EXHIBIT 10.1
YOCREAM INTERNATIONAL, INC.
CHANGE OF CONTROL AGREEMENT
This Change in Control Agreement (Agreement) is made and entered into
on the date set forth below by and between Yocream International, Inc. (the
Company) and Xxxx X. Xxxxx, the Companys Chief Executive Officer (the
CEO).
WHEREAS, the Company and the CEO wish to memorialize this agreement to
provide for the CEOs compensation in the event of a change of control of the
Company;
WHEREAS, the Company makes, markets, and sells frozen dessert, snack,
and beverage items from its headquarters in Portland, Oregon;
WHEREAS, the Company is aware that a change of control over the Company
would likely result in the termination of the CEOs employment with the
Company even though the CEO has faithfully executed the duties of his office
to the Company; and
WHEREAS, the Company wishes to protect the CEO from the consequences of
an arbitrary change in control of the Company;
NOW, THEREFORE, the parties have agreed on the following terms and
conditions.
1. Change of Control Payment for Chief Executive Officer. Notwithstanding
any other requirement regarding the determination and amount of
compensation that shall be paid by the corporation to its officers, the
CEO shall, upon the occurrence of a Triggering Event, have the option
of unilaterally terminating his or her employment with the corporation
within Twelve (12) months of the occurrence of the Triggering Event.
The CEO must exercise this option by providing written notice to the
Board. If the CEO exercises this option and terminates his or her
employment with the corporation, the Company shall, within Sixty (60)
days of the exercise of such option, make a payment to the CEO in cash
equal to two (2) times his or her annualized annual earnings from the
corporation for the five (5) year period immediately preceding the
Triggering Event (the Change of Control Payment). If the CEO is
terminated by the Company within Twelve (12) months of the occurrence
of the Triggering Event, the CEO shall have Thirty (30) days following
the receipt of notice of his or her termination to exercise this option
and the Company shall, within Sixty (60) days of the exercise of such
option, make a distribution to the CEO of the Change in Control
Payment. Notwithstanding the preceding sentences, the amount of the
Change of Control Payment shall be reduced to the extent necessary to
avoid any excise tax that would be imposed on the Change in Control
Payment. For purposes of this Section, a Triggering Event is any
acquisition by any one person (including, without limitation, a
corporation, partnership, company, or other entity) or more than one
person acting as a group, of stock of the corporation that represents
more than Fifty Percent (50%) of the total fair market value or total
voting power of the corporations stock. A Triggering Event is also
any acquisition by any one person (including, without limitation, a
corporation, partnership, company, or other entity) or more than one
person acting as a group, of assets from the corporation that have a
total fair market value equal to or greater than one-third of all of
the corporations assets.
2. Term. This Agreement shall begin on the date entered into and shall
have a five (5) year term, scheduled to expire on September 30, 2008,
unless sooner terminated pursuant to the provisions of Paragraph 3,
(Termination,) set forth below, or unless automatically renewed in
accordance with Xxxxxxxxx 0, (Xxxxxxx), set forth below.
3. Termination. This Agreement shall be terminated should the CEO
voluntarily retire from his position as CEO with the Company or
relinquish the position of CEO of the Company and take another position
of employment with the Company. This Agreement shall also be
terminated should the Company terminate the CEOs employment; however,
should such termination occur within Twelve (12) months of a Triggering
Event the termination of employment shall not terminate this Agreement.
In no event shall the termination of this Agreement as permitted by
this Section create a liability in any party to make a payment to the
other party.
4. Renewal. This Agreement shall renew automatically for an additional
five (5) year term unless the Board of Directors affirmatively votes
within six (6) months prior to the scheduled expiration date not to
renew this Agreement. Should the Board decide not to renew this
Agreement, the Board shall use its good faith efforts to notify the CEO
of this decision within five (5) business days.
5. No Restrictions on Post-Employment Compensation. The amount of the
Change of Control Payment shall not be mitigated by any subsequent
employment the CEO may obtain from any employer or any dividends or
other distributions from the Company.
6. No Provisions for Forfeiture of Change of Control Payment. This
Agreement does not contain any conditions of forfeiture of the Change
of Control Payment.
7. Effect of Prior Agreements: This Agreement supersedes any prior
agreement between the Company or any predecessor of the Company and the
CEO, except that this Agreement shall not affect or operate to reduce
any benefit or compensation inuring to the CEO of a kind elsewhere
provided and not expressly provided for in this Agreement.
8. Settlement by Arbitration: Any claim or controversy that arises out of
or relates to this Agreement or the breach of this Agreement shall be
settled by arbitration in accordance with the rules of the American
Arbitration Association. Judgment upon the award rendered may be
entered in any court with jurisdiction.
9. Severability: If, for any reason, any provision of this Agreement is
held invalid, all other provisions of this Agreement shall remain in
effect. If this Agreement is held invalid or cannot be enforced, then
to the full extent permitted by law any prior agreement between the
Company (or any predecessor thereof) and the CEO shall be deemed
reinstated as if this Agreement had not been executed.
10. Assumption of Agreement by Companys Successors and Assigns: This
Agreement shall be binding upon and inure to the benefit of all of the
parties and the parties respective successors, heirs, assigns, and
legal representatives.
11. Oral Modification Not Binding: This instrument is the entire Agreement
of the Company and the CEO. Oral modifications have no effect. The
Agreement may be altered only by a written agreement signed by both
parties to this Agreement.
12. Warrants: Each individual executing this Agreement on behalf of a
partnership, corporation, or other entity warrants that such individual
is authorized to do so and that this Agreement will constitute a
legally binding obligation of such entity.
13. Counterparts: This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
14. Definition of Board of Directors: For purposes of this Agreement,
Board or Board of Directors means either (a) individuals who on the
date hereof constitute the Board of the Company, and (b) any new
director who subsequently was nominated for election by a majority of
the directors who held such office immediately prior to the Triggering
Event.
Dated effective this 15th day of September, 2003.
CHIEF EXECUTIVE OFFICER:
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
COMPANY:
By: /s/ W. Xxxxxxx Xxxxxxx
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W. Xxxxxxx Xxxxxxx
Chief Financial Officer
