EXHIBIT 10.4
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") made as of the __ day of
February, 1997 between Jazz Photo Corp., a New Jersey corporation (the
"Company"), and Xxxxx X. Xxxxxxxxx, residing at 79 Many Xxxxxx Xxxx, Xxxxx Xxxx
Xxxx, Xxxxxxxxx 00000 (the "Executive").
WHEREAS, the Company believes it is in the best interests of the Company
to retain the Executive as an executive of the Company on the terms herein
provided; and
WHEREAS, the Executive is desirous of committing himself to serve the
Company on the terms herein provided;
NOW, THEREFORE, in consideration of the foregoing and of the respective
covenants and agreements of the parties herein contained, the parties hereto
agree as follows:
1. Effectiveness. This Agreement shall be effective (the "Effective Date")
immediately upon the last to occur of (a) the approval by the Board of Directors
of the Company of this Agreement including the express grant of the Stock Option
as defined herein; (b) the execution of this Agreement by the Company and the
Executive; or (c) April 1, 1997.
2. Employment. The Company hereby agrees to employ the Executive, and the
Executive hereby accepts such employment, on the terms and conditions set forth
herein for the period commencing on the Effective Date and expiring on the third
anniversary thereof, unless such employment is sooner terminated as hereinafter
set
forth (such period is hereinafter sometimes referred to as the "Term of
Executive's Employment").
3. Position and Duties. During the Term of Executive's Employment
hereunder, the Executive shall serve as Chief Executive Officer and a Director
of the Company, reporting to the Board of Directors of the Company, and shall
have supervision and control over, and responsibility for all aspects of the
Company's operations, and shall have such other powers and duties as may from
time to time be prescribed by the Board of Directors of the Company. The
Executive shall devote his entire working time and efforts to the business and
affairs of the Company.
4. Compensation.
(a) Executive Base Compensation. During the Term of Executive's
Employment hereunder, the Executive shall receive a base salary at the annual
rate of $315,000.00 (the "Executive Base Compensation"), or such amount in
excess of Executive Base Compensation as the Company shall from time to time
determine in its discretion, payable at such intervals or times as shall accord
with the Company's normal procedure.
(b) Expenses. During the Term of his employment hereunder the
Executive shall be entitled to receive reimbursement for all reasonable expenses
incurred by him (in accordance with the policies and procedures currently in
effect for the senior executive officers of the Company) in performing services
hereunder, provided that the Executive properly accounts therefor in accordance
with Company policy.
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(c) Fringe Benefits. The Executive shall be entitled to participate
in or receive benefits under any profit-sharing or pension plan, savings plan,
stock option plan, stock purchase plan, life insurance and/or death benefits
plan, medical and health-and-accident plans, or arrangement currently made
available by the Company or to be made available in the future to its executives
and key management employees, including the Company's 1997 Long-Term Incentive
Plan, as currently in effect or any comparable successor plan thereto, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Nothing paid to the Executive
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of Base Compensation to the Executive
hereunder.
(d) Perquisites. The Executive shall be entitled to receive
perquisites appertaining to, and consistent with, his office in accordance with
such practices as may be adopted by the Company from time to time, including,
but not limited to (i) an automobile, the style and year to be chosen at the
Company's discretion, for the exclusive use of Executive; and (ii) an automobile
allowance in the amount of $1,000.00 per month.
(e) Vacation. The Executive shall be entitled to five (5) weeks of
vacation for each calendar year during the Executive's employment commencing in
1997. Executive shall be permitted to carryover a maximum of two and one-half (2
1/2) weeks of an accrued and unused vacation to the next calendar year. Any
other unused vacation will be forfeited. Subject to the limitations of the
preceding sentence,
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Executive will be entitled to a payment for any accrued and unused vacation upon
termination of his employment for any other reason other than cause or if
Executive terminates his employment.
