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EXHIBIT 10
EMPLOYMENT, CONFIDENTIALITY AND NON-COMPETITION AGREEMENT
This Agreement is made this ____ day of __________, 1997, between
Xxxxxx Xxxxxxx individually (hereinafter "Employee"), and Xxxxxxxxx Foods
Company, an Ohio corporation (hereinafter "Xxxxxxxxx").
WHEREAS, Employee is the president and a key manager of Southern Belle
Dairy Company, Inc., a Kentucky corporation (the "Company") active in the
management and operations of the Company and whose efforts have been vital to
the continuing success of the Company's business; and
WHEREAS, pursuant to an Agreement of Merger dated the ____ day of
September, 1997, Company will be merged with and into Xxxxxxxxx Foods Company
("Xxxxxxxxx"), an Ohio corporation; and
WHEREAS, Employee has heretofore rendered valuable services to the
Company, and Xxxxxxxxx expects that Employee will continue to be active in the
operations of Xxxxxxxxx and wishes to assure the continued availability of
Employee's expertise and the future rendition of valuable services by Employee
to Xxxxxxxxx after the merger; and
WHEREAS, consummation of such merger is therefore contingent upon the
execution of this Employment, Confidentiality and Non-Competition Agreement; and
WHEREAS, as a material inducement to Xxxxxxxxx to enter into and
consummate the aforesaid Agreement of Merger, Employee is willing to execute and
perform this agreement and has herein
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further agreed to be employed by and not to compete with Xxxxxxxxx after
consummation of the merger.
NOW, THEREFORE, in consideration of the premises which are and shall be
construed to be an integral part hereof and not as mere recitals, for the mutual
covenants and agreements set forth in said Agreement of Merger and this
Agreement and the consideration flowing therefrom and herefrom, and for other
good and valuable consideration, the receipt and sufficiency of all of which are
hereby acknowledged, it is agreed as follows:
1. Xxxxxxxxx agrees to employ Employee, and Employee agrees to serve
Xxxxxxxxx, upon the terms and conditions hereinafter set forth. Under the terms
of this Agreement, Employee shall have the status of an employee, all of whose
compensation hereunder shall be considered wages subject to withholding for both
income tax and Social Security tax purposes.
2. Employee shall:
(a) serve Xxxxxxxxx faithfully and to the best of his ability under
the direction of the Board of Directors of Xxxxxxxxx;
(b) devote his entire time, energy and skill during regular business
hours to such employment, regular vacations excepted, and represent no other
company nor work for any other employer or engage in any joint venture unless
Xxxxxxxxx consents to same in writing, except further that nothing herein shall
preclude Employee from making passive investments in enterprises not requiring
his personal involvement);
(c) perform from time to time such services and act in such capacity
or office consistent with and in the course and
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scope of Xxxxxxxxx'x business for Xxxxxxxxx as such Board of Directors shall
request without any compensation other than that for which provision is made in
this agreement;
(d) abide by all the rules and regulations of Xxxxxxxxx.
3. Xxxxxxxxx shall:
(a) pay to Employee during the term hereof a fixed salary of Six
Thousand Six Hundred Sixty-Six Dollars and Sixty-Six Cents ($6,666.66) a month
payable once each month in one installment, less all required deductions, which
installment shall be payable on "normal pay days" determined in accordance with
the general payroll practices of Xxxxxxxxx.
(b) for each calendar year of Xxxxxxxxx commencing January 1, 199_
during the term of Employee's employment under this Agreement, pay the Employee
as a bonus, four percent (4%) of the net pre-tax profits of the Company (which
for purposes of this Section 3 shall be deemed to be the business unit or
division of Xxxxxxxxx which constituted the Company prior to the merger) for
such fiscal year. Payment of such sum shall be made in one lump sum annually as
soon as reasonably practicable after the Company's audited financial statements
for the Company's fiscal year are available. The term "net pre-tax profits" as
used herein shall mean the book net income of the Company for the fiscal year as
reflected in financial statements of the Company and Xxxxxxxxx, before
subtraction of the amount of federal, state and local income tax allocated by
the Company's or Xxxxxxxxx'x accountants as due and owing on such amount of
income. For
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purposes of this determination, "net pre-tax profits" shall be computed without
regard to gains or losses realized on the sale or other disposition of capital
assets, as well as "extraordinary" items of gain or loss, as that term is
defined under generally accepted accounting principles. Financial statements of
Company and Xxxxxxxxx, as used herein, shall mean the financial statements
prepared in accordance with generally accepted accounting principles audited
and/or reviewed by the public accountants employed by the Company and Xxxxxxxxx
for the fiscal year. Such accountant's reports and the final statements, as well
as the accountants' determination of "net pre-tax profits" shall be conclusive
on the Company and Employee, and shall be furnished to the Company and Employee
as soon as possible.
