EMPLOYMENT AGREEMENT
dated as of March 9, 1998, between
CFP HOLDINGS, INC., a Delaware
corporation (the "Company"), and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (the
"Executive").
The Company desires to employ the Executive as President and Chief
Executive Officer of QF Acquisition Corp., a subsidiary of the Company doing
business under the name "Quality Foods" ("Quality Foods"), and the Executive
desires to accept employment with the Company upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and
obligations hereinafter set forth, the parties agree as follows:
SECTION 1. Employment.
The Company hereby employs the Executive and the Executive hereby
accepts employment by the Company upon the terms and conditions hereinafter set
forth.
SECTION 2. Term.
The employment of the Executive hereunder shall be for the period (the
"Employment Period") commencing on March 17, 1998 (the "Commencement Date") and
ending on (a) the third anniversary thereof (the "Scheduled Termination Date"),
or (b) such earlier date (the "Termination Date") upon which the employment of
the Executive shall terminate in accordance with the provisions hereof.
SECTION 3. Duties.
Until the first anniversary of the Commencement Date, the Executive
shall be employed as the President and Chief Executive Officer of Quality Foods.
Thereafter, the Executive shall serve as the President and Chief Executive
Officer of the Company and CFP Group, Inc., its parent company. The Executive
shall perform such duties as are consistent with his title and position, but
shall have such other titles and duties (including with respect to affiliates of
Quality Foods) consistent with the status of a senior level executive of the
Company as the Board of Directors of the Company (the "Board") shall in its
discretion designate. The Executive shall report to the Board and shall use his
best efforts to perform well and faithfully the foregoing duties and
responsibilities.
SECTION 4. Time to be Devoted to Employment.
During the Employment Period, the Executive shall devote all of his
business time, attention and energies to the business of the Company and its
affiliates (except for vacations to which he is entitled pursuant to Section
6(b) and periods of illness or incapacity). During the Employment Period, the
Executive shall not engage in any business activity which, in the reasonable
judgment of the Board, conflicts with the duties of the Executive hereunder,
whether or not such activity is pursued for gain, profit or other pecuniary
advantage.
SECTION 5. Compensation.
(a) The Company (or at the Company's option, any affiliate thereof)
shall pay or caused to be paid to the Executive an annual base salary (the "Base
Salary") during the Employment Period of $325 000 per annum, payable in such
installments (but not less often than monthly) as is generally the policy of the
Company with respect to its officers, less such deductions as are required by
applicable law. The Base Salary shall be subject to annual Board review and may
be increased in the sole discretion of the Board.
(b) In addition to the Base Salary, the Executive shall be eligible to
participate in the Company's incentive stock option plan to be formulated by the
Board of Directors of the Company.
(c) The Executive shall also be eligible to participate in the
Company's annual cash bonus plan based upon achieving and exceeding annual
performance targets as determined by the Board. Pursuant to such plan, provided
certain minimum performance thresholds are met, the Executive would be entitled
to receive an annual bonus of between 30% and 100% of the Base Salary, based
upon achieving 80% to 120% of the performance targets for such year (with a
bonus of 50% of the Base Salary to be payable if 100% of such targets are met).
(d) Within 30 days of the Commencement Date, the Company shall pay, or
cause to be paid, to the Executive a one-time "signing" bonus in the amount of
$75,000, less such deductions as are required by applicable law.
SECTION 6. Business Expenses; Benefits.
(a) The Company (or, at the Company's option, any affiliate thereof)
shall reimburse, or cause to be reimbursed, the Executive, in accordance with
the practice from time to time for senior executive employees of the Company,
for all reasonable and necessary expenses and other disbursements incurred by
the Executive for or on behalf of the Company in the performance of his duties
hereunder. The Executive shall
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provide such appropriate documentation of expenses and disbursements as may from
time to time be reasonably required by the Company.
(b) During the Employment Period, the Executive shall be entitled to
four weeks of paid vacation during each 12-month period worked beginning on the
Commencement Date.
