EXHIBIT 10(C)
LINCOLN SNACKS COMPANY
0 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
February 27, 1998
Xx. Xxxxx Xxxxxxx
Xxxx Group, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xxxxx:
In recognition of your current employment by Lincoln Snacks Company
(the "Company") and in order to induce you to continue in such
employment, this letter sets forth our mutual understanding concerning
the terms of your severance in the event of a Change of Control (as
defined below).
1. You shall be entitled to receive the severance payment
contemplated by this Agreement only in the event (i) you cease to be
employed by the Company for any reason (including, without limitation,
as a result of your resignation) within a twelve (12) month period
commencing at the effective time of a Change of Control and ending on
the first anniversary thereof, other than as a result of being
terminated by the Company for Cause (as defined below) or (ii) your
employment by the Company is terminated other than for Cause within 90
days prior to a Change of Control.
2. For purposes of this Agreement the following terms shall have
the following meanings:
(a) "Cause" shall mean (i) proven or admitted (A) embezzlement
or (B) dishonest usage of Company funds or assets; or (ii) conviction in
a court of law of, or pleading of guilty or nolo contendere to, any
crime that constitutes a felony in the jurisdiction involved.
(b)(i) "Change of Control" shall be deemed to have occurred
upon the occurrence of any of the following events:
(A) any transaction or series of related transactions
as a result of which any "person" or "group" (within the meaning
of Section 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")), other than Xxxx Group,
Inc. ("Xxxx"), a wholly-owned subsidiary of Xxxx, or a
liquidating trust established by Xxxx, becomes the "beneficial
owner" (as defined in Rule 13d-3 of the Exchange Act) of
outstanding voting securities of the Company representing 50% or
more of the combined voting power of the Company's then
outstanding securities;
(B) the individuals who, as of the effective date of
this Agreement, constitute the Board of Directors of the Company
plus any individual who is within the definition of "Continuing
Director," cease for any reason to constitute at least a
majority of the directors of the Company;
(C) there shall be consummated any merger of the
Company with or into any person, other than Xxxx or a wholly-owned
subsidiary of Xxxx, where immediately following such
transaction 50% or more of the outstanding voting stock of the
surviving entity is not owned, directly or indirectly, by
persons who were shareholders of the Company holding, in the
aggregate, 50% or more of the outstanding shares of the Company
immediately prior to such transaction; or
(D) there shall be consummated a sale, to a person
other than Xxxx or a wholly-owned subsidiary of Xxxx, of all or
substantially all of the operating assets of the Company in one
transaction or a series of transactions.
(ii) Notwithstanding anything to the contrary herein contained:
(A) A "Change of Control" shall not be deemed to have
occurred as a result of a distribution by Xxxx of shares of the
Company's stock pro rata to Noel's shareholders.
(B) In the event of a transaction which would
constitute a "Change of Control" within the meaning of Section
2(b)(i) but for the exceptions relating to wholly-owned
subsidiaries of Xxxx contained in Subsections 2(b)(i)(A),
2(b)(i)(C) or 2(b)(i)(D), a "Change of Control" shall be deemed
to occur in the event (x) of any transaction or series of
related transactions as a result of which any "person" or
"group" becomes the "beneficial owner" of outstanding voting
securities of the wholly-owned subsidiary representing 50% or
more of the combined voting power of the wholly-owned
subsidiary's then outstanding securities; (y) there shall be
consummated any merger of the wholly-owned subsidiary with or
into any person, other than Xxxx, where immediately following
such transaction 50% or more of the outstanding voting stock of
the surviving entity is not owned, directly or indirectly, by
persons who were shareholders of the wholly-owned subsidiary
holding, in the aggregate, 50% or more of the outstanding shares
of the wholly-owned subsidiary immediately prior to such
transaction; or (z) there shall be consummated a sale, to a
person other than Xxxx, of all or substantially all of the
operating assets of the wholly-owned subsidiary in one
transaction or a series of transactions.
(c) "Continuing Director" shall mean any director on the date
hereof and any director who was nominated or elected a director by a
majority of the Continuing Directors in office at the time of his or her
nomination or election.
3. Subject to the terms and conditions contained herein, the
severance payment payable hereunder shall equal $250,000 which payment
you acknowledge is over and above that to which you would normally be
entitled. The amount payable under this Section 3 shall be payable by
the Company to you, or to your executors or personal representatives, in
a lump sum immediately following the execution of a release in favor of
the Company in the form of Exhibit A attached hereto (the "Release")
(which the Company shall deliver to you for execution promptly following
the occurrence of either of the events set forth in Section 1 of this
Agreement) and the expiration of the waiting periods set forth therein.
You acknowledge that all payments hereunder will be subject to
applicable withholding taxes. In the event that any proceeding is
instituted by you or the Company to enforce rights under this Agreement,
the unsuccessful party, as determined in such proceeding, shall pay the
reasonable legal fees and related expenses incurred by the successful
party in such proceeding.
4. In consideration of the foregoing benefits:
(a) if you choose to deliver the Release and accept the
severance provided for in this Agreement, the payment shall be in lieu
of and in satisfaction of all liabilities and obligations of the Company
to you, whether known or unknown, other than any unpaid salary for the
period preceding termination, any unpaid bonus previously awarded to
you, vacation pay accrued, accrued vested pension benefits and interests
in the Company's 401(k) plan and reasonable expenses in connection with
your employment for which timely substantiation shall have been
submitted prior to the payment of the severance amount. As a condition
of receiving the severance amount you will execute and deliver the
Release; and
(b) you agree to return to the Company or to destroy, within
five business days following the date you cease to be employed (or date
of Change of Control, if later), all documents, records and other
property relating to the Company and its business which are in your
possession or under your control. You agree not to disclose to anyone
any confidential or non-public information which relates to the Company
or its business.
