EXHIBIT 10.51 Execution Copy (2)
EXECUTIVE EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (the "Agreement"), effective as of July
15, 1997, by and among MCC-DSD HOLDINGS, INC., a Delaware
corporation ("Holdings"), MOTHER'S CAKE & COOKIE CO., a
California corporation ("Mother's), SPECIALTY FOODS CORPORATION,
a Delaware corporation ("SFC"), and XXXXXXX X. X'XXX (the
"Executive"). Holdings, Mother's and SFC are each sometimes
herein referred to individually as an "Employer" and are
sometimes referred to collectively as the "Employers."
The Employers wish to employ the Executive, and the
Executive wishes to accept such employment, on the terms and
conditions set forth in this Agreement.
Accordingly, the Employers and the Executive hereby agree as
follows:
1. Employment, Duties and Acceptance.
1.1 Employment Duties. The Employers hereby employ
the Executive for the Term (as defined in Section 2), to render
exclusive and full-time services to the Employers, as the
President and Chief Executive Officer of Holdings and Mother's
(or in such other capacity as may be agreed to in writing by the
parties to this Agreement), and to perform such other duties
(consistent with the customary duties of a corporate officer of a
subsidiary corporation as may be assigned to the Executive by the
Board of Directors of SFC, Holdings and Mother's (collectively,
the "Boards"), and the Chief Executive Officer of SFC.
1.2 Acceptance. The Executive hereby accepts such
employment and agrees to render the services described above.
During the Term, the Executive agrees to devote the Executive's
entire business time, energy and skill to such employment, and to
use the Executive's best efforts, skill and ability to promote
the Employers' interests. The Executive further agrees to accept
election, and to serve during all or any part of the Term, as an
officer or director of any subsidiary of either Employer, without
any compensation therefor other than that specified in this
Agreement, if elected to any such position by the shareholders of
either Employer or the shareholders or Board of Directors of any
such subsidiary, as the case may be.
2. Terms of Employment.
2.1 The Term. The term of the Executive's employment
under this Agreement (the "Term") shall commence as of the date
of this Agreement (the "Effective Date") and shall, unless sooner
terminated pursuant to Section 2.2 hereof, end on December 31,
2000. If the Executive remains employed by the Employers after
December 31, 2000, then the Term shall be deemed to be ended and
the Executive's employment shall be employment at will unless the
parties otherwise agree in writing.
2.2 Early Termination. The Term shall end earlier
than the December 31, 2000 if sooner terminated pursuant to
Article 4.
3. Compensation; Benefits.
3.1 Salary. As compensation for all services to be
rendered pursuant to this Agreement, the Employers agree to pay
the Executive a base salary at an annual rate of $280,000 (the
"Base Salary"). The annual Base Salary rate may be increased
from time to time, in the sole discretion of the Boards.
3.2 Bonus; Relocation Allowance.
3.2.1 In addition to the amounts to be paid to
the Executive pursuant to Section 3.1, the Executive will be
eligible to receive with respect to each fiscal year of the
Employers commencing with their fiscal year ending December 31,
1997, an incentive bonus (the "Incentive Bonus") equal to a
percentage of Base Salary for such fiscal year based on the
achievement by the Employers of performance targets ("Performance
Targets") to be set in the beginning of such fiscal year by the
compensation committee of the Boards, such that if the minimum
Performance Target is not achieved, the Incentive Bonus shall be
zero; if the intermediate Performance Target is achieved, the
Incentive Bonus shall be equal to 75% of Base Salary; and if the
maximum Performance Target is achieved, the Incentive Bonus shall
be equal to 150% of Base Salary (provisions for pro rata
Incentive Bonus amounts for achievements between the minimum
Performance Target and the intermediate Performance Target or
between the intermediate Performance Target and the maximum
Performance Target, as the case may be, shall also be
established). The Incentive Bonus for each fiscal year shall be
paid to the Executive within 30 days of the receipt by the
Employers of their audited financial statements for such fiscal
year. Notwithstanding anything herein to the contrary, Executive
shall, subject to the Employers meeting required performance
objectives, receive a bonus for the year ended December 31, 1997
calculated in a manner as if the Executive had been employed by
the Employers pursuant to this Agreement beginning on January 1,
1997. Notwithstanding the foregoing, in no event shall the bonus
payable to the Executive for the year ended December 31, 1997 be
less than $70,000.
