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EXHIBIT 10.50
BONUS AGREEMENT
THIS BONUS AGREEMENT (the "Agreement") is entered into as of
June 30, 1999 among Fresh Foods, Inc., a North Carolina corporation (the
"Company"), and Xxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company is contemplating the sale or other disposition of
each of its two businesses, consisting of its restaurant business and its food
processing business; and
WHEREAS, the Company wants to provide incentives for the Executive, a
key employee, to remain with the Company and to assist in the planning and
execution of these extraordinary corporate transactions; and
WHEREAS, the Executive and the Company wish to terminate their Change
in Control Agreement dated as of March 25, 1999 (the "Change in Control
Agreement") and to set forth their agreement with respect to such termination;
NOW, THEREFORE, in consideration of the covenants contained herein,
together with other valuable consideration, the receipt and legal sufficiency of
which are hereby acknowledged, the parties hereby agree as follows:
1. Certain Defined Terms. As used in this Agreement, the following
terms have the meanings indicated:
"Disposition" means a Restaurant Disposition or a Food Processing
Disposition (or both).
"Food Processing Disposition" means the sale or other disposition
(whether by merger or consolidation or transfer of assets or equity interests
issued by the Company or by one or more subsidiaries of the Company) of all or
substantially all of the food processing operations presently conducted by
Pierre Foods, LLC.
"Restaurant Disposition" means the sale or other disposition (whether
by merger or consolidation or transfer of assets or equity interests issued by
the Company or by one or more subsidiaries of the Company) of all or
substantially all of the restaurant operations presently conducted by Claremont
Restaurant Group, LLC.
2. Change in Control Agreement Terminated. The Change in Control
Agreement shall terminate in its entirety, immediately prior to the first
Disposition, without liability on the part of any party as a consequence
thereof. Without limiting the generality of the foregoing, the Company shall
have no liability to the Executive upon any Disposition pursuant to such
Agreement.
3. Bonuses.
(a) Restaurant Disposition Bonus. Except in the circumstances
contemplated by subsection (c), in the event that the Company
consummates a Restaurant Disposition the
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Company shall pay to the Executive, as a lump sum transaction bonus, an
amount equal to the sum of:
(i) $562,500; plus
(ii) an amount determined by the Company to be equal
to the aggregate of any and all federal, state and local
income tax and excise tax liabilities of the Executive
resulting from the payments due pursuant to clauses (i) and
(ii) hereof; provided, however, that, if the Company
determines that the total of all payments to or for the
benefit of the Executive under this Agreement after reduction
for any and all federal, state and local income tax and excise
tax liabilities of the Executive resulting therefrom (the
"After-Tax Payments") would be increased by the limitation or
elimination of any payment under this subsection (a), then
amounts payable under this subsection (a) shall be reduced to
the extent, and only to the extent, determined necessary by
the Company to maximize the After-Tax Payments; and provided
further that the Company shall withhold from all payments to
be made to the Executive pursuant to this Agreement all taxes
that, by applicable federal, state or local law, the Company
determines that it is required to withhold.
The payment required to be made to the Executive pursuant to the
foregoing provisions of this subsection (a) shall be made by bank check
or other good funds at the closing of the Restaurant Disposition.
(b) Food Processing Disposition Bonus. Except in the
circumstances contemplated by subsection (c), in the event that the
Company consummates a Food Processing Disposition the Company shall pay
to the Executive, as a lump sum transaction bonus, an amount equal to
the sum of:
(i) $562,500; plus
(ii) an amount determined by the Company to be equal
to the aggregate of any and all federal, state and local
income tax and excise tax liabilities of the Executive
resulting from the payments due pursuant to clauses (i) and
(ii) hereof; provided, however, that, if the Company
determines that the total of all After-Tax Payments would be
increased by the limitation or elimination of any payment
under this subsection (b), then amounts payable under this
subsection (b) shall be reduced to the extent, and only to the
extent, determined necessary by the Company to maximize the
After-Tax Payments; and provided further that the Company
shall withhold from all payments to be made to the Executive
pursuant to this Agreement all taxes that, by applicable
federal, state or local law, the Company determines that it is
required to withhold.
