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EXHIBIT 10.19
EMPLOYMENT AGREEMENT
AGREEMENT made as of the 16th day of July, 1997 by and between
MIKE'S ORIGINAL, INC., a Delaware corporation (hereinafter the "Company") and
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, residing at ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
(hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, the Company and the Employee desire to enter into an
Employment Agreement relating to the Company's employment of the Employee; and
WHEREAS, this Agreement is intended to supersede and replace
all prior agreements, understandings and arrangements between the Company and
the Employee relating to such employment.
NOW, THEREFORE, it is agreed as follows:
1. Retention of Services. The Company hereby retains the
services of Employee, and Employee agrees to furnish such services, upon the
terms and conditions hereinafter set forth.
2. Term. Subject to earlier termination on the terms and
conditions hereinafter provided, and further subject to certain provisions
hereof which survive the term hereof, the term of this Agreement shall be one
(1) year after the date on which the Company completes an initial public
offering (the "IPO") of its capital stock.
3. Duties and Extent of Services During Period of Employment.
During the term of employment, Employee shall be an officer of the Company. In
such capacity, Employee agrees that he shall serve the Company under the
direction of the Board of Directors of the Company to the best of his ability,
shall perform all duties incident to his offices on behalf of the Company and
shall perform such other reasonable duties as may from time to time be assigned
to him by the Board of Directors of the Company. Employee shall also serve in
similar capacities of such of the subsidiary corporations of the Company as may
be selected by the Board of Directors and shall be entitled to such additional
compensation therefor as may be determined by the Board of Directors of the
Company. Notwithstanding the foregoing, it is understood and agreed that during
the term hereof Employee shall be responsible for the sales and marketing
operations of the Company and that the duties of Employee during the period of
active employment shall not be inconsistent therewith or with (i) his position
and title as a Vice-President - Marketing; or (ii) with those duties ordinarily
performed by a Vice-President - Marketing.
4. Remuneration. During the period of employment, Employee
shall be entitled to receive the following compensation for his services:
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(a) The Company shall pay to Employee a salary at the
rate of $115,000 per annum, payable in equal bi-weekly installments, or in such
other manner as shall be agreeable to the Company and Employee.
(b) Not later than ninety (90) days after the end of
each fiscal year of the Company, so long as the Company has had net operating
income before income taxes and extraordinary items ("Pre-Tax Income") for such
immediately preceding fiscal year, as reported on the Company's audited annual
financial statements, the Company shall pay to Employee, as incentive
compensation, an amount equal to three percent (3%) of the Company's Pre-Tax
Income for such immediately preceding fiscal year. The Company agrees to furnish
to Employee a copy of such financial statements not later than ninety (90) days
after the end of each fiscal year of the Company during the term hereof.
5. Employee Benefits; Expenses.
(a) During the period of employment, the Company may
provide at its expense, life insurance to Employee in the face amount of up to
$1,000,000 with the Company as beneficiary.
(b) During the period of employment, Employee shall
be provided with health insurance and shall be eligible to participate in the
Company's stock option plans, stock purchase plans or other employee incentive
plans (including without limitation its 1995 Long-Term Incentive Plan and 1996
Non-Qualified Stock Option Plan) to the extent determined in the sole discretion
of the Board of Directors of the Company or a committee thereof. Notwithstanding
the foregoing, Employee shall receive options under the 1996 plan to purchase
66,667 shares of Common Stock at a purchase price of $1.50 per share.
(c) During the period of employment, Employee shall
be furnished with office space and facilities commensurate with his position and
adequate for the performance of his duties; he shall be provided with the
perquisites customarily associated with the position of Vice President of the
Company; and he shall be entitled to regular vacations during each year of three
weeks in the aggregate.
(d) It is contemplated that during the period of
employment, Employee may be required to incur out-of-pocket expenses in
connection with the performance of his services hereunder, including expenses
incurred for travel and business entertainment. Accordingly, the Company shall
reimburse Employee for all reasonable out-of-pocket expenses incurred by
Employee in the performance of his duties hereunder upon submission of
reasonable documentation therefore in accordance with the Company's policies.
