EXHIBIT 10.12
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into effective as of the
1st day of June, 2002 by and between XXXXXXXX FOODS OF DISTINCTION, INC., a
Colorado corporation ("Corporation"), and XXXXXX X. XXXX ("Employee") under
the following circumstances:
A. Employee is the Chief Financial Officer, Treasurer and Secretary of
Corporation. Employee currently provides services to the Corporation on a part
time basis.
B. Corporation desires to continue to employ Employee as its Chief
Financial Officer, Treasurer and Secretary because of his knowledge,
experience and expertise with respect to the business of Corporation.
C. Employee and Corporation anticipate that during the term of this
Agreement Employee may be requested by Corporation to expand his duties and
responsibilities beyond those of Chief Financial Officer. Employee is willing
to expand his services to Corporation upon the terms and conditions of this
Agreement.
D. The parties hereto desire to set forth in writing the terms and
conditions of the employment relationship to be established and continued.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment.
Corporation shall employ Employee as the Chief Financial Officer,
Treasurer and Secretary of Corporation pursuant to the terms and conditions
hereinafter set forth, and Employee shall perform the duties of such office.
Employee shall perform such duties at the offices of Corporation located in
Hayward, California. Corporation shall have the option of employing Employee
as its Chief Operating Officer or its Chief Executive Officer, upon the terms
and conditions of this Agreement, in the event Xxxxxxx X. Xxxxxxxx is unable
to serve in those capacities as a result of disability or retirement.
2. Terms of Employment.
Subject to the provisions of paragraph 7, the term of employment (the
"Term") shall be two (2) years and seven (7) months, commencing on June 1,
2002, and expiring on December 31, 2004 (the "Expiration Date").
3. Duties and Responsibilities.
Subject only to the directives of the President and Chief Executive
Officer and board of directors of Corporation, Employee shall be responsible
for the financial and accounting operations of Corporation and such other
administrative and operational operations as are assigned to him by the
President and Chief Executive Officer of the Corporation commensurate with his
position as the Chief Financial Officer, Treasurer and Secretary of
Corporation. Employee's duties and responsibilities may be expanded upon the
mutual agreement of Employee and the President and Chief Executive Officer of
Corporation or the Vice Chairman of the Board of Corporation. Employee shall
be employed on a part time basis of at least thirty (30) hours per week. The
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minimum number of hours to be devoted to the performance of Employee's duties
(up to a maximum of forty (40) hours per week) may be determined from time to
time by mutual agreement of Employee and the President and Chief Executive
Officer of Corporation. Such number of hours shall be recorded in the books
and records of the Corporation and such recordation shall be deemed an
amendment to this Agreement. 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 One
Hundred Seventeen Thousand Dollars ($117,000.00) per annum for thirty (30)
hours of work per week based on a salary of One Hundred Fifty-Six Thousand
Dollars ($156,000.00) per annum (which is based on a full-time employee
equivalent of forty (40) hours per week), payable in accordance with
Corporation's normal payroll practices. In the event Employee's duties and
responsibilities are expanded as set forth herein, Employee's base salary
shall be increased, upon the mutual agreement of Employee and the President
and Chief Executive Officer or Vice Chairman of the Board, up to the
equivalent of $200,000 per annum based on a full-time employee equivalent of
forty (40) hours per week.
5. Bonus.
As further consideration for Employee's services under this Agreement,
Corporation shall pay Employee a bonus of up to 25% of Employee's Base Salary
(as reported on Employee's Form W-2 for the applicable year) (the "Maximum
Bonus") determined as follows:
a. 50% of the Maximum Bonus shall be earned by Employee if the
Corporation achieves its board of directors approved budget forecast, of which
(i) 25% of the Maximum Bonus that may be earned will be based on the
Corporation achieving the budget forecast for sales (the "Sales Forecast") and
(ii) 25% of the Maximum Bonus that may be earned will be based on the
Corporation achieving the budget forecast for net income before taxes and
extraordinary items as reported in the Corporation's year end audited
financial statements (the "Income Forecast").
b. An additional 1/2 percentage point of the Maximum Bonus, up to a
maximum of 25% of the Maximum Bonus, may be earned by Employee for each 1% by
which the Company exceeds the Sales Forecast.
c. An additional 1/2 percentage point of the Maximum Bonus, up to a
maximum of 25% of the Maximum Bonus, may be earned by Employee for each 1% by
which the Company exceeds the Income Forecast.