3.2.2 In addition to the amounts to be paid to
the Executive pursuant to Section 3.1, the Executive will be
eligible to receive a relocation bonus equal to $30,000 per year
on July 15, 1997, April 1, 1998 and April 1, 1999; provided that
Executive remains employed by the Company on each such date (the
"Relocation Bonus").
3.3 Business Expenses. The Employers shall pay or
reimburse the Executive for all reasonable expenses actually
incurred or paid by the Executive during the Term in the
performance of the Executive's services under this Agreement,
upon presentation of expense statements or vouchers or such other
supporting information as the Employers customarily require of
their other senior executives.
3.4 Vacation. During the Term, the Executive shall be
entitled to a paid vacation period or periods taken in accordance
with the vacation policy of the Employers during each year of the
Term; provided, that the Executive shall be entitled to not less
than four (4) weeks paid vacation for each year of the Term.
Vacation time not taken in the year it is granted shall not carry-
over to the following year.
3.5 Fringe Benefits; Securities Investment; Stock
Options.
3.5.1 Benefits. During the Term, the
Executive shall be entitled to all benefits for which the
Executive shall be eligible under any long term incentive plan,
qualified pension plan, 401(k) plan, annuity plan, group
insurance plan or other so-called "fringe" benefit plan which
Mother's provides to its executive officers generally.
3.5.2 Management Option and Bonus. The
Executive shall participate in the management stock option plan
(the "Option Plan") of the Employers and may from time to time
receive grants in addition to the grants Executive has already
received.
3.6 Withholding. All compensation of the Executive by
the Employers provided for in this Agreement, whether in the form
of cash, securities or "fringe" benefits, shall be subject to
such deductions or amounts to be withheld as required by
applicable law and regulations. Whenever compensation provided
for under this Agreement is to be delivered to the Executive in a
form other than cash, the Employers may require as a condition of
delivery that the Executive remit to the Employers an amount
sufficient to satisfy all federal, state and other governmental
withholding tax requirements related thereto. If the
compensation referred to in the preceding sentence is in the form
of securities (whether by the vesting of securities or
otherwise), the Employers shall, if the Executive so requests and
the Employers consent (such consent not to be withheld
unreasonably), satisfy the requirements of the preceding
sentence, to the extent permitted by applicable law, by deducting
from the number of securities otherwise deliverable to the
Executive, a number of securities having a fair market value
equal to the amount required to satisfy all federal, state and
other governmental withholding tax requirements related thereto.
3.7 Source of Payment; Nature of Certain Payments.
Any amounts payable to or on behalf of the Executive under this
Agreement shall be paid by Mother's unless the Executive
otherwise consents in writing.
4. Termination.
4.1 Death. If the Executive shall die during the
Term, upon the date of the Executive's death the Term shall
terminate and no further amounts or benefits shall be payable
hereunder, except that the Employers shall be obligated to pay to
the Beneficiary (as defined below) in exchange for a release in
form and substance acceptable to the Employers acting reasonably,
within 60 days of the date of the Executive's death, (i) all
unpaid Base Salary accrued through and including the date of the
Executive's death, (ii) a lump sum amount equal to Base Salary
for one year, at the rate in effect on the date of the
Executive's death (the "Annual Base Salary Upon Death"), (iii) a
lump sum equal to $30,000 representing the amount of one
Relocation Bonus payable to the Executive, and (iv) an additional
lump sum bonus amount equal to the sum of (x) 75% of Annual Base
Salary Upon Death and (y) 75% of Annual Base Salary Upon Death
pro rated for the period commencing on the first day of the
fiscal year during which the Executive's death occurred and
ending on the date of Executive's death; it being understood that
such 75% bonus level has been agreed to in satisfaction of any
actual bonus for the year in which the Executive's death occurs
because it is impossible to determine the performance of the
Employers for future periods. The "Beneficiary" shall be (i) the
beneficiary designated by the Executive on a form prescribed for
such purpose by the Employers, or (ii) in the absence of such
designation, the Executive's executor or legal representative.