Notwithstanding and in addition to the foregoing: (i) in recognition of Employee
traveling each week to and from Buffalo, New York, so that he can work in New
York on a full time basis, Employee shall be entitled to receive traveling and
relocation expenses, as incurred, up to $25,000 for such purpose; and (ii) in
recognition that Employee will be required during the term of this Agreement to
do a considerable amount of driving in connection with his services hereunder,
the Company shall also provide Employee with an automobile allowance of $650 per
month, and shall
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reimburse the Employee for all expenses relating to gasoline and automobile
insurance, throughout the term of this Agreement.
(e) All benefits to Employee specifically provided for
herein shall be in addition to, and shall not diminish, (i) such other benefits
and/or compensation as may hereafter be granted to or afforded to Employee by
the Board of Directors of the Company, or (ii) any rights which Employee may
have or may acquire under any hospitalization, life insurance, pension, profit
sharing, incentive compensation or other present or future employee benefit plan
or plans of the Company.
6. Disability. If Employee, during the period of employment,
becomes unable for three consecutive months or more, or any 180 days in any
twelve-month period, due to ill health or other physical or mental incapacity,
to perform his services hereunder, the Company may thereafter, upon at least 45
days' written notice to Employee, place him on disability status. After such
action by the Company, Employee shall continue to receive one-half (1/2) of the
sum of the last salary paid to Employee under Section 4(a) hereof and any
increment thereto payable under Section 4(b) hereof until the end of the period
of employment or until his disability ends.
7. Confidential Information.
(a) In the course of Employee's employment by the Company,
Employee will have access to and possession of valuable and important
confidential or proprietary data or information of the Company and its
operations. Employee will not during Employee's employment by the Company or at
any time thereafter divulge or communicate to any person nor shall Employee
direct any Company employee, representative or agent to divulge or communicate
to any person or entity (other than to a person or entity bound by
confidentiality obligations similar to those contained herein and other than as
necessary in performing Employee's duties hereunder) or use to the detriment of
the Company or for the benefit of any other person or entity, any of such
confidential or proprietary data or information or make or remove any copies
thereof, whether or not marked or otherwise identified as "confidential" or
"secret." Employee shall take all reasonable precautions in handling the
confidential or proprietary data or information within the Company to a strict
need-to-know basis and shall comply with any and all security systems and
measures adopted from time to time by the Company to protect the confidentiality
of confidential or proprietary data or information.
(b) The term "confidential or proprietary data or
information" as used in this Agreement shall mean information not generally
available to the public, including, without limitation, all database
information, personnel information, financial information, customer lists,
supplier lists, trade secrets, patented or proprietary information, forms,
information regarding operations, systems, services, know how, computer and any
other processed or collated data, computer programs, pricing, marketing and
advertising data.
(c) Employee will at all times promptly disclose to the
Company in such form and manner as the Company may reasonably require, any
inventions, improvements or procedural or methodological innovations, programs,
methods, forms, systems, services, designs, marketing ideas,
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products or processes (whether or not capable of being trademarked, copyrighted
or patented) conceived or developed or created by Employee during or in
connection with Employee's employment hereunder and which relate to the business
of the Company ("Intellectual Property"). Employee agrees that all such
Intellectual Property (including, without limitation, "Mike's Original,
Inc.(R)", "Gramwich(R)", "▇▇▇▇▇▇ Cracker Delight(R)", "Strawberry Fantasy(TM)"
and "Chocolate Tidbits(TM)"), shall be the sole property of the Company.
Employee further agrees that Employee will execute such instruments and perform
such acts as may reasonably be requested by the Company to transfer to and
perfect in the Company all legally protectable rights in such Intellectual
Property.
(d) All written materials, records and documents made by
Employee or coming into Employee's possession during Employee's employment by
the Company concerning any products, processes or equipment manufactured, used,
developed, investigated, purchased, sold or considered by the Company or
otherwise concerning the business or affairs of the Company shall be the sole
property of the Company, and upon termination of Employee's employment by the
Company, or upon request of the Company during Employee's employment by the
Company, Employee shall promptly deliver the same to the Company. In addition,
upon termination of Employee's employment by the Company, Employee will deliver
to the Company all other Company property in Employee's possession or under
Employee's control, including, but not limited to, financial statements,
marketing and sales data, customer and supplier lists, database information and
other documents, and any Company credit cards.
