Exhibit 10.7
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made this 1st day of
October, 2004, between XXXXXXX MANUFACTURING INC., a Delaware corporation, as
employer (hereinafter "Employer"), and XXXXX XXXX (hereinafter "Employee")
W I T N E S S E T H:
WHEREAS, the Employer agrees to hire and employ Employee according to the
terms and conditions stated herein; and,
WHEREAS, the Employee agrees to render Employer services according to the
terms and conditions stated herein;
NOW, THEREFORE, in consideration of the mutual promises herein contained
and intending to be legally bound hereby, the parties hereto agree as follows:
1. EMPLOYEE'S DUTIES AND TITLE. Employer hereby employs Employee to render
services to Employer in the title and capacity of Chief Operating Officer, with
assigned duties and tasks as specified by Employer's Board of Directors,
including, by way of example only and without limitation: responsibility for
production and manufacturing, technical guidance, employee supervision and other
matters related to Employer's day-to-day manufacturing operations and affairs at
the Pharmaloz facility in Lebanon, PA and the Xxxxx Xxxxx facility in
Elizabethtown, PA. Employee's job description shall be as described on Exhibit
"A" attached hereto and made a part hereof. In no event shall Employee's job
description or responsibilities be materially changed without his consent, nor
shall Employee be obligated to relocate without his consent. The Employee hereby
accepts such employment for the period stated in Paragraph 2, and agrees to
devote his full time and attention and his best talents and expertise to the
duties of employment hereby accepted by him.
2. TERM OF EMPLOYMENT. The term of Employee's employment under this
Agreement shall commence on the date hereof ("Commencement Date") and continue
until the close of business on December 31, 2006 (the "Termination Date"),
unless sooner terminated pursuant to paragraph 5 of this Agreement; PROVIDED,
however that the term will automatically renew on the Termination Date, and on
each subsequent anniversary of the Termination Date (each, an "ANNIVERSARY
DATE") for an additional one-year period unless either party shall give written
notice of non-renewal to the other not less than sixty (60) days prior to the
Termination Date or the then-applicable Anniversary Date, in which event this
Agreement shall terminate on the Termination Date or at the end of the one-year
period then in effect.
3. COMPENSATION. As compensation to the Employee pursuant to services
rendered under this contract, the Employer shall pay to Employee and Employee
shall accept the following salary, other compensation, and benefits:
(a) Employer shall pay the Employee a base salary at an annual rate,
of One Hundred Four Thousand Dollars ($104,000.00) per year, or such
greater amount as the Board of Directors may from time to time determine.
(b) Employer shall, during the term of this Agreement, pay the premium
for a $500,000 term life insurance policy obtained by Employer in
Employee's name. Employer's payment of the premium shall be subject to all
applicable federal, state or local employment or withholding taxes.
(c) The Employee shall be entitled to such bonuses and incentive
compensation as may be awarded in the discretion of the Board of Directors.
(d) The Employee shall receive, at the Employer's expense, family
healthcare coverage through such health insurance plan as is established by
Employer, and shall be entitled to participate in any employee benefit
plans established by Employer, including, without limitation, pension and
profit sharing plans, and savings plans, which are generally applicable to
the Employer's employees; provided, however, that (1) the Employee's
receipt of such benefits is pursuant to and determined by the provisions of
such plans, and (2) the Employer reserves the right to modify or eliminate
and or all such plans, so long as Employer maintains and/or makes available
employee benefits comparable to those available to Employee through XXXX,
Inc. as of July 1, 2004.
(e) Employee shall be entitled to participate in the stock option plan
sponsored by The Xxxxxxx Corporation ("TQC") for officers and executives of
TQC and Employer, and TQC's Board (through its Compensation Committee)
shall make periodic determinations whether to award options to Employee in
accordance with determinations made by such Committee regarding similarly
situated officers.
4. VACATION BENEFITS; EXPENSE REIMBURSEMENT.
(a) The Employee shall be entitled to five (5) weeks paid vacation in
each calendar year (pro rated for 2004) during the term of his employment
hereunder.
