UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): December 31, 2009
|
Innovative
Food holdings, Inc.
|
|
(Exact
name of registrant as specified in its
charter)
|
|
|
||
|
Florida
|
0-9376
|
20-1167761
|
|
(State
or other jurisdiction
|
(Commission
|
(IRS
Employer
|
|
of
incorporation)
|
File
Number)
|
Identification
No.)
|
|
3845
Beck Blvd., Suite 805, Naples, Florida
|
34114
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Registrant’s
telephone number, including area code: (239)
596-0204
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2. below):
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item
1.01. Entry into a Material Definitive Agreement
On
January 6, 2010, the registrant entered into employment agreements with each of
Sam Klepfish, its Chief Executive Officer, and Justin Wiernasz, its
President. The agreements are effective as of January 1, 2010 and
have a term of three years. The annual salary under the agreements
ranges from a base of $151,000 in 2010 and can increase to a maximum of $181,000
in 2012, provided certain revenue targets are met. The agreements
also provide for an annual bonus (payable one-half in cash and one-half in
shares of the registrant’s common stock) ranging from 7% - 50% of base salary
depending upon the amount of incremental year-over-year increase in
revenues. The agreements contain provisions permitting the registrant
to terminate the executives for “cause” as defined in the agreements as well as
restrictions with respect to confidentiality, competition and
solicitation. This abbreviated summary of the agreements is subject
to the actual terms of the agreements, a copy of each of which agreement is
filed herewith as an exhibit.
Item 5.02. Departure of
Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain
Officers
As
disclose above under Item 1.01, the registrant entered into employment
agreements with two of its executive officers containing compensatory
arrangements.
On
December 31, 2009, the registrant’s board of directors, in recognition of the
performance of Justin Wiernasz., the registrant’s President, during 2009,
awarded him a bonus as follows: eight million stock options, with each option
having the right to purchase one share of common stock. The options,
which are exercisable for five years from the date of vesting, shall vest at a
rate of two million options per quarter, on the last day of each quarter of
2010, provided Mr. Wiernasz is still an executive officer of the registrant on
such date. The exercise price of each option shall be an amount equal
to a 20% premium to the closing price of the registrant’s common stock on the
primary market upon which it trades or is quoted (currently the OTC Bulletin
Board) on the last trading day of each quarter, but no lower than a price of
$0.005 per share. .
Item
8.01. Other Events
Effective
December 16, 2009, Whalehaven Capital Fund limited, one of the registrant’s
creditors extended the due date to February 15, 2010 of notes aggregating to
$138,000.
Item
9.01 Financial Statements and Exhibits
(d) Exhibits
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| INNOVATIVE FOOD HOLDINGS, INC. | |||
|
Dated: January
7, 2010
|
By:
|
/s/ Sam Klepfish | |
| Sam Klepfish | |||
| CEO | |||
Exhibit
Index
Exhibit
10.1
EMPLOYMENT
AGREEMENT
AGREEMENT made as of the
1st day
of January 2010, by and between Innovative Food Holdings, Inc., a Florida
corporation with its principal offices at 3845 Beck Blvd., Suite 805, Naples,
Florida 34114 (the “Corporation”), and Sam Klepfish, (the
“Executive”).
W
I T N E S S E T H:
In
consideration of the mutual covenants contained herein, the parties hereto agree
as follows:
1. Employment. The
Corporation hereby employs the Executive as an executive of the Corporation, and
the Executive agrees to serve the Corporation as such, upon the terms and
conditions set forth in this Agreement for the period commencing as of the date
hereof and, unless Executive's employment under the Agreement is otherwise
terminated in accordance with the provisions hereof, ending on December 31,
2012.
2. Duties. (a)
Executive shall serve as the Chief Executive Officer, with such duties and
authority as are generally incident to such position, or in such other
management position as the Corporation shall determine. Without limiting the
generality of the foregoing, the Executive shall manage the overall strategic
direction and operations of the corporation. In performing his duties
hereunder, the Executive shall be subject to the direction of the Corporation's
Board of Directors, but shall not be required to relocate to any location in
order to perform his duties hereunder.
1
(b)
The Executive agrees that he will devote his business time and attention to the
affairs of the Corporation and that he will use his best efforts to promote the
business and interests of the Corporation. It is understood, however, that the
foregoing will not prohibit the Executive from engaging in investment and other
activities that do not interfere with the performance of his duties
hereunder.