(e) The provisions of this Section 7 shall survive the
termination of this Employment Agreement.
8. Non-Competition.
(a) During the term of this Agreement and for one year
thereafter (subject to clause (b) of this Section 8, the "Restricted Period"),
the Employee shall not, without the written consent of the Company, directly or
indirectly,
(i) become associated with, render services to, invest
in, represent, advise or otherwise participate in as an officer, employee,
director, stockholder, partner, promoter, agent of, consultant for or otherwise,
any business which is conducted in any of the jurisdictions in which the
Company's business is conducted and which is competitive with the business in
which the Company is engaged or plans to be engaged at the time Employees'
employment by the Company ceased; provided, however, that nothing contained
herein will prevent Employee from owning less than five percent (5%) of any
class of equity or debt securities listed on a national securities exchange or
traded in any established over-the-counter securities market, so long as such
involvement with the issuer of any such securities is solely that of a passive
investor;
(ii) for your own account or for the account of any other
person or entity (A) interfere with the Company's relationship with any of its
suppliers, customers, representatives or agents or (B) transact any business
with any customer or supplier of the Company which transacts or has transacted
business with the Company at any time during the term of this Agreement; or
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(iii) employ or otherwise engage, or solicit, entice or
induce on behalf of yourself or any other person or entity, the services,
retention or employment of any person who has been an employee, sales
representative, consultant to or agent of the Company within one year of the
date of such offer or solicitation.
(b) In the event that the Employee terminates his
employment hereunder after a breach hereof by the Company, or if the Company
terminates the Employee's employment hereunder other than for cause (as defined
in Section 9(a) hereof), the covenant contained in Section 8(a) hereof shall
extend for a period of one year beyond the termination of the Employee's
employment only if the Company shall pay to the Employee with respect to such
period an amount equal to the annual compensation otherwise provided for
hereunder with respect to the immediately preceding year during the term hereof.
This Section 8(b) shall be of no effect, and the Employee shall be subject to
the restrictive covenant contained in Section 8(a) hereof without the Company
being obligated to make the payments referred to in the preceding sentence, if
the Company terminates its employment of the Employee for cause (as defined in
Section 9(a) hereof) or if the Employee terminates his employment hereunder in
the absence of a breach hereof by the Company.
(c) The parties hereto intend that the covenants contained
in this Section 8 shall be deemed a series of separate covenants for each
country, state, county and city. If, in any judicial proceeding, a court shall
refuse to enforce all the separate covenants deemed included in this Section 8
because, taken together, they cover too extensive a geographic area, the parties
intend that those of such covenants (taken in order of the cities, counties,
states and countries therein which are lease populous) which if eliminated would
permit the remaining separate covenants to be enforced in such proceeding shall,
for the purpose of such proceeding, be deemed eliminated from the provisions of
this Section 8.
(d) With respect to the covenants contained in Sections 7
and 8 of this Agreement, Employee agrees that any remedy at law for any breach
or threatened or attempted breach of such covenants may be inadequate and that
the Company shall be entitled to specific performance or any other mode of
injunctive and/or other equitable relief to enforce its rights hereunder or any
other relief a court might award without the necessity of showing any actual
damage or irreparable harm or the posting of any bond or furnishing of other
security.
9. Termination.
(a) The Company and Employee agree that Employee's services
hereunder may be terminated for "cause" by the Company only (i) for an act of
fraud or embezzlement adversely affecting the financial interest of the Company,
(ii) in the event that the Company places Employee on disability status pursuant
to Section 6 hereof more than once during the term hereof, (iii) in the event of
a conviction of the Employee for any felony, (iv) in the event of material
breach without cure by the Employee of this Agreement after the expiration of
any applicable grace period, or (v) in the event of any willful breach by the
Employee of this Agreement.
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(b) If the Company terminates Employee's employment
hereunder for any reason other than for "cause" as set forth in Section 9(a)
hereof, Employee's compensation shall be paid to him as provided hereunder for
the greater of the (i) remainder of the term of this Agreement or (ii) one year.
