EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 12th of April 2000, by and between IVC
Industries, Inc., a Delaware corporation (the "Company"), with offices at 500
Halls Mill Road, Freehold, New Jersey 07728, and Michael A. Durso ("Durso"), 4
Jay Court, Marlton, New Jersey 08053 (hereinafter "the Agreement").
WHEREAS, the Company wishes to assure itself of the services of Durso; and
WHEREAS, Durso is willing to enter into this Agreement upon the terms and
conditions herein set forth.
NOW, THEREFORE, in consideration of the mutual promises, covenants,
undertakings and agreements set forth herein, the sufficiency of which is
acknowledged by the parties, the Company and Durso agree as follows:
1. Employment
The Company shall employ Durso to serve the Company as its Senior Vice
President of Sales and Marketing during the Term of Employment as set forth in
Paragraph 2 of this Agreement. Durso shall report to the Chief Executive Officer
of the Company and/or to any other individual as may be designated by the Board
of Directors of the Company. Durso's duties shall be consistent with his title
of Senior Vice President of Sales and Marketing. Durso shall devote his best
efforts and his entire business time to advancing the interests of the Company
and in execution of his duties and obligations to the Company as its Senior Vice
President of Sales and Marketing. It is understood that Durso's services during
the Term of Employment shall be performed primarily in the Freehold, New Jersey
area and/or such other area in which the Company's headquarters are located,
subject to such reasonable travel outside that area and in and outside the
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United States as performance of his duties and the business of the Company may
reasonably require.
2. Term of Employment
"Term of Employment," as such phrase is used throughout this Agreement,
shall mean the period beginning on the effective date of this Agreement as set
forth in Paragraph 14 hereof and ending on the third annual anniversary of such
effective date, unless this Agreement and/or Durso's employment with the Company
is terminated earlier thereto in accordance with the terms of Paragraph 4 of
this Agreement.
3. Compensation and Other Benefits
(a) The Company shall pay Durso an annual base salary of $165,000.00 for
Durso's Term of Employment under this Agreement, payable in equal installments
in accordance with the Company's customary payroll practices. Annually on or
about October 15th of each year during the Term of Employment, Durso shall meet
with the Company's Chief Executive Officer and Compensation Committee for a
review and adjustment, if any at the sole discretion of the Chief Executive
Officer and Compensation Committee, of Durso's base salary based upon Durso's
performance in the year in question, the financial performance of the Company
for the year in question, the current financial condition of the Company and any
and all other factors deemed relevant in the sole discretion of the Chief
Executive Officer and/or Compensation Committee. The first such salary review to
be conducted under the terms of this Paragraph 3(a) shall be on October 15, 2000
and continue annually thereafter for the Term of Employment. Nothing contained
in this Agreement, however, guarantees or requires the Company to increase
Durso's base salary at any time during the Term of Employment.
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(b) During the Term of Employment, the Company may in the sole discretion
of the Company's Chief Executive Officer and Compensation Committee pay Durso an
annual bonus based upon Durso's performance during the year in question, the
financial performance of the Company during the year in question, the current
financial condition of the Company and any and all other factors deemed relevant
in the sole discretion of the Chief Executive Officer and/or Compensation
Committee. The first such discretionary bonus review under the terms of this
Paragraph 3(b) shall be on October 15, 2000, and continue annually thereafter
for the Term of Employment. Nothing contained in this Agreement guarantees or
requires the Company to pay Durso a bonus at any time during the Term of
Employment.
(c) During the Term of Employment, Durso shall be entitled to participate
and shall be included in any pension, 401(k), stock option and/or other similar
plan or program of the Company as may be in effect from time to time for
executives of the Company and such participation shall be in accordance with the
terms of such plans and/or programs provided by the Company subject to
modification and/or termination by the Company. Nothing contained in this
Agreement obligates and/or requires the Company to create, obtain and/or
maintain any such plans and/or programs. This Agreement merely requires that in
the event the Company has such plans and/or programs in effect, Durso be
permitted to participate therein.