3. Compensation. (a)
The Corporation will pay the Executive for all services to be rendered by the
Executive hereunder (including, without limitation, all services to be rendered
by him as an officer of the Corporation and its subsidiaries and affiliates) an
annual base salary (hereinafter referred to as the "Base Salary") at the rate
of: (i) 151,000 per annum from the date hereof through December 31,
2010 of which $6,500 shall be accrued until June 20, 2010 and then payable in
equal weekly installments until said $6,500 is paid in full by December 31,
2010; (ii) $165,000 per annum from January 1, 2011 through December 31, 2011,
provided, however, that the
increase of $14,000 shall only take effect if the Corporation’s gross annual
sales for 2010 are at least $7.5 million dollars; and (iii) the
lesser of a 10% increase in salary above the salary in 2011 or $181,000 per
annum from January 1, 2012 through December 31, 2012, provided, however, the increase
in 2012 shall only take effect if the Corporation’s gross annual
sales for 2011 are at least $7.5 million dollars. The Base
Salary for each year shall be payable in equal, weekly installments (accept with
respect to the $6,500 accrued during the initial six months of this Agreement or
as otherwise provided for herein) in accordance with customary payroll practices
for executives of the Corporation.
2
(b) Executive
shall also be entitled to receive an annual bonus based upon the consolidated
aggregate incremental revenues of the Corporation and its subsidiaries (“IVFH”),
over each of the three 12-month periods beginning January 1, 2010 (the
“Bonus”). The Bonus shall be payable one-half in cash and one-half in
the Corporation’s stock. The equity component shall be valued based
upon the average closing price of the Corporation’s common stock over the 30
trading days ended on December 31 of the year for which the Bonus is being
calculated, but under no circumstance will be below $0.005 per
share. The Bonus shall be paid in full as long as an average gross
margin (as calculated historically) of at least 20% is maintained on all sales
revenues of the Corporation’s consolidated sales revenues. Any
decline in such average gross margin below 20% on all of the Corporation’s
consolidated sales revenues shall reduce the Bonus by 20% for each ½ percent
decline. All calculations with respect to the Base Salary and Bonus
shall be based upon the Corporation’s financial statements and shall be
completed no later than January 20 of the following year. The Bonus
for each year, if earned, shall be payable in full on or before the following
January 27.
The Bonus
shall be payable according to the following schedule:
2010 - additional gross
revenues as compared to 2009
7%
of the then current Base Salary if IVFH achieves $ 500,000 of
additional revenues
14% of
the then current Base Salary if IVFH achieves $1,000,000 of additional
revenues
21% of
the then current Base Salary if IVFH achieves $1,500,000 of additional
revenues
28% of
the then current Base Salary if IVFH achieves $2,000,000 of additional
revenues
35% of
the then current Base Salary if IVFH achieves $2,500,000 of additional
revenues
50% of
the then current Base Salary if IVFH achieves $3,000,000 of additional
revenues
2011- additional gross
revenues as compared to 2010
7%
of the then current Base Salary if IVFH achieves $ 600,000 of
additional revenues
14% of
the then current Base Salary if IVFH achieves $1,100,000 of additional
revenues
21% of
the then current Base Salary if IVFH achieves $1,600,000 of additional
revenues
28% of
the then current Base Salary if IVFH achieves $2,200,000 of additional
revenues
35% of
the then current Base Salary if IVFH achieves $2,500,000 of additional
revenues
50% of
the then current Base Salary if IVFH achieves $3,000,000 of additional
revenues
3
2012 – additional gross
revenues as compared to 2011
7%
of the then current Base Salary if IVFH achieves $ 700,000 of
additional revenues
14% of
the then current Base Salary if IVFH achieves $1,100,000 of additional
revenues
21% of
the then current Base Salary if IVFH achieves $1,600,000 of additional
revenues
28% of
the then current Base Salary if IVFH achieves $2,200,000 of additional
revenues
35% of
the then current Base Salary if IVFH achieves $2,700,000 of additional
revenues
50% of
the then current Base Salary if IVFH achieves $3,300,000 of additional
revenues
For 2011
and 2012, the Corporation shall establish a separate account in which it will
maintain Executive’s increased Base Salary as if it was earned and
payable. In the event it is determined that Executive is entitled to
such additional Base Salary, the accrued amount of funds in said account shall
be delivered in a lump sum when such determination is made, but no later than
Jan 27th of each such year. In the event it is determined that
Executive is not entitled to such funds, they shall be returned to the
Corporation’s general working account.
4. Expenses. The
Executive shall be entitled to reimbursement by the Corporation, in accordance
with the Corporation's policies then applicable to executives at the Executive's
level, against appropriate vouchers or other receipts for authorized travel,
entertainment and other business expenses reasonably incurred by him in the
performance of his duties hereunder.
5. Executive
Benefits. The Executive shall be entitled to participate in,
and receive family health insurance and all benefits either currently offered,
or which are offered during the term of this Agreement, to employees of the
Corporation or the cash equivalent of such health insurance and such other
benefits. The Corporation shall be responsible for paying 75% of the cost of
such health insurance and benefits and shall pay 75% of the cost, at the choice
of the Executive, either through direct payments to the health insurance and/or
benefit providers or through weekly direct cash payments to the Executive (in
the cash amount of 75% of the cost of such Personal or Family Health Insurance
and benefits had the Executive participated in such health insurance plan and/or
benefit plans).