The payment required to be made to the Executive pursuant to the
foregoing provisions of this subsection (b) shall be made by bank check
or other good funds at the closing of the Food Processing Disposition.
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(c) Combined Disposition Bonus. In the event that the Company
consummates a Restaurant Disposition and a Food Processing Disposition
in a single transaction or series of related transactions with the same
buyer or related buyers, the Company shall pay to the Executive, as a
lump sum transaction bonus, an amount equal to the sum of:
(i) $1,125,000; plus
(ii) an amount determined by the Company to be equal
to the aggregate of any and all federal, state and local
income tax and excise tax liabilities of the Executive
resulting from the payments due pursuant to clauses (i) and
(ii) hereof; provided, however, that, if the Company
determines that the total of all After-Tax Payments would be
increased by the limitation or elimination of any payment
under this subsection (c), then amounts payable under this
subsection (c) shall be reduced to the extent, and only to the
extent, determined necessary by the Company to maximize the
After-Tax Payments; and provided further that the Company
shall withhold from all payments to be made to the Executive
pursuant to this Agreement all taxes that, by applicable
federal, state or local law, the Company determines that it is
required to withhold.
The payment required to be made to the Executive pursuant to the
foregoing provisions of this subsection (c) shall be made by bank check
or other good funds at the closing of the Disposition.
4. Company Car. On the later to occur of the Restaurant Disposition and
the Food Processing Disposition, the Company shall transfer and convey to the
Executive all of its right, title and interest in and to the motor vehicle
currently used by the Executive for business purposes. Upon request by the
Executive, the Company will execute and deliver all such documents and take all
such other actions as the Executive may reasonably request to better evidence
such transfer and conveyance.
5. Stock Options. This Agreement shall not be construed as having any
effect on the rights of the Executive under the stock option agreements and
related stock option plans that govern stock options that have been granted by
the Company to the Executive and may be held by the Executive at any time.
6. Severability. The illegality, unenforceability or invalidity of any
one or more covenants, phrases, clauses, sentences or paragraphs of this
Agreement, as determined by a court of competent jurisdiction, shall not affect
the remaining portions of this Agreement, or any part thereof; and, in case of
any such illegality, unenforceability or invalidity, this Agreement shall be
construed as if such covenants, phrases, clauses, sentences or paragraphs, to
the extent and only to the extent determined to be illegal, unenforceable or
invalid, had not been inserted.
7. Waiver of Breach. The waiver by either party of any breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach of any provision of this Agreement.
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8. Entire Agreement. This Agreement sets forth the entire understanding
between the parties relating to the subject matter hereof and supersedes all
previous and contemporaneous understandings or agreements, written and oral.
This Agreement may be modified only by an agreement in writing, signed by all
parties, purporting to modify it.
9. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of North Carolina without regard to the
principles of conflict of laws thereof.
10. Notices. Any notice that may be given hereunder shall be in writing
and shall be deemed to have been given on the earlier to occur of (a) actual
receipt or (b) the second business day after the same shall have been mailed by
certified mail, postage prepaid, return receipt requested, to the parties at the
addresses listed below:
If to the Company: Fresh Foods, Inc.
X.X. Xxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
If to the Executive: Xxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or, in any case, to such other address as the party to whom or to which such
notice is to be given shall have specified by notice given to the other parties.
11. Successors, Heirs and Assigns. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, their successors, heirs and
assigns.
12. Counterparts. This Agreement may be executed in counterparts, each
of which shall constitute an original and all of which, taken together, shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
FRESH FOODS, INC.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx, President
THE EXECUTIVE:
/s/ Xxxxx X. Xxxxxx (SEAL)
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Xxxxx X. Xxxxxx
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