Xxxxxxxxx shall not be required to make any payments under this Section
3 to the Employee during any period while the Employee shall be in breach or
violation of any of the non-competition provisions of this Agreement after
Xxxxxxxxx shall have notified the Employee in writing that Xxxxxxxxx deems the
Employee's activity to constitute such a breach or evasion.
The Employee shall not anticipate, encumber, alienate or assign any of
his rights, claims or interests under this Agreement except upon written
authority of Xxxxxxxxx and except further for the assignment and set-off rights
of Xxxxxxxxx described above, and no payments, benefits or rights arising by
reason of this Agreement shall be in any way subject to their debts, contracts
or engagements nor to any judicial process to levy upon or tax the same for
payment thereof.
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(c) provide the Employee paid vacations and holidays as follows: The
Employee shall receive each year as many vacation weeks as determined in
accordance with the general vacation practice of Xxxxxxxxx. All vacations shall
be scheduled by Xxxxxxxxx, taking into consideration the requirements of the
business and the desires of the Employee. During vacation periods, the Employee
shall not be required to perform any services for Xxxxxxxxx but shall
nevertheless receive his regular fixed salary as provided for in Section 3(a)
above. The Employee shall be allowed time off on all holidays observed by
Xxxxxxxxx with respect to all of its employees, and Employee's fixed salary
provided for in Section 3(a) above shall not be reduced or affected as a result
of the observance of holidays; and
(d) Xxxxxxxxx will in accordance with the general practices of
Xxxxxxxxx reimburse the Employee for all reasonable expenses necessarily
incurred the Employee in the performance of his duties under this Agreement.
Such reimbursement will be made against vouchers containing all information
generally required by Xxxxxxxxx in connection with reimbursement of expenses
incurred by its employees.
4. The employment of Employee hereunder shall be effective as of
____________, 1997, and shall continue at the will of Xxxxxxxxx until terminated
in any one of the following ways:
(a) by Xxxxxxxxx giving Employee written notice of immediate
termination after he shall have been found by the Board of Directors of
Xxxxxxxxx to have committed an act of fraud or
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embezzlement or other dishonest act with regard to his employment or the
business of Xxxxxxxxx;
(b) by Xxxxxxxxx giving Employee thirty days written notice of
termination "for cause", which shall mean Employee's (i) willful misconduct in
respect of, or breach, violation or failure to perform his duties under this
Agreement; (ii) conviction of a felony; or (iii) failure to comply with
applicable laws with respect to the execution of Xxxxxxxxx'x business
operations;
(c) by the death of Employee, or other incapacity or disability of
Employee which is sufficient to prevent Employee's full and adequate performance
of all of his obligations hereunder;
(d) by Xxxxxxxxx giving Employee thirty days written notice of
"termination without cause" (termination for any reason other than a reason set
forth in Section 4(a) or (b) above) which reason is not specifically prohibited
by law;
(e) by Employee giving thirty days written notice of his intention
to terminate employment.
5. Except with respect to death of Employee or termination without
cause, upon termination of Employee's employment hereunder pursuant to Section 4
or otherwise, Employee shall be paid only those monies then properly due and
owing to Employee as salary as calculated pursuant to Section 3(a), and Employee
shall forfeit all rights to vacations, fixed salary attributable to vacation
periods, bonuses, and all other benefits of employment.
In the event of termination of Employee's employment due to Employee's
death or termination without cause, Employee shall be
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entitled to receive the bonus provided in Section 3(b) for the fiscal year of
such event, prorated to the date of termination.