(b) The Employer shall reimburse the Employee for necessary and
appropriate travel and business expenses incurred by Employee on behalf of
the Employer
5. TERMINATION. Employee's employment under this Agreement shall terminate
upon occurrence of any of the events described in the following subparagraphs
(a) through (c):
(a) In the event of Employee's violation of any of the covenants of
this Agreement, his employment shall automatically and immediately
terminate; PROVIDED, however, that Employer provides Employee with ten (10)
days' written notice of any such violation, and Employee has failed to cure
the violation within such 10-day period. No further payments or benefits
whatsoever shall be due to the Employee or any beneficiary under this
Agreement as of the date of said violation.
(b) The Employer may terminate the employment of the Employee for
"cause" at any time, in which event neither the Employee nor his
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beneficiaries or estate shall be entitled to any further payments
hereunder. For purposes of this Agreement, "cause" shall mean:
(i) The misappropriation of funds or property of the Employer;
(ii) Any attempt to obtain personal profit from the Employer by
actions that are adverse to the interests of the Employer;
(iii) Unreasonable neglect or refusal to perform duties assigned
to him; or
(iv) Conviction of a felony.
(c) If the Employee dies during the term of his employment under this
Agreement, his employment shall automatically terminate, and Employee and
his estate and beneficiaries shall only be entitled to such benefits, if
any, as are provided under the Employer's benefit plans in the event of an
employee's death, as well as any compensation due but not paid through the
date of death.
(d) In the event of Employee's termination for any reason other than
set forth in paragraphs (a) through (c), Employee shall be entitled to a
lump-sum severance payment equal to nine (9) months' salary. No further
payments shall be due to Employee hereunder.
6. COVENANT NOT TO COMPETE. Except as provided in paragraph (b) below:
(a) Employee agrees, that during the term of his employment under this
Agreement and for a period of two (2) years thereafter, that:
(i) He shall not associate with, enter into the employ of, or
render any services to any business that competes with Employer or a
business that conducts similar business (as defined below) to the
business of Employer, within a twenty-five (25) mile radius of the
Employer's facilities in Lebanon and Elizabethtown, Pennsylvania.
(ii) He shall not solicit, divert, or induce customers or clients
of Employer to obtain similar products or services from others,
including any competitor of the Employer.
(iii) He shall not acquire any financial interest, other than for
full consideration, in any competitor in a similar business to the
business of Employer (including any interest in any publicly-traded
entity) that competes with Employer anywhere in the United States.
"Similar business" as used in the foregoing subparagraphs shall
include, but not be limited to, the business of manufacture,
distribution and sale of (a) cold-relief products, (b) allergy-relief
products, and (c) health and nutritional supplements.
(b) The provisions of paragraphs (a)(i) - (iii) shall not apply if
Employee's employment terminates because of a sale, merger, consolidation,
or similar transaction involving the Employer.
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7. CONFIDENTIALITY/SECRECY COVENANTS.
(a) During the period of his employment hereunder, and for a period of
five (5) years thereafter, Employee agrees that he shall not:
(i) Use, divulge, or communicate to anyone, either orally, in
writing, or by electronic means, the names and/or addresses of
Employer's customers or clients, or the details of any transactions or
financial matters of Employer, whether or not such information was
available to Employee during his employment.
(ii) Use, divulge or communicate to anyone, either orally, in
writing, or by electronic means, any Employer trade secrets, patents,
formulas, processes, manufacturing methods, or data supplied or
available to him in connection with his employment.
(b) Employee agrees that all trade secrets, formulas, patents,
processes, manufacturing methods, data, documents, equipment, property,
customer and supplier information, financial information, sales and
marketing data, and other information provided to the Employee by the
Employer, or obtained by the Employee, in the course of, or in connection
with, his employment, are and shall remain the property of the Employer and
shall be returned to the Employer by the Employee immediately upon
termination of Employee's employment, and no copies or reproductions
thereof in any form shall be retained by Employee.