(d) During the Term of Employment, Durso shall be entitled to participate
in any group hospitalization, medical, health, accident, and/or disability
insurance plans and/or programs of the Company now existing or hereafter
established for executives of the Company in accordance with the terms of such
plans and/or programs subject to
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modification or termination of such plans and/or programs by the Company.
Nothing contained in this Agreement obligates the Company to create, obtain
and/or maintain group hospitalization, medical, health, accident, and/or
disability insurance plans and/or programs. This Agreement merely requires that
in the event the Company has such plans and/or programs in effect, Durso be
permitted to participate therein.
(e) During the Term of Employment, the Company shall provide Durso with a
term life insurance benefit in an amount equal to Durso's annual base salary
under Paragraph 3(a) of this Agreement. The Company at its option may elect to
fulfill its obligations under this Paragraph 3(e) by purchasing a term life
policy from a third-party insurance company or by the Company's administration
of a self-insured plan. The beneficiary of such life insurance benefits provided
under this Paragraph 3(e) shall be designated by Durso in accordance with the
terms and conditions of any such plan and/or policy. Should Durso fail to
designate a beneficiary, the Company shall be designated as the beneficiary of
any such life insurance benefits provided hereunder.
(f) During the Term of Employment, the Company agrees to reimburse Durso
for all reasonable business expenses incurred by him in connection with the
performance of his duties hereunder in accordance with the policies of the
Company.
(g) During the Term of Employment, the Company shall furnish Durso with
office space, administrative support staff, facilities and other similar
accommodations commensurate with his position and reasonably necessary for the
performance of his duties hereunder.
(h) During each year of the Term of Employment, Durso shall be entitled to
three (3) weeks of paid vacation (in addition to all holidays observed by the
Company) at such
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time or times as may be selected by him, which do not unreasonably interfere
with the proper performance of his duties hereunder. In the event that Durso
does not use all three (3) weeks of vacation during any year of the Term of
Employment, the Company shall pay Durso an amount equal to the pro rata daily
compensation rate for Durso based upon his base salary for such year multiplied
by the number of unused vacation days for such year to which Durso is entitled
under the terms of this Agreement. Payment shall be made in accordance with the
Company's payroll practices no later than sixty (60) days after the end of each
such year.
(i) The Company shall lease an automobile for Durso's use during the Term
of Employment, and the Company shall be responsible to pay any and all monthly
lease charges and expenses up to and not in excess of $1000.00 per month. The
Company shall also be responsible to pay any and all costs, charges and/or
expenses relating to the use and/or maintenance of the vehicle leased for
Durso's use as provided under this Paragraph 3(i), including without limitation
lease initiation fees, automobile insurance, service, gasoline, and lease
termination fees, costs, charges, assessments and/or expenses. As soon as
practical after execution of this Agreement, the Company shall take all steps
necessary to assume the obligations under the automobile lease currently in
Durso's name individually and shall be responsible to pay any and all expenses
relating to the transfer and/or assignment of such lease to the Company. Durso
shall fully cooperate with the Company to effectuate the transfer and/or
assignment of such lease. Any and all costs and expenses paid by the Company for
the leased vehicle that are allocated to Durso's personal use of the leased
vehicle shall be treated and reported by the Company as W-2 compensation to
Durso. Durso shall be responsible to provide the Company with an
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accurate allocation as to the amount of business use versus personal use of the
leased vehicle and shall provide the Company with documentation supporting such
allocation.
4. Termination of Employment
(a) Durso's employment shall terminate upon his death and may be
terminated, at the option of the Company, upon written notice to Durso only (i)
as a result of Durso's "disability," as defined in Paragraph 4(b) below, or (ii)
for "cause," as defined in Paragraph 4(c) below. Termination under either (i) or
(ii) of this Paragraph 4(a) shall be effective thirty (30) days after the
Company gives Durso written notice of termination.