4
6. Death; Permanent Disability;
Termination. (a) Upon the death of the Executive during the
term of this Agreement, this Agreement shall terminate. If during the
term of this Agreement the Executive fails because of illness (physical or
mental) or other incapacity to perform the services required to be performed by
him hereunder for any consecutive period of more than 30 days, or for shorter
periods aggregating more than 45 days in any consecutive twelve-month period
(any such illness or incapacity being hereinafter referred to as “permanent
disability”), then the Corporation, in its discretion, may at any time
thereafter terminate this Agreement upon not less the 10 days’ written notice
thereof to the Executive, and this Agreement shall terminate and come to an end
upon the date set forth in said notice as if said date were the termination date
of this Agreement; provided, however, that no such
termination shall be effective if prior to the date set forth in such notice,
the Executive’s illness or incapacity shall have terminated and he shall be
physically and mentally able to perform the services required hereunder and
shall have taken up and be performing such duties. If there shall be
any dispute as to whether the Executive has a permanent disability, the dispute
shall be submitted to a panel of three physicians, one of whom shall be selected
by each of the parties, and the third of whom shall be a physician selected by
the first two. The written decision of such panel shall be
determinative of the issue as to whether the Executive has a permanent
disability, and shall be binding upon both parties.
(b) If the Executive’s employment shall be terminated by reason of
his death or permanent disability, the Executive or his estate, as the case may
be, shall be entitled to receive (i) any earned and unpaid Base
Salary accrued through the date of termination, (ii) a pro rata
portion of any Bonus which the Executive would otherwise have been entitled to
receive pursuant to any bonus plan or arrangement for senior executives of the
Corporation (such pro rata portion to be payable at the time such Bonus would
otherwise have been payable to the Executive), and (iii) subject to
the terms thereof, any benefits which may be due to the Executive on the date of
termination under the provisions of any employee benefit plan, program or
policy.
(c) In the event the Corporation terminates this Agreement without Cause
(as defined in Section 7), Executive shall be paid in a lump sum, on the date of
termination, an amount equal to the Base Salary he would have earned hereunder
for the six (6) months following the date of termination and any Bonuses earned
and/or accrued.
5
7. Termination for
Cause. The Corporation may at any time during the term of this
Agreement, by written notice, terminate the employment of the Executive for
cause, the cause to be specified (in reasonable detail) in the
notice. For purposes of this Agreement, “cause” shall mean any
malfeasance of the Executive in connection with the performance of any of his
duties hereunder, including, without limitation, misappropriation of funds or
property of the Corporation; wrongfully, securing or attempting to secure,
personally any profit in connection with any transaction entered into on behalf
of the Corporation; any intentional act having the effect of injuring the
reputation, business or business relationships of the Corporation; the willful
failure, neglect or refusal by Executive to perform his duties hereunder in any
material respect; the material breach of any material covenants
contained in this Agreement (provided, however, that the
Executive shall be entitled to thirty days from the date on which the
Corporation gives written notice of termination to cure such conduct or breach);
or conviction (or nolo contendere plea) in
connection with a felony or misdemeanor involving moral
turpitude. Termination for cause shall be effective upon the giving
of such notice or, where applicable, the expiration of the cure period without
such a cure having been affected by Executive in all material respects; and the
Executive shall be entitled to receive any earned and unpaid Base Salary accrued
through the date of termination.
6
8. Insurance. The
Executive agrees that the Corporation may procure insurance on the life of the
Executive, in such amounts as the Corporation may in its discretion determine,
and with the Corporation named as the beneficiary under the policy or
policies. The Executive agrees that upon request from the Corporation
he will submit to a physical examination and will execute such applications and
other documents as may be required for the procurement of such
insurance. The Executive shall be granted the right to purchase such
policy at its cash surrender value upon the termination of his employment
hereunder.
9. Non-Competition;
Solicitation. (a) The Executive agrees that during his
employment with the Corporation and for a period of two years after Executive
leaves the Corporation’s employ for any reason (other than by termination
without cause), he shall not, without the written consent of the Corporation,
directly or indirectly, either individually or as an employee, agent, partner,
shareholder, consultant, option holder, lender of money, guarantor or in any
other capacity, participate in, engage in or have a financial interest or
management position or other interest in any business, firm, corporation or
other entity if it competes directly with any business operation conducted by
the Corporation or its subsidiaries or affiliates or any successor or assign
thereof at the time the Executive’s employment with the Corporation is
terminated.
7
(b)
The Executive will not at any time during his employment with the Corporation
and for a period of two years after Executive leaves the Corporation’s employ
for any reason, solicit (or assist or encourage the solicitation of) any
employee of the Corporation or any of its subsidiaries or affiliates to work for
Executive or for any business, firm, corporation or other entity in which the
Executive, directly or indirectly, in any capacity described in Section 9(a)
hereof, participates or engages (or expects to participate or engage) or has (or
expects to have) a financial interest or management position.
