EMPLOYMENT AGREEMENT
XXXXXX X. XXXXXXX
THIS EMPLOYMENT AGREEMENT is made and entered into as of September 15,
1997, by and between XXXXXXXX FOODS OF DISTINCTION, INC., a Colorado
corporation ("Corporation"), and XXXXXX X. XXXXXXX ("Employee") under the
following circumstances:
A. Corporation desires to employ Employee as its Chief Operating
Officer because of his knowledge, experience and expertise.
B. Employee desires to become employed by Corporation in such
capacity.
C. The parties hereto desire to set forth in writing the terms and
conditions of the employment relationship to be established.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment.
Corporation shall employ Employee as the Chief Operating Officer
of Corporation pursuant to the terms and conditions hereinafter set forth, and
Employee shall perform the duties of such position.
2. Terms of Employment.
Subject to the provisions of paragraph 7, the initial term of
employment shall be three (3) years, commencing as of September 15, 1997, and
terminating on September 14, 2000. If, upon expiration of the term of this
Agreement a new written agreement has not been negotiated and executed,
Employee shall continue to be employed by Corporation on at-will basis,
subject to his resigning or Corporation terminating his employment for any
reason or no reason at all, at anytime, with or without notice, in the
Corporation's sole discretion.
3. Duties and Responsibilities.
a. Subject to the directives of the President and Chief
Executive Officer, Employee shall be responsible for all day-to-day
operational activities of Corporation. All current employees, other than the
President and Chief Executive Officer, shall report to Employee. Such
reporting requirements may be changed by the President and Chief Executive
Officer from time to time in the exercise of his reasonable business judgment.
The guidelines for many of the specific duties and responsibilities of such
position are set forth on the position description attached hereto as Exhibit
A. It is anticipated that Employee's duties and responsibilities as manager of
all day-to-day operational activities of Corporation shall include immediate,
short-term, mid-term and long-term goals and objectives established by the
President and Chief Executive Officer in conjunction with members of the
Corporation's Board of Directors. Such goals may be modified from time to time
consistent with Employee's duties as the Chief Operating Officer of
Corporation. Employee agrees to perform his services conscientiously,
effectively and to the best of his ability.
4. Base Salary.
In consideration of Employee's services under this Agreement to
Corporation, Employee's base salary shall be fixed at an annual rate of One
Hundred Thirty Thousand Dollars ($130,000.00), from the effective date of this
Agreement payable in accordance with Corporation's normal payroll practices.
Such base salary shall be reviewed no later than March 15,1998 and at least
annually thereafter for increases by the Board of Directors at the same time
the officers of Corporation are reviewed.
5. Incentive Bonus Compensation.
As further consideration for Employee's services under this
Agreement, Corporation shall pay Employee such incentive bonus compensation to
which Employee may be entitled pursuant to Corporation's Employee Incentive
Compensation Plan as may be adopted by the Board of Directors of Corporation
for the years 1998, 1999 and 2000. Employee shall be entitled to a pro-rata
distribution, if any, of Corporation's Employee Incentive Compensation Plan as
in effect for the year 1997. Employee acknowledges that he has received a copy
of the Employee Incentive Compensation Plan as in effect for the year 1997.
6. Benefits.
In consideration for Employee's accepting the employment provided
for herein, Corporation agrees to provide the following benefits:
a. After ninety (90) days of employment, all the standard
benefits normally provided to the employees of Corporation and described in
Corporation's employee handbook, including, but not limited to, social
security benefits, workers' compensation, 401(k) plan participation, long-term
disability insurance, health insurance of various kinds and similar benefits.
Corporation's standard ninety (90) day eligibility period applicable to
vacation and sick leave accrual and holiday pay shall not apply to Employee.