(c) During the Employment Period, the Company shall provide the
Executive with group health, hospitalization and disability insurance and other
employee benefits consistent with such benefits as are generally made available
from time to time to senior executive employees of the Company. To the extent
the Company is not prohibited from doing so by contract or applicable law, the
Company shall make such benefits available to the Executive commencing as of the
Commencement Date.
(d) During the Employment Period, the Company shall also provide the
Executive with supplemental life and disability insurance, provided the premiums
therefor shall not exceed $5,000 on an annual basis.
(e) During the Employment Period, the Executive shall be entitled to an
allowance for a leased automobile not to exceed $1,200 per month (inclusive of
all maintenance, gasoline, insurance and other costs and expenses related to
such automobile).
SECTION 7. Involuntary Termination.
(a) If the Executive is incapacitated or disabled by accident, sickness
or otherwise so as to render him mentally or physically incapable of performing
the services required to be performed by him under this Agreement (such
condition being hereinafter referred to as a "Disability") for a period of 180
consecutive days, or for an aggregate of 210 days, or longer during any 12-month
period, the Company may, at any time during the continuation of such Disability,
at its option, terminate the employment of the Executive under this Agreement
immediately upon giving him written notice to that effect (such termination, as
well as a termination under Section 7(b), being hereinafter referred to as an
"Involuntary Termination"). Until the Executive's employment hereunder shall
have been terminated in accordance with the foregoing, the Executive shall be
entitled to receive his compensation notwithstanding any such Disability.
(b) If the Executive dies during the Employment Period, his employment
hereunder shall be deemed to cease as of the date of his death.
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SECTION 8. Termination For Cause.
The Company may terminate the employment of the Executive hereunder at
any time for Cause (as hereinafter defined) (such termination being referred to
herein as a "Termination For Cause") by giving the Executive written notice of
such termination, effective immediately upon the giving of such notice to the
Executive. As used in this Agreement (a) "Cause" means (i) the Executive's
material breach of this Agreement and, if such breach is capable of being cured,
the failure to cure such breach within 30 days of notice thereof from the
Company to the Executive, (ii) the Executive's past, present or future conduct
that has a Material Adverse Effect, whether or not previously disclosed, (iii)
the Executive's disregard of lawful instructions of the Board that are
consistent with the Executive's position, or neglect of duties or failure to
act, which, in any case, may reasonably be anticipated to have a Material
Adverse Effect, and the continuance of such condition for a period of 10 days
after notice thereof from the Company to the Executive, (iv) alcohol or drug
abuse by the Executive, (v) the commission by the Executive of a felony or an
act involving fraud, theft or dishonesty or (vi) the Executive's material breach
of any agreement with the Company or any of its affiliates and, if such breach
is capable of being cured, the failure to cure such breach within 30 days of
notice thereof from the Company to the Executive and (b) "Material Adverse
Effect" means a material adverse effect on the business, operations, financial
condition, results of operations, assets, liabilities or prospects of the
Company or any of its affiliates.
SECTION 9. Termination Without Cause.
The Company may terminate the employment of the Executive hereunder
without Cause (such termination being hereinafter referred to as a "Termination
Without Cause") by giving the Executive written notice of such termination,
which notice shall be effective on the date specified therein but not earlier
than the date on which such notice is given.
SECTION 10. Voluntary Termination.
Any termination of the employment of the Executive hereunder other than
as a result of an Involuntary Termination, a Termination For Cause, a
Termination Without Cause or a Termination For Nonrenewal (as hereinafter
defined) shall be deemed to be a "Voluntary Termination."
SECTION 11. Termination For Nonrenewal.
On the second anniversary of the Commencement Date, the Company and the
Executive shall enter into good faith negotiations for the renewal of this
Agreement following the Scheduled Termination Date. If the parties are unable,
within 90
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days after commencement of such negotiations, to agree to a renewal of this
Agreement on mutually acceptable terms, the Executive shall continue to perform
the services required hereunder until the Scheduled Termination Date, whereupon
a termination for nonrenewal (such termination being referred to herein as a
"Termination For Nonrenewal") shall be deemed to have occurred; provided,
however, that a Termination For Nonrenewal shall not be deemed to have occurred
in the event the Executive and the Company do in fact renew this Agreement prior
to the Scheduled Termination Date.