(c)
If any of the covenants contained in this Section 9 or any part thereof, is held
by a court of competent jurisdiction to be unenforceable because of the duration
of such provision, the activity limited by or the subject of such provision
and/or the area covered thereby, then the court making such determination shall
construe such restriction so as to thereafter be limited or reduced to be
enforceable to the greatest extent permissible by applicable law.
(d)
If the Executive is terminated without cause the provisions of this Section 9
shall be null and void.
(e)
For purposes of this Section 9, (i) the term “Corporation” shall mean IVFH and
any of its subsidiaries; (ii) any act which Executive is prohibited from
engaging in pursuant to this Section 9, he is also prohibited from soliciting,
hiring, encouraging or retaining any other person to engage in any such
activity; and (iii) participation by Executive in the operation of any business
other than in connection with the operation of a business which is in direct
competition with the Corporation or its subsidiaries or affiliates or any
successor or assign thereof shall not be deemed to be a breach of this Section 9
and the foregoing provisions of this Section 9 shall not prohibit the ownership
by the Executive (as the result of open market purchase) of 1% or less of any
class of capital stock of a corporation which is regularly traded on a national
securities exchange, on the NASDAQ System or on an over-the-counter
system.
8
10. Trade Secrets,
Etc. The Executive agrees that he shall not, during or after
the termination of this Agreement, divulge, furnish or make accessible to any
person, firm, corporation or other business entity, any information, trade
secrets, client lists, vendor lists, pricing information, technical data (with
the exception of duplicatable technical data and code that does not compete with
the Corporation or the Corporation’s business) or know-how relating to the
business, business practices, methods, products, processes, equipment or other
confidential or secret aspect of the business of the Corporation and/or any
subsidiary or affiliate, except as may be required in good faith in the course
of his employment with the Corporation or by law, without the prior written
consent of the Corporation, unless such information shall become public
knowledge (other than by reason of Executive’s breach of the provisions
hereof).
11. Acceptance by Executive and
Corporation. The Executive and the Corporation each accept all
of the terms and provisions of this Agreement, and agree to perform all of the
covenants on their respective parts to be performed hereunder.
12. Equitable
Remedies. The Executive acknowledges that he has been employed
for his unique talents and that his leaving the employ of the Corporation during
the Term of this Agreement would seriously hamper the business of the
Corporation and that the Corporation will suffer irreparable damage if any
provisions of Sections 9 or 10 hereof are not performed strictly in accordance
with their terms or are otherwise breached. The Executive hereby
expressly agrees that the Corporation shall be entitled as a matter of right to
injunctive or other equitable relief, in addition to all other remedies
permitted by law, to prevent a breach or violation by the Executive and to
secure enforcement of the provisions of Sections 9 or 10
hereof. Resort to such equitable relief, however, shall not
constitute a waiver of any other rights or remedies that the Corporation may
have.
9
13. Entire
Agreement. This Agreement constitutes the entire agreement
between the parties hereto and there are no other terms other than those
contained herein. No waiver, amendment or modification hereof shall
be deemed valid unless in writing and signed by the parties hereto (or their
permitted successors and assigns) and no discharge of the terms hereof shall be
deemed valid unless by full performance of the parties hereto or by a writing
signed by the parties hereto. No waiver by the Corporation or any
breach by the Executive or the Corporation of any provision or condition of this
Agreement by either of them to be performed shall be deemed a waiver of a breach
of a similar or dissimilar provision or condition at the same time or any prior
or subsequent time.
14. Severability. In
case any provision in this Agreement shall be declared invalid, illegal or
unenforceable by any court of competent jurisdiction, the validity and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
15. Notices. All
notices, requests, demands and other communications provided for by this
Agreement shall be in writing and shall be deemed to have been given at the time
when mailed in the United States enclosed in a registered or certified post-paid
envelope, return receipt requested, and addressed to the addresses of the
respective parties stated below or to such changed addresses as such parties may
fix by notice:
|
To
the Corporation:
|
Innovative
Food Holdings, Inc.
|
|
|
3845
Beck Blvd., Suite 805
|
||
|
Naples,
FL 34114
|
||
|
Attn:
President
|
||
|
with
a copy to:
|
Howard
I. Rhine, Esq.
|
|
|
Feder
Kaszovitz LLP
|
||
|
845
Third Avenue, 11th Floor
|
||
|
New
York, NY 10022
|
| To the Executive: | |||
provided, however, that any
notice of change of address shall be effective only upon receipt.
10
16. Successors and
Assigns. This Agreement is personal in its nature and neither
of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder (except for an
assignment or transfer by the Corporation to its parent or an assignment by the
Executive to a corporation managed by the Executive); provided, however, that the
provisions hereof shall inure to the benefit of, and be binding upon, any
successor of the Corporation, whether by merger, consolidation, transfer of all
or substantially all of the assets of the Corporation, or otherwise, and upon
the Executive, his heirs, executors, administrators and legal
representatives.