Employee hereby waives coverage under Corporation's health and dental
insurance plan until March 15, 1998 without reimbursement from the
Corporation.
b. During 1997, Employee shall accrue vacation days on a
prorated basis at the annual rate of three (3) weeks per year. Employee shall
be entitled to three (3) weeks paid vacation days per calendar year thereafter
and in accordance with Corporation's standard policies.
c. Corporation shall reimburse Employee for reasonable and
necessary expenses incurred by him in the performance of his duties hereunder
upon presentation of vouchers in accordance with Corporation's policies.
d. Subject to board of director's approval, Employee shall be
granted 100,000 incentive stock options of Corporation, which shall vest in
accordance with the vesting schedule set forth in the Stock Option Agreement
attached hereto as Exhibit B. The exercise price shall be the mean between the
bid and asking price of Corporation's common stock on the date such options
are ratified by the Board of Directors. Such options shall be granted as
incentive stock options pursuant to the terms and conditions set forth in the
form of Stock Option Agreement attached hereto as Exhibit B and the 1993 Stock
Option Plan of Corporation, as amended.
e. Such other flexible executive perquisites that may be
approved by the Board of Directors of Corporation for the senior management
group of employees of Corporation.
f. Corporation shall reimburse Employee for automobile expenses
incurred by Employee in carrying out his duties hereunder in an amount up to
$600 per month. Such reimbursement shall include, but not be limited to,
seventy-five percent (75%) of gas, oil, maintenance, lease payments,
automobile loan or similar payments and insurance expenses; provided, however,
that if Employee owns
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his own vehicle, and does not incur automobile lease or loan payments,
Employee shall be reimbursed for such automobile use at the applicable federal
income tax mileage reimbursement rate. Subject to the submission by Employee
of the documentary evidence as required below, Employee's business use an
automobile shall be assumed to be seventy-five percent (75%) of its total use.
Employee shall furnish to Corporation adequate records and other documentary
evidence required by federal and state statutes and regulations for the
s~stant-aticn of such payments as deductible business expenses of Corporation
and not as deductible compensation to Employee.
g. Corporation shall provide Employee with the use of, or
reimburse Employee for the cost of, an apartment, or other suitable housing,
within close proximity to Corporation's offices, to enable Employee to more
effectively fulfill his obligations under this Agreement. The parties agree
that the initial budgeted cost for such required local housing shall be one
thousand dollars ($1,000) per month. In the event Corporation is required to
commit to a lease term for such apartment, rather than a month to month
tenancy, and Employee terminates his employment hereunder pursuant to Section
7(b) hereof prior to the end of the term of such tenancy, Employee shall
indemnify Corporation for fifty percent (50%) of any costs, expenses or
damages incurred as a result of such early termination. In addition, in the
event Employee moves his permanent residence to a location which provides
Employee with more convenient access to Corporation's offices, Corporation
shall assist Employee in defraying the cost of such relocation in an amount
mutually agreeable to the parties.
7. Early Termination and Severance.
a. By Corporation. Corporation, acting through its President or
Board of Directors, may terminate this Agreement at any time for "just cause".
If such termination is for any reason other than "just cause", then all of the
rights, duties and obligations of the parties under this Agreement shall cease
upon the effective date of termination, except that Corporation shall pay to
Employee a sum equal to one month of base pay for each month subsequent to
September 15, 1997 in which the effective date of termination occurs, up to a
maximum of twelve (12) months' base pay. If such termination is for "just
cause," then all of the rights, duties and obligations of the parties under
this Agreement shall cease upon the effective date of termination. For
purposes of this Agreement, such termination shall be deemed for "just cause"
if: (I) it is by reason of Employee's commission of acts of neglect,
dishonesty, fraud or other acts involving moral turpitude as determined in the
good faith judgment of the Board of Directors of Corporation; (ii) failure to
follow lawful directives of Corporation's Board of Directors, (iii) material
breach of any of the provisions of this Agreement by Employee, (iv) the
habitual neglect by Employee of his duties hereunder, or (vi) continued
unsatisfactory performance of Employee's duties hereunder as determined in the
good faith judgment of the Board of Directors of Corporation.
b. By Employee. Employee may terminate this agreement in his
sole discretion for any reason upon thirty (30) days prior written notice to
the President of Corporation. Upon the effective date of such termination by
Employee, all of the rights, duties, and obligations of the parties under this
Agreement small cease, including Employee's right to his base salary and
incentive bonus compensation benefits.
c. Survival of Severance Rights. In the event Employee's
employment is terminated by Corporation after the expiration of the term of
this Agreement for any reason other than "just cause", including the failure
to renew or extend this Agreement or negotiate a new agreement with Employee,
then all of the rights, duties and obligations of the parties to each other
shall cease upon
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the effective date of termination, except that Corporation shall pay to
Employee a sum equal to twelve (12) months' base pay.