SECTION 12. Effect of Termination
(a) Upon the termination of the Executive's employment hereunder due to
a Termination for Cause or a Voluntary Termination, neither the Executive nor
his beneficiary or estate shall have any further rights or claims against the
Company or any of its affiliates under this Agreement, except to receive (i) the
unpaid portion, if any, of the Base Salary provided for in Section 5(a),
computed on a pro rata basis to the Termination Date (based on the actual number
of days elapsed over a year of 365 or 366 days, as applicable), (ii) any unpaid
accrued benefits of the Executive, and (iii) reimbursement for any expenses for
which the Executive shall not have been reimbursed as provided in Section 6(a).
(b) Upon the termination of the Executive's employment hereunder due to
an Involuntary Termination, neither the Executive nor his beneficiary or estate
shall have any further rights or claims against the Company or any of its
affiliates under the Agreement except (i) to receive the amounts set forth in
Section 12(a) above and (ii) to continue to receive the Base Salary, payable in
such installments as it was paid to the Executive prior to such termination of
employment, for a period of 12 months.
(c) Upon the termination of the Executive's employment hereunder due to
a Termination Without Cause, neither the Executive nor his beneficiary or estate
shall have any further rights or claims against the Company or any of its
affiliates under this Agreement except (i) to receive the amounts set forth in
Section 12(a) above, (ii) to continue to receive the Base Salary, payable in
such installments as it was paid to the Executive prior to such termination of
employment, for a period of 18 months and (iii) to participate in all group
health, hospitalization and disability insurance plans as contemplated by
Section 6(c) hereof for a period of 18 months; provided, however, that any such
rights under clauses (ii) and (iii) of this Section 12(c) shall be reduced, to
the extent the Executive shall obtain other employment during the period such
payments are required to be made, by the amount of the salary and benefits
received by the Executive in connection with such new employment.
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(d) Upon the termination of the Executive's employment hereunder due to
a Termination For Nonrenewal, neither the Executive nor his beneficiary or
estate shall have any further rights or claims against the Company or any of its
affiliates under this Agreement except (i) to receive the amounts set forth in
Section 12(a) above, (ii) to continue to receive the Base Salary, payable in
such installments as it was paid to the Executive prior to such termination of
employment, for a period of nine months and (iii) to participate in all group
health, hospitalization and disability insurance plans as contemplated by
Section 6(c) hereof for a period of nine months; provided, however, that any
such rights under clauses (ii) and (iii) of this Section 12(d) shall be reduced,
to the extent the Executive shall obtain other employment during the period such
payments are required to be made, by the amount of the salary and benefits
received by the Executive in connection with such new employment.
SECTION 13. Insurance.
The Company may, for its own benefit, maintain "key-man" life and
disability insurance policies (collectively, the "Insurance Policies") covering
the Executive. The Executive will cooperate with the Company and provide such
information or other assistance as the Company may reasonably request in
connection with the Company's obtaining and maintaining the Insurance Policies.
SECTION l4. Disclosure of Information.
The Executive agrees that he will enter into, and comply with the terms
of, the Company's customary form of secrecy and nondisclosure agreement. In
addition, and without limitation thereof, the Executive agrees that he will not,
at any time during the Employment Period or thereafter, disclose to any person,
firm, corporation or other business entity, except as required by law, any
non-public information concerning the business, clients or affairs of the
Company or any subsidiary or affiliate thereof for any reason or purpose
whatsoever nor shall the Executive make use of any of such non-public
information for his own purpose or for the benefit of any person, firm,
corporation or other business entity except the Company or any affiliate
thereof.
SECTION 15. Right to Inventions.
