Exhibit 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") made and entered into as of the
8th day of April, 2002 among AMERICAN SEAFOODS, L.P., ("Parent") and AMERICAN
SEAFOODS INTERNATIONAL LLC ("Employer" or the "Company") and Xxxx X. Xxxxxxxx
who resides at 0 Xxx Xxxxxx Xxxx, Xxxxxxx Xxxxx, Xxx Xxxxxxxxx, 00000
("Xxxxxxxx").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Company desires to employ Xxxxxxxx and Xxxxxxxx desires to
accept employment with Employer upon the terms and conditions hereinafter set
forth; and
WHEREAS, the Company is in the business of preparing, packaging and
selling seafood products on a world-wide basis (the "Company Business");
WHEREAS, the Company is part of a group of related entities (the
"Group") engaged in the harvesting, preparing and selling of seafood products
world-wide (the "Group Business")
NOW THEREFORE in consideration of the premises and the mutual covenants
hereinafter set forth, and intending to be legally bound hereby, it is hereby
agreed as follows:
1. Employment Term. Employer agrees to employ Xxxxxxxx, and Xxxxxxxx
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agrees to be so employed, in the capacity of President of American Seafoods
International, LLC, for a term commencing on the date hereof and ending on the
third anniversary of the date hereof (the "Initial Term"); provided, however,
that, notwithstanding anything to the contrary set forth in this Agreement, this
Agreement may be earlier terminated pursuant to the terms hereof. The term of
this Agreement will automatically extend past the Initial Term for succeeding
periods of one year each unless either party terminates this Agreement as of the
end of the Initial Term, or as of the end of any subsequent one-year period (in
either case, the "Termination Date"), by delivering notice to the other party
specifying the applicable Termination Date not earlier than 180 days and not
later than 120 days prior to the date so specified. "Employment Term" as used
herein shall mean the term of this Agreement including any automatic extensions
pursuant to the preceding sentence.
2. Position and Duties. Xxxxxxxx shall diligently and conscientiously
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devote his full business time, attention, energy, skill and best efforts to the
business of Employer and the discharge his duties hereunder. Xxxxxxxx'x duties
under this Agreement shall be to serve as President of the Company, with the
responsibilities, rights,
authority and duties customarily pertaining to such position and as may be
established from time to time by or under the direction of the Board of
Directors or similar governing body of Employer (the "Board") or its designees,
and Xxxxxxxx shall report to the Chief Executive Officer of the Company.
Xxxxxxxx'x principal office will be in New Bedford, Massachusetts.
3. Compensation.
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(a) Base Salary. Employer shall pay Xxxxxxxx base salary compensation
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at an annual rate of $200,000. In April 2003 and annually thereafter, the, Board
shall review Xxxxxxxx'x base salary in light of the performance of Xxxxxxxx and
the Company, and may, in its sole discretion, increase or decrease (but not
decrease below $200,000) such base salary by an amount it determines to be
appropriate. Xxxxxxxx'x annual base salary payable, hereunder, as it may be
increased or decreased from time to time, is referred to herein as "Base
Salary." Base Salary shall be paid in equal installments in accordance with
Employer's payroll practices in effect from time to time for executive officers,
but in no event less frequently than monthly.
(b) Bonus. In addition to Base Salary, Xxxxxxxx may receive an annual
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bonus of an amount to be determined by the Board in its sole discretion, taking
into consideration individual and corporate performance. Further, Xxxxxxxx shall
be entitled to receive with respect to each fiscal year during the Employment
Term a nondiscretionary bonus if the EBITDA (as, defined on Schedule I hereto)
of Parent and its subsidiaries in such fiscal year exceeds certain targets. The
amount and calculation of such bonus are described with particularity on
Schedule I hereto. In no event will (i) the nondiscretionary bonus be payable if
at the time of payment or at any time during the year of measurement the Company
was in material default under any credit agreement relating to indebtedness for
borrowed money or (ii) the annual bonus (including discretionary and
nondiscretionary portions hereof) in any year exceed 75% of Xxxxxxxx'x Base
Salary. The annual bonus with respect to any year, if any, shall be paid within
30 days after the receipt by the Board of audited financial statements for
Parent and its subsidiaries for the pertinent year.
(c) Housing. Commencing April 1, 2002, and ending on the earlier of (i)
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June 1, 2004, or (ii) termination of employment by either party, or (iii) mutual
agreement, the Company will provide to Xxxxxxxx a studio apartment including
furniture and utilities, but excluding incidentals such as towels, bedding,
dishes, cookware, etc., in the greater New Bedford, Massachusetts area.