6. During and after his term of employment with Xxxxxxxxx, Employee
shall not furnish to any person, firm or company or retain or use any papers or
other information of any nature whatsoever concerning the customers of the
Company or Xxxxxxxxx, or any other confidential business information of the
Company or Xxxxxxxxx, and shall not engage in, or participate in, any effort or
act to induce any customer of the Company or Xxxxxxxxx to take any steps which
might result to the disadvantage of or be detrimental to the interests of the
Company or Xxxxxxxxx.
7. Employee recognizes and acknowledges that the list of the customers
of the Company and Xxxxxxxxx is a valuable, special and unique asset of the
business of the Company and Xxxxxxxxx and, therefore, during and after his term
of employment, he shall keep secret from every person, firm or company, other
than the Company or Xxxxxxxxx, together with all knowledge concerning the same
which he may at any time acquire during his employment with the Company or
Xxxxxxxxx, to include all knowledge or understanding of the Company or
Xxxxxxxxx, their operation, customers, plans, organization, financial condition,
xxxxxxxx, products, product formulae, creative ideas, and/or costs. It is
explicitly understood and agreed between the parties that divulgence of any of
the above information to any person or entity outside of the Company or
Xxxxxxxxx must have the written approval of Xxxxxxxxx'x board of directors,
which approval may be withheld for any reason by Xxxxxxxxx'x board of directors.
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Employee further covenants and agrees that every document, computer
disk, computer software program, notation, record, diary, memorandum,
development, investigation, or the like, and any method or manner of doing
business, of Company or Xxxxxxxxx (or containing any other secret or
confidential information of Company or Xxxxxxxxx) made or acquired by Employee
during said employment, is and shall be the sole and exclusive property of
Company and Xxxxxxxxx.
Employee will deliver the same (and each and every copy, disk,
abstract, summary, or reproduction of same made by or for Employee or acquired
by Employee) whenever Xxxxxxxxx may so require and in any event prior to or at
the termination of said employment. It is understood and agreed by Employee that
all information of the Company or Xxxxxxxxx developed or used by its officers,
consultants, or employees or acquired by Company or Xxxxxxxxx from anyone not an
officer, consultant, or employee shall be considered to be secret and
confidential to the extent and for so long as such information is not available
to the general public.
8. During the term of Employee's employment with Xxxxxxxxx, and for a
period of two (2) years after the termination of the employment of Employee with
Xxxxxxxxx, for any reason whatsoever, Employee shall not:
(a) enter into or engage directly or indirectly, or provide
assistance to any other person, firm or company, in any business competitive
with the business of the Company or Xxxxxxxxx, (either as an individual on his
own account or as a
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partner or joint venturer or as an employee, agent or salesman for any person,
firm or company or as an officer, director or stockholder of a company or
otherwise) within the Commonwealth of Kentucky; or
(b) approach, contact, solicit, sell to, or deal with any customer
of Company or Xxxxxxxxx, for the purpose of offering or selling products or
services to, or otherwise obtaining or receiving business or income from, or
otherwise diverting from Company or Xxxxxxxxx business or income from, such
customer of Company or Xxxxxxxxx; or
(c) directly or indirectly, solicit or induce, or attempt to solicit
or induce, any employee, current or future, of the Company or Xxxxxxxxx to leave
the Company or Xxxxxxxxx for any reason whatsoever, or hire any current or
future employee of the Company or Xxxxxxxxx.
without having first obtained the written consent of Xxxxxxxxx, which consent
may be arbitrarily withheld. The covenants and agreements of Employee which are
contained in this section shall be construed as covenants and agreements
independent of any other provision in this agreement and the existence of any
claim or cause of action of Employee, whether predicated on this agreement or
otherwise, shall not constitute a defense to the enforcement
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by Xxxxxxxxx of the aforesaid covenants and agreements. Each of the three
covenants set forth above in paragraph 8(a), 8(b) and 8(c), respectively, is and
shall be deemed to be an entirely separate and wholly independent covenant, and
the invalidity of any one or more of said four separate and independent
covenants shall have absolutely no effect whatsoever upon the validity of the
others.