The Executive shall promptly disclose, grant and assign to the Company
for its sole use and benefit any and all marks, designs, logos, inventions,
improvements, technical information and suggestions relating in any way to the
business actually conducted by the Company, which he may develop or which may be
acquired by the Executive during the Employment Period (whether or not during
usual working hours), together with all trademarks,
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patent applications, letters patent, copyrights and reissues thereof that may at
any time be granted for or upon any such ▇▇▇▇, design, logo, invention,
improvement or technical information. In connection therewith:
(a) the Executive shall without charge, but at the expense of the
Company, promptly at all times hereafter execute and deliver such applications,
assignments, descriptions and other instruments as may be necessary or proper in
the opinion of the Company to vest title to any such marks, designs, logos,
inventions, improvements, technical information, trademarks, patent
applications, patents, copyrights or reissues thereof in the Company and to
enable it to obtain and maintain the entire right and title thereto throughout
the world;
(b) the Executive shall render to the Company at its expense (including
a reasonable payment for the time involved in case he is not then in its employ
based on his last per diem earnings) all such assistance as it may require in
the prosecution of applications for said trademarks, patents, copyrights or
reissues thereof, in the prosecution or defense of interferences which may be
declared involving any said trademarks, applications, patents or copyrights and
in any litigation in which the Company may be involved relating to any such
trademarks, patents, inventions, improvements or technical information; and
(c) for the avoidance of doubt, it is hereby agreed that the foregoing
provisions shall be deemed to include an assignment of future copyright in
accordance with Section 37 of the Copyright Act of 1986 and any amendment or
re-enactment thereof.
SECTION 16. Restrictive Covenant.
(a) The Executive acknowledges and recognizes that during the
Employment Period he will be privy to non-public information critical to the
Company's and its affiliates' business and further acknowledges and recognizes
that the Company would find it extremely difficult to replace him. Accordingly,
in consideration of the premises contained herein, and the consideration to be
received by the Executive hereunder, during the Employment Period and the
Non-Competition Period (as defined below), the Executive shall not (i) directly
or indirectly engage in, represent in any way, or be connected with, any
Competing Business (as defined below), whether such engagement shall be as an
officer, director, owner, employee, partner, affiliate or other participant in
any Competing Business; (ii) assist others in engaging in any Competing
Business; (iii) induce any employee of the Company or any affiliate thereof to
terminate such employee's employment with the Company or any such affiliate or
to engage in any Competing Business; or (iv) induce any entity or person with
which the
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Company or any affiliate thereof has a business relationship to terminate or
alter such business relationship; provided, however, that the foregoing shall
not prevent the Executive from owning the securities of or an interest in any
business, provided such ownership of securities or interest represents less than
five percent (5%) of any class or type of securities of, or interest in, such
business.
(b) The Executive understands that the foregoing restrictions may limit
his ability to earn a livelihood in a business similar to the business of the
Company or any affiliate thereof, but he nevertheless believes that he has
received and will receive sufficient consideration and other benefits as an
employee of the Company and as otherwise provided hereunder and pursuant to
other agreements between the Company and the Executive to justify clearly such
restrictions which, in any event (given his education, skills and ability), the
Executive does not believe would prevent him from earning a living.
(c) As used herein, "Competing Business" shall mean any business in
North America if such business or the products sold by it are competitive,
directly or indirectly, with (i) the business of the Company or any of its
affiliates, (ii) any of the products manufactured, sold or distributed by the
Company or any of its affiliates or (iii) any products or business being
developed by the Company or any of its affiliates; and "Non-Competition Period"
shall mean the period commencing on the day immediately following the
Termination Date and ending on the later of (A) 18 months following the
Termination Date and (B) if the Executive owns any securities (including the
right to receive any such securities) of the Company or any of its affiliates on
the Termination Date, the date on which the Executive no longer owns any
securities (including the right to receive any such securities) issued by the
Company or any of its affiliates; provided, however, that at the election of the
Company at least 30 days prior to the date (the "Last Payment Date") on which
the last payment of Base Salary would otherwise be made pursuant to this
Agreement (including, without limitation, as contemplated by Section 12(c) or
Section 12(d) hereof), the Company may continue to pay the Executive his Base
Salary for up to 12 months beyond the Last Payment Date, in which case the
Non-Competition Period shall be extended for the duration of the period during
which the Company has elected to make such additional payments of Base Salary.
