EXHIBIT 10.17
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of June 16, 1997, by and between AURORA
FOODS INC. (the "Company"), a Delaware corporation, and Xxxx X. Xxxxxxx (the
"Employee").
W I T N E S S E T H:
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 or
before June 30, 1997 hereof and shall continue in effect through June 30, 1998,
unless earlier terminated pursuant to Section 6 below (the "Term"); provided
that (I) on the first anniversary of the date hereof, the Term of this Agreement
shall be automatically extended for an additional 6-month period 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 Chief
Financial Officer 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.
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(c) Office and Location. Employee shall perform services for the
Company from the Company's corporate headquarters.
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. The Base Salary may be increased from time to time in the 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 C.F.O. 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:
(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 C.F.O. 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.
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(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) Fi 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.
(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 begin 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.
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(b) As of the date hereof, MBW Investors LLC will issue to Employee 8
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
reasonable requested by the Company of MBW Investors LLC in connection with the
issuance of Class D Units to Employee.
(c) 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 (1) 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 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
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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 bee 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
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.
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(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 of 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. 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.
(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.
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(c) Confidentiality. The Employee agrees and acknowledges that the
Confidential Information (as hereinafter defined) of the Company and its
subsidiaries and affiliates, is valuable, special and unique to their
business, that such 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 Informat8ion of the Company or any of its
subsidiaries or Affiliates;
(iii) The Employee agrees to take all reasonable steps
necessary, or reasonably required 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 or may become engaged or
(b) not 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.
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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 8 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 delivered by overnight courier addressed as follows:
(i) If to the Company:
AURORA Foods, Inc.
Community Corporate Center
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
with a copy to:
MBW Investors LLC
c/o Dartford Partnership, L.L.C.
000 Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
with a copy to:
XxXxxx De Leeuw & Co.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
(ii) If to the Employee:
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0000 Xxxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxx 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 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
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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
the 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 the Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation
of this Agreement.
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.
AURORA FOODS INC.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: President
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/s/ Xxxx X. Xxxxxxx
-------------------------
Xxxx X. Xxxxxxx