(b) As used herein, "disability" shall mean such physical or mental
disability or incapacity of Durso, which has substantially prevented him from
performing his principal duties hereunder during any period of 150 consecutive
calendar days or for a total of 180 calendar days (whether or not consecutive)
in any 365-day period of the Term of Employment. During such period of
disability and until notice of termination is given by the Company under
Paragraph 4(a)(i) of this Agreement, Durso shall continue to receive his base
salary compensation and benefits described in Paragraph 3(a)-(i) of this
Agreement, reduced by the amount, if any, of disability benefits received by
Durso during this period, including benefits paid by the State of New Jersey
and/or benefits provided under any policy of disability insurance covering
Durso.
(c) As used herein, "cause" shall mean (i) willful misconduct involving
bad faith by Durso in respect of his duties and obligations under this
Agreement, which misconduct causes or was intended by Durso to cause significant
injury to the Company, or (ii) commission of a crime involving moral turpitude
which would adversely affect the Company should Durso continue to serve as an
employee of the Company. "Cause" shall
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not include a bona fide disagreement over a corporate policy so long as Durso
does not willfully violate any specific written directions from the Company's
Board of Directors, Chief Executive Officer and/or any other individual to whom
Durso reports pursuant to the direction of the Board of Directors and/or Chief
Executive Officer, provided such directions are consistent with the provisions
of this Agreement.
(d) Upon termination of Durso's employment as a result of death,
disability or for cause, the Company shall only be required to pay, within ten
(10) business days of the effective date of the termination as provided in
Paragraph 4(a) of this Agreement, to Durso or to his beneficiaries, personal
representatives or his Estate, as the case may be, any unpaid annual base salary
accrued and unpaid as of the effective date of the termination. All payments
made under the terms of this Paragraph 4(d) shall be in full and complete
satisfaction of any and all claims Durso may have against the Company, its
officers, directors, employees, shareholders, agents, attorneys and
representatives relating to his employment with the Company and/or the
termination thereof, including without limitation, all claims under this
Agreement and any and all claims under applicable state or federal law.
(e) If Durso's employment is terminated by the Company before the
expiration of the Term of Employment for any reason other than death, disability
or cause, then Durso shall be entitled to receive a Severance Package in an
amount equal to the greater of twelve (12) months base salary or the amount of
base salary for the period of time remaining under the Term of Employment as of
the effective date of termination. Such Severance Package shall be paid in
accordance with the Company's customary payroll practices on the dates it would
have been paid had Durso's employment not been
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terminated before the expiration of the Term of Employment. Durso shall also
continue to participate for twelve months from the effective date of termination
or the period of time remaining under the Term of Employment as of the date of
termination, whichever time period is longer, in all plans and/or programs of
the Company described in Paragraphs 3(c)-(e) of this Agreement that were in
effect as of the date of termination to the extent that such continued
participation is permitted under the terms and provisions of such plans and/or
programs and is not otherwise prohibited by law. In the event Durso's continued
participation in any group health, medical, disability and/or life insurance
plan and/or program in effect under Paragraph 3(d)-(e) of this Agreement is
prohibited by the terms of such plans and/or programs or otherwise prevented by
law, then in lieu of such continued participation therein the Company shall pay
to Durso for the applicable time period described above amounts equal to the
actual out-of-pocket cost (grossed up for tax effect) incurred by Durso to
participate in plans and/or programs privately obtained by him providing
substantially similar benefits to those under the Company's plan or program
providing health, medical, disability and/or life insurance from which such
participation is barred. All payments made under the terms of this Paragraph
4(e) shall be in full and complete satisfaction of any and all claims Durso may
have against the Company, its officers, directors, shareholders, agents,
attorneys, employees and representatives relating to his employment with the
Company and/or the termination thereof, including without limitation, all claims
under this Agreement and any and all claims under applicable state or federal
law.