If the Company terminates Employee's employment hereunder for "cause" as set
forth in Section 9(a) hereof, Employee shall not be entitled to receive any
further compensation hereunder which has not already been earned pursuant to the
terms hereof. Employee shall have no duty to mitigate the Company's damages
hereunder; provided, that there shall be deducted from the amounts payable by
the Company hereunder an amount equal to any compensation earned by Employee
from other employment subsequent to such termination of his employment
hereunder. Employee and the Company acknowledge that the foregoing provisions of
this paragraph 9(b) are reasonable and are based upon the facts and
circumstances of the parties at the time of entering into this Agreement, and
with due regard to future expectations.
10. Consolidation or Merger. In the event of any consolidation
or merger of the Company into or with any other corporation during the term of
this Agreement, or the sale of all or substantially all of the assets of the
Company to another corporation, person or entity during the term of this
Agreement, such successor corporation shall assume this Agreement and become
obligated to perform all of the terms and provisions hereof applicable to the
Company, and Employee's obligations hereunder shall continue in favor of such
successor corporation.
11. Notices. Any notice to be given to the Company hereunder
shall be deemed sufficient if addressed to the Company in writing and delivered
or mailed by certified or registered mail to its offices at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or such other address as the Company may
hereafter designate, with a copy to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq., Blau, Kramer,
Wactlar & ▇▇▇▇▇▇▇▇▇, P.C., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Any
notice to be given to Employee hereunder shall be delivered or mailed by
certified or registered mail to him at: ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or such other address as he may hereafter designate.
12. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the Company, and
unless clearly inapplicable, all references herein to the Company shall be
deemed to include any such successor. In addition, this Agreement shall be
binding upon and inure to the benefit of the Employee and his heirs, executors,
legal representatives and assigns; provided, however, that the obligations of
Employee hereunder may not be delegated without the prior written approval of
the Board of Directors of the Company.
13. Amendments. This Agreement may not be altered, modified,
amended or terminated except by a written instrument signed by each of the
parties hereto.
14. Prior Agreements Superseded. This Agreement supersedes any
employment or consulting agreements, oral or written, entered into between
Employee and the Company prior to the date of this Agreement.
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15. Change of Control.
(a) In the event there shall be a change in the present
control of the Company, as hereinafter defined, and the Employee's working
conditions as contemplated hereby shall have been adversely affected as a result
thereof, Employee shall have the option, exercisable within six (6) months of
his becoming aware of such event, to terminate this Agreement forthwith. Upon
such termination, Employee shall have the right to immediately receive as a lump
sum payment an amount equal to three times the total compensation paid to
Employee during the immediately preceding fiscal year of the Company, less
$1.00.
(b) For purposes of this Agreement, a change in the
present control of the Company shall mean:
(i) if any "person" (as such term is used in Section 13(d)
and 14(d) of the Exchange Act) other than the Company or any "person" who on the
date of this Agreement is a director or officer of the Company, becomes the
"beneficial owner" (as defined in Rule 13(d)-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing thirty percent (30%) of
the voting power of the Company's then outstanding securities; or
(ii) if during any period of two (2) consecutive years
during the term of this Agreement, individuals who at the beginning of such
period constitute the Board of Directors cease for any reason to constitute at
least a majority thereof, unless the election of each director who is not a
director at the beginning of such period has been approved in advance by
directors representing at least two-thirds (2/3) of the directors then in office
who were directors at the beginning of the period.
16. Applicable Law. This Agreement shall be governed by,
construed and enforced in accordance with the laws of the State of New York,
without regard to conflicts of laws.
17. Acknowledgment. Employee acknowledges that he has
carefully read this Agreement and hereby represents and warrants to the Company
that Employee's entering into this Agreement, and the obligations and duties
undertaken by Employee hereunder, will not conflict with, constitute a breach of
or otherwise violate the terms of any other agreement to which Employee is a
party and that Employee is not required to obtain the consent of any person,
firm, corporation or other entity in order to enter into and perform his
obligations under this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
MIKE'S ORIGINAL, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇
Chairman, President and
Chief Executive Officer
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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