SECTION 17. Enforcement; Severability; Etc.
It is the desire and intent of the parties that the provisions of this
Agreement shall be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Agreement shall be adjudicated
to be invalid or unenforceable, such provision shall
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be deemed amended to delete therefrom the portion thus adjudicated to be invalid
or unenforceable, such deletion to apply only with respect to the operation of
such provision in the particular jurisdiction in which such adjudication is
made.
SECTION 18. Remedies.
The Executive acknowledges and understands that the provisions of this
Agreement are of a special and unique nature, the loss of which cannot be
adequately compensated for in damages by an action at law, and that the breach
or threatened breach of the provisions of this Agreement would cause the Company
irreparable harm. In the event of a breach or threatened breach by the Executive
of the provisions of this Agreement, the Company shall be entitled to an
injunction restraining him from such breach. Nothing contained in this Agreement
shall be construed as prohibiting the Company from or limiting the Company in
pursuing any other remedies available for any breach or threatened breach of
this Agreement.
SECTION 19. Notices.
All notices, claims, certificates, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given and delivered if personally delivered or it sent by
nationally-recognized overnight courier, by telecopy, or by registered or
certified mail, return receipt requested and postage prepaid, addressed as
follows:
if to the Company, to it at:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇;
with a copy to:
First Atlantic Capital, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇; and
▇'▇▇▇▇▇▇▇▇ Graev & Karabell, LLP
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇;
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if to the Executive, to him at:
c/o QF Acquisition Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as the party to whom notice is to be given may have
furnished to the other party or parties in writing in accordance herewith. Any
such notice or communication shall be deemed to have been received (a) in the
case of personal delivery, on the date of such delivery, (b) in the case of
nationally-recognized overnight courier, on the next business day after the date
when sent, (c) in the case of telecopy transmission, when received, and in the
case of mailing, on the third business day following that on which the piece of
mail containing such communication is posted.
SECTION 20. Successors and Assigns.
Subject to Section 25 hereof, the provisions of this Agreement will be
binding upon, and will inure to the benefit of, the respective heirs, legal
representatives, successors and permitted assigns of the parties.
SECTION 21. Governing Law.
This Agreement will be governed by, and construed and enforced in
accordance with, the laws of the State of New York (without giving effect to
principles of conflicts of laws).
SECTION 22. Waiver of Breach.
The waiver by either party of a breach of any provision of this
Agreement must be in writing and shall not operate or be construed as a waiver
of any other breach.
SECTION 23. Entire Agreement; Amendments.
This Agreement and the agreements referred to herein contain the entire
agreement between the parties with respect to the subject matter hereof and
supersede all prior agreements or understandings between the parties with
respect thereto. This Agreement may be amended only by an agreement in writing
signed by the parties.
SECTION 24. Headings.
The section headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
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SECTION 25. Assignment.
This Agreement is personal in its nature and the parties shall not,
without the consent of the other, assign or transfer this Agreement or any
rights or obligations hereunder; provided, however, that the Company may assign
this Agreement to any of its affiliates and the provisions of this Agreement
shall inure to the benefit of, and be binding upon, each successor of the
Company, whether by merger, consolidation, transfer of all or substantially all
of its assets, or otherwise.
SECTION 26. Counterparts.
This Agreement may be executed in counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
SECTION 27. Gender.
Any reference to the masculine gender shall be deemed to include the
feminine and neuter genders unless the context otherwise requires.
* * * *
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IN WITNESS WHEREOF, the parties have duly executed this Employment
Agreement as of the date first written above
CFP HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------
Name:
Title:
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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