(f) Durso shall be permitted, upon not less than thirty (30) days written
notice to the Company, to terminate this Agreement in the event (i) the Company
fails to perform
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in any material respect its obligations under this Agreement or shall violate or
fail to comply in any material respect with the provisions hereof or fail in any
way to fulfill the obligations contained in this Agreement and such failure
shall continue for thirty (30) days after written notice thereof is given by
Durso to the Company; or (ii) other than in connection with termination of
Durso's employment for death, disability or cause, the Company removes Durso
from the position of Senior Vice President of Sales and Marketing.
(g) If Durso elects to terminate this Agreement in accordance with the
terms of Paragraph 4(f), Durso shall be entitled to receive, and the Company
shall be obligated to provide and pay to Durso the Severance Package and
benefits in accordance with the terms of Paragraph 4(e) of this Agreement. All
payments made under the terms of this paragraph shall be in full and complete
satisfaction of any and all claims Durso may have against the Company, its
officers, directors, employees, shareholders, agents, attorneys and
representatives relating to his employment with the Company and/or termination
thereof, including without limitation, all claims under this Agreement and any
and all claims under applicable state or federal law.
5. Restrictive Covenants
(a) Except as required in the performance of his duties to the Company, or
as authorized in writing by the Company, Durso shall not at any time during or
after the Term of Employment disclose or use, directly or indirectly, any trade
secrets and/or confidential or proprietary information (collectively referred to
as "Confidential Information") belonging to or used by the Company or any of its
subsidiaries and of which Durso shall obtain knowledge by reason of his
employment with the Company.
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All such Confidential Information shall be retained by Durso in trust in a
fiduciary capacity for the sole benefit of the Company. Such Confidential
Information includes, but is not limited to, information with respect to
marketing, advertising and sales presentation methods and materials, customer
and supplier lists, external and internal business forms, manuals, corporate
planning, manufacturing, distribution and marketing processes, procedures,
devices and materials utilized by the Company in providing goods to customers,
plans for expansion into new areas or markets and information regarding internal
operations, together with all written and graphic materials relating to all or
any part of the same.
(b) During the Term of Employment and for two (2) years thereafter, Durso
shall not, directly or indirectly, solicit any person, firm, entity or
corporation who is or was, during Durso's Term of Employment, a client/customer
of the Company. Company clients/customers shall mean (1) those actual clients
and customers of the Company, and (2) those active prospective clients or
customers of the Company, both past and present, at any time during the two (2)
year period immediately preceding the termination of Durso's employment with the
Company.
(c) Durso recognizes that the Company's employees are a valuable resource
of the Company. Durso agrees that during the Term of Employment and for two (2)
years thereafter, he shall not, either alone or in conjunction with any person
or entity, solicit, induce, and/or recruit any Company employee to leave the
employ of the Company.
(d) Durso shall not, at any time during or after the Term of Employment,
knowingly disparage in any material manner or in any material respect the
Company
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and/or any of its subsidiaries, officers and/or directors and/or the Company's
financial soundness, responsibility, personnel, products or practices.
(e) Upon expiration of the Term of Employment, termination of employment,
termination of the Agreement and/or or at any other time as the Chief Executive
Officer and/or Board of Directors of the Company may request, Durso shall
promptly deliver to the Company all Confidential Information and materials in
his possession, including, but not limited to, sales presentation materials,
other internal and external business forms, manuals, correspondence, notes and
customer and supplier lists together with all copies thereof, and Durso shall
not make or retain any copy or extract of any of the foregoing.
(f) As a means reasonably calculated to prevent Durso from disclosing or
making accessible to any person or entity any Confidential Information Durso
acquired during the Term of Employment which would cause the Company's business
to be prejudiced, and because disclosure or use of such Confidential Information
is difficult to detect and establish, during the Term of Employment and for one
(1) year thereafter Durso agrees that he will not, without first having obtained
the written consent of the Company, which consent shall not be unreasonably
withheld inconsistent with the protections to be afforded the Company under this
Agreement, enter into the employ of, render services to, or engage in or become
the proprietor, partner, or stockholder (except a stockholder holding less than
five percent (5%) of the outstanding voting shares of any publicly owned
corporation) of any entity doing business in the State of New Jersey and/or in
any other state or country in which the Company is licensed to do business which
directly competes with the Company.