4. Benefits. Xxxxxxxx shall be eligible to participate in all employee
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benefit programs of Employer offered from time to time during the term of
Xxxxxxxx'x employment hereunder by Employer to employees or executives of
Xxxxxxxx'x rank, to the extent that Xxxxxxxx qualifies under the eligibility
provisions of the applicable plan
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or plans, in each case consistent with Employer's then current practice as
approved by the Board from time to time. The foregoing shall not be construed to
require Employer to establish such plans or to prevent the modification or
termination of such plans once established and no such action or failure thereof
shall affect this Agreement, Xxxxxxxx recognizes that Employer and its
affiliates have the right, in their sole discretion, to amend, modify or
terminate their benefit plans without creating any rights in Xxxxxxxx.
5. Vacation. Xxxxxxxx shall be entitled to up to three weeks of paid
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vacation in the first year, and four weeks thereafter, per calendar year. A
maximum of one week of vacation time may be carried over from calendar year and
into the following calendar year; provided, however, that the vacation time be
exercised prior to the end of the subsequent calendar year.
6. Business Expenses. To the extent that Xxxxxxxx'x reasonable and
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necessary expenditures for travel, entertainment and similar items made in
furtherance of Xxxxxxxx'x duties under this Agreement comply with Employer's
expense reimbursement policy, are wholly or partially deductible by Employer for
federal income tax purposes pursuant to the Internal Revenue Code of 1986, as
amended and are documented and substantiated by Xxxxxxxx as required by the
Internal Revenue Service and the policies of Employer, Employer shall reimburse
Xxxxxxxx for such expenditures; provided documentation, therefor is submitted
not later than 45 days after such expense is incurred.
7. Termination by the Company.
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(a) Employer shall have the right Terminate the Employment Term under
the following circumstances (and also as contemplated by Section 8(b)):
(i) upon the death of Xxxxxxxx;
(ii) in the event of a disability which prevents or seriously
inhibits Xxxxxxxx from performing his duties for 60 consecutive days as
determined in good faith by the Board, upon 30 days written notice from
Employer to Xxxxxxxx; or
(iii) for Cause (as defined below).
"Cause" as used in this Agreement shall mean (i) Xxxxxxxx'x commission of a
felony or any other crime involving moral turpitude, fraud, misrepresentation,
embezzlement or theft, (ii) Xxxxxxxx'x engaging in any activity that is harmful
(including, without limitation, alcoholic or other self-induced affliction), in
a material respect, to the Company or any of its subsidiaries, monetary or
otherwise, as determined by a majority of the Board; (iii) Xxxxxxxx'x material
malfeasance (including without limitation, any intentional act of fraud of
theft); (iv) Xxxxxxxx'x significant violation of any statutory or
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common law duty of loyalty to the Company or any of its subsidiaries; (v)
Xxxxxxxx'x material breach of this Agreement or of a material Company policy
(including without limitation, disclosure or misuse of any confidential or
competitively sensitive information or trade secrets of the Company or a
subsidiary); or (vi) Xxxxxxxx'x refusal or failure to carry out directives or
instructions of the Board that are consistent with the scope and nature of
Xxxxxxxx'x duties and responsibilities set forth herein, in the case of clause
(v) or (vi) above, only if such breach or failure continues for more than 10
days following written notice from Employer describing such breach or failure.
(b) If this Agreement is terminated pursuant to Paragraph 7(a), or for
any other reason (except by Xxxxxxxx pursuant to Paragraph 8 or by Employer
other than pursuant to Paragraph 7(a)), Xxxxxxxx'x rights and Employer's
obligations hereunder shall forthwith terminate except that Employer shall pay
Xxxxxxxx his Base Salary warned but not yet paid through the date of
termination. In addition, if Xxxxxxxx is terminated pursuant to Paragraph
7(a)(i) or 7(a)(ii), Employer shall also pay Xxxxxxxx within 30 days following
receipt of audited financial statements for the year during which such
termination occurred, a prorated annual bonus in respect of the partial year
during which such termination occurred, the amount to be equal to the full
amount of the nondiscretionary bonus, if any, that would be due under Section
3(b) multiplied by a fraction, the numerator of which is the number of days in
such fiscal year prior to such termination and the denominator of which is 365.