17. Governing
Law. This Agreement and its validity, construction and
performance shall be governed in all respects by the internal laws of the State
of Florida without giving effect to any principles of conflict of
laws.
18. Headings. The
headings in this Agreement are for convenience of reference only and shall not
control or affect the meaning or construction of this Agreement.
19. Counterparts. This
Agreement may be executed in two counterparts, each of which shall be deemed an
original of this Agreement and facsimile signatures shall be treated as original
signatures.
11
IN
WITNESS WHEREOF, the parties hereto have hereunder set their hands and seals as
of the day and year first above written.
| INNOVATIVE FOOD HOLDINGS, INC. |
| By: | ||
| Name: Justin Wiernasz, President | ||
| Joel Gold, Director | ||
| Michael Ferrone, Director | ||
| EMPLOYEE: | ||
|
Sam
Klepfish
|
12
Exhibit
10.2
EMPLOYMENT
AGREEMENT
AGREEMENT made as of the 29 day of December, 2009, by and
between Innovative Food Holdings, Inc., a Florida corporation with its principal
offices at 3845 Beck Blvd., Suite 805, Naples, FL 34114 , Naples, Florida 34109
(the “Corporation”), and Justin
Wiernasz, (the “Executive”).
W
I T N E S S E T H :
In
consideration of the mutual covenants contained herein, the parties hereto agree
as follow:
1. Employment. The
Corporation hereby employs the Executive as an executive of the Corporation, and
the Executive agrees to serve the Corporation as such, upon the terms and
conditions set forth in this Agreement for the period commencing as of the date
hereof and, unless Executive's employment under the Agreement is otherwise
terminated in accordance with the provisions hereof, ending on December 31,
2012.
2. Duties. (a) Executive
shall serve as the President and Chief Marketing Officer of Innovative Food
Holdings and it’s subsidiary companies , with such duties and authority as are
generally incident to such position, or in such other management position as the
Corporation shall determine, Without limiting the generality of the foregoing,
the Executive shall (i)
develop a sales program and sales staff; (ii) if the Corporation shall so
determine, assist the Corporation in developing support staff; (iii) solicit
sales of the Corporation's product (iv)
report directly to the CEO (v) perform such responsibilities and duties as
designated by the Chief Executive Officer; and (vi) perform other duties as
requested by the Chief Executive Officer. The Executive will hold
such offices in the Corporation and/or any subsidiaries or affiliates of the
Corporation to which, from time to time, he may be elected or appointed (if
any); provided
that the offices to which the Executive may be so elected or appointed shall not
be inconsistent with such duties and authority. In performing his duties
hereunder, the Executive shall be subject to the direction of the Corporation's
Board and Chief Executive Officer.
1
(b) The
Executive agrees that he will devote substantially all of his time and attention
to the affairs of the Corporation, that he will use his best efforts to promote
the business and interests of the Corporation, and that he will not engage,
directly or indirectly, in any other business or occupation during the term of
employment hereunder. It is understood, however, that the foregoing will not
prohibit the Executive from engaging in personal investment activities for
himself and his family that do not interfere with the performance of his duties
hereunder.
3. Compensation. (a) The
Corporation will pay the Executive for all services to be rendered by the
Executive hereunder (including, without limitation, all services to be rendered
by him as an officer of the Corporation and its subsidiaries and affiliates) an
annual base salary (hereinafter referred to as the "Base Salary") at the rate
of: (i) 151,000 per annum from the date hereof through December 31, 2010 of
which $6,500 shall be accrued until June 20, 2010 and then payable in equal
weekly installments until said $6,500 is paid in full by December 31,
2010; (ii)
$165,000 per annum from January 1, 2011 through December 31, 2011, provided,
however, that the increase of $14,000 shall only take effect if the
Corporation’s gross annual sales for 2010 are at least $7.5 million dollars; and
(iii) the lesser of a 10% increase in salary above the salary in 2011 or
$181,000 per annum from January 1, 2012 through December 31, 2012, provided,
however, the increase in 2012 shall only take effect if the Corporation’s gross
annual sales for 2011 are at least $7.5 million dollars. The Base Salary for
each year shall be payable in equal, weekly installments (accept with respect to
the $6,500 accrued during the initial six months of this Agreement or as
otherwise provided for herein) in accordance with customary payroll practices
for executives of the Corporation.