(f) Housing Allowance. The Executive shall be entitled to receive a
housing allowance from the Company for the rental of a dwelling within commuting
distance of the Company's New Jersey headquarters adequate to accommodate the
Executive and his family at a cost not exceeding $5,000 per month, in living
arrangements comparable to those currently maintained by Executive.
(g) Stock Option Grant. The Board of Directors of the Company
concurrently with the execution hereof shall grant to Executive an option to
purchase a total of 70,000 shares of the Class A Common Stock of the Company
(the "Stock Option") in accordance with the terms and conditions of the
Company's 1997 Long-Term Incentive Plan at an exercise price of $1.50 per share.
(h) Moving Allowance. In consideration of the substantial expenses
the Executive will incur in connection with Executive's relocation, the Company
shall provide Executive with a relocation allowance of $75,000.00, such amount
to be payable in full to Executive within three (3) months of the date Executive
assumes his duties hereunder. Executive agrees that should he resign his
employment with the Company at any time prior to thirty-six (36) months
following the Effective Date, he shall reimburse the Company on the last day
worked for a portion of the relocation allowance. The relocation allowance shall
be prorated over thirty-six (36) months, and
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the portion for which Executive must reimburse the Company will be payable in
full upon the last day of his Employment.
(i) Life Insurance Policies.
(i) The Company shall provide Executive, at no expense to
Executive, with a life insurance policy in the amount of $250,000, the
beneficiary of which shall be at Executive's sole and exclusive discretion.
(ii) At any time during the term of this Agreement, the
Company shall have the right to insure the life of Executive for the Company's
sole benefit, and to determine the amount of insurance and the type of policy.
The Company shall be the solely liable for the payment of the premiums due on
such policy, shall be the sole owner of the policy, shall be entitled at all
times to its physical possession, and shall be its beneficiary and the person
entitled to all its rights and privileges. Executive agrees to cooperate with
the Company in making application for such policy by submitting to a physical
examination, by supplying all information required by the insurance company, and
by executing all necessary documents, provided that those documents do not
impose upon Executive any financial obligation to the Company or the insurance
company in connection with such life insurance.
(j) Disability Benefits. The Company shall purchase for the benefit
of Executive a disability policy in a form reasonably acceptable to the
Executive with disability benefits equal to fifty percent (50%) of the
Executive's Base Compensation for a term beginning with the Executive's
employment and ending on April 2, 2000.
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5. Offices; Directorships. The Executive agrees to serve on the Board of
Directors of the Company without additional compensation, when elected or
appointed thereto, in one or more offices in, and/or as a director of, the
Company or any subsidiary or affiliate of the Company.
6. Termination.
(a) Disability. If, based on independent medical advice, from a
physician reasonably acceptable to the Company and Executive, the Board of
Directors determines that, due to physical or mental illness, the Executive has
been unable to perform his duties hereunder for six consecutive months or six
non-consecutive months in any twelve month period, the Company may terminate the
employment of the Executive by delivering a Notice of Termination specifying a
termination date. The return of the Executive to the performance of his duties
in accordance with Section 3 hereof prior to the specified termination date
shall not render such notice ineffective for the purpose of terminating
Executive's employment hereunder.
(b) Termination by the Executive. The Executive may terminate his
employment hereunder voluntarily, provided that the Executive delivers to the
Company a Notice of Termination specifying a termination date not less than
ninety (90) days subsequent to the date of such Notice of Termination.