8. Termination by Xxxxxxxx.
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(a) Xxxxxxxx shall have the right to terminate the Employment Term for
Good Reason (as defined below), upon 60 days' written notice to the Board given
within 60 days following the occurrence of an event constituting Good Reason;
provided that Employer shall have 10 days after the date such notice has been
given to the Board in which to cure the conduct specified in such notice. For
purpose of this Agreement "Good Reason" shall mean:
(i) The Company's failure to pay or provide when due
Xxxxxxxx'x Base Salary, which failure is not cured within 10 days after
the receipt by the Board from Xxxxxxxx of a written notice referring to
this provision and describing such failure; or
(ii) The failure to continue Xxxxxxxx in his position as
provided in Paragraph 1 or removal of him from such position.
(b) If this Agreement is terminated pursuant to Paragraph 8(a), or if
Employer shall terminate Xxxxxxxx'x employment under this Agreement other than
pursuant to Paragraph 7(a), Xxxxxxxx shall be entitled to the following, which
he acknowledges to
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be fair and reasonable, as his sole and exclusive remedy, in lieu of all other
remedies at law or in equity, for any such termination:
(i) Base Salary earned but not yet paid through the date of
termination;
(ii) a prorated annual bonus in respect of the partial year
during which such termination occurred, the amount to be equal to the
full amount of the nondiscretionary bonus, if any, that would be due
under Section 3(b) multiplied by a fraction, the numerator which is the
number of days in such fiscal year prior to the termination and the
denominator of which is 365; and
(iii) An amount equal to Xxxxxxxx'x actual Base Salary (not
including any bonus paid or payable) for the 12-month period
immediately prior to such termination (or the period during which
Xxxxxxxx was employed by Employer if less than 12 months), payable in
24 equal installments during the 24-month period following such
termination (the "Severance Pay Period").
In the event of any such termination, Xxxxxxxx shall use commercially reasonable
efforts to secure alternative employment. During the last 12 months of the
Severance Pay Period, any compensation, income or benefits earned by or paid to
(in cash or otherwise) Xxxxxxxx as an employee of or consultant to a company
other than the Company shall reduce the amount of severance payments payable
during such 12-month period pursuant to Paragraph 8(b)(iii).
(c) If Xxxxxxxx terminates his employment at any time during the term
of this Agreement other than pursuant to Section 8(a), without limiting or
prejudicing any other legal or equitable rights or remedies which Employer may
have upon such breach by Xxxxxxxx, Xxxxxxxx will receive his Base Salary earned
but not yet paid through the date of termination.
9. Services Unique. Xxxxxxxx recognizes that Xxxxxxxx'x services
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hereunder are of a, special, unique, unusual, extraordinary and intellectual
character giving them a peculiar value, the loss of which cannot be reasonably
or adequately compensated for in damages, and in the event of a breach of this
Agreement by Xxxxxxxx (particularly, but without limitation, with respect to the
provisions hereof relating to the exclusivity of Xxxxxxxx'x services and the
provisions of Paragraph 11), the Company shall, in addition to all other
remedies available to it, be entitled to equitable relief by way of an
injunction and any other legal or equitable remedies. Anything to the contrary
herein notwithstanding, the Company may seek such equitable relief in a federal
or state court in the State of Washington, and Xxxxxxxx hereby submits to
jurisdiction in those courts.
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10. Protection of the Company's Interests. To the fullest extent
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permitted by law, all rights worldwide with respect to any intellectual or other
property of any nature conceived, developed, produced, created, suggested or
acquired by Xxxxxxxx during the period commencing on the date hereof and ending
12 months following the termination of Xxxxxxxx'x employment hereunder shall be
deemed to be a work made for hire and shall be the sole and exclusive property
of Employer. Xxxxxxxx agrees to execute, acknowledge and deliver to Employer at
Employer's request, such further documents, as the Employer finds appropriate to
evidence the Employer's rights in such property. Xxxxxxxx further acknowledges
that in performing his duties hereunder, he will have access to proprietary and
confidential information and to trade secrets of Employer and its affiliates.
Any confidential and/or proprietary information of Employer or its affiliates
shall not be used by Xxxxxxxx or disclosed or made available by Xxxxxxxx to any
person except (i) as required in the course or Xxxxxxxx'x employment or (ii)
when required to do so by a court of law, by any governmental agency having
supervisory authority over the business of Employer or by any administrative or
legislative body (including a committee thereof) with apparent jurisdiction to
order her to divulge, disclose or make accessible such information, it being
understood that Xxxxxxxx will promptly notify Employer of such requirement so
that Employer may seek to obtain a protective order. Upon expiration or earlier
termination of the term of Xxxxxxxx'x employment, Xxxxxxxx shall return to
Employer all such information that exists in written or other physical form (and
all copies thereof) under Xxxxxxxx' control.