2
(b)
Executive shall also be entitled to receive an annual bonus based upon the
consolidated aggregate incremental revenues of the Corporation and its
subsidiaries (“IVFH), over each of the three 12-month periods beginning January
1, 2010 (the “Bonus”). The Bonus shall be payable one-half in cash and one-half
in the Corporation’s stock. The equity component shall be valued based upon the
average closing price of the Corporation’s common stock over the 30 trading days
ended on December 31 of the year for which the Bonus is being calculated, but
under no circumstance will be below $0.005 per share. The Bonus shall be paid in
full as long as an average gross margin (as calculated historically) of at least
20% is maintained on all sales revenues of the Corporation’s consolidated sales
revenues. Any decline in such average gross margin below 20% on all of the
Corporation’s consolidated sales revenues shall reduce the Bonus by 20% for each
½ percent decline. All calculations with respect to the Base Salary and Bonus
shall be based upon the Corporation’s financial statements and shall be
completed no later than January 20 of the following year. The Bonus for each
year, if earned, shall be payable in full on or before the following January
27.
The Bonus
shall be payable according to the following schedule:
2010 -additional gross
revenues as compared to 2009
7%
of the then current Base Salary if IVFH achieves $ 500,000 of additional
revenues
14% of
the then current Base Salary if IVFH achieves $1,000,000 of additional revenues
21% of
the then current Base Salary if IVFH achieves $1,500,000 of additional revenues
28% of
the then current Base Salary if IVFH achieves $2,000,000 of additional revenues
35% of
the then current Base Salary if IVFH achieves $2,500,000 of additional revenues
50% of
the then current Base Salary if IVFH achieves $3,000,000 of additional
revenues
2011-additional gross
revenues as compared to 2010
7%
of the then current Base Salary if IVFH achieves $ 600,000 of additional
revenues
14% of
the then current Base Salary if IVFH achieves $1,100,000 of additional revenues
21% of
the then current Base Salary if IVFH achieves $1,600,000 of additional revenues
28% of
the then current Base Salary if IVFH achieves $2,200,000 of additional revenues
35% of
the then current Base Salary if IVFH achieves $2,500,000 of additional revenues
50% of the
then current Base Salary if IVFH achieves $3,000,000 of additional
revenues
3
2012 – additional gross
revenues as compared to 2011
7%
of the then current Base Salary if IVFH achieves $ 700,000 of additional
revenues
14% of
the then current Base Salary if IVFH achieves $1,100,000 of additional revenues
21% of
the then current Base Salary if IVFH achieves $1,600,000 of additional revenues
28% of
the then current Base Salary if IVFH achieves $2,200,000 of additional revenues
35% of
the then current Base Salary if IVFH achieves $2,700,000 of additional revenues
50% of
the then current Base Salary if IVFH achieves $3,300,000 of additional
revenues
For 2011
and 2012, the Corporation shall establish a separate account in which it will
maintain Executive’s increased Base Salary as if it was earned and payable. In
the event it is determined that Executive is entitled to such additional Base
Salary, the accrued amount of funds in said account shall be delivered in a lump
sum when such determination is made, but no later than Jan 27th of each such
year. In the event it is determined that Executive is not entitled to such
funds, they shall be returned to the Corporation’s general working
account.
4. Expenses. The
Executive shall be entitled to reimbursement by the Corporation, in accordance
with the Corporation's policies then applicable to executives at the Executive's
level, against appropriate vouchers or other receipts for authorized travel,
entertainment and other business expenses reasonably incurred by him in the
performance of his duties hereunder.
5. Executive Benefits.
The Executive shall be entitled to participate in, and receive family health
insurance and all benefits either currently offered, or which are offered during
the term of this Agreement, to employees of the Corporation or the cash
equivalent of such health insurance and such other benefits. The Corporation
shall be responsible for paying 75% of the cost of such health insurance and
benefits and shall pay 75% of the cost, at the choice of the Executive, either
through direct payments to the health insurance and/or benefit providers or
through weekly direct cash payments to the Executive (in the cash amount of 75%
of the cost of health
insurance and benefits had the Executive participated in such health insurance
plan and/or benefit plans).
4
6. Withholding. All
payments required to be made by the Corporation hereunder to the Executive shall
be subject to the withholding of such amounts relating to taxes and other
governmental assessments as the Corporation may reasonably determine it should
withhold pursuant to any applicable law, rule or regulation.
7. Death; Permanent Disability;
Termination. (a) Upon the death of the Executive during the term of this
Agreement, this Agreement shall terminate. If during the term of this Agreement
the Executive fails because of illness (physical or mental) or other incapacity
to perform the services required to be performed by him hereunder for any
consecutive period of more than 30 days, or for shorter periods aggregating more
than 45 days in any consecutive twelve-month period (any such illness or
incapacity being hereinafter referred to as “permanent disability”), then the
Corporation, in its discretion, may at any time thereafter terminate this
Agreement upon not less the 10 days’ written notice thereof to the Executive,
and this Agreement shall terminate and come to an end upon the date set forth in
said notice as if said date were the termination date of this Agreement;
provided, however, that no such termination shall be effective if prior to the
date set forth in such notice, the Executive’s illness or incapacity shall have
terminated and he shall be physically and mentally able to perform the services
required hereunder and shall have taken up and be performing such duties. If
there shall be any dispute as to whether the Executive has a permanent
disability, the dispute shall be submitted to a panel of three physicians, one
of whom shall be selected by each of the parties, and the third of whom shall be
a physician selected by the first two. The written decision of such panel shall
be determinative of the issue as to whether the Executive has a permanent
disability, and shall be binding upon both parties.
