Exhibit 10.12
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of January 20, 1997, by and between MBW
FOODS INC. (the "Company"), a Delaware corporation, and XXXX XXXXX (the
"Employee").
WITNESSETH:
WHEREAS, upon the terms and subject to the conditions of this Agreement,
the Company desires to employ the Employee and the Employee desires to accept
employment by the Company;
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Employment. Upon the terms and subject to the conditions of this
Agreement, the Company hereby employs the Employee and the Employee hereby
accepts employment with the Company in the capacities hereinafter set forth.
2. Term of Employment. The term of this Agreement shall commence on the
date hereof and shall continue in effect through January 20, 1998, unless
earlier terminated pursuant to Section 6 below (the "Term); provided that six
months after the date hereof, the Term of this Agreement shall be
automatically extended for an additional day and each day thereafter the Term
shall be automatically extended by a day so that the Term remaining under the
Agreement shall remain at 6-months.
3. Duties: Extent of Services: Office and Location.
(a) Duties. During the Term, the Employee shall serve as a Vice-President
of Sales of the Company and shall report to and carry out the lawful
directions of the President of the Company. The Employee shall perform the
duties, undertake the responsibilities and exercise the authority reasonably
required of such an employee of the Company, and shall have such other powers
and perform such additional executive duties as may be assigned to him from
time to time by the President of the Company.
(b) Extent of Services. Except for illness and permitted vacation
periods, during the Term the Employee shall (i) devote his full time and
attention during normal business hours to the businesses of the Company and
its subsidiaries and Affiliates (as defined herein); (ii) use his best
efforts to promote the interests of the Company and its subsidiaries and
Affiliates; (iii) discharge such executive and administrative duties not
inconsistent with his position as may
be assigned to him by the President; and (iv) serve, without additional
compensation, as a director or officer of any subsidiary of the Company if
elected as such.
(e) Office and Location. Employee shall initially perform services for
the Company from an office located in his home in the Atlanta, Georgia
metropolitan area. The Company shall provide to Employee equipment reasonably
necessary to conduct business on behalf of the Company from his home office.
Following each acquisition of additional assets by the Company (or its
subsidiaries and Affiliates), the Chairman and President of the Company shall
review with the Employee whether the Company's Vice-President of Sales should
be located at the Company's corporate headquarters. If, after such review,
the Company determines that the Vice-President of Sales should be located at
the Company's corporate headquarters, the Employee shall have the option to
relocate to the Company's headquarters and retain the position of
Vice-President of Sales. If, however, the Employee does not desire to
relocate to the Company's corporate headquarters, the Employee's position
within the Company shall be changed to a second level area sales/broker
manager position and Employee may continue to be based in the Atlanta,
Georgia metropolitan area. In the event of such change in position and
responsibility, the Employee's Base Salary (as hereinafter defined) shall
remain at its then current level and the Employee shall not receive any
additional Class D Units (as such term is defined in the Amended and Restated
Limited Liability Agreement of MBW Investors LLC, dated as of December 31,
1996 (the "LLC Agreement")). In addition, following any such change in
position and responsibility, Employee's bonus package shall be determined in
accordance bonus' applicable to persons employed at second level sales
positions within the Company and shall not be determined in accordance with
the provisions of Sections 4(b) and 4(c) of this Agreement.
4. Compensation.
(a) Base Salary. In consideration of the services rendered by the
Employee hereunder and provided that the Employee has substantially performed
all of his obligations provided for herein, the Company will pay to the
Employee a base salary (the "Base Salary") at the rate of $120,000 per year
during the Term. Employee's Base Salary will be increased to no less than One
Hundred Forty Thousand Dollars ($140,000) per year commencing upon that date
when Employee assumes increased responsibilities as determined, in good
faith, by the President or the Board. In addition, the Base Salary may be
increased from time to time in an amount mutually agreed to by the Employee
and the Company to reflect the performance of the Employee and additional
responsibilities undertaken by the Employee. The Base Salary shall be paid in
accordance with the Company's normal payroll practice.
