Exhibit 10.6
CHANGE OF CONTROL AGREEMENT
This CHANGE OF CONTROL agreement is made as of March 25, 2003 between
Aurora Foods Inc. (the "Company") and Xxxxxxx X. Xxxxxxxx (the "Executive").
WHEREAS, the Executive is currently employed by the Company; and
WHEREAS, the Executive and the Company entered into an Enhanced
Severance Agreement dated July 12, 2002; and
WHEREAS, the Company wishes to provide the Executive with certain
additional benefits exclusively in the event of a Change of Control in return
for the Executive not competing with the Company.
NOW, THEREFORE, the parties agree as follows:
1. If within two years of a Change-Of-Control the executive's
employment is terminated involuntarily and without Cause, or, the Executive
voluntarily terminates his employment for Good Reason, the Company shall have
no further obligations under this Agreement other than (i) a lump sum payment
equal to two-times the Executive's annual salary and target bonus; and (ii)
medical and dental coverage for 18 months, or until Executive secures other
employment (whichever is less) at the same rate in effect for all active plan
participants; and (iii) Rights Not Subject to Release. COBRA coverage during
this time will be counted as part of the maximum COBRA period of 18 months.
2. As an executive officer of Aurora Foods and in consideration of
the enhanced severance and Change-Of-Control provision outlined above, the
Company will require the following:
a. While the Executive is employed by the Company and for a period of
two years immediately following his termination date, the Executive agrees not
to compete with Aurora Foods or undertake any planning for any competitive
business either directly or indirectly whether as owner, partner, investor,
consultant, agent, employee, co-venturer or otherwise.
b. The Executive will not solicit or encourage any person who is a
customer of Aurora Foods to terminate its relationship with any of them or to
conduct with any other person any business or activity which that customer
conducted with Aurora Foods or which is detrimental to the Company.
3. Capitalized terms in this Agreement shall have the meaning as set
forth below:
a. Affiliate. "Affiliate" shall mean (a) any Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with the Company (or other specified Person) (b) any other Person
which, together with its Affiliates (as defined in clause (a) above) shall,
directly or indirectly, own beneficially or control the voting of at least 10%
of the ownership interest in the Company (or other specified Person) and (c)
ay other Person of which the Company (or other specified Person) and its
Affiliates (as defined in clauses (a) and (b) above) shall, directly or
indirectly, own beneficially or control the voting of at least 10% of any
class of outstanding capital stock or other evidence of beneficial interest or
of any interest as a general partner or joint venturer.
b. Beneficial Owner. "Beneficial Owner" shall have the meaning in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have a "beneficial ownership" of all shares that any such Person has
the right to acquire, whether such right is excercisable immediately or only
after the passage of time.
c. Board. "Board" shall mean the Board of Directors of the Company.
d. Cause. For the purposes of this Agreement, the Company shall have
"Cause" to terminate the executive's employment hereunder upon: (a) the
Executive's breach of his fiduciary duties as an officer or director of the
Company or any of its Subsidiaries or Affiliates, or as an officer, trustee,
or director thereof; (b) the Executive's commission of a felony involving
fraud, personal dishonesty or moral turpitude (whether or not in connection
with his employment); or (c) the Executive's failure to follow the reasonable
instructions of the Board; provided, that the Executive shall receive written
notice of the occurrence of any event contemplated under section (c) hereunder
and Executive shall have failed to cure the conduct, activity or event
thereunder within 30 days.
