EXHIBIT 10.24
EMPLOYMENT AND
CONFIDENTIALITY AGREEMENT
THIS EMPLOYMENT AND CONFIDENTIALITY AGREEMENT (this "Agreement") is made
November 25, 1996, between GORGES/QUIK-TO-FIX FOODS, INC., a Delaware
corporation (the "Company"), and XXXXXX X. XXXXX, a resident of the State of
Arkansas ("Executive").
BACKGROUND
On the date of this Agreement and pursuant to that certain Asset Purchase
Agreement (the "Agreement" dated October 17, 1996 by and among the Company,
Tyson Foods, Inc., Gorges Foodservices, Inc., and Tyson Holding Company the
Company has acquired substantially all of the business and assets of the
Gorges/Quik-to-Fix division of Tyson Foods, Inc. (the "Division"). Prior to the
date hereof, Executive was an employee of the Division, and the Company desires
to employ the Executive in the capacities and on the terms and conditions set
forth below. Executive desires to accept employment on the terms and conditions
set forth below.
AGREEMENT
NOW, THEREFORE, for and in consideration of the employment and continued
employment of Executive by the Company, the premises, and the mutual agreements
hereinafter set forth, the parties agree as follows:
1. Definitions. The following terms used herein shall have the
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definitions set forth below:
(a) "Affiliate" means any person or entity directly or indirectly
controlling, controlled by, or under common control with another person.
(b) "Area" means the territorial United States.
(c) "Business" or "Business of the Company" means the business of the
manufacture, sale and distribution of further processed meat products.
(d) "Cause" means (i) conduct amounting to fraud or dishonesty against
the Corporation or any subsidiary or affiliate of the Corporation; (ii)
Executive's intentional misconduct or repeated refusal to follow the reasonable
directions of the Board of Directors of the Corporation, provided an officer of
the Corporation, upon the direction of the Board of Directors, notifies
Executive of the acts deemed to constitute such intentional misconduct or
repeated refusal in writing and Executive fails to correct such acts (or begins
such action as may be necessary to correct such acts and thereafter diligently
pursues the completion thereof) within five (5) business days after written
notice has been given; (iii) repeated absences from work without a reasonable
excuse, (iv) repeated intoxication with alcohol or drugs while on Corporation
business during regular business hours; (v) a conviction or plea of guilty or
nolo contendere to a felony (other than one arising from the operation of a
motor vehicle or resulting from actions taken (or not taken) by Executive in
good faith in his capacity as an employee or officer of the Corporation; or (vi)
a breach or violation by the Executive of any material terms of this Agreement
or any other agreement to which Executive and the Corporation are a party.
(e) "Change of Control" means (i) the sale of all or substantially all
of the assets of the Company other than to an affiliate of the Company or (ii)
prior to the initial public offering of shares of common stock of either Gorges
Holding Corporation ("Parent") or the Company, CGW Southeast Partners III, L.P.
shall cease to have the right and power to designate or appoint, either directly
or indirectly, a majority of the Board of Directors of the Company or (iii)
after such initial public offering, any person or entity or group of persons or
entitites acting in concert (in either case, other than the persons and entities
that are the stockholders of Parent on the date hereof) shall acquire more than
thirty-five percent (35%) of the outstanding common stock of Parent or the
Company.
(f) "Competing Enterprise" means any person or any business
organization of whatever form, engaged directly or indirectly within the Area in
the Business of the Company.
(g) "Disability" means (i) the inability of Executive to perform the
duties of Executive's employment due to physical or emotional incapacity or
illness, where such inability is expected to be of long-continued and indefinite
duration, or (ii) Executive shall be entitled to (x) disability retirement
benefits under the federal Social Security Act or (y) recover benefits under any
long-term disability plan or policy maintained by the Company. In the event of
a dispute, the determination of Disability shall be made reasonably by the Board
of Directors of the Company and shall be supported by advice of a physician
competent in the area to which such Disability relates.