(b) Base Bonus. For so long as the Employee is the Vice-President of
Sales of the Company, the Company shall pay the Employee a bonus with respect
to each fiscal year or portion thereof during the Term in accordance with the
following provisions:
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(i) If the Financial Results of the Company for a fiscal year during
the Term are at least 90% but less than 95% of the EBITDA Target for such
year, Employee shall be paid an amount equal to 20% of so much of his Base
Salary as was paid with respect to such year.
(ii) If the Financial Results of the Company for a fiscal year
during the Term are at least 95% but less than 100% of the EBITDA Target
for such year, Employee shall be paid an amount equal to 30% of so much of
his Base Salary as was paid with respect to such year.
(iii) If the Financial Results of the Company for a fiscal year
equal or exceed 100% of the EBITDA Target for such year, Employee shall be
paid an amount equal to 40% of so much of his Base Salary as was paid with
respect to such year.
(c) Supplemental Bonus. In addition to the Base Bonus, if any, to which
the Employee may be entitled under clauses (i), (ii) or (iii) of Section
4(b), for so long as the Employee is the Vice-President of Sales of the
Company, the Company shall pay the Employee a bonus with respect to such
fiscal year or portion thereof during the Term in accordance with the
following provisions:
(i) If the Financial Results of the Company for a fiscal year
during the Term are at least 105%, but less than 110% of the EBITDA Target
for such year, Employee shall be paid an amount equal to 5% of so much of
his Base Salary as was paid with respect to such year.
(ii) If the Financial Results of the Company for a fiscal year
during the Term are at least 110%, but less than 115% of the EBITDA Target
for such year, Employee shall be paid an amount equal to 10% of so much of
his Base Salary as was paid with respect to such year.
(iii) If the Financial Results of the Company for a fiscal year
during the Term are at least 115% but less than 120% of the EBITDA Target
for such year, Employee shall be paid an amount equal to 15% of so much of
his Base Salary as was paid with respect to such year.
(iv) If the Financial Results of the Company for a fiscal year
during the Term equal or exceed 120% of the EBITDA Target for such year, the
Employee shall be paid an amount equal to 20% of so much of his Base Salary
as was paid with respect to such year.
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(d) For the purpose of this Agreement (1) the term "EBITDA Target" shall
mean the Company's projected earnings before interest, taxes, depreciation
and amortization, as contained in the Company's annual budget which is
approved by the Board of Directors of the Company (the "Board") (without
reference to any adjustments or revision, upwards or downwards, to such
projected earnings which are subsequently approved by the Board as part of
any subsequent revision to such annual budget), (2) the term "Financial
Results" shall mean the Company's annual financial results reflected in the
Company's annual audited financial statements and (3) the Company's 1997
fiscal year shall be deemed to have begun on December 31, 1996.
(e) Any bonus due under Section 4(b) and (c) shall be paid to the
Employee within 30 days of the publication of the Company's annual audited
financial statements for the relevant year.
(f) Employee shall be entitled to receive a bonus (if any) with respect
to a fiscal year during the Term pursuant to the terms of Section 4(b) and
(c) of this Agreement if the Employee shall be employed by the Company on the
last day of such fiscal year. Such entitlement shall not thereafter be
affected by the subsequent termination of Employee's employment with the
Company pursuant to any provision of Section 6 of this Agreement.
5. Other Employee Benefits.
(a) During the Term, the Employee shall be entitled (i) to vacation time
in accordance with the Company's policy from time to time in effect; (ii) to
participate in all employee insurance and other fringe benefit programs,
including, without limitation, life, health, dental and accident insurance
plans and long term disability now or hereafter maintained by the Company for
senior executive or other salaried personnel for which the Employee is
eligible; and (iii) to participate in a pension plan with terms similar to
those applicable to executives of the Company.