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(g) Durso acknowledges that his breach of any of the restrictive covenants
contained in Paragraph 5 of this Agreement can cause irreparable damage to the
Company for which the remedy at law would not be adequate. Accordingly, in
addition to any other remedy provided by law or equity, the Company shall be
entitled to injunctive relief restraining Durso from any actual or threatened
violation of any of the terms of this Paragraph 5 or any other appropriate
decree of specific performance (without any bond or other security being
required), including, without limitation, an injunction restraining Durso from
rendering any services to any person or entity in competition with the then
business being conducted by the Company and/or to whom all or any part of any
Confidential Information has been disclosed by Durso.
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6. Notices
Any notice made or to be given under the terms of this Agreement shall be
effective and duly given only if it is in writing and delivered via hand
delivery or by reliable overnight delivery service (e.g. Federal Express) to the
party at its address set forth below or at such other addresses as the parties
may specify by notice to the other in accordance with the terms hereof:
(a) To Durso-
Michael A. Durso
4 Jay Court
Marlton, New Jersey 08053
Phone No. (609) 988-0488
(b) To the Company -
E. Joseph Edell
Chief Executive Officer
500 Halls Mill Road
Freehold, New Jersey 07728
Phone No.: (732) 308-3000
Facsimile No.: (732) 761-2808
With a copy to:
Diane L. Mulligan, Esq.
Edell & Associates, P.C.
P.O. Box 2355
1776 On the Green, 8th Floor
Morristown, New Jersey 07962
Phone No.: (973) 605-1776
Fax No.: (973) 605-1812
7. Prior Agreements
This Agreement supersedes and replaces all prior understandings,
arrangements and agreements of employment, if any, between the Company and
Durso.
8. Assigns and Successors
Subject to the limitations set forth below, this Agreement shall inure to
the benefit of and shall be binding upon the parties hereto and their respective
heirs, representatives and successors. This Agreement shall not be assignable by
Durso and shall only be assignable by the Company to (i) any corporation or
entity resulting from any reorganization, merger and/or consolidation of the
Company with any other corporation and/or entity; or (ii) any corporation or
entity to which the Company may sell all or substantially all of its assets. In
addition, this Agreement shall remain in full force and effect and shall be
binding upon any corporation or entity resulting from any reorganization, merger
and/or consolidation of the Company with another corporation or
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entity and/or any corporation or entity that acquires all or substantially all
of the Company's assets.
9. Invalid or Unenforceable Provisions
In the event any provision of this Agreement shall be determined to be
invalid or unenforceable in any respect, the remaining provisions of this
Agreement shall not be affected thereby and shall continue in full force and
effect.
10. Amendment
This Agreement may be amended or modified only by a written instrument
signed by both the Company and Durso.
11. Construction
This Agreement shall be construed under the laws of the State of New
Jersey. The parties agree and acknowledged that this Agreement is the result of
negotiations between the parties and that the terms hereof shall not be
construed against the party responsible for preparation of this Agreement.
12. Headings
Paragraph headings are for convenience only and shall not be considered a
part of the terms and provisions of the Agreement.
13. Waiver
The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver or deprive that party
of the right to thereafter insist upon strict adherence to that term or any
other term of this Agreement.
14. Effective Date
The Effective Date of this Agreement is April 12, 2000.
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IN WITNESS WHEREOF, the parties hereunto set their hands and seal this
12th day of April 2000.
THE COMPANY
IVC INDUSTRIES, INC.
Attested:
By: /s/ Domenic N, Golato By: /s/ E. Joseph Edell
-------------------------------- -------------------------------------
Domenic Golato E. Joseph Edell
Secretary Chief Executive Officer
Seal
Witnessed by: EMPLOYEE
/s/ G.O. Morales /s/ Michael Durso
----------------------------------- ----------------------------------------
Notary Public Michael Durso
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