EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of August 1, 2000, by and between IVC Industries,
Inc., a Delaware corporation (the "Company"), with offices at 000 Xxxxx Xxxx
Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, and Xxxxxx X. Xxxxxxxx ("Xxxxxxxx"),
(hereinafter "the Agreement").
WHEREAS, the Company wishes to assure itself of the services of Xxxxxxxx;
and
WHEREAS, Xxxxxxxx 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 Xxxxxxxx agree as follows:
1. Employment
The Company shall employ Xxxxxxxx to serve the Company as its Chief
Financial Officer during the Term of Employment as set forth in Paragraph 2 of
this Agreement. Xxxxxxxx shall report to the Chief Executive Officer ("CEO") of
the Company and/or to any other individual as may be designated by the CEO
and/or the Board of Directors of the Company. Xxxxxxxx'x duties shall be
consistent with his title of Chief Financial Officer. Xxxxxxxx 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 Xxxxxxxx'x services during the
Term of Employment shall be performed primarily in the Freehold, New Jersey area
and/or such other office location of the Company, 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 Xxxxxxxx'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 Xxxxxxxx an annual base salary of $165,000.00
for Term of Employment under this Agreement, payable in equal installments in
accordance with the Company's customary payroll practices. Annually on or about
October 15 each year during the Term of Employment, Xxxxxxxx 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 Xxxxxxxx'x base salary based upon Xxxxxxxx'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, 2001
and continue annually thereafter for the Term of Employment. Nothing contained
in this Agreement, however, guarantees or requires the Company to increase
Xxxxxxxx'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
Xxxxxxxx an annual bonus based upon Xxxxxxxx'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, 2001, and continue annually
thereafter for the Term of Employment. Nothing contained in this Agreement
guarantees or requires the Company to pay Xxxxxxxx a bonus at any time during
the Term of Employment.
(c) During the Term of Employment, Xxxxxxxx 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, Xxxxxxxx be
permitted to participate therein.
(d) During the Term of Employment, Xxxxxxxx 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, Xxxxxxxx be
permitted to participate therein.
(e) During the Term of Employment, the Company shall provide Xxxxxxxx with
a term life insurance benefit in an amount equal to Xxxxxxxx'x annual base
salary under Paragraph 3(a) of this Agreement. The Company at its option may
elect to fulfill its obligation 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 Xxxxxxxx in
accordance with the terms and conditions of any such plan and/or policy. Should
Xxxxxxxx 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
Xxxxxxxx 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 Xxxxxxxx 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, Xxxxxxxx shall be entitled
to three (3) weeks of paid vacation (in addition to all holidays observed by the
Company) at
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such 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
Xxxxxxxx does not use all three (3) weeks of vacation during any year of the
Term of Employment, the Company shall pay Xxxxxxxx an amount equal to the pro
rata daily compensation rate for Xxxxxxxx based upon his base salary for such
year multiplied by the number of unused vacation days for such year to which
Xxxxxxxx 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) During the Term of Employment, Xxxxxxxx will receive from the Company
as additional W-2 compensation, a monthly auto allowance in the gross amount of
$1,000.00, which amount shall be added to the amount of Xxxxxxxx'x regular
salary during the Term of Employment, to be allocated and paid equally among
each of the payroll periods for each month thereof, beginning with the first pay
period in August 2000.
4. Termination of Employment
(a) Xxxxxxxx'x employment shall terminate upon his death and may be
terminated, at the option of the Company, upon written notice to Xxxxxxxx only
(i) as a result of Xxxxxxxx'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 Xxxxxxxx written notice of termination.
(b) As used herein, "disability" shall mean such physical or mental
disability or incapacity of Xxxxxxxx, which has substantially prevented him from
performing his
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principal duties hereunder during any period of 90 consecutive calendar days or
for a total of 120 calendar days (whether or not consecutive) during 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, Xxxxxxxx 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 Xxxxxxxx under a plan and/or policy provided to
Xxxxxxxx and paid for by the Company.
(c) As used herein, "Cause" shall mean any and all of the following: (i)
misconduct by Xxxxxxxx in respect of his duties and obligations under this
Agreement, which misconduct by Xxxxxxxx causes significant injury to the
Company; (ii) Xxxxxxxx'x commission of a crime and/or other actionable civil
wrong involving moral turpitude, which would adversely affect the Company should
Xxxxxxxx continue to serve as an employee of the Company; (iii) gross negligence
by Xxxxxxxx in the performance of any of his duties under this Agreement; and
(iv) Xxxxxxxx is found to be incompetent by the Board of Directors to perform
his duties under this Agreement. "Cause" shall not include a bona fide
disagreement over a corporate policy so long as Xxxxxxxx does not violate on a
continuing basis (three times or more during the Term of Employment) specific
directions (oral or written) from the Company's Board of Directors, CEO and/or
any other individual to whom Xxxxxxxx reports pursuant to the direction of the
Board of Directors and/or CEO, provided such directions are consistent with the
provisions of this Agreement.