(b) During the Term, the Employee shall be entitled to a monthly auto
allowance of $800.00 to cover all costs associated with the ownership,
maintenance, repair and insurance for such vehicle. The Employee shall
maintain general liability insurance against any and all claims for personal
injury and property damage arising out of the operation or use of the
automobile by the Employee during the course of Employee's performance of
services on behalf of the Company. Such insurance shall have limits of
liability for injuries to any number of persons in any one accident or
occurrence or for damage to property in any one accident or occurrence in
amounts reasonably acceptable to the Company. The Employee shall have the
Company named as an additional insured under such policy of insurance. The
Employee shall provide to the Company appropriate and acceptable evidence of
his compliance with the provisions of this paragraph, such as certificates of
insurance or copies of the policies. Such certificates or policies shall
provide that such insurance will not be cancelled or materially amended
unless fifteen (15)
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days prior to written notice of such cancellation or amendment is given to
the Company. The automobile utilized by Employee shall be a make and model
appropriate for the position held by the Employee. In the event the Employee
relocates to the Company's corporate headquarters in Columbus, Ohio, the
Employee shall not be entitled to a monthly auto allowance; provided,
however, that the automobile allowance amount that had been payable to
Employee prior to such relocation will be added to his then-current Base
Salary pursuant to Section 4(a) above.
(c) As of the date hereof, MBW Investors LLC will issue to Employee 12
Class D Units. Employee understands that these Class D Units are part of an
aggregate of 100 Class D Units issued or to be issued to operating management
of the Company. Employee understands that, in the discretion of the Chairman
of MBW Investors LLC, additional Class D Units may be issued to Employee.
Employee further understands that, as provided in the LLC Agreement, Class D
Units in addition to the initial 100 Class D Units may be issued by MBW
Investors LLC to other persons. Employee agrees to execute such documents as
may be required or reasonably requested by the Company or MBW Investors LLC
in connection with the issuance of Class D Units to Employee.
(d) It is contemplated that Employee shall have the opportunity to
purchase certain Class A Units (as defined in the LLC Agreement) of MBW
Investors LLC. It is also contemplated any such purchase of Class A Units
would be subject to a minimum investment of $25,000 with the maximum
investment to be determined by MBW Investors LLC. It is further contemplated
that the Company would loan to the Employee up to $75,000 for the purpose of
purchasing Class A Units and that any such loan would be repaid over a three
year period with interest paid quarterly. Employee understands, however, that
the timing and the terms and conditions of the opportunity, if any, to
purchase Class A Units shall be solely determined in the discretion of MBW
Investors LLC.
6. Termination Provisions.
(a) Termination for Cause. The President or the Board may terminate the
Employee's employment hereunder for Cause, as hereinafter defined,
immediately upon written notice to the Employee. For purposes of this
Agreement, "Cause" shall mean (i) embezzlement, theft or other
misappropriation of any property of the Company or any Affiliate, (ii) gross
or willful misconduct resulting in substantial loss to the Company or any
Affiliate or substantial damage to the reputation of the Company or any
Affiliate, (iii) any act involving moral turpitude which results in a
conviction for a felony involving moral turpitude, fraud or
misrepresentation, (iv) gross neglect of his assigned duties to the Company
or any Affiliate, (v) gross breach of his fiduciary obligations to the
Company or any Affiliate, or (vi) any chemical dependence which materially
affects the performance of his duties and responsibilities to the Company or
any Affiliate; provided that in the case of the misconduct set forth in
clauses (iv) and (vi) above, such misconduct shall continue for a period of
30 days following written notice thereof by the
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Company to the Employee. During the Term, the Employee shall be entitled to
only one such notice and right to cure for any single act or event. If the
Employee's employment is terminated for Cause, the Employee shall be entitled
to receive only the unpaid portion of the Base Salary then in effect which
has accrued to the date of termination, any other payments generally
available to departing employees of the Company (such as unused vacation and
personal days) and any bonus pursuant to Section 4 for the preceding fiscal
year which has not been paid as of the date of such termination. The Employee
shall not be entitled to receive any severance payment with respect to such
termination.
