1
EXHIBIT 10.3
AMENDMENT NO. 1
DATED AS OF JANUARY 28, 1997
TO
EMPLOYMENT AGREEMENT
DATED AS OF OCTOBER 2, 1995
This Amendment No. 1 to Employment Agreement (this "Amendment"), dated
as of January 28, 1997, is by and between INTREPID FOOD HOLDINGS, INC., a
Delaware corporation (the "Company"), and Xxxxxxx X. Xxxx ("Executive").
RECITALS
A. The Company and Executive are parties to that certain Employment
Agreement dated as of October 2, 1995 (the "Employment Agreement;" the terms
defined in the Employment Agreement are being used herein as defined in the
Employment Agreement unless otherwise defined herein).
B. The Company and Executive desire to amend the Employment
Agreement on the terms stated herein to, among other things, eliminate the
Company's right to repurchase certain shares of capital stock owned by
Executive.
AGREEMENTS
In consideration of the foregoing recitals and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:
SECTION 1. Amendments to the Employment Agreement. The
Employment Agreement is amended as set forth below.
1.1 Section 6 of the Employment Agreement is hereby amended to
read in its entirety as follows:
"6. Repurchase of Securities of Founder Upon Termination of
Employment.
(a) If Executive's employment with Company is terminated on or prior
to April 15, 1999 (i) for Cause, (ii) voluntarily by Executive (other than for
Good Reason pursuant to Section 3.5) or (iii) as a result of the non-renewal of
the Term by Executive, any or all of the Management Securities (as hereinafter
defined) may be purchased in accordance with the terms of this paragraph (a) at
a price of $100.00 per share (as appropriately adjusted for splits and
combinations of the Common Stock of the Company after the date hereof). The
Company shall have sixty (60) days after such termination in which to purchase
all or part of such Management
1
2
Securities. If there is more than one holder of such Management Securities and
less than all of the Management Securities held by such holders are being
purchased by Company, the Management Securities being purchased by the Company
pursuant to this paragraph shall be purchased (i) first, from Executive, (ii)
second, from Permitted Transferees of Executive (as defined in the Common Stock
Purchase Agreement), pro rata among such Permitted Transferees according to the
number of Management Securities held by each such Permitted Transferee, and
(iii) third, from other holders of Management Securities (other than Founder
and Founder's Permitted Transferees), pro rata among such holders according to
the number of Management Securities held by each such holder.
(b) "Management Securities" means, at any time, (i) shares of Common
Stock of the Company held at any time by Executive, (ii) shares of Common Stock
of the Company that were at one time held by Executive but are then held by a
successor or assign of Executive (other than Frontenac VI Limited Partnership,
State of Wisconsin Investment Board of any of their affiliates or assigns), and
(iii) securities that were issued as a dividend or other distribution with
respect to or in replacement of other Management Securities and are then held
by (1) Executive or (2) a successor or assign of Executive (other than
Frontenac VI Limited Partnership, State of Wisconsin Investment Board of any of
their affiliates or assigns), but for purposes of section 6(a) does not include
Excluded Management Securities (as defined below). "Excluded Management
Securities" means (i) shares of Common Stock of the Company issued to Executive
pursuant to the Common Stock Purchase Agreement or that certain Stock Purchase
Agreement, dated as of April 15, 1996, by and among the Company, Executive,
Frontenac VI Limited Partnership and the State of Wisconsin Investment Board
(the "1996 Stock Purchase Agreement") (whether held by Executive or any other
person or entity) and (ii) securities that are issued as a dividend or other
distribution with respect to or in replacement of the shares issued pursuant to
the Common Stock Purchase Agreement or the 1996 Stock Purchase Agreement.
(c) The repurchase right of the Company pursuant to Section 6(a)
shall terminate upon the consummation of a public offering of shares of Common
Stock of the Company pursuant to a registration statement declared effective
under the Securities Act of 1933, as amended, but only if all or a portion of
the proceeds thereof are used to redeem in cash all shares of preferred stock
of the Company then outstanding.
(d) If Executive's employment with Company is terminated by Company
without Cause, Executive shall have the right, for a period of sixty (60) days
following such termination, to require the Company to purchase all or part of
the Management Securities at a price of $100.00 per share (as appropriately
adjusted for splits and combinations of the Common Stock after the date
hereof). The resale right of Executive pursuant to this Section 6(d) shall
terminate upon the consummation of a public offering of shares of Common Stock
of the Company pursuant to a registration statement declared effective under
the Securities Act of 1933, as amended.
2
3
(e) So long as the provisions of this Section 6 apply with respect to
Management Securities, the following legend (or a legend to substantially the
following effect) will be affixed to all certificates evidencing Management
Securities subject to repurchase by the Company:
"The securities evidenced by this certificate are subject to
certain repurchase rights in favor of the issuer hereof set forth
in that certain Employment Agreement between the Company and
Xxxxxxx X. Xxxx, a copy of which is on file with the Secretary of
the issuer".
At Executive's request and upon surrender by Executive to the Company of
any certificate or certificates evidencing Excluded Management Securities, the
Company will remove the above-referenced legend from such certificate or
certificates and reissue such certificate or certificates without such legend
to Executive.
(f) If Executive is required to pay any income taxes arising directly
as a result of the compensation deemed received by Executive due to the
termination hereunder of the Company's repurchase rights with respect to the
Excluded Management Securities, the Company shall be obligated to pay to
Executive a bonus equal to the lesser of (a) the sum of (i) the income taxes
payable by Executive attributable to such termination of repurchase rights plus
(ii) the federal, state and local income taxes payable by Executive
attributable to the receipt of such bonus and (b) the amount by with the
federal, state and local income taxes payable by the Company are reduced as a
result of the tax deduction utilized by the Company (i) pursuant to section
83(h) of the Internal Revenue Code of 1986, as amended (the "Code"),
attributable to the termination of such repurchase rights and (ii) pursuant to
section 162 of the Code attributable to the payment of such bonus. A portion
of the bonus to which Executive is entitled pursuant to this Section 6(f) shall
be paid at such time or times as the Company is required to withhold income
taxes with respect to either the compensation deemed received by Executive upon
termination of the Company's repurchase rights with respect to the Excluded
Management Securities or the bonus, in an amount sufficient to fund payment of
such withholding taxes. Any remaining portion of the bonus shall be paid not
later than December 31, 1997. The taxes payable by Executive and the reduction
in taxes payable by the Company as described in this Section 6(f) shall be
reasonably determined by the parties not later than December 31, 1997.
SECTION 2. REFERENCE TO AND EFFECT ON THE EMPLOYMENT
AGREEMENT.
2.1 Each reference in the Employment Agreement to "this Agreement",
"hereunder", "hereof", "herein", or words of like import shall mean and be a
reference to the Employment Agreement as amended hereby, and each reference to
the Employment Agreement in any other document, instrument or agreement shall
mean and be a reference to the Employment Agreement as amended hereby.
2.2 Except as specifically amended above, the Employment Agreement
shall remain in full force and effect and is hereby ratified and confirmed.
3
4
SECTION 3. EXECUTION IN COUNTERPARTS. This Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which taken together
shall constitute but one and the same instrument.
SECTION 4. HEADINGS. Section headings in this Amendment
are included herein for convenience of reference only and shall not constitute
a part of this Amendment for any other purpose.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.
INTREPID FOOD HOLDINGS, INC.
By: /S/ Xxxxxxx X. Xxxx
-------------------------
Its: President
-------------------------
/S/ Xxxxxxx X. Xxxx
------------------------------
Xxxxxxx X. Xxxx
4