5. The Company encourages you to carefully review the terms of this
Agreement and, if you wish, to seek advice and counsel from an attorney
before signing this Agreement.
6. This Agreement shall inure to benefit of and shall be binding
upon you and your executors, administrators, heirs, personal
representatives and assigns, and the Company and its successors and
assigns; provided, however, that you shall not be entitled to assign or
delegate any of your rights or obligations hereunder without the prior
written consent of the Company.
7. This Agreement constitutes the entire agreement between the
parties relating to the subject matter hereof and supersedes any and all
other agreements relating to your employment whether written or oral.
This Agreement cannot be altered or amended except by a writing duly
executed by the party against whom such alteration or amendment is
sought to be enforced.
8. If any one or more of the provisions contained in this Agreement
shall be held illegal or unenforceable, no other provision shall be
affected.
We are pleased that we have been able to reach this Agreement.
After you have had the chance to review this Agreement and to consult
with your attorney, if you wish, please sign the enclosed copy and
return it to us.
LINCOLN SNACKS COMPANY
By: /s/ R. Xxxxx Xxxx
-------------------
Name: X. X. Xxxx
Title: President & C.O.O.
Accepted and Agreed:
/s/ Xxxxx Xxxxxxx
--------------------
Xxxxx Xxxxxxx
EXHIBIT A
RELEASE
The undersigned, for herself and her successors and assigns, does
hereby fully and completely RELEASE, ACQUIT and FOREVER DISCHARGE each
of Lincoln Snacks Company (the "Company"), its affiliates, subsidiaries
or other related entities as well as its shareholders, officers,
directors, employees, advisors, consultants or agents (collectively, the
"Releasees"), in all of its or their respective capacities, from any and
all claims, debts, demands, actions, causes of action, suits, sums of
money, contracts, agreements, judgements and liabilities, including
attorney's fees, whatsoever, both in law and in equity ("claims") of any
kind and any character arising out of or in connection with the
undersigned's employment by the Company that she ever had, might now or
hereafter have, or could have had, whether in contract, tort or
otherwise, including specifically any claims of discrimination that she
may claim in connection with her employment or association with the
Company or the termination thereof; provided, however, that this Release
excludes the Company's obligations under Section 4(a) of the agreement
dated February 24, 1998 between the Company and the undersigned. This
release includes, but is not limited to, claims arising under the
federal, state or local laws prohibiting discrimination on the basis of
one's sex, race, age, disability, national origin, color or religion, or
other reason forbidden by federal, state or local laws or claims growing
out of any legal restrictions on the right to terminate employees. This
release also specifically includes the waiver of any rights or claims
arising under the Age Discrimination in Employment Act of 1967 (29
U.S.C. 621 et seq.).
The undersigned acknowledges that after the undersigned has executed
and delivered this Release, the undersigned will have seven (7) days
following the date of execution during which time the undersigned may
revoke this Release, provided, however, that, if the undersigned elects
to return an executed copy of the document to the Company before the
expiration of 22 days from the date of receipt of the release from the
Company, the undersigned may revoke this Release at any time before the
later to occur of seven (7) days following the date of execution or 22
days after the date of receipt from the Company. The undersigned
further acknowledges that if the Company does not receive a written
revocation from the undersigned, or the undersigned's attorney, prior to
the expiration of the period in which the undersigned may revoke this
Release, this Release will become effective on the date after the
expiration of the applicable revocation period.
The undersigned acknowledges that she has been given the opportunity
to consider this Release for at least twenty-one (21) days, that the
undersigned has been advised to discuss this Release with an attorney of
her choice, that the undersigned has carefully read and fully
understands and agrees to all of the provisions of this Release and that
the undersigned is voluntarily entering into this Release.
Finally, the undersigned also understands that the undersigned has
seven (7) days after the execution of this Release (or twenty-two days
after the date of receipt of this release from the Company, if later) to
change her mind and that the undersigned may revoke this Release by
providing written notice of revocation to the Company prior to the
expiration of the applicable period.
June 12, 1998 /s/ Xxxxx Xxxxxxx
------------------- --------------------
Date of Execution Xxxxx Xxxxxxx
LINCOLN SNACKS COMPANY
LETTER AGREEMENT REGARDING AMENDED SEVERANCE AGREEMENT
Xx. Xxxxx Xxxxxxx
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xx. Xxxxxxx:
Please be advised that pursuant to resolutions adopted by the Board
of Directors on June 4, 1998, paragraph 1 of the Severance Agreement
between you and the Company dated February 27, 1998, has been amended so
that you shall also be entitled to receive severance payments in the
event that you are not reelected as the Chairman of the Board for any
reason other than Cause (as defined in the Severance Agreement). In
addition, paragraph 4(a) of the Severance Agreement is amended so that
while you must still execute a release to receive severance payments, by
executing the release you will not be waiving your rights or releasing
the Company of its obligations pursuant to any stock option agreements
between you and the Company which may be in effect as of the date of the
release.
If the foregoing is in accordance with your understanding and
approved by you, please confirm such by mailing and returning the
duplicate of this Letter Agreement delivered for that purpose.
LINCOLN SNACKS COMPANY
By: /s/ R. Xxxxx Xxxx
---------------------
R. Xxxxx Xxxx
President and
Chief Operating Officer
AGREED AND ACCEPTED:
/s/ Xxxxx Xxxxxxx
---------------------
Xxxxx Xxxxxxx