5
(b) If
the Executive’s employment shall be terminated by reason of his death or
permanent disability, the Executive or his estate, as the case may be, shall be
entitled to receive (i) any earned and unpaid Base Salary accrued through the
date of termination, (ii) a pro rata portion of any Bonus which the Executive
would otherwise have been entitled to receive pursuant to any bonus plan or
arrangement for senior executives of the Corporation (such pro rata portion to
be payable at the time such Bonus would otherwise have been payable to the
Executive), and (iii) subject to the terms thereof, any benefits which may be
due to the Executive on the date of termination under the provisions of any
employee benefit plan, program or policy.
(c) In
the event the Corporation terminates this Agreement without Cause (as defined in
Section 7), Executive shall be paid in a lump sum, on the date of termination,
an amount equal to the Base Salary he would have earned hereunder for the six
(6) months following the date of termination and any Bonuses earned and/or
accrued.
7A. Termination for
Cause. The Corporation may at any time during the term of this Agreement,
by written notice, terminate the employment of the Executive for cause, the
cause to be specified (in reasonable detail) in the notice. For purposes of this
Agreement, “cause” shall mean any malfeasance of the Executive in connection
with the performance of any of his duties hereunder, including, without
limitation, misappropriation of funds or property of the Corporation;
wrongfully, securing or attempting to secure, personally any profit in
connection with any transaction entered into on behalf of the Corporation; any
intentional act having the effect of injuring the reputation, business or
business relationships of the Corporation; the failure, neglect or refusal by
Executive to perform his duties hereunder in any material respect; the material
breach of any material covenants contained in this Agreement (provided, however,
that the Executive shall be entitled to thirty days from the date on which the
Corporation gives written
notice of termination to cure such conduct or breach); or conviction (or nolo
contendere plea) in connection with a felony or misdemeanor involving moral
turpitude. Termination for cause shall be effective upon the giving of such
notice or, where applicable, the expiration of the cure period without such a
cure having been affected by Executive in all material respects; and the
Executive shall be entitled to receive any earned and unpaid Base Salary accrued
through the date of termination.
6
8. Insurance. The
Executive agrees that the Corporation may procure insurance on the life of the
Executive, in such amounts as the Corporation may in its discretion determine,
and with the Corporation named as the beneficiary under the policy or policies.
The Executive agrees that upon request from the Corporation he will submit to a
physical examination and will execute such applications and other documents as
may be required for the procurement of such insurance. The Executive shall be
granted the right to purchase such policy at its cash surrender value upon the
termination of his employment hereunder.
9. Non-Competition;
Solicitation. (a) The Executive agrees that during his employment with
the Corporation and for a period of two years after Executive leaves the
Corporation’s employ for any reason (other than by termination without cause),
he shall not, without the written consent of the Corporation, directly or
indirectly, either individually or as an employee, agent, partner, shareholder,
consultant, option holder, lender of money, guarantor or in any other capacity,
participate in, engage in or have a financial interest or management position or
other interest in any business, firm, corporation or other entity if it competes
directly with any business operation conducted by the Corporation or its
subsidiaries or affiliates or any successor or assign thereof at the time the
Executive’s employment with the Corporation is terminated.
7
(b) The
Executive will not at any time during his employment with the Corporation
and for a period of two years after Executive leaves the Corporation’s employ
for any reason, solicit (or assist or encourage the solicitation of) any
employee of the Corporation or any of its subsidiaries or affiliates to work for
Executive or for any business, firm, corporation or other entity in which the
Executive, directly or indirectly, in any capacity described in Section 9(a)
hereof, participates or engages (or expects to participate or engage) or has (or
expects to have) a financial interest or management position.
(c) If
any of the covenants contained in this Section 9 or any part thereof, is held by
a court of competent jurisdiction to be unenforceable because of the duration of
such provision, the activity limited by or the subject of such provision and/or
the area covered thereby, then the court making such determination shall
construe such restriction so as to thereafter be limited or reduced to be
enforceable to the greatest extent permissible by applicable law.
(d) If
the Executive is terminated without cause the provisions of this Section 9 shall
be null and void.
(e) For
purposes of this Section 9, (i) the term “Corporation” shall mean IVFH and any
of its subsidiaries; (ii) any act which Executive is prohibited from engaging in
pursuant to this Section 9, he is also prohibited from soliciting, hiring,
encouraging or retaining any other person to engage in any such activity; and
(iii) participation by Executive in the operation of any business other than in
connection with the operation of a business which is in direct competition with
the Corporation or its subsidiaries or affiliates or any successor or assign
thereof shall not be deemed to be a breach of this Section 9 and the foregoing
provisions of this Section 9 shall not prohibit the ownership by the Executive
(as the result of open market purchase) of 1% or less of any
class of capital stock of a corporation which is regularly traded on a national
securities exchange, on the NASDAQ System or on an over-the-counter
system.