11. Non-Competition.
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(a) Exclusivity of Employment. Xxxxxxxx agrees that his employment
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hereunder is on an exclusive basis and that during the Employment Term, he will
not engage in any other business activity. Notwithstanding the foregoing,
nothing in this Agreement shall preclude Xxxxxxxx from serving or engaging in
charitable and public service activities, or engaging in speaking and writing
activities, or from managing his personal investments, provided that such
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activities are disclosed in writing to the Board in a notice that references
this provision and do not interfere with Xxxxxxxx'x availability or ability to
perform his duties and responsibilities hereunder.
(b) Noncompete. Xxxxxxxx agrees that during the Employment Term, and
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the Severance Pay Period (if applicable), and the 24-nionth period thereafter,
he shall not, directly or indirectly, engage in, or participate as an investor
in, an officer, employee, director or agent of, or consultant of, any entity
engaging in any line of business competitive with that of Employer or any of its
subsidiaries, or any line of business which Employer or any of its subsidiaries
is contemplating; provided however that, nothing herein shall prevent him from
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investing as less than a 5% shareholder in the securities of any company listed
on a national securities exchange or quoted on an automated quotation system.
Xxxxxxxx'x participation in an entity in any of the foregoing
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capacities, other than participation described in the foregoing proviso, being
sometimes referred to herein as being a "Participant."
(c) Nonsolicitation of Employees. Xxxxxxxx agrees that during the
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Employment Term and the Severance Pay Period (if applicable), and the 24-month
period thereafter (the "Nonsolicitation Period"), he will not directly or
indirectly, employ, or be a Participant in any entity that employs, any person
previously employed by the Company or any of its subsidiaries or in any way
induce or attempt to induce any person to leave the employment of the Company or
any of its subsidiaries.
(d) Nonsolicitation of Customers. Xxxxxxxx agrees that during the
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Nonsolicitation Period, he will not directly or indirectly, solicit or do
business with, or be a Participant in any entity that solicits Or does business
with, any customer of Employer or any of its subsidiaries, nor shall Xxxxxxxx in
any way induce or attempt to induce any customer of Employer to do business with
any person or entity other than Employer; provided that, the foregoing shall not
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restrict Xxxxxxxx or any entity in which he is a Participant from soliciting or
doing business with any customer of Employer or any of its subsidiaries with
respect to a business that is not competitive with the business of Employer or
any of its subsidiaries or any line of business that Employer or any of its
subsidiaries is contemplating. Notwithstanding the foregoing, after the
expiration of the noncompetition period set forth in Paragraph 11(b), Xxxxxxxx
may participate as an investor in, an officer, employee, director or agent of or
consultant for an entity that does that does business with one or more customers
of Employer so long as Xxxxxxxx has no contact with such customer and has no
direct or indirect involvement in the solicitation of business from any such
customer.
(e) Standstill. Xxxxxxxx agrees that during the Nonsolicitation Period,
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Xxxxxxxx shall not, except at the specific written request of the Board:
(i) engage in or propose, or be a Participant in any entity
that engages in or proposes, a Rule 13e-3 Transaction (as defined in
Rule l3e-3 under the Securities Exchange Act of 1934) or any other
material transaction, between Parent, Employer or any of its
subsidiaries, on the one hand, and Xxxxxxxx or any entity in which
Xxxxxxxx is a Participant, on the other hand;
(ii) acquire any equity securities of Parent, Employer or any
of its subsidiaries (other than partnership units issued to Xxxxxxxx by
Parent or issued to Xxxxxxxx by Parent upon exercise of options issued
to Xxxxxxxx by Parent), or be a participant in any entity that acquires
any equity securities of Parent, Employer or any of its subsidiaries;
(iii) solicit proxies, or be a Participant in any entity that
solicits proxies, or become a participant in any solicitation of
proxies, with respect to the election
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of directors of Parent, Employer or any of its subsidiaries in
opposition to the nominees recommended by the Board of any such entity;
or
(iv) Directly or indirectly, engage in or participate in any
other activity that would be reasonably expected to result in a change
of control of Parent, Employer or any of its subsidiaries.
The foregoing provisions of this Paragraph shall not be construed to prohibit or
restrict the manner in which Xxxxxxxx exercises his voting rights in respect of
partnership units in Parent acquired in a manner that is not a violation of the
terms of this Paragraph 11.
