Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (hereinafter referred to as the "Agreement"),
is made and entered into as of June ___, 2002, by and between Xxxxxx X'Xxxxxxx
(hereinafter referred to as "Employee"), and Montana Xxxxx Bread Co., Inc., a
Delaware corporation (hereinafter referred to as "Employer").
W I T N E S E T H:
WHEREAS, Employer desires to employ the Employee in an executive
capacity with Corporation on the terms hereinafter set forth, and the Employee
desires to be so employed on such basis; and
WHEREAS, the parties desire to establish the compensation and other
benefits to be paid to the Employee while he shall be in the employ of the
Employer.
NOW, THEREFORE, in consideration of the mutual promises contained in
this Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which hereby is acknowledged, it is agreed as follows:
EMPLOYMENT
1. TERM OF EMPLOYMENT. Employer hereby agrees to employ Employee, and
Employee hereby accepts such employment by Employer, as Chairman, Chief
Executive Officer and President of Employer for a term commencing on the date
hereof and ending on June ___, 2005 (hereinafter referred to as the "Term of
Employment").
2. DUTIES OF EMPLOYMENT.
a. Employee shall have such responsibilities and duties as shall be
determined by the Board of Directors of the Corporation, consistent with this
Agreement and with the position of Chairman, Chief Executive Office and
President. The duties to be performed by Employee shall be performed at
Employer's facilities in Rochester, New York or, provided, however, that
Employer may move its facilities anywhere within fifty (50) miles of said
locations. During the Term of Employment, Employer shall not make any
substantial change in the duties and responsibilities of the position held by
Employee and shall not require Employee to perform duties which are not
commensurate with his position without Employee's prior consent; except that
Employer may reasonably require Employee to travel on behalf of the Company.
b. Employee shall render the services described herein diligently
on a full-time basis using his best efforts.
3. COMPENSATION. During the Term of Employment, Employee shall receive
base compensation ("Base Compensation") at a rate of not less than $180,000 per
annum plus annual raises, payable in equal weekly installments on the last
business day of each week,
commencing on the first such day to occur after the date hereof. The Base
Compensation shall be increased at the beginning of each fiscal year by the
increase in the cost of living for the prior year (as published by the United
States Department of Commerce). Other benefits shall include fully-paid family
heath insurance coverage or equivalent, paid holidays in accordance with
Employer's policies and four weeks' paid vacation per year, full reimbursement
for all business travel and business entertainment expense including country
club dues and assessments (which dues and assessments will not exceed $6,000 per
year), fully-paid life insurance equal to $1,000,000, fully-paid long-term
disability insurance to provide Employee, on an after work basis, 60% of
Employee's Base Compensation and participation on a proportional basis in all
profit-sharing, 401-K, pension stock plan or similar plans made available to
other Company executives and employees and reimbursement or leasing an
automobile, the cost of which shall not exceed $800 per month). Employee shall
also be eligible to receive any bonuses as may from time to time be approved by
the Compensation Committee of the Board of Directors.
4. RESTRICTIONS ON USE AND DISCLOSURE.
a. Except as required by Employee's duties to Employer as an
employee, Employee shall not (during or after any period of employment) directly
or indirectly use, publish, disseminate or otherwise disclose any Confidential
Information without the express prior written consent of Employer. For purposes
of this Agreement, "Confidential Information" shall mean all written and oral
confidential or proprietary information of Employer and its affiliates, whether
or not discovered or developed by Employer, and of third parties (such as
suppliers, customers and consultants) who may have imparted information in
confidence to Employer or its affiliates, known by Employee as a result of his
employment with Employer at any time (including prior to execution of this
Agreement), provided that Confidential Information shall not include any such
information which is now or hereafter becomes generally known in the industries
in which Employer is conducting business without the fault of Employee.
b. Upon termination of employment with Employer for any reason,
Employee shall forthwith deliver to Employer all Employer property, including
without limitation, all copies of all procedural manuals, guides, customer
lists, technical and product information and drawings, records and other
documents and materials containing Confidential Information then in Employee's
possession or control, whether prepared by Employee or others.
5. TERMINATION ON DISABILITY.
a. Employer shall have the right to terminate this Agreement on the
death or disability of Employee. For purposes of this Agreement, "disability"
shall mean the failure of Employee, due to illness, accident, or any other
physical or mental incapacity, to perform his duties substantially as required
hereunder for a period of any one hundred and eighty (180) consecutive days , or
two hundred forty (240) out of three hundred sixty-five (365) days as evidenced
by a certificate from a physician acceptable to Employer.
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6. TERMINATION FOR CAUSE.
a. Employer shall have the right to terminate Employee's employment
hereunder at any time and with immediate effect for cause. For all purposes of
this Agreement, Employee's employment shall be deemed terminated for "cause"
only if it is terminated by Employer for:
i. a substantial misappropriation of corporate funds by Employee;
ii. gross and willful misconduct; or
iii. a breach by Employee of the terms of this Agreement after
receiving written notice from the Board of Directors of Employer advising
Employee of the action allegedly resulting in the breach.
b. If Employee's employment hereunder is terminated for cause:
i. Employee shall be entitled to payment of all arrearages of
salary and expenses to the Date of Termination; but
ii. Employee shall not be eligible to receive, and Employer shall
have no further obligation to make, from and after the Date of Termination, any
further payments or benefits pursuant to this Agreement arising out of or in
connection with Employee's employment hereunder.
