Bonus based upon a percentage of total amount of Employee's Base Salary
and Guaranteed Bonus or an
2
3
earning bonus equal to 5% of the Company's net income in excess of fifty
thousand dollars ($50,000) ("Earnings Bonus") with a maximum of ten
thousand dollars ($10,000) per year for calendar year 1999 and 2000. The
Incentive Bonus and Earning Bonus, if any, and the Guaranteed Bonus
(collectively the "BONUS PAYMENTS") shall be paid on or before the 15th
day of March following the calendar year for which such Bonus Payments
were earned.
(c) While Employee is performing the services described herein, the
Company shall, upon request, reimburse Employee for all reasonable and
necessary expenses incurred by Employee in connection with the
performance of duties of employment hereunder.
(d) If the Company now maintains or, while Employee renders services
to the Company, establishes an incentive or other compensation plan
(however described or denominated) for the corporate, operating or
executive officers or other management of the Company, or if the Company
now maintains or, while Employee renders services to the Company,
establishes any other benefit program(s) (however described or
denominated) for corporate, operating or executive officers or other
management employees of the Company, Employee shall be eligible to fully
participate in each such plan or benefit program.
(e) During the Term, the Company shall provide health, medical,
disability and term life insurance to Employee in accordance with any
group plan which it now maintains or which may hereafter be established
by the Company.
(f) Employee shall receive not less than three (3) weeks paid
vacation during each twelve (12) month period of employment. Such
vacation period may be increased from time to time and at any time by the
Board but shall in no event be shortened to less than the longest period
attained by Employee at any time during his employment.
(g) On October 14, 1996, the Employee was granted incentive stock
options to purchase 80,000 shares of common stock pursuant to the
Company's 1996 Employee Stock Option Plan, which were canceled and
terminated by Employee and the Company on November 6, 1999.
5. TERMINATION.
(a) Employee's employment may be terminated only as follows:
(1) By the Company: For Cause; or
(2) By the Employee: (A) because of a material breach of this
Agreement by the Company which is not cured after written notice
specifying such failure and reasonable opportunity to cure such
failure; or (B) if a Change in Control Event occurs; or (C) if the
Employee is requested by the Company to relocate more than fifty
(50) miles from its current offices; or
(3) Upon death of the Employee; or
(4) Upon the Total Disability of the Employee.
3
4
(b) In the event that employment is terminated due to the Employee's
death or Total Disability, the Company will be obligated to pay to the
Employee the full amount of Base Salary earned by Employee through the
effective date of termination or death, as the case may be.
(c) In the event that employment is terminated by the Company for
Cause, the Company will have no obligations to pay any amount beyond the
effective date of such termination whether as Base Salary, Bonus Payments
or otherwise or to provide any benefits arising hereunder except as
required by law.
(d) In the event that within one hundred eighty (180) days after a
Change of Control Event, (1) Employee's employment with the Company is
terminated by the Company, its successor, or (2) Employee's position with
or duties for the Company are changed to a level not substantially
commensurate with Employee's current position or duties hereunder:
(i) The Company shall pay Employee on the date of such
termination the full amount of Base Salary earned by Employee
through the Effective Date of termination and a prorata amount of
the Guaranteed Bonus, plus an amount equal to $250,000.
(e) In the event employment is terminated by Employee:
(i) pursuant to Section 5(a)(2)(A); or
(ii) pursuant to Section 5(a)(2)(B) or Section 5(a)(2)(C)
(either hereinafter referred to as an "EVENT") within 90 days of
the Event,
the Company will be obligated to pay Employee the full amount of Base
Salary earned by Employee through the Effective Date of termination plus
liquidated and sole damages with respect to an Event of an amount equal
to $100,000.
(f) Upon a Change of Control event, all of Employee's stock options
shall immediately become fully vested.
6. CONFIDENTIAL INFORMATION. Employee acknowledges that the nature of his
engagement by the Company is such that Employee shall have access to
information of a confidential and/or trade secret nature which has great value
to the Company. Such information includes financial, manufacturing and
marketing data, business plans and methods, processes, product formulas,
developmental work, work in process, methods, trade secrets (including, without
limitation, customer lists, supplier lists and lists of customer, supplier and
food broker sources), and any other information relating to the products,
services, customers, sales or business affairs of the Company, which has value
and is treated as secret and/or confidential by the Company (the "CONFIDENTIAL
INFORMATION"). The Company and Employee have and will also have access to
Confidential Information of its suppliers ("SUPPLIERS" means any persons with
whom the Company has a co-packing or joint venture relationship with or who
supplies any products or materials to the Company). Confidential Information
includes not only information disclosed by the Company or its Suppliers to
Employee in the course of employment, but also information developed or learned
by Employee during the course of employment with the Company. Confidential
Information is to be broadly defined. Confidential Information includes all
information that has or could have commercial value or other utility in the
business in which the
4
5
Company or Suppliers are engaged or in which they contemplate engaging.