(c) Termination by the Company. The Company may terminate the
employment of the Executive, with or without cause, by delivering a Notice of
Termination specifying a termination date not less than ninety (90) days
subsequent to such Notice of Termination, except that, in the case of a
Termination for Cause (as
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herein defined), a Notice of Termination shall be effective immediately. A
"Termination Without Cause" shall mean a termination of the Executive's
employment hereunder, other than a "Termination for Cause" as defined herein and
other than pursuant to subsections (a), (b) or (d) hereof. A "Termination for
Cause" shall mean, in the context of termination of the employment or the
directorship of the Executive, any of the following events or conditions: (i)
the Executive's material failure to perform (other than by reason of disability)
his duties and responsibilities as an employee or director which are not
remedied within 30 days after receipt of written notice thereof from the
Company, (ii) fraud, embezzlement or other material dishonesty with respect to
the Company, (iii) conviction of, or plea of nolo contendere to, any felony or
any other crime involving fraud, dishonesty or moral turpitude, (iv) the
Executive shall have materially breached any confidentiality or non-competition
agreement to which the Executive is a party with the Company directly, or (v)
the Executive shall have materially breached this Agreement, provided, however,
with respect to clauses (i) and (v) hereof Executive shall have received written
notice from the Company and such material failure or material breach shall not
have been remedied within 30 days of receipt of such notice and provided,
further, that the termination of the employment of the Executive shall not be
deemed to be a Termination for Cause unless (1) the written notice of
termination indicates the specific termination provision relied upon and sets
forth the facts and circumstances claimed to provide a basis for termination;
(2) an opportunity is provided for the Executive, together with his counsel, to
be heard before the Board of Directors on the matter of termination; and (3) the
Executive receives a
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letter of termination from the Board of Directors stating that in the good faith
opinion of the Board, the Executive was guilty of the conduct set forth in
clauses (c), (i), (ii), (iii), (iv), or (v).
(d) The Executive's employment hereunder shall terminate upon his
death.
(e) Any termination (1) by the Company pursuant to subsections 6(a)
or (c) above or (2) by the Executive pursuant to subsection 6(b) above shall be
communicated by written Notice of Termination ("Notice of Termination") to the
other party hereto. For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision
relied upon, and shall set forth the facts and circumstances claimed to provide
a basis for termination of the Executive's employment hereunder.
(f) "Date of Termination" shall mean (i) if the Executive's
employment is terminated by his death, the date of his death, (ii) if the
Executive's employment is terminated under Section 6(a), on the date the
Executive's employment is terminated by the Company in accordance with a Notice
of Termination under Section 6(a), (iii) if the Executive's employment is
terminated pursuant to a Notice of Termination under Section 6(c), the date upon
which such termination becomes effective pursuant to this Agreement and such
Notice of Termination, and (iv) the third anniversary of the Effective Date if
the Executive is employed by the Company at such date.
(g) Except in the case of a Termination Without Cause pursuant to
Section 6(c), the Executive shall be paid all amounts earned to the Date of
Termination.
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In the case of Termination Without Cause during the Executive's employment under
this Agreement pursuant to Section 6(c), the Executive shall be paid by the
Company his Base Compensation for a period commencing on the day following the
Date of Termination and ending on the third anniversary of the Effective Date
(as defined in Section 1 of this Agreement). Executive's rights under this
Subsection (g) shall survive the termination of his employment under this
Agreement.
7. Confidential Information; Intellectual Property; Restricted Activities.
(a) Confidential Information. Executive acknowledges that Company
and its affiliates continually develop Confidential Information, that the
Executive may develop Confidential Information for the Company or its affiliates
and that the Executive may learn of Confidential Information during the course
of employment. The Executive will comply with the policies and procedures of the
Company and its affiliates for protecting Confidential Information and shall
never disclose to any person or to any governmental agency or political
subdivision of any government (except as required by applicable law or for the
proper performance of his duties and responsibilities hereunder), or use for his
own benefit or gain, any Confidential Information obtained by the Executive
incident to his employment or other association with the Company or any of its
affiliates. The Executive understands that this restriction shall continue to
apply after his employment terminates, regardless of the reason for such
termination.
"Confidential Information" means any and all information of the
Company and its affiliates that is not generally known by others with whom they
compete or do business, or with whom they actively plan to compete or do
business. Confidential
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Information includes without limitation such information relating to (i) the
development, research, testing, manufacturing, marketing and financial
activities of the Company and its affiliates, (ii) the Products, (iii)
Intellectual Property; (iv) the costs, sources of supply, financial performance
and strategic plans of the Company and its affiliates, (v) the identity and
special needs of the customers of the Company and its affiliates; and (vi) the
people and organizations with whom the Company and its affiliates have business
relationships and those relationships. Confidential Information also includes
comparable information that the Company or any of its affiliates have received
belonging to others or which was received by the Company or any of its
Affiliates with any understanding, express or implied, that it would not be
disclosed.