(h) "Effective Date of Termination" means the later of the last day on
which Executive performs any duties of his employment as a full-time employee of
the Company hereunder or the effective date of the termination of Executive's
employment hereunder specified in any notice of termination of such employment
given by the Company as permitted herein.
(i) "Excluded Information" means any data or information that is a
Trade Secret hereunder (i) that has been voluntarily disclosed to the public by
the Company or any Affiliate thereof or has become generally known to the public
(except where such public disclosure has been made by or through Executive or by
a third person or entity with the knowledge of Executive without authorization
by the Company); (ii) that has been independently developed and disclosed by
parties other than Executive or the Company or any Affiliate thereof to
Executive or to the public generally without a breach of any obligation of
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confidentiality by any such person running directly or indirectly to the Company
or any Affiliate thereof; or (iii) that otherwise enters the public domain
through lawful means.
(j) "Subsidiary" means any subsidiary of the Company.
(k) "Trade Secrets" means information which derives economic value,
actual or potential, from not being generally known and not being readily
ascertainable to other persons who can obtain economic value from its disclosure
or use and which is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy or confidentiality. Trade Secrets may
include either technical or non-technical data, including without limitation,
(i) any useful process, machine, chemical formula, composition of matter, or
other device which (A) is new or which Executive has a reasonable basis to
believe may be new, (B) is being used or studied by the Company or any Affiliate
thereof and is not described in a printed patent or in any literature already
published and distributed externally by the Company or any Affiliate thereof,
and (C) is not readily ascertainable from inspection of a product of the Company
or any Affiliate thereof; (ii) any engineering, technical, or product
specifications including those of features used in any current product of the
Company or any Affiliate thereof or to be used, or the use of which is
contemplated, in a future product of the Company or any Affiliate thereof; (iii)
any application, operating system, communication system, or other computer
software (whether in source or object code) and all flow charts, algorithms,
coding sheets, routines, subroutines, compilers, assemblers, design concepts,
test data, documentation, or manuals related thereto, whether or not
copyrighted, patented or patentable, related to or used in the Business of the
Company or any Affiliate thereof; or (iv) information concerning the customers,
suppliers, products, pricing strategies of the Company or any Affiliate thereof,
personnel assignments and policies of the Company, or matters concerning the
financial affairs and management of the Company or any Affiliate thereof;
provided however, that Trade Secrets shall not include any Excluded Information.
2. Terms of Engagement; Duties
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(a) The Company hereby employs Executive as Director of Research and
Development of the Company. In such capacity Executive shall report to the
President of the Company or his designee, and shall perform such duties and
responsibilities relating to the Business of the Company as may be assigned or
delegated to him from time to time by the President of the Company or his
designee.
(b) Executive accepts such employment and agrees to:
(i) devote substantially all of Executive's effort, time,
energy, and skill (reasonable vacations and reasonable
absences due to illness excepted) during regular business
hours to the duties of his employment hereunder;
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(ii) faithfully, loyally, and industriously perform such duties,
subject to the supervision of the Board of Directors of the
Company; and
(iii) diligently follow and implement all lawful management
policies and decisions of the Company that are communicated
to Executive.
(c) During the Term of this Agreement, Executive shall not engage
(whether or not during normal business hours) in any other business or
professional activity, whether or not such activity is pursued for gain, profit
or other pecuniary advantage; but this shall not be construed as preventing
Executive from (i) investing his personal assets in businesses which do not
compete with the Business of the Company or any Affiliate thereof in such form
or manner as will not require any services on the part of Executive in the
operation or the affairs of the entities in which such investments are made and
in which his participation is solely that of an investor, or (ii) purchasing
securities in any corporation whose securities are regularly traded on a
national securities exchange, provided that such purchase does not result in
Executive collectively owning beneficially at any time five (5%) percent or more
of the voting securities of any Competing Enterprise or any Affiliate thereof.
3. Compensation.
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(a) In consideration of the services rendered by Executive pursuant to
this Agreement, the Company shall pay to Executive a base salary of Eighty-Seven
Thousand Seven Hundred Fifty Dollars ($87,750) per annum (the "Base Salary"),
which Base Salary will be reviewed periodically and may be increased by the
Company from time to time. The Base Salary shall be paid in accordance with the
Company's standard payroll practices in effect from time to time. All amounts
payable to Executive hereunder shall be subject to such deductions and
withholdings as are required by law or by policies of the Company.