8
10. Trade Secrets, Etc. The Executive
agrees that he shall not, during or after the termination of this Agreement,
divulge, furnish or make accessible to any person, firm, corporation or other
business entity, any information, trade secrets, client lists, vendor lists,
pricing information, technical data (with the exception of duplicatable
technical data and code that does not compete with the Corporation or the
Corporation’s business) or know-how relating to the business, business
practices, methods, products, processes, equipment or other confidential or
secret aspect of the business of the Corporation and/or any subsidiary or
affiliate, except as may be required in good faith in the course of his
employment with the Corporation or by law, without the prior written consent of
the Corporation, unless such information shall become public knowledge (other
than by reason of Executive’s breach of the provisions hereof).
11. Acceptance by Executive and
Corporation. The Executive and the Corporation each accept all of the
terms and provisions of this Agreement, and agree to perform all of the
covenants on their respective parts to be performed hereunder.
12. Equitable Remedies.
The Executive acknowledges that he has been employed for his unique talents and
that his leaving the employ of the Corporation during the Term of this Agreement
would seriously hamper the business of the Corporation and that the Corporation
will suffer irreparable damage if any provisions of Sections 9 or 10 hereof are
not performed strictly in accordance with their terms or are otherwise breached.
The Executive hereby expressly agrees that the Corporation shall be entitled as
a matter of right to injunctive or other equitable relief, in addition to all
other remedies permitted by law, to prevent a breach or violation by the
Executive and to secure enforcement of the provisions of Sections 9 or 10
hereof. Resort to such equitable
relief, however, shall not constitute a waiver of any other rights or remedies
that the Corporation may have.
9
13. Entire Agreement.
This Agreement constitutes the entire agreement between the parties hereto and
there are no other terms other than those contained herein. No waiver, amendment
or modification hereof shall be deemed valid unless in writing and signed by the
parties hereto (or their permitted successors and assigns) and no discharge of
the terms hereof shall be deemed valid unless by full performance of the parties
hereto or by a writing signed by the parties hereto. No waiver by the
Corporation or any breach by the Executive or the Corporation of any provision
or condition of this Agreement by either of them to be performed shall be deemed
a waiver of a breach of a similar or dissimilar provision or condition at the
same time or any prior or subsequent time.
14. Severability. In case
any provision in this Agreement shall be declared invalid, illegal or
unenforceable by any court of competent jurisdiction, the validity and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
15. Notices. All notices,
requests, demands and other communications provided for by this Agreement shall
be in writing and shall be deemed to have been given at the time when mailed in
the United States enclosed in a registered or certified post-paid envelope,
return receipt requested, and addressed to the addresses of the respective
parties stated below or to such changed addresses as such parties may fix by
notice:
|
To
the Corporation:
|
Innovative
Food Holdings, Inc.
|
|
|
3845
Beck Blvd., Suite 805
|
||
|
Naples,
FL 34114
|
||
|
Attn:
President
|
||
|
with
a copy to:
|
Howard
I. Rhine, Esq.
|
|
|
Feder
Kaszovitz LLP
|
||
|
845
Third Avenue, 11th Floor
|
||
|
New
York, NY 10022
|
| To the Executive: | |||
provided,
however, that any notice of change of address shall be effective only upon
receipt.
10
16. Successors and
Assigns. This Agreement is personal in its nature and neither of the
parties hereto shall, without the consent of the other, assign or transfer this
Agreement or any rights or obligations hereunder (except for an assignment or
transfer by the Corporation to its parent or an assignment by the Executive to a
corporation managed by the Executive); provided, however, that the provisions hereof
shall inure to the benefit of, and be binding upon, any successor of the
Corporation, whether by merger, consolidation, transfer of all or substantially
all of the assets of the Corporation, or otherwise, and upon the Executive, his
heirs, executors, administrators and legal representatives.
17. Governing Law. This
Agreement and its validity, construction and performance shall be governed in
all respects by the internal laws of the State of Florida without giving effect
to any principles of conflict of laws.
18. Headings. The
headings in this Agreement are for convenience of reference only and shall not
control or affect the meaning or construction of this Agreement.
19. Counterparts. This
Agreement may be executed in two counterparts, each of which shall be deemed an
original of this Agreement and facsimile signatures shall be treated as original
signatures.
11
IN
WITNESS WHEREOF, the parties hereto have hereunder set their hands and seals as
of the day and year first above written.
| INNOVATIVE FOOD HOLDINGS, INC. |
| By: | ||
| Name: Samuel Klepfish, CEO | ||
| Joel Gold, Director | ||
| Michael Ferrone, Director | ||
| EMPLOYEE: | ||
| Justin Wiernasz |
12