e. Change of Control. "Change of Control" means
(i) any person (used as such term is defined in Sections 13(d)
and 14(d) of the Exchange Act) other than one of more Permitted Holders, is or
becomes the Beneficial Owner, directly or indirectly, of more than 25% of the
total voting power of the Voting Stock of the Company; provided that the
Permitted Holders are Beneficial Owners of, directly or indirectly, in the
aggregate, a lesser percentage of the total voting power of the Voting Stock
of the Company than such other person (used as such term is defined in
Sections 13(d) and 14(d) of the Exchange Act) and do not have the right or
ability by voting power, contract or otherwise to elect or designate for
election a majority of the Board; provided, further, that a person (used as
such term is defined in Sections 13(d) and 14(d) of the Exchange Act) shall be
deemed to be the Beneficial Owner of any Voting Stock of a Person held by any
other Person (the "Parent Corporation") if such other person (used as such
term is defined in Sections 13(d) and 14(d) of the Exchange Act) is the
Beneficial Owner of, directly or indirectly, more than 35% of the voting power
of the Voting Stock of the Parent Corporation and the Permitted Holders are
Beneficial Owners of, directly or indirectly, in the aggregate, a lesser
percentage of the voting power of the Voting Stock of the Parent Corporation
and do not have the right or ability by voting power, contract or otherwise to
elect or designate for election a majority of the board of directors of the
Parent Corporation; or
(ii) the consummation, through one transaction of a series of
related transaction, of a reorganization, merger or consolidation, in each
case, unless, following such reorganization, merger or consolidation are the
Beneficial Owners, directly or indirectly, or more than 50% of, respectively,
the then outstanding shares of Common Stock resulting from such
reorganization, merger or consolidation and the combined voting power of the
Voting Stock of the Company; or
(iii) the consummation, through one transaction or a series of
related transactions, of (i) a complete liquidation or dissolution of the
Company or (ii) the sale, disposition or other transfer or removal of assets
of the Company to which 40% of the Company's annualized revenues as of
December 31, 2001 are directly attributable; provided, that a Change of
Control shall not be deemed to have occurred if the entity or entities
acquiring control is such sale or disposition are the Permitted Holders or
their Affiliates; or
(iv) within any twenty-four (24) consecutive month period,
persons who were members of the Board immediately prior to such twenty-four
(24) month period, together with any persons who were first elected as
directors (other than as a result of any settlement or proxy or consent
solicitation contest or any action taken to avoid such a contest) during such
twenty-four (24) month period and who constituted a majority of the Board at
the time of such election, cease to constitute a majority of the Board.
f. Exchange Act. "Exchange Act" means the Securities and Exchange Act
of 1934, as amended.
g. Fenway. "Fenway" means Fenway Capital Partners Fund, L.P., a
Delaware limited partnership, and Fenway Capital Partners Fund II. L.P. a
Delaware limited partnership.
h. Good Reason. For the purposes of this Agreement, the Executive
shall have "Good Reason" to terminate the Executive's employment hereunder
upon: (a) material diminution in the nature or scope of Executive's
responsibilities, duties or powers, (b) a reduction in the amount of the
Executive's salary, (c) the failure by the Company to pay the Executive his
salary, long term incentive bonus or annual bonus, respectively (provided,
that in the case of the annual bonus or long term incentive bonus, the Company
is not required to pay any part of such bonus that is conditioned upon certain
events, including without limitation, the achievement of Board-specified
performance targets, unless such events have occurred, (d) the material
reduction, individually or in the aggregate, by the Company to provide the
Executive with Company benefits, (e) the relocation of Executive's current
principal place of business to a location that is more than fifty (50) miles
from Executive's current location, or (f) a Change of Control in which the
successor company, if any, to the Company fails to assume this agreement in
its entirety.
x. XxXxxx. "XxXxxx" means XxXxxx De Leeuw & Co. II, XxXxxx De Leeuw &
Co. III (Europe), L.P., XxXxxx De Leeuw & Co. III (Asia), L.P., Gamma Fund
LLC, XxXxxx De Leeuw & Co. IV, L. P., XxXxxx De Leeuw & Co. IV Associates,
L.P.
j. Permitted Holders. "Permitted Holders" means Fenway, XxXxxx, Delta
Fund LLC, California Public Employees Retirement System, Tiger Oats Limited
and UBS Capital LLC.
k. Person. "Person" means any individual, partnership, corporation,
association, trust, joint venture, limited liability company, unincorporated
organization or entity, and any government, governmental department or agency
or political subdivision thereof.
l. Rights Not Subject to Release. "Rights Not Subject to Release"
shall mean (1) any future claim to enforce rights of Executive under this
Agreement, (2) any rights to indemnification under any bylaws, certificate of
incorporation or an agreement between the Company or its subsidiaries and
Executive, respecting indemnification of directors and officers, (3) any
rights under any directors and officers liability insurance policies
maintained by the Company or its Subsidiaries, and (4) any vested rights under
any employee benefit or pension benefit plan of the Company or its
subsidiaries in accordance with the terms and conditions of such plan.
m. Voting Stock. "Voting Stock" of a Person means all classes of
capital stock of such Person then outstanding and normally entitle to vote in
the election of directors or managers.
4. Entire Agreement. This Agreement represents the entire agreement
of the parties regarding separation pay and benefits pursuant to any
termination of the Executive subsequent to a Change of Control and may not be
modified, altered or amended except by a subsequent written agreement signed
by both parties.
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands, as of
the date first above written.
The Company: The Executive:
Aurora Foods Inc.
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx
Chairman and Chief Executive Officer