Confidential Information also includes all information of which the
unauthorized disclosure could be detrimental to the interests of the Company or
Suppliers, whether or not such information is identified as Confidential
Information by the Company or Suppliers. Employee agrees to keep all
Confidential Information that could be materially detrimental to the interests
of the Company or Suppliers in confidence during the term of this Agreement and
at any time thereafter and shall not use, disclose, publish or otherwise
disseminate any of such Confidential Information to any other person, except to
the extent such disclosure is (i) necessary to the performance of this
Agreement and in furtherance of the Company's best interests, (ii) required by
applicable law, (iii) lawfully obtainable from other sources, (iv) authorized
in writing by the Company, or (v) no longer qualifies as a trade secret or
Confidential Information under applicable law. Upon termination of employment
with the Company, Employee shall deliver to the Company all documents, records,
notebooks, work papers, and all similar material containing Confidential
Information, whether prepared by Employee, the Company or anyone else.
7. NON-COMPETITION. In order to protect the Confidential Information,
Employee agrees that during the term of employment, and for a period of one (1)
year thereafter, Employee will not, directly or indirectly, whether as an
owner, partner, shareholder, agent, employee, creditor, or otherwise, promote,
participate or engage in any activity or other business directly competitive
with the Company's then existing Business, if Company reasonably believes that
such activity or other business may involve any use of any of the Confidential
Information by Employee.
8. NON-SOLICITATION OF CUSTOMERS OR SUPPLIERS. Employee agrees that for a
period of one (1) year after the termination of employment with the Company,
Employee will not, on his own behalf or on behalf of any other individual,
association or entity, call on any of the customers or Suppliers of the Company
for the purpose of soliciting or inducing any of such customers to acquire (or
providing to any of such customers) or any of the Suppliers to provide any
product or service provided by or to the Company, nor will Employee in any way,
directly or indirectly, as agent or otherwise, in any other manner solicit,
influence or encourage such customers or Suppliers to take away or to divert or
direct their business away from the Company to Employee or to any other person
or entity with which Employee is employed, associated, affiliated or otherwise
related.
9. NONINTERFERENCE WITH EMPLOYEES. In order to protect the Confidential
Information and as a consideration for this Agreement, Employee agrees that
during the term hereof and for a period of one (1) year thereafter, Employee
will not, directly or indirectly, induce or entice any employee of the Company
to leave such employment or cause anyone else to leave such employment.
10. REMEDIES. The parties hereto agree that the services to be rendered
by Employee pursuant to this Agreement, and the rights and privileges granted
to the Company pursuant to this Agreement, are of a special, unique,
extraordinary and intellectual character, which gives them a peculiar value,
the loss of which cannot be reasonably or adequately compensated in damages in
any action at law, and that a breach by Employee of any of the terms of this
Agreement will cause the Company great and irreparable injury and damage.
Employee hereby expressly agrees that the Company shall be entitled to the
remedies of injunction, specific performance and other equitable relief to
prevent a breach of this Agreement by Employee. This Section 10 shall not be
construed as a waiver of any other rights or remedies which the Company may
have for damages or otherwise.
5
6
11. SEVERABILITY. In case any one or more of the provisions of this
Agreement shall for any reason be held to be invalid, illegal or unenforceable
in any respect, the same shall not affect any other provision of this
Agreement, but this Agreement shall be construed as if such invalid or illegal
or unenforceable provision had never been contained herein.
12. ASSIGNMENT. This Agreement and the rights and obligations of the
parties hereunder may not be assigned by either party hereto without the prior
written consent of the other party hereto.
13. NOTICES. Except as otherwise specifically provided herein, any notice
required or permitted to be given to Employee pursuant to this Agreement shall
be given in writing, and personally delivered or mailed to Employee by
certified mail, return receipt requested, at the address set forth below
Employee's signature on this Agreement or at such other address as Employee
shall designate by written notice to the Company given in accordance with this
Section 13, and any notice required or permitted to be given to the Company
shall be given in writing, and personally delivered or mailed to the Company by
certified mail, return receipt requested, addressed to the Company at the
address set forth under the signature of the President of the Company or his
designee on this Agreement or at such other address as the Company shall
designate by written notice to Employee given in accordance with this Section
13. Any notice complying with this Section 13 shall be deemed received upon
actual receipt by the addressee.
14. WAIVER. The waiver by either party hereto of any breach of this
Agreement by the other party hereto shall not be effective unless in writing,
and no such waiver shall operate or be construed as the waiver of the same or
another breach on a subsequent occasion.
15. GOVERNING LAW. This Agreement and the rights of the parties hereunder
shall be governed by and construed in accordance with the laws of the State of
Illinois.
16. BENEFICIARY. All of the terms and provisions of this Agreement shall
be binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, heirs, executors, administrators and
permitted assigns.
17. ENTIRE AGREEMENT. This Agreement embodies the entire agreement of the
parties hereto relating to Employee's employment by the Company in the capacity
herein stated and, except as specifically provided herein, no provisions of any
employee manual, personnel policies, Company directives or other agreement or
document shall be deemed to modify the terms of this Agreement. No amendment or
modification of this Agreement shall be valid or binding upon Employee or the
Company unless made in writing and signed by the parties hereto. All prior
understandings and agreements relating to Employee's employment by the Company,
in whatever capacity, are hereby expressly terminated.
18. CONFIDENTIALITY. The terms, conditions and existence of this
Agreement shall be confidential.
IN WITNESS WHEREOF, Employee and the Company have executed and delivered
this agreement as of the date first shown above.
EMPLOYEE: THE COMPANY:
XXX X. XXXXXXX VITA FOOD PRODUCTS, INC.
6
7
___________________________________ By:__________________________________
Address:___________________________ Printed Name:________________________
___________________________ Title:_______________________________
___________________________ Address: 0000 Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000
7