(b) Intellectual Property. The Executive hereby assigns and agrees
to assign to the Company (or as otherwise directed by the Company) the
Executive's full right, title and interest in and to all Intellectual Property.
The Executive agrees to promptly and fully disclose all Intellectual Property to
the Company and to execute any and all applications for domestic and foreign
patents, copyrights or other proprietary rights and to do such other acts
(including without limitation the execution and delivery of instruments of
further assurance or confirmation) requested by the Company to assign the
Intellectual Property to the Company and to permit the Company to enforce any
patents, copyrights or other proprietary rights to the Intellectual Property.
The Executive will not charge the Company for time spent in complying with these
obligations. All copyrightable works that the Executive creates shall be
considered "work made for hire".
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"Intellectual Property" means inventions, discoveries, developments,
methods, processes, compositions, works, concepts and ideas (whether or not
patentable or copyrightable or constituting trade secrets) conceived, made,
created, developed or reduced to writing by the Executive (whether alone or with
others, whether or not during normal business hours or on or off Company
premises) during the Executive's employment that relate to either the Products
or any activity of the Company or any of its Affiliates which is under active
development.
"Products" mean all products under active development, researched,
developed, tested, manufactured, sold, licensed, leased or otherwise distributed
or put into use by the Company or any of its affiliates, together with all
services provided or under active development by the Company or any of its
affiliates, during the Term of Executive's Employment.
(c) All documents, records, files, tapes and other media of every
kind and description relating to the business, present or otherwise, of the
Company or any of its affiliates and to their customers, prospective customers,
vendors, and any other persons with whom the Company has business dealings,
including, but not limited to, originals and all copies of all correspondence,
soliciting materials, contracts, proposals, analyses, performance data and other
written or computer software, data bases, programs and disks, in whole or in
part, thereof, whether or not prepared by the Executive, are the sole and
exclusive property of the Company and its affiliates ("Documents"). Upon
termination of Executive's employment for any reason, whether during the period
set forth in Section 2 hereof or thereafter, or at such earlier time or
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times as the Board may specify, the Executive shall immediately turn over to the
Company all Documents maintained by, or under the control or possession of, the
Executive.
(d) Restricted Activities.
(i) While the Executive is employed hereunder and for a period
of two (2) years after his employment terminates (the "Non-Competition Period"),
the Executive shall not, directly or indirectly, whether as owner, partner,
investor, consultant, agent, employee, coventurer or otherwise, compete with the
Company or any of its affiliates within the United States or within any country
in which the Company makes sales of products representing 50% or more of its
revenue undertake with any third party any planning for any business competitive
with the Company or any of its affiliates. Specifically, but without limiting
the foregoing, the Executive agrees not to engage in any manner in any activity
that is directly or indirectly competitive with the business of the Company or
any of its affiliates as conducted or under active development at any time
during the Term of Executive's Employment. For the purposes of this Section 7,
the business of the Company and its affiliates shall include all Products and
the Executive's undertaking shall encompass all items, products and services
that may be competitive with Products.
(ii) The Executive agrees that, during his employment
hereunder, he will not undertake any outside activity, whether or not
competitive with the business of the Company or any of its affiliates, that
could reasonably give rise to a
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conflict of interest or otherwise interfere with his duties and obligations to
the Company or any of its affiliates.
(iii) The Executive further agrees that while he is employed
by the Company hereunder and during the Non-Competition Period, the Executive
will not hire or attempt to hire any employee of the Company or any of its
affiliates, to perform services for any Person, assist in such hiring by any
Person, encourage any such employee to terminate his or her relationship with,
the Company or any of its affiliates, or solicit or encourage any customer or
vendor of the Company or any of its affiliates to terminate or diminish its
relationship with them or, in the case of a customer, to conduct with any Person
any business or activity which such customer conducts or could conduct with the
Company or any of its affiliates.