8. Confidentiality and Non-Disclosure. Employee agrees to execute and
comply with the terms and conditions of Corporation's Employee Confidentiality
and Rights Agreement, a copy of which has been provided to Employee.
9. Arbitration: Any dispute arising out of the termination of
Employee's employment (including, but not limited to, purported violations of
statute, claims based on any alleged breach of duty arising out of contract or
tort) or any other alleged violation of a statutory, contractual or common law
right(s) (but excluding workers' compensation, unemployment insurance claims
and wage and hour matters within the jurisdiction of the State Labor
Commissioner) or any claim for discrimination or harassment arising out of
Employee's employment, which cannot be resolved through either discussion or
mediation, shall be submitted to final and binding arbitration before a
neutral arbitrator pursuant to the American Arbitration Association Employment
Dispute Resolution Rules, as may be amended from time to time. Statutes and
laws covered by this Agreement, include, but are not limited to, equal
employment opportunity laws (which include claims for age, race, color,
disability, medical condition, marital status, religion, ancestry, national
origin, sexual harassment and discrimination, and sexual orientation), the
Federal Civil Rights Acts of 1964 and 1991, as amended, the Age Discrimination
in Employment Act, the Americans with Disabilities Act, the California Falr
Employment and Housing Act and California wrongful discharge law. Employee may
be represented by counsel of his choice, at his own expense.
Arbitration will be the exclusive means of resolving any dispute
described above. No other action will be brought by the Employee in any court
or other forum except those claims specifically excluded in the arbitration
procedures, or as otherwise provided by law. If any dispute should arise,
Employee agrees to deliver a written Request for Arbitration to the President
of Corporation within one (1) year of the date the dispute occurred. The
request for arbitration shall describe the dispute in sufficient detail to
advise the Corporation of the nature of the dispute, the date when the dispute
first arose, and the remedies sought. Employee agrees to respond within ten
(10) calendar days to each communication regarding the selection of an
arbitrator and scheduling of the hearing. If Employee does not file a written
Request for Arbitration within one year of the date of said occurrence or does
not respond to any communication about the arbitration proceeding within ten
(10) calendar days, such claims will be untimely and therefore barred. The
limitations period set forth herein shall not be subject to tolling. Employee
shall not have the right to raise any claims, in any forum, arising out of any
controversy that is subject to arbitration.
10. Notices.
Notices required or permitted by this Agreement shall be effective
upon mailing, postage prepaid, or upon personal delivery, to the following
address:
To Corporation: Xxxxxxxx Foods of Distinction, Inc
00000 Xxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxxx
To Employee: Xxxxxx X. Xxxxxxx
0000 Xxxxx Xxxxx
Xxxxxx, XX 00000
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11. Miscellaneous Provisions.
a. The law of the State of California shall govern the
interpretation and enforcement of this Agreement.
b. If any provision of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way.
c. This Agreement contains all of the covenants and agreements
between the parties on the matter stated herein. Each party to this Agreement
acknowledges that no representations, 1nducements, promises, or agreements,
orally or otherwise, have been made by any party, or anyone acting on behalf
of any party, which are not embodied herein, and that no other agreement,
statement, or promise on the subject matter stated herein not contained in
this Agreement shall be valid or binding.
d. Any modification of this Agreement shall be effective only
if it is in writing and executed by the party or parties to be charged.
e. This Agreement shall be binding upon and inure to the
benefit of the parties and their spouses, successors, assigns, personal
representatives, heirs and legal representatives.
f. Employee shall have the right to rescind this Agreement if
the board of directors of Corporation shall fail to approve or ratify the
Stock Option Agreement attached hereto as Exhibit B at its next regularly
scheduled board of directors meeting.
IN WITNESS WHEREOF, the parties hereto have entered into this
Agreement as of the date first hereinabove written.
XXXXXXXX FOODS OF DISTINCTION, INC.,
a Colorado corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
ITS: President
"Corporation"
/s/ Xxxxxx X. Xxxxxxx
XXXXXX X. XXXXXXX
"Employee"
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