12. Nondisparagement. Xxxxxxxx will not at any time during or after
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this Agreement directly (or through any other person or entity) make any public
or private statements (whether oral or in writing) which are derogatory or
damaging to the Company, its business, activities, operations, affairs,
reputation or prospects or any of its officers, employees, directors or
shareholders. Employer will not at any time during or after the term of this
Agreement directly (or through any other person or entity) make any defamatory
public or private statements (whether oral or in writing) concerning Xxxxxxxx.
13. Representation of the Parties. Xxxxxxxx represents and warrants to
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Employer and Parent that Xxxxxxxx has the capacity to enter into this Agreement
and the other agreements referred to herein, and that the execution, delivery
and performance of this Agreement and such other agreements by Xxxxxxxx will not
violate any agreement, undertaking or covenant to which Xxxxxxxx is party or is
otherwise bound. Each of Employer and Parent represents to Xxxxxxxx that it is a
limited liability company or limited partnership, as applicable, and is duly
organized and validly existing under the laws of the State of Delaware, that it
is fully authorized and empowered by action of its Board or general partner, as
applicable, to enter into this Agreement and the other agreements referred to
herein, and that performance of its obligations under this Agreement and such
other agreements will not violate any agreement between it and any other person,
firm or other entity.
14. Notices. All notices given under this Agreement shall be in writing
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and shall be deemed to have been duly given (a) when delivered personally, (b)
three business days after being mailed by first class certified mail, return
receipt requested, postage prepaid, (c) one business day after being sent by a
reputable overnight delivery service, postage or delivery charges prepaid, or
(d) on the date on which a facsimile is transmitted to the parties at their
respective addresses stated below. Any party may change its address for notice
and the address to which copies must be sent by giving notice of the new
addresses to the other parties in accordance with this Paragraph 15, except that
any such change of address notice shall riot be effective unless and until
received.
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If to the Employer or Parent:
American Seafoods International LLC
00 Xxxxxx Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxx
If to Employee:
Xx. Xxxx X. Xxxxxxxx
0 Xxx Xxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
15. Entire Agreement; Amendments, Waivers, Etc.
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(a) No amendment or modification of this Agreement shall be effective
unless set forth in writing signed by the Company and Xxxxxxxx, No waiver by
either party of any breach by the other party of any provision or condition of
this Agreement shall be deemed a waiver of any similar or dissimilar provision
or condition at the same or any prior or subsequent time. Any waiver must be in
writing and signed by the waiving party.
(b) This Agreement, together with the Exhibits and Schedules hereto and
the documents referred to herein and therein, sets forth the entire
understanding and agreement of the parties with respect to the subject matter
hereof and supersedes all prior oral and written understandings and agreements.
There are no representations, agreements, arrangements or understandings, oral
or written, among the parties relating to the subject matter hereof which are
not expressly set forth herein, and no party hereto has been induced to enter
into this Agreement, except by the agreements expressly contained herein.
(c) Nothing herein contained shall be construed so as to require the
commission of any act contrary to law, and wherever there is a conflict between
any provision of this Agreement and any present or future statute, law,
ordinance or regulation, the latter shall prevail, but in such event the
provision of this Agreement affected shall be curtailed and limited only to the
extent necessary to bring it within legal requirements.
(d) This Agreement shall inure to the benefit of and be enforceable by
Xxxxxxxx and his heirs, executors, administrator and legal representatives, by
the Company and its successors and assigns and by Parent and its successors and
assigns. This Agreement and all rights hereunder are personal to Xxxxxxxx and
shall not be assailable. Each of the Company and Parent may assign its rights
under this Agreement
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to any successor by merger, consolidation, purchase of all or substantially all
of its and its subsidiaries' assets, or otherwise; provided that such successor
assumes all of the liabilities, obligations and duties of the Company under this
Agreement, either contractually or as a matter of law.
(e) If any provision of this Agreement or the application thereof is
held invalid, the invalidity shall not affect the other provisions or
application of this Agreement that can be given effect without the invalid
provisions or application, and to this end the provisions of this Agreement are
declared to be severable.
16. Governing Law. This Agreement shall be governed by and construed in
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accordance with the laws the State of Washington without reference to principles
of conflict of laws.