7. TERMINATION WITHOUT CAUSE. Employer shall have the right to terminate
Employee's employment hereunder for any reason other than cause upon not less
than one hundred eighty (180) days' written notice to Employee, provided that
Employer shall pay to Employee:
a. an amount (payable in equal weekly installments or in a lump sum
at Employee's option) equal to the average monthly amount of Base Compensation
entitled to Employee during the 12-month period immediately preceding the Date
of Termination multiplied by the number of months remaining between the Date of
Termination and the expiration of the Term of Employment;
b. any accrued vacation days, and Employer shall continue to provide
health, life and disability insurance benefits to Employee, except to the extent
Employee is currently paying for the same, for the balance of the Term of
Employment; and
c. For purposes of this Section 7, Xxxxx X'Xxxxxxx shall not be
entitled to vote with regard to a termination of Employee.
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8. TERMINATION BY EMPLOYEE FOR GOOD REASON.
a. Employee shall have the right to terminate his employment
hereunder at any time and with immediate effect for good reason. As used in this
Agreement "good reason" shall mean:
i. the removal of Employee from office of Chairman, Chief
Executive Officer or President without the Employee's consent or a substantial
reduction or change in the nature or status of Employee's duties and
responsibilities as described in Section 2 hereof; or
ii. the reduction of Employee's then current Base Compensation
(except with regard to voluntary reductions); or
iii. the relocation of Employer's principal executive offices to a
location more than fifty (50) miles from Rochester, New York without the
Employee's consent; or
iv. the failure by Employer to continue to provide Employee with
benefits at least as favorable as those in which Employee was then participating
except with regard to voluntary reductions.
b. In such event Employer shall pay to Employee:
i. an amount (payable in equal weekly installments or a lump sum)
equal to the average monthly amount of Base Compensation received by Employee
during the 12-month period immediately preceding the Date of Termination
multiplied by the number of months remaining between the Date of Termination of
Employee and the expiration of the Term of Employment; and
ii. Employer shall continue to provide automobile, health, life
and disability insurance benefits, except to the extent, if any, Employee is
then paying for the same, to Employee for the balance of Term of Employment.
With respect to stock options, Employee may, at his option, require Employer to
provide Employee to extend the period in which to exercise such options for a
period of one year from termination.
9. NOTICE OF TERMINATION. Any purported termination of Employee's
employment hereunder, either by Employer or by Employee, shall be communicated
by a written Notice of Termination to the other party hereto (except in the case
of termination upon death of Employee in which event the Date of Termination
shall be the date of death). Such notice shall indicate the specific termination
provision in this Agreement which is relied upon, recite the facts and
circumstances claimed to provide the basis for such termination and specify the
effective date of such termination (the "Date of Termination").
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NON-COMPETE
10. NON-COMPETE AGREEMENT. For the Term of Employment, Employee will not
become involved, for his own account or that of another, as and for the years
thereafter an owner, principal, stockholder, director, employee, officer,
consultant, contractor, partner, joint venturer, or in any other manner, with
any business entity that, directly or indirectly, within the United States,
competes with the Company's retail bakery business; provided, however, that
nothing herein shall restrict Employee from owning 5% or less of the corporate
securities of any competitor of Employer whose securities are listed on any
national securities exchange or traded over the counter. In the event that a
court of competent jurisdiction shall determine this non-compete agreement to be
unenforceable by reason of its extending for too great a period of time or over
too large a geographic area or over too great a range of activities, the parties
intend that it shall be interpreted and reformed to extend only over a maximum
period of time, geographic area or range of activities as to which it may be
enforceable.
MISCELLANEOUS
11. INDEMNITY. Employer shall indemnify Employee and hold him harmless
from and against any liability, cost or expense which she may incur as an
employee or officer of Employer in a manner at least as beneficial to Employee
as is now provided in accordance with the provisions of the Articles of
Incorporation and By-laws of Employer in effect on the date prior to the date
hereof, all of which shall not exceed the legal limits under Delaware law.
12. BINDING EFFECT. This Agreement shall inure to the benefit of and be
binding upon Employer, its successors and assigns, and any person, partnership,
company or corporation which may acquire substantially all of Employer's assets
or business or with or into which Employer may be liquidated, consolidated,
merged or otherwise combined, and shall inure to the benefit of and be binding
upon Employee, his heirs, executors, administrators, and personal
representatives.
13. INJUNCTIVE RELIEF. Employee acknowledges that any breach of Sections
4 or 10 hereof would entail irreparable injury to Employer and that in addition
to Employer's other remedies, Employer shall be entitled to injunctive and other
equitable relief to prevent any such breach, actual, intended or likely.
14. SEVERABILITY. If any one or more of the terms, provisions, covenants
or restrictions of this Agreement shall be determined by a court of competent
jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
15. NOTICES. Any notice, demand or other communication given by the
parties under this Agreement shall be in writing delivered personally or sent by
certified mail, return receipt requested to the address of the parties set forth
beneath their signatures to this Agreement.
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Notices so sent by mail shall be deemed delivered on the date and at the time
indicated on the duly completed Postal Service return receipt.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
17. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
supersedes any prior agreement of the parties relating to the subject matter
hereof, and the parties have made no agreement, representations or warranties
relating to the subject matter of this Agreement which are not set forth herein.
18. AMENDMENT. No waiver or modification of this Agreement or of any
covenant, condition or limitation herein contained shall be valid unless in
writing and duly executed by the party to be charged therewith, and no evidence
of any waiver or modification shall be offered or received in evidence of any
proceeding, arbitration or litigation between the parties hereto arising out of
or affecting this Agreement, or the rights or obligations of the parties
hereunder, unless such waiver or modification is in writing, duly executed as
aforesaid.
19. COUNTERPARTS. This Agreement may be executed in one or more
counterparts each of which shall be considered an original.
IN WITNESS WHEREOF, the parties have executed or caused this Agreement
to be executed as of the day first above written.
MONTANA XXXXX BREAD CO., INC.
By:
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Xxxxx X'Xxxxxxx, Vice President
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Xxxxxx X'Xxxxxxx
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