(b) Executive shall be eligible to receive an annual bonus in the
amount of up to 20% of the Base Salary then being paid to Executive, if, as and
when declared and paid by the board of Directors of the Company pursuant to an
executive incentive plan to be established by the Company's Board of Directors.
The award and payment of any such bonus, and the amount thereof if awarded and
paid, shall be in the sole discretion of the Board of Directors of the Company.
(c) Executive shall also have the right to participate in any medical,
hospitalization, dental, disability income, life or other similar insurance
plans maintained by the Company from time to time to the extent that Executive's
position, tenure, salary, age, health and other qualifications make him eligible
to participate, and such other fringe benefits as are provided to the other
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senior management employees of the Company, provided that the Company shall not
be required to adopt or continue any insurance plans or fringe benefit plans.
(d) The Company shall reimburse Executive for all reasonable business
expenses incurred by Executive in connection with the business of the Company
subject to compliance with the expense reimbursement policies established by the
Company and in sufficient detail to comply with Internal Revenue Service
Regulations.
(e) Except for stock incentive awards which may be granted from time
to time to Executive, the remuneration and benefits set forth in this Section 3
shall be the only compensation payable to Executive with respect to his
employment hereunder, and Executive shall not be entitled to receive any
compensation in addition to that set forth in this Section 3 or under such stock
incentive awards for any services rendered by him in any capacity to the Company
or any Affiliate thereof unless agreed to in writing by the Company or such
Affiliate thereof.
4. Term and Termination of this Agreement. The term of employment of
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Executive (the "Term") pursuant to this Agreement shall commence on the date
hereof and shall continue for a term of five (5) years from the date hereof (the
"Term").
(a) Executive's employment hereunder shall be terminated during the
Term upon the death or Disability of Executive.
(b) Executive's employment hereunder may be terminated during the Term
by the Company (i) with Cause at any time, and (ii) without Cause upon thirty
(30) days written notice to Executive, provided that Executive shall immediately
cease the performance of his duties hereunder if the Company shall so request
following the date of such notice. In the event Executive's employment is
terminated without Cause, the Company shall pay to Executive, as severance pay
hereunder, an amount equal to the annual Base Salary paid to Executive at the
Effective Date of Termination, which amount shall be paid in twelve (12)
substantially equal monthly installments (less such deductions and withholdings
as are required by law or the policies of the Company) commencing with the first
day of the calendar month next following.
(c) Upon termination of Executive's employment hereunder pursuant to
subsection 4(a) or for Cause pursuant to subsection 4(b), or upon voluntary
termination by Executive of Executive's employment hereunder, the Company shall
have no further obligation to Executive or his personal representative with
respect to remuneration due under this Agreement, except for Base Salary earned
but unpaid at the Effective Date of Termination and, in the case of termination
of employment under subsection 4(a), a pro rata portion (based on the number of
days of the fiscal year of the Company in which such termination occurred during
which this Agreement was in effect) of the bonus, if any, payable under Section
3(b) with respect to such fiscal year. Payment of such bonus, if any, shall be
made at such time as similar bonuses are paid to other executives of the Company
with respect to such fiscal year.
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(d) If Executive's employment hereunder is terminated during the Term
by the Company without Cause pursuant to subsection 4(b), the Company shall have
no obligation to Employee with respect to renumeration due under this Agreement
or such termination other than (i) Base Salary earned but unpaid at the
Effective Date of Termination, and (ii) a pro rata portion (based on the number
of days of the fiscal year of the Company in which the Effective Date of
Termination occurred during which this Agreement was in effect) of the bonus, if
any, payable under Section 3(b) with respect to such fiscal year, and (iii) the
severance pay described in subsection 4(b). Payment pursuant to clause (ii) of
the preceding sentence shall be made when such bonuses are paid to other
executive officers receiving bonus payments with respect to such fiscal year.