(d) Upon termination of Xxxxxxxx'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
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the effective date of the termination as provided in Paragraph 4(a) of this
Agreement, to Xxxxxxxx or to his beneficiaries, personal representatives or his
Estate, as the case may be, any annual base salary and unused vacation time
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 Xxxxxxxx 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 Xxxxxxxx'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 Xxxxxxxx shall be entitled to receive a Severance Package in an
amount equal to the unpaid base salary for the period of time 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 Xxxxxxxx'x employment not
been terminated before expiration of the Term of Employment. Xxxxxxxx shall also
continue to participate for the period of time remaining under the Term of
Employment as of the date of termination 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 Xxxxxxxx'x continued participation
in any group health, medical, disability and/or life insurance plan and/or
program in effect under
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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 Xxxxxxxx for the applicable time
period described above amounts equal to the actual out-of-pocket cost (grossed
up for tax effect) incurred by Xxxxxxxx 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, and/or disability
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 Xxxxxxxx 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 thereof, including without
limitation, all claims under this Agreement and any and all claims under
applicable state or federal law.
(f) Xxxxxxxx shall be permitted at any time during the Term of Employment
upon thirty (30) days written notice to the Company to resign from his
employment with the Company. In the event of Xxxxxxxx'x resignation under this
Paragraph 4(f), the Company may in its sole discretion accept such resignation
to be effective immediately or to be effective as of any other date the Company
may select within the thirty (30) day notice period. The Company shall only be
responsible for payment of Xxxxxxxx'x base salary under Paragraph 3(a) and such
other benefits provided for under Paragraphs 3(c)-(e), (f), (g) and (i) until
the effective date of resignation as selected by the Company, irrespective of
the fact that such date may be earlier than the expiration of the required
thirty (30) day notice period. Except for annual salary and other benefits
accrued and
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unpaid as of the effective date of resignation, Xxxxxxxx automatically forfeits
any and all other compensation and/or benefits under this Agreement upon tender
of his resignation to the Company under this Paragraph 4(f). For example, if
Xxxxxxxx on May 1, 2000 provides the Company with the required thirty (30) days
written notice of his resignation, the Company in its sole discretion may accept
the resignation effective as of May 1, 2000, thereby extinguishing any and all
of the Company's obligations to Xxxxxxxx under this Agreement as of May 1, 2000.
Upon and by the tender of his resignation to the Company under this Paragraph
4(f), unless prohibited by law, Xxxxxxxx releases and waives any and all claims
he may have against the Company, its officers, directors, shareholders, agents,
attorneys, employees and representatives relating to his employment with the
Company and/or his resignation from and/or subsequent termination of employment
with the Company, including without limitation, all claims under this Agreement,
any and all claims for constructive termination and/or 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, Xxxxxxxx shall not at any time during
or after the Term of Employment disclose or use, directly or indirectly, any
trade secrets and/or 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 Xxxxxxxx shall obtain knowledge by
reason of his employment with the Company. Xxxxxxxx shall retain all such
Confidential Information in trust in a fiduciary capacity for the sole benefit
of the Company. Such Confidential Information includes, but is not
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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,
Xxxxxxxx shall not, directly or indirectly, solicit any person, firm, entity or
corporation who is or was, during Xxxxxxxx'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 Xxxxxxxx'x
employment with the Company.
(c) Xxxxxxxx recognizes that the Company's employees are a valuable
resource of the Company. Xxxxxxxx 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.
(d) Xxxxxxxx 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.
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(e) Upon expiration of the Term of Employment, termination of employment
and/or or at any other time as the Chief Executive Officer and/or Board of
Directors of the Company may request, Xxxxxxxx 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 Xxxxxxxx shall not make or retain any copy
or extract of any of the foregoing.
(f) As a means reasonably calculated to prevent Xxxxxxxx from disclosing
or making accessible to any person or entity any Confidential Information
Xxxxxxxx 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 Xxxxxxxx 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 other state or country in which the Company is licensed
to do business which directly competes with the Company.
(g) Xxxxxxxx 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
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to any other remedy provided by law or equity, the Company shall be entitled to
injunctive relief restraining Xxxxxxxx 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 Xxxxxxxx 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 Xxxxxxxx.
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) the
addresses set forth below for each party or at such other addresses as the
parties may specify by notice to the other in accordance with the terms hereof:
(a) To Xxxxxxxx -
Xxxxxx X. Xxxxxxxx
(b) To the Company -
E. Xxxxxx Xxxxx
Chief Executive Officer
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Facsimile No.: (000) 000-0000
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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
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
Xxxxxxxx.
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 Xxxxxxxx under any circumstances 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;
(ii) any corporation or entity to which the Company may sell all or
substantially all of its assets; or (iii) any corporation or entity which may
purchase all of the outstanding stock of the Company. 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 entity and/or any
corporation or entity that acquires all or substantially all of the Company's
assets.
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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 Xxxxxxxx.
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.
Xxxxxxxx has obtained legal advice concerning the terms, conditions and legal
effect of this Agreement from the attorneys of their own choosing and have not
relied on anything the Company or its attorneys have said in deciding to sign
this Agreement.
12. Headings
Paragraph headings are for convenience purposes only and shall not be
considered part of the terms and conditions 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.
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14. Effective Date
The Effective Date of this Agreement is August 1, 2000. IN WITNESS
WHEREOF, the parties have executed this Agreement as of the first date written
above.
THE COMPANY
IVC INDUSTRIES, INC.
Attested:
By: /s/ Xxxxxx Xxxxxx By: /s/ E. Xxxxxx Xxxxx
------------------------- ----------------------------------
Xxxxxx Xxxxxx E. Xxxxxx Xxxxx
Assistant Secretary Chief Executive Officer
Seal
Witnessed by: EMPLOYEE
/s/ Xxxxx Xxxxxxxx /s/ Xxxxxx Xxxxxxxx
----------------------------- --------------------------------------
Xxxxxx X. Xxxxxxxx
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