8. INJUNCTIVE RELIEF. In the event of a breach by Employee of any of the
covenants contained in paragraphs 6 and 7 of this Agreement, Employee agrees
that money damages shall not be an adequate remedy for such breach, and Employer
shall, in addition to all other remedies for such breach provided for under this
Agreement or applicable law, have the right to request immediate and permanent
injunctive relief to enjoin and restrain such breach and any consequences
thereof.
9. EMPLOYER'S PROPRIETARY RIGHTS. Employee agrees that all inventions and
products developed by the Employee during the term of his employment under this
Agreement shall be owned by and be the exclusive property of the Employer.
10. MISCELLANEOUS.
(a) This Agreement supersedes any and all prior agreements or
understandings, oral or written, with respect to the employment of the
Employee with the Employer. This Agreement may not be altered or terminated
orally, and shall be modified only by a subsequent written Agreement
executed by both the Employee and the Employer.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
(c) This Agreement shall be binding upon and shall inure to the
benefit of the Employer and its successors and assigns; PROVIDED, however,
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that Employer shall not assign or transfer (by operation of law or
otherwise) this Agreement without the express prior written consent of
Employee. This Agreement shall be binding upon and shall inure to the
benefit of the Employee, his heirs, executors and personal representatives,
and shall not be assigned by the Employee and any attempted assignment
shall be in violation of this Agreement and shall be null and void.
(d) Whenever possible, each provisions of this Agreement shall be
interpreted in such a manner as to make all provisions effective and valid;
but, if any provision in this Agreement is held to be invalid, illegal or
unenforceable, such provision will be ineffective without invalidating the
remainder of this Agreement.
(e) All notices, demands or other communications, shall be delivered
to the Employer or Employee at the following addresses which may be changed
from time to time by either party within thirty (30) days' written notice:
To the Employer:
Xxx X. Xxxxxxx, President/CEO
The Xxxxxxx Corporation
000 Xxxxx Xxxxxxx Xxxx
X.X. Xxx 0000
Xxxxxxxxxx, XX 00000
To the Employee:
Xxxxx Xxxx
00 Xxxxx Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxxxxx, XX 00000
(f) All rights and remedies granted to the Employer hereunder shall
not be exclusive, but shall be in addition to all rights and remedies
available to the Employer at law or in equity.
(g) Unless otherwise specifically defined within this Agreement, words
and phrases shall be construed and interpreted according to their common
usage and meaning. Headings and titles are for reference purposes only and
are not to be construed as part of this Agreement.
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IN WITNESS WHEREOF, the Employer, by its authorized representative, and
Employee have caused this Agreement to be executed and made, all as of the day
and year first written above.
Xxxxxxx Manufacturing, Inc.
By: /s/ Xxx X. Xxxxxxx
---------------------------------
Xxx X. Xxxxxxx, its President
/s/ Xxxxx Xxxx
------------------------------------
Xxxxx Xxxx("Employee")
THE XXXXXXX CORPORATION hereby unconditionally and irrevocably guarantees to
Employee the full and punctual payment and performance of all obligations when
due of Employer under this Employment Agreement.
THE XXXXXXX CORPORATION
By: /s/ Xxx X. Xxxxxxx
---------------------------------
Xxx X. Xxxxxxx, President
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Exhibit "A"
SUMMARY JOB DESCRIPTION FOR CHIEF OPERATING OFFICER
Essential duties and responsibilities of the Chief Operating Officer is to:
1. Oversee all of the production functions of both operating plants to
assure compliance with established operating procedures, including
quality assurance functions, maintenance procedures, material
acquistion, storage and handling;
2. Establish production goals and objectives in line with capabilities of
plant personnel and equipment parameters, and reviews those results
taking steps to help correct unsatisfactory results;
3. Supervise those employees who report directly to the position and, at
minimum, perform an annual performance evaluation of those employees;
4. Dispense advice, guidance, direction, and authorization to carry out
plans and procedures consistent with established policies;
5. Review all capital projects ascertaining the functionality of the
project and selecting the vendor in consideration of quality,
functionality, cost, service, and reputation;
6. Serves as a technical point person relating to new products,
ingredients, or processes;
7. Represents the organization to key contract customers, major
suppliers, and trade organizations;
8. Plus such other duties as directed by the President.