(e) Notwithstanding anything to the contrary expressed or implied
herein, the covenants and agreements of Executive in Sections 5 and 6 of this
Agreement shall survive the termination of Executive's employment hereunder.
5. Ownership, Non-Disclosure, and Non-Use of Trade Secrets.
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(a) Executive acknowledges and agrees that all Trade Secrets, and all
physical embodiments thereof, are confidential to and shall be and remain the
sole and exclusive property of the Company and any Affiliate thereof and that
any Trade Secrets produced by Executive during the period of Executive's
employment by the Company shall be considered "work for hire" as such term is
defined in 17 U.S.C. Section 101, the ownership and copyright of which shall be
vested solely in the Company. Executive agrees (i) immediately to disclose to
the Company all Trade Secrets developed in whole or part by Executive during the
Term of Executive's employment by the Company, and (ii) at the request and
expense of the Company, to do all things and sign all documents or instruments
reasonably necessary in the opinion of the Company to eliminate any ambiguity as
to the rights of the Company in such Trade Secrets including, without
limitation, providing to the Company Executive's full cooperation in any
litigation or other proceeding to establish, protect, or obtain such rights.
Upon request by the Company, and in any event upon termination of Executive's
employment by the Company for any reason, Executive shall promptly deliver to
the Company all property belonging to the Company or any of its Affiliates,
including, without limitation, all Trade Secrets (and all embodiments thereof)
then in Executive's custody, control, or possession.
(b) Executive agrees that all Trade Secrets of the Company or any
Affiliate thereof received or developed by Executive as a result of Executive's
employment with the Company will be held in trust and strictest confidence, that
Executive will protect such Trade Secrets from disclosure, and that Executive
will make no use of such Trade Secrets, except in connection with Executive's
employment hereunder, without the Company's prior written consent. The
obligations of confidentiality contained in this Agreement will apply during
Executive's employment by the Company and (i) with respect to all Trade Secrets
consisting of scientific or technical data, at any and all times after
expiration or termination (for whatever reason) of such employment; and (ii)
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with respect to all other Trade Secrets, for a period of five (5) years after
such expiration or termination, unless a longer period of protection is provided
by law.
6. Non-Compete: Non-Solicitation Covenants.
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(a) In consideration of the amounts to be paid to Executive hereunder,
Executive covenants that Executive shall, during the Term of this Agreement, and
for one (1) year following the termination or expiration of the Term of this
Agreement or Executive's employment hereunder (other than a termination of
Executive's employment hereunder by either the Company or its assignee or the
Executive within six (6) months following a Change of Control), observe the
following separate and independent covenants:
(i) Neither Executive nor any Affiliate will, without the prior
written consent of the Company, within the Area, either
directly or indirectly, (A) become financially interested in
a Competing Enterprise (other than as a holder of less than
five percent (5%) of the outstanding voting securities of
any entity whose voting securities are listed on a national
securities exchange or quoted by the National Association of
Securities Dealers, Inc. National Market System), or, (B)
engage in or be employed by any Competing Enterprise as an
executive or managerial employee.
(ii) Neither Executive nor any Affiliate will, without the prior
written consent of the Company, either directly or
indirectly, on Executive's own behalf or in the service or
on behalf of others, solicit, divert, or appropriate, or
attempt to solicit, divert, or appropriate, to any Competing
Enterprise within the Area, any person or entity that was a
customer of the Company during the Term of this Agreement
who was solicited or serviced as such by or under the
supervision of Executive.
(iii) Neither Executive nor any Affiliate will, without the
Company's prior written consent, either directly or
indirectly, on Executive's own behalf or in the service or
on behalf of others, solicit, divert, or hire away, or
attempt to solicit, divert, or hire away, to any Competing
Enterprise, any person employed by the Company or one of its
Affiliates, whether or not such employee is a full-time or a
temporary employee of the Company or such Affiliate and
whether or not such employment is pursuant to written
agreement and whether or not such employment is at will.