9. All of the terms and conditions of Sections 6, 7 and 8 shall remain
in full force and effect for a period of two (2) years after the termination of
the employment of Employee with Xxxxxxxxx for any reason whatsoever, and during
the whole of such two-year period, Employee will not make or permit to be made
any public announcement or statement of any kind that he was formerly connected
with the Company or Xxxxxxxxx in any capacity whatsoever, except that Employee
may state on applications for future employment and resumes that he was employed
by the Company and Xxxxxxxxx and further Employee is permitted to describe the
duties, responsibilities and services he performed at the Company and Xxxxxxxxx.
10. Any breach or evasion of any term of this agreement by Employee
will cause immediate and irreparable injury to Xxxxxxxxx, its business and
property; therefore, in the event of any breach or evasion of any of the terms
of this agreement by Employee, Xxxxxxxxx shall be entitled to an immediate
injunction, without necessity of bond, to restrain the violation thereof or to
specific performance, or both, as well as to all other legal or equitable
remedies to which Xxxxxxxxx may be entitled
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hereunder or under applicable law, including, but not limited to, the recovery
of damages from Employee, as well as any person, firm or company which
participates in such breach or evasion.
11. Employee represents and admits that in the event his employment
with Xxxxxxxxx is terminated for any reason whatsoever, his experience and
capabilities are such that employment can be obtained by him in businesses and
areas consistent with the provisions of Section 8 of this Agreement and that the
enjoining of any breach or evasion by him of the terms and provisions of this
agreement will not prevent him from earning a comfortable livelihood.
12. Notwithstanding anything in this agreement to the contrary, if
Employee shall breach or evade any of the provisions of Sections 6, 7 or 8, the
two-year period referred to in Section 9 shall commence on the date a court of
competent jurisdiction enters a final order or decree enjoining or prohibiting
Employee from violating the terms and provisions contained in the respective
sections aforesaid.
13. Employee represents and warrants to Xxxxxxxxx that there is no
restriction or limitation, by reason of any agreement or otherwise, upon
Employee's right or ability to enter into and fulfill in their entirety his
duties and obligations under this Agreement. Without limiting the foregoing,
Employee further represents and warrants Xxxxxxxxx that his performance of all
the terms of this Agreement and as an employee of Xxxxxxxxx does not and will
not breach any agreement to keep in confidence proprietary information acquired
by Employee in confidence prior
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to his employment by Xxxxxxxxx, and that he has not entered into, and agrees
that he will not enter into, any agreement either written or oral in conflict
with this Agreement.
Employee agrees that he shall defend, indemnify and hold Xxxxxxxxx
harmless from and against any and all losses, claims, liabilities, damages,
costs, judgments and expenses (including attorney's fees) whatsoever arising out
of or resulting from any breach of the foregoing warranties or any
misrepresentation contained above.
14. The Employee understands the nature of and the burdens imposed by
the restrictive covenants contained in this Agreement. The Employee has had the
opportunity to and has independently consulted with his counsel and after such
consultation represents and agrees that such covenants are reasonable,
enforceable, and proper in duration, scope, and effect.
15. This agreement may not be modified or terminated orally. No
modification or termination or attempted waiver shall be valid unless in writing
signed by the party against whom the same is sought to be enforced.
16. Employee shall not anticipate, encumber, alienate or assign any of
his rights, claims, interests or obligations under this agreement except upon
the written consent of Xxxxxxxxx, such consent may be arbitrarily withheld and
no payments, benefits or rights arising by reason of this agreement shall be in
any way subject to Employee's debts, contracts or engagements nor to any
judicial process to levy upon or tax the same for payment thereof.
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17. Except as otherwise provided herein, the provisions of this
agreement shall be binding upon and inure to the benefit of Xxxxxxxxx, its
successors and assigns and Employee, his legal representatives, heirs at law,
distributees, devisees and legatees.
18. It is understood and agreed that the construction and
interpretation of this Agreement shall at all times and in all respects be
governed by the internal laws of the Commonwealth of Kentucky, without giving
effect to the conflict of laws provisions thereof.
19. This agreement supersedes all other oral or written agreements of
every nature whatsoever between the Company and Employee relating to the
employment of Employee by the Company and embodies the full and complete
understanding of Xxxxxxxxx and Employee relating thereto.
This instrument is executed as of the date first above written.
XXXXXXXXX FOODS COMPANY,
an Ohio corporation
By
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Its President
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Xxxxxx Xxxxxxx
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