(b) Termination By Reason of Permanent Disability. If at any time during
the Term the Employee has been unable, as a result of physical or mental
illness or incapacity, to perform his duties hereunder for a period of four
consecutive months or for an aggregate of more than six months in any twelve
month period (a "Permanent Disability"), the Employee's employment hereunder
may be terminated by the President or the Board upon thirty days' written
notice to the Employee. If the Employee's employment is terminated by reason
of Permanent Disability, the Employee shall be entitled to receive only the
unpaid portion of the Base Salary then in effect which has accrued to the
date of termination, plus any other payments generally available to departing
employees of the Company (such as unused vacation and personal days), plus
any bonus pursuant to Section 4 for the preceding fiscal year which has not
been paid as of the date of such termination, plus an amount equal to six
months of Employee's Base Salary.
(c) Termination By Reason of Death. The Employee's employment hereunder
shall automatically terminate on the date of his death. If the Employee's
employment is so terminated by his death, the Company shall pay to the
Employee's estate in addition to the unpaid portion of the Base Salary then
in effect through date of Employee's death plus an amount equal to six months
of Employee's Base Salary, plus any other payments generally available to
departing employees of the Company (such as unused vacation and personal
days), plus any bonus pursuant to Section 4 for the preceding fiscal year
which has not been paid as of the date of the Employee's death. Such amount
shall be paid within thirty days after the date of his death if a personal
representative has been appointed by the end of such thirty day period or, if
a personal representative has not been appointed by the end of such thirty
day period, promptly after a personal representative has been appointed.
(d) Termination Without Cause. The President or the Board may terminate
the Employee's employment hereunder at any time for any reason without Cause
in which case the Employee shall be entitled to receive an amount (the
"Severance Amount") equal to the Base Salary the Employee would have been
entitled to receive through the end of the then current Term (without giving
effect to any future extension pursuant to Section 2 hereof). The Severance
Amount shall be in lieu of any other severance payment to which Employee may
be otherwise entitled under any other severance plan maintained by the
Company. The Severance Amount shall be paid within 30 days of such
termination. In addition, the Employee shall be entitled to receive
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any other payments generally available to departing employees of the Company
(such as unused vacation and personal days), plus any bonus pursuant to
Section 4 for the preceding fiscal year which has not been paid as of the
date of such termination, plus, to the extent the Company achieves the
required percentage of the EBITDA Target for the fiscal year in which such
termination occurs.
(e) Termination by Employee. Notwithstanding any other provisions of
this Agreement, Employee shall have the right to terminate the employment
relationship under this Agreement at any time prior to the expiration of the
Term for any of the following reasons: (i) a material breach by the Company
of any provision of this Agreement that remains uncorrected for 30 days
following written notice of such breach by Employee to the Company or (ii)
for any other reason whatsoever, in the sole discretion of the Employee, upon
90 days prior written notice to the Company. If the Employee terminates his
employment with the Company pursuant to clause (i) of this Section 6(e), the
Employee shall be entitled to receive the Severance Amount plus any other
payments generally available to departing employees of the Company (such as
unused vacation and personal days), plus any bonus pursuant to Section 4 for
the preceding fiscal year which has not been paid as of the date of such
termination. If the Employee terminates his employment with the Company
pursuant to clause (ii) of this Section 6(e), the Employee shall be entitled
to receive the unpaid portion of the Base Salary then in effect which has
accrued to the date of termination plus any other payments generally
available to departing employees of the Company (such as unused vacation and
personal days), plus any bonus pursuant to Section 4 for the preceding fiscal
year which has not been paid as of the date of such termination.
7. Covenants of the Employee
(a) Non-Competition. Until the later of (x) the first anniversary of
the date of the termination of the Employee's employment hereunder and (y)
the end of the then current Term in effect on the date of such termination,
the Employee shall not, directly or indirectly, be associated with any entity
which competes with the Company or any of its Affiliates that are
subsidiaries of MBW Investors LLC or for which the Employee renders
substantial services and whose primary business is, or personally engage in,
the same or similar grocery product line of business of the Company or any of
its Affiliates, whether as a director, officer, employee, agent, consultant,
partner, owner, independent contractor or otherwise. Notwithstanding the
foregoing, in the event the termination of the Employee's employment is
pursuant to Section 6(d) or 6(e)(1) of this Agreement, the duration of the
non-competition covenant shall extend only for a period of six months after
the date of termination of the Employee's employment. For the purpose of
this Agreement, the term "Affiliate" means, with respect to the Company, any
person or entity which, directly or indirectly, controls, is controlled by or
under common control with the Company, with "control" to be based on the
ownership of 50% or more of the voting securities (or their equivalent) of a
particular entity.