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7. Remedies. Executive acknowledges and agrees that the Company is
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engaged in the Business of the Company in and throughout the Area, that by
virtue of the training, duties, and responsibilities attendant with Executive's
employment by the Company and the special knowledge of the Business and
operations of the Company that Executive will have as a consequence of
Executive's employment by the Company, great loss and irreparable damage would
be suffered by the Company if Executive should breach or violate any of the
terms or provisions of the covenants and agreements set forth herein, and that
by virtue of Executive's senior management position with the Company Executive
has been and will be throughout the Term of this Agreement directly and
indirectly involved in servicing the accounts of the Company's customer.
Executive further acknowledges and agrees that each such covenant and agreement
is reasonably necessary to protect and preserve the interest of the Company.
Therefore, in addition to all the remedies provided at law or in equity,
Executive agrees and consents that the Company shall be entitled to a temporary
restraining order and a permanent injunction to prevent a breach or threatened
breach of any of the covenants or agreements of Executive contained herein. The
existence of any claim, demand, action or cause of action of Executive against
the Company shall not constitute a defense to the enforcement by the Company of
any of the covenants or agreements herein whether predicated upon this Agreement
or otherwise, and shall not constitute a defense to the enforcement by the
Company of any of its rights hereunder.
8. General Provisions.
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(a) In the event that any one or more of the provisions, or parts of
any provisions, contained in the Agreement shall for any reason be held to be
invalid, illegal, or unenforceable in any respect by a court of competent
jurisdiction, the same shall not invalidate or otherwise affect any other
provision hereof, and this Agreement shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.
Specifically, but without limiting the foregoing in any way, each of the
covenants of the parties to this Agreement contained herein shall be deemed and
shall be construed as a separate and independent covenant and should any part or
provision of any of such covenants be held or declared invalid by any court of
competent jurisdiction, such invalidity shall in no way render invalid or
unenforceable any other part or provision thereof or any other covenant of the
parties not held or declared invalid.
(b) This Agreement and the rights and obligations of the Company
hereunder may be assigned by the Company to any Subsidiary or to any successor
to the Company, and shall inure to the benefit of, shall be binding upon, and
shall be enforceable by any such assignee, provided that any such assignee shall
agree to assume and be bound by this Agreement. This Agreement and the rights
and obligations of Executive hereunder may not be assigned by Executive.
(c) The waiver by the Company of any breach of this Agreement by
Executive shall not be effective unless in writing, and no such waiver shall
operate or be construed as a waiver of the same or another breach on a
subsequent occasion.
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(d) This Agreement and the rights of the parties hereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.
(e) This Agreement embodies the entire agreement of the parties
relating to the employment of Executive by the Company. No amendment or
modification of this Agreement shall be valid or binding upon the Company or
Executive unless made in writing and signed by the parties. All prior
understandings and agreements relating to the employment of Executive by the
Company are hereby expressly terminated.
(f) Any notice, request, demand, or other communication required to be
given hereunder shall be made in writing and shall be deemed to have been fully
given if personally delivered or if mailed by overnight delivery (the date on
which such notice, request, demand, or other communication is received shall be
the date of delivery) to the parties at the following addresses (or at such
other addresses as shall be given in writing by any party to the other party
hereto):
If to Executive:
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If to Company:
Gorges/Quik-To-Fix Foods, Inc.
c/o CGW Southeast Partners III, L.P.
Suite 210
Twelve Piedmont Center
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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with a copy (which shall not constitute notice) to:
Xxxxxx & Bird
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attention: X.X. Xxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
(g) This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, and it shall not be necessary for
the same counterpart of this agreement to be signed by all of the undersigned in
order for the agreements set forth herein to be binding upon all of the
undersigned in accordance with the terms hereof.
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IN WITNESS WHEREOF, the Company and Executive have each executed and
delivered this Agreement as of the date first above written.
COMPANY:
GORGES/QUIK-TO-FIX FOODS, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: VP-Secretary
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EXECUTIVE:
/s/ Xxxxxx X. Xxxxx (SEAL)
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Xxxxxx X. Xxxxx
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