Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This
Employment Agreement ("Agreement") is made and effective the 5th
day
of September, 2006, by and between Monterey Gourmet Foods, a
California
corporation ("MGF"), and Eric Eddings ("Executive").
I. MGF is
engaged in the business of production of fresh refrigerated
gourmet food products.
II. MGF
desires to have the services of Executive.
III.
Eddings is willing to be employed by MGF.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment.
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MGF hereby
agrees to employ Executive as its President and Chief Executive
Officer (CEO) and Executive hereby accepts such employment in
accordance with
the terms of this Agreement and the terms of employment applicable
to regular
employees of MGF. In the event of an conflict or ambiguity between
the terms of
this Agreement and terms of employment applicable to regular
employees, the
terms of this Agreement shall control.
In the
event of a change of control of MGF during the term of this
Agreement, through merger, acquisition, or such other event,
Executive shall
have the option of continuing on with MGF as an employee in such
office or
position as assigned, or ending his employment relationship with
MGF pursuant to
Paragraph 6 (A) of this Agreement. For purposes of this section, a
"change of
control" shall be defined as the acquisition of a majority of the
outstanding
voting shares of MGF by any individual or entity or group of
affiliated
individuals or entities in one or a series of related transactions,
and shall
include, for purposes of Executive's election hereunder, the
commencement of
negotiations reasonably leading to a change of control or proposed
change of
control.
2. Duties of
Executive.
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The duties
of Executive shall include the performance of all duties
typical of the office held by Executive as described in the bylaws
of MGF and
such other duties and projects as may be assigned by a superior
officer of MGF,
if any, or the board of directors of MGF. Executive shall devote
his entire
productive time, ability, and attention to the business of MGF and
shall perform
all duties in a professional, ethical, and businesslike manner.
Executive will
not, during the term of this Agreement, directly or indirectly
engage in any
other business, either as an employer, employee, consultant,
director,
principal, officer, advisor or in any other capacity, either with
or without
compensation, without to prior written consent of the board of
directors of MGF.
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3. Compensation.
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Executive
will be paid compensation during this Agreement as follows:
A. Salary.
An annual base salary of $285,000, payable to Executive in
installments according to MGF's normal and customary payroll
schedule. The base
salary may be adjusted at the end of each year of employment at the
sole
discretion of the board of directors of MGF.
B.
Bonuses. Executive shall be entitled to annual bonus compensation.
For
2006, the maximum bonus amount shall be 100% of Executive's base
compensation
paid during the fourth quarter. Actual bonus compensation paid to
Executive
shall be based on the percentage by which Executive has achieved
MGF goals and
benchmarks that are agreed to by Executive and MGF for the
remainder of 2006.
Thereafter, and during the remaining term of this Agreement,
Executive shall be
entitled to annual bonus compensation in accordance with such plan
and
contingent upon the attainment of such goals as to which Executive
and the Board
of Directors shall further agree in writing.
C. Stock
Option. The Board of Directors grants to Executive, effective
as
of the date of this Agreement, an incentive stock option under
MGF's 2002 Stock
Option Plan ("Plan") to purchase 150,000 shares of MGF common
stock, vesting and
exercisable in installments of 50,000 shares on each of the first,
second, and
third anniversaries of this Agreement (the "Option"). The shares of
common stock
subject to the Option shall be priced at the closing price of the
common stock
on the Nasdaq Global Market on September 15, 2006, and shall be
evidenced by and
subject to all of the terms and conditions of MGF's standard form
of incentive
stock option agreement under the Plan.
4. Benefits
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Executive
shall be provided benefits during this Agreement as follows:
A.
Vacation. Executive shall be entitled to four (4) weeks of paid
vacation each year of employment. Without the express consent of
MGF, not more
than one week of vacation may be carried over to the following
year.
B. Paid
Holidays. Executive shall be entitled to paid holidays in
accordance with MGF's annual paid holiday schedule for all regular
employees.
C. Sick
Leave and Personal Time Off (PTO). Executive shall be entitled
to
four (4) paid sick days and one (1) paid day of PTO each year of
employment. Not
more than four paid sick days may be carried from year to year.
D.
Medical, Dental, Life, Disability Insurance. Executive shall be
entitled to all medical, dental, life and disability insurance
benefits which
are made available to all regular employees of MGF.
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E.
Pension, Profit Sharing Plans, and 401(k). Executive shall be
entitled
to participate in any pension, profit sharing plan, 401(k) plan or
other type of
plan adopted by MGF for the benefit of its officers and/or regular
employees.
F.
Automobile Allowance. Executive shall be entitled to a car
allowance of
a $750.00 per month.
G. Expense
Reimbursement. Executive shall be entitled to reimbursement for
all reasonable expenses, including travel and entertainment,
incurred by
Executive in the performance of Executive's duties. Exe