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(b) Non-Solicitation of Employees of the Employer. Until the later of
(x) the first anniversary of the date of the termination of the employment of
the Employee hereunder and (y) the end of the then current Term in effect on
the date of such termination, the Employee shall not, and shall cause each
business or entity with which he shall become associated in any capacity not
to, solicit for employment or employ any person who is then, or who was at
any time after the date four months prior to the date of such termination,
employed in a professional or managerial position by the Company, its
subsidiaries or Affiliates.
(c) Confidentiality. The Employee agrees and acknowledges that the
Confidentiality Information (as hereinafter defined) of the Company and its
subsidiaries and affiliates, is valuable, special and unique to their
business; that much business depends on such Confidential Information; and
that the Company wishes to protect such Confidential Information by keeping
it confidential for the use and benefit of the Company and its subsidiaries
and Affiliates. Based on the foregoing, the Employee agrees to undertake
the following obligations with respect to such Confidential Information:
(i) the Employee agrees to keep any and all Confidential
Information in trust for the use and benefit of the Company and its
subsidiaries and Affiliates;
(ii) the Employee agrees that, except as required by applicable
law or as authorized in writing by the Board, he will not at any time during
or after the termination of his employment hereunder, disclose, directly or
indirectly, any Confidential Information of the Company or any of its
subsidiaries or Affiliates;
(iii) the Employee agrees to take all reasonable steps necessary,
or reasonably requested by the Company, to ensure that all Confidential
Information is kept confidential for the use and benefit of the Company and
its subsidiaries and Affiliates; and
(iv) the Employee agrees that, upon termination of his employment
hereunder or at any other time the Company may in writing so request, he will
promptly deliver to the Company all materials constituting Confidential
Information (including all copies thereof) that are in his possession or
under his control. The Employee further agrees, that if requested by the
Company, to return any Confidential Information pursuant to this subparagraph
(iv), he will not make or retain any copy or extract from such materials.
For purposes of paragraph (c) of this Section 7, "Confidential
Information" means any and all information developed by or for the Company or
any of its subsidiaries or Affiliates of which the Employee gains or has
acquired knowledge during or prior to the Term by reason of his employment
with the Company that is (A) not generally known in any industry in which the
Company or any of its subsidiaries or Affiliates is nor may become engaged or
(B) not
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publicly available. Confidential Information includes, but is not limited
to, any and all Information developed by or for the Company or any of its
subsidiaries or Affiliates concerning plans, marketing and sales methods,
customer lists, materials, processes, business forms, procedures, devices,
plans for development of products, services or expansion into new areas or
markets, internal operations, and any trade secrets and proprietary
information of any type owned by the Company or any of its subsidiaries or
Affiliates, together with all written, graphic and other materials relating
to all or any part of the same.
8. Successors: Assignment.
(a) The Company. The Company may assign any of its rights and
obligations hereunder, without the written consent of the Employee, in
connection with a merger, consolidation or sale of all or substantially all
of the business or assets of the Company. This Agreement shall be binding
upon and shall inure to the benefit of the Company and its successors and
assigns.
(b) The Employee. Neither this Agreement nor any right or interest
hereunder may be assigned by the Employee, his beneficiaries, or legal
representatives without the prior written consent of the Board; PROVIDED,
HOWEVER, that nothing in this Section b shall preclude (i) the Employee from
designating a beneficiary to receive any benefit payable hereunder upon his
death, or (ii) the executors, administrators, or other legal representatives
of the Employee or his estate from assigning any rights hereunder to
distributees, legatees, beneficiaries, testamentary trustees or other legal
heirs of the Employee.
9. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given when delivered by hand, mailed
by first-class registered or certified mail, postage prepaid and return
receipt requested, or delivery by overnight courier addressed as follows:
(i) If to the Company:
MBW Foods Inc.
Community Corporate Center
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
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with a copy to:
MBW Investors LLC
c/o Dartford Partnership, L.L.C.
000 XXxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
with a copy to:
XxXxxx DeLoeuw & Co.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
(ii) If to the Employee:
0000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
or, in each case, at such other address as may from time to time be specified
to the other party in a notice similarly given.
10. Governing Law Jurisdiction. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws
of the State of Ohio applicable to contracts executed and to be performed
entirely within said State. Any judicial proceeding brought against any of
the parties to this Agreement or any dispute arising out of this Agreement or
any matter related hereto may be brought in the courts of the State of Ohio
or in the United States District Court for the southern District of Ohio,
and, by execution and delivery of this Agreement, each of the parties to this
Agreement accepts the jurisdiction of said courts, and irrevocably agrees to
be bound by any judgment rendered thereby in connection with this Agreement.
The foregoing consent to jurisdiction shall not be deemed to confer rights on
any person other than the respective parties to this Agreement.
11. Expenses. If a dispute arises out of or related to this Agreement,
if either party to the Agreement brings legal action to enforce the terms of
the Agreement, the party who prevails in such legal action, whether plaintiff
or defendant, in addition to the remedy or relief obtained in such legal
action, shall be entitled to recover his or its expenses incurred in such
legal action, including without limitation, court costs and attorneys fees.
A party shall be deemed to
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have prevailed in such a legal action if such action is concluded pursuant to
a court order or final judgment in favor of such party which is not subject
to appeal, a settlement agreement or dismissal of the principal claims.
12. Entire Agreement. This Agreement contains the entire agreement of
the parties and their Affiliates relating to the subject matter hereof and
supersedes all prior agreements, representations, warranties and
understandings, written or oral, with respect thereto.
13. Severability. If any term or provision of this Agreement or the
application thereof to any person, property or circumstance shall to any
extent be invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons, property or circumstances
other than those as to which it is invalid or unenforceable, shall not be
affected thereby, and each term and provision of this Agreement shall remain
valid and enforceable to the fullest extent permitted by law.
14. Remedies.
(a) Injunctive Relief. The Employee acknowledges and agrees that
the covenants and obligations of the Employee contained in subsections (a),
(b) and (c) of Section 7 hereof relate to special, unique and extraordinary
matters and are reasonable and necessary to protect the legitimate interests
of the Company and its subsidiaries and Affiliates and that a breach of any
of the terms of such covenants and obligations will cause the Company
irreparable injury for which adequate remedies at law are not available.
Therefore the Employee agrees that the Company shall be entitled to an
injunction, restraining order, or other equitable relief from any court of
competent jurisdiction, restraining the Employee from any such breach.
(b) Remedies Cumulative. The Company's rights and remedies under
this Section 14 are cumulative and are in addition to any other rights and
remedies the Company may have at law or in equity.
15. Withholding Taxes. The Company may deduct any federal, state or
local withholding or other taxes from any payments to be made by the Company
hereunder in such amounts which the Company reasonably determine are required
to deduct under applicable law.
16. Amendments, Miscellaneous, etc. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated except by an
instrument in writing signed by the party against which such change, waiver,
discharge or termination is sought to be enforced. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an
original, and all of which together shall constitute one and the same
instrument. The headings contained in this Agreement are for reference
purposes only and shall not affect in any the way the meaning or
interpretation of this Agreement.
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17. Survival. The Covenants set forth in Sections 4(f), 6 and 7 of
this Agreement shall survive and shall continue to be binding upon the
parties notwithstanding the termination of this Agreement for any reason
whatsoever. The Covenants set forth in Section 7 of this Agreement shall be
deemed and construed as separate agreements independent of any other
provision of this Agreement. The existence of any claim or cause of action
by the Employee against Company, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by Company of
any or all covenants.
IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
MBW FOODS INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------
Title: President
/s/ XXXX XXXXX
--------------------------------
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