"Person" means an individual, a corporation, an association, a
partnership, an estate, a trust and any other entity or organization, other than
the Company or any of its affiliates.
8. Enforcement. The Executive recognizes that his agreement to the
terms and conditions of this Section 8 represents a material inducement to the
Company to employ the Executive. The Executive acknowledges that irreparable
injury may result to the Company and that the Company will have no adequate
remedy at law in the event that the Executive breaches any of the provisions of
Section 7 hereof. Accordingly, the Executive agrees that in the event of a
breach by the Executive of any of the provisions of Section 7, the Company
shall, in addition to all other rights and remedies, be entitled to injunctive
relief with respect to such breach and/or to a decree
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for specific performance of the terms of such Section, in each instance without
the necessity of showing any irreparable injury or special damages.
9. Successors.
(a) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to the Executive, expressly to assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
As used in this Agreement, "Company" shall mean the Company as hereinbefore
defined and any successor to its business and/or assets as aforesaid which
executes and delivers the Agreement provided for in this Section 9 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.
(b) In the event Executive's employment under this Agreement
shall terminate for any reason while any amounts have been earned but not paid
as of the applicable Date of Termination as defined herein or are otherwise due
the Executive under the terms of Section 6 hereof or by reference thereto, then
the right to receive such amount shall survive and be enforceable after the
termination of Executive's employment hereunder by the Executive, his
successors, assigns, executors, administrators, heirs, legatees, devisees or
legal representatives.
10. Notices. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed
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to have been duly given when mailed by United States registered or certified
mail, return receipt requested, postage prepaid, transmitted by facsimile
transmission or delivered by messenger addressed as follows:
If to the Executive:
Xxxxx X. Xxxxxxxxx
79 Many Xxxxxx Xxxx
Xxxxx Xxxx Xxxx, Xxxxxxxxx 00000
with a copy to: Xxxx X. Xxxxxx, Esq.
Xxxxxx and Xxxxxx
0000 Xxxxx Xxxxxxxx Xxxx Xxxxxxxx
Xxxxx Xxxx, XX 00000
If to the Company:
Jazz Photo Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
with a copy to: Xxxxxxx X. Xxxx, Esq.
Xxxxxxxxx & Kahr
0 Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
or to such other address as any such person may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
11. Amendment and Waiver. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and duly authorized officer of the Company.
No waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such
other party shall be
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deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
12. Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
Jersey without reference to conflicts of laws.
13. Severability; Survivability. It is the intent of the parties hereto
that in case any one or more of the provisions contained in this Agreement
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect the
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein. The provisions of Sections 6(g), 7, 8 and 9(b) of this Agreement shall
survive the expiration or termination of Executive's employment hereunder,
whether during the period set forth in Section 2 of this Agreement or
thereafter, and the termination of this Agreement.
14. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. Only Employment Agreement. From and after the Effective Date, this
Agreement shall supersede any and all prior employment agreements between the
parties.
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16. Future Negotiations. If the Executive is employed by the Company six
(6) months prior to the third anniversary of the Effective Date then the Company
and the Executive shall commence good faith negotiations for the purpose of
determining whether, and on what basis, if any, they can agree that Executive
may be employed by the Company after the third anniversary of the Effective
Date. The Executive shall have no obligation under this Section 16 to remain in
the employ of the Company and the Company shall have no obligation hereunder to
employ the Executive after the second anniversary of the Effective Date.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date and year first above written.
JAZZ PHOTO CORP.
BY: /s/ Xxxx Xxxxx
--------------------
Xxxx Xxxxx, President
/s/ Xxxxx X Xxxxxxxxx
--------------------
Xxxxx X. Xxxxxxxxx 3-18-97
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