17. Right to Equitable Relief. Xxxxxxxx recognizes that Employer will
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have no adequate remedy at law for his breach of any provision of Paragraph 10,
11 or 12 and in the event of any such breach or threatened breach he agrees that
Employer shall be entitled to obtain equitable relief in addition to other
remedies available at law and/or hereunder.
18. Taxes. All payments required to be made at Xxxxxxxx hereunder,
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whether during the term of his employment hereunder or otherwise shall be
subject to all applicable federal, state and local tax withholding laws.
19. Headings, Etc. The headings set forth herein are included solely
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for the purpose of identification and shall not be used for the purpose of
construing the meaning of the provisions of this Agreement. Unless otherwise
provided, references herein to Exhibits, Schedules and Paragraphs refer to
Exhibits and Schedules to and Paragraphs of this Agreement.
20. Arbitration. Any dispute or controversy between Employer and
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Xxxxxxxx, arising out of or relating to this Agreement, the breach of this
Agreement, or otherwise, shall be settled by arbitration in Seattle, Washington,
administered by the American Arbitration Association in accordance with its
Commercial Rules then in effect and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator shall have the authority to award any remedy or relief that a court
of competent jurisdiction could order or grant, including, without limitation,
the issuance of an injunction. However, either party may, without inconsistency
with this arbitration provision, apply to any court having jurisdiction over
such dispute or controversy and seek interim provisional, injunctive or other
equitable relief until the arbitration award is rendered or the controversy is
otherwise resolved. Except as necessary in court proceedings to enforce this
arbitration provision or an award rendered hereunder, or to obtain interim
relief, neither a party nor an arbitrator may disclose the
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existence, content or results of any arbitration hereunder without the prior
written consent of Employer and Xxxxxxxx.
21. Survival. Xxxxxxxx'x obligations under the provisions of Paragraphs
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10, 11 and 12, as well as the provisions of Paragraphs 6, 7(b), 8(b) and 15
through and including 19 and Paragraph 22, shall survive the termination or
expiration of this Agreement.
22. Construction. Each party has cooperated in the drafting and
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preparation of this Agreement. Therefore, in any construction to be made of this
Agreement, the same shall not be construed against any party on the basis that
the party was the drafter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written
EMPLOYER:
AMERICAN SEAFOODS INTERNATIONAL LLC
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: CEO
EMPLOYEE:
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
AMERICAN SEAFOODS:
AMERICAN SEAFOODS, L.P.
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: CEO
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SCHEDULE I
BONUS CALCULATION
Subject to the terms and conditions of Section 3(b) (including the
requirement that there shall have occurred no default under credit agreements
applicable to Employer or its affiliates), the non-discretionary bonus described
in Section 3(b) for any fiscal year shall be equal to (i) if EBITDA for such
fiscal your is less than 80% of Target EBITDA for such fiscal year, zero
dollars; (ii) if EBITDA for such fiscal year exceeds 120% of Target EBITDA for
such fiscal year, 75% of Cumming's Base Salary earned for such fiscal year; and
(iii) if neither (i) nor (ii) applies, the product of 75% of Cumming's Base
Salary earned during such fiscal year multiplied by a fraction, the numerator of
which is the amount by which EBITDA for such fiscal year exceeds 80% of Target
EBITDA for such fiscal year, and the denominator of which is 40% of Target
EBITDA for such fiscal year. Such bonus shall be determined by the Board in good
faith on the basis of the audited financial statement of Parent and its
subsidiaries.
For these purposes:
"EBITDA" means, for any period, the sum of the amounts for such period
of (i) net income (or loss) (excluding (I) interest income, (II) non cash income
items (other than ordinary accruals) and (III) extraordinary items), plus (ii)
to the extent deducted in determining consolidated net income, (x) interest
expense, (y) provisions for taxes based on net income and (z) depreciation and
amortization expense, each as determined for the Partnership and its
subsidiaries on a consolidated basis in accordance with generally accepted
accounting principles, consistently applied, except that no effect shall be
given to non cash gains and losses on foreign exchange contracts. EBITDA for any
period shall be determined by the Board acting in good faith following receipt
of audited financial statements for the relevant period and shall reflect as
expenses (determined on an iterative basis if necessary) any bonuses payable in
respect of such year.
"Target EBITDA" means, for any fiscal year, the amount set forth in the
table below opposite such fiscal year.
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EBITDA Comments
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2002 ASG 109.9 50% of non-discretionary bonus
ASI 4.2 50% of non-discretionary bonus
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2003 ASI TBD 100% of non-discretionary bonus
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2004 ASI TBD 100% of non-discretionary bonus
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