Notwithstanding the above, however, no bonus shall be earned by Employee
unless the Company reports positive net income for the applicable year, except
at the discretion of the board of directors.
In addition to any bonus determined as set forth above, the board of
directors may approve a special bonus for Employee, if in the discretion of
the board of directors, Employee has been instrumental in presenting, securing
or consummating a strategic transaction for the benefit of Corporation or its
shareholders.
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6. Benefits.
a. In consideration for Employee's accepting the employment
provided for herein, Corporation agrees to provide to Employee all the
standard benefits normally provided to the employees of Corporation,
including, but not limited to, social security benefits, workers'
compensation, life insurance, long-term disability insurance, health insurance
of various kinds and similar.
b. If Employee is employed by Corporation on a full-time basis,
Employee shall be entitled to twenty (20) paid vacation days per year and
shall be entitled to up to ten (10) paid sick days per year. Employee's
actual paid vacation days and paid sick days shall be prorated based on
Employee's initial employment hereunder on a part-time basis of thirty (30)
hours per week (Full-time employment shall be deemed to be the equivalent of
forty (40) hours per week). Employee shall not be entitled to accrue more
than thirty (30) paid vacation days (no more than an aggregate of thirty (30)
days of which may be carried over to subsequent years) or more than twenty
(20) paid sick days (no more than an aggregate of twenty (20) days of which
may be carried over to subsequent years). Upon termination of Employee's
employment for any reason, Employee shall not be entitled to payment for any
accrued but unpaid sick days.
7. Early Termination and Severance.
a. By Corporation. Corporation, acting through its Board of
Directors, may terminate this Agreement immediately upon written notice to
Employee only for "cause." For purposes of this Agreement, such termination
shall be deemed for "cause" only if it is by reason of Employee's commission
of willful and material acts of neglect, dishonesty, fraud or other acts
involving moral turpitude which materially and adversely affect the business
or affairs of Corporation. If such termination is for "cause," then all of
the rights, duties and obligations of the parties under this Agreement shall
cease upon the effective date of termination. If such termination is for any
reason other than for "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 the
greater of (i) twelve months' base salary, or (ii) that number of months of
base salary which is equal to the number of months remaining on the Term of
this Agreement as of the date of termination.
b. By Employee. Employee may terminate this Agreement in his sole
discretion for any reason upon ninety (90) days prior written notice to the
Board of Directors of Corporation. Upon the effective date of such
termination by Employee (except in the event of Employee's death, disability
(which is subject to the provisions of paragraph 6.a.)), all of the rights,
duties, and obligations of the parties under this Agreement shall cease
including Employee's right to his base salary and benefits.
c. This Agreement shall inure to the benefit of and be binding upon
Corporation, its successors and assigns, including but not limited to any
corporation which may acquire all or substantially all of Corporation's assets
or business or with which Corporation may be consolidated or merged.
8. Notices.
Notices required or permitted by this Agreement shall be effective upon
mailing, postage prepaid, or upon personal delivery, to the following address:
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To Corporation: Xxxxxxxx Foods of Distinction, Inc
00000 Xxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
To Employee: Xxxxxx X. Xxxx
000 Xxxxxxxxx Xxxx
Xxxxxx Xxxx, XX 00000
9. 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, inducements, 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.
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
Dated: 7/16/02 By:/s/ Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
Its: President and Chief Executive
Officer
"Corporation"
Dated: July 11, 2002 /s/ Xxxxxx X. Xxxx
XXXXXX X. XXXX
"Employee"
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