4.2 Disability. If during the Term the Executive
shall become physically or mentally disabled, whether totally or
partially, such that the Executive is unable to perform the
Executive's services hereunder for (i) a period of six
consecutive months, or (ii) for shorter periods aggregating six
months during any twelve month period, the Employers may on any
day (the "Disability Termination Date") after the last day of the
six consecutive months of disability or the day on which the
shorter periods of disability shall have equaled an aggregate of
six months (but, in each case, before the Executive has recovered
from such disability), by written notice to the Executive,
terminate the Term (a "Disability Termination") and no further
amounts or benefits shall be payable hereunder, except that the
Employers shall be obligated to pay to the Executive in exchange
for a release in form and substance acceptable to the Employers
acting reasonably, within 60 days of the Disability Termination
Date, (i) all unpaid Base Salary accrued through and including
the Disability Termination Date, (ii) a lump sum amount equal to
Base Salary for one year, at the rate in effect on the Disability
Termination Date (the "Annual Base Salary Upon Disability"),
(iii) a lump sum equal to $30,000 representing the amount of one
Relocation Bonus payable to the Executive, and (iv) an additional
lump sum bonus amount equal to the sum of (x) 75% of Annual Base
Salary Upon Disability and (y) 75% of Annual Base Salary Upon
Disability prorated for the period commencing on the first day of
the fiscal year during which the Disability Termination occurred
and ending on the Disability Termination Date; it being
understood that such 75% bonus level has been agreed to in
satisfaction of any actual bonus for the year in which the
Executive's death occurs because it is impossible to determine
the performance of the Employers for future periods. If the
Executive shall die before receiving all amounts required to be
paid by the Employers in accordance with the foregoing, such
amounts shall be paid to the Beneficiary.
4.3 Cause; Voluntary Termination.
4.3.1 In the event of the conviction of the
Executive of any felony involving intentional conduct on the part
of the Executive, the conviction of the Executive of any lesser
crime or offense involving the illegal use or conversion of
property of the Employers or any of their subsidiaries or
affiliates, the willful misconduct by the Executive in connection
with the performance of the Executive's duties hereunder (which
shall not be deemed to include an action by the Executive taken
in good faith in the best interest of the Employers) or the
continued breach by the Executive of any material provision of
this Agreement after notice of such breach has been actually
received by the Executive from the Employers (the "deemed
receipt" provisions of Article 8 hereof being inapplicable to
this Section 4.3.1), the Employers may at any time, by written
notice to the Executive, terminate the Term (a "Termination For
Cause") and, upon such Termination For Cause, the Term shall
terminate and the Executive shall be entitled to receive no
further amounts or benefits hereunder; provided, that the
Employers shall be obligated to pay to the Executive in exchange
for a release in form and substance acceptable to the Employers
acting reasonably, within 60 days of the date of termination, all
unpaid Base Salary accrued, and provide the Executive with all
benefits and expense reimbursement to which the Executive would
otherwise be entitled, through and including the date of
termination.
4.3.2. Upon a voluntary termination of the term
by the Executive (a "Voluntary Termination") without Good Reason
(as defined in Section 4.4.2), the Term shall terminate and the
Executive shall be entitled to receive no further amounts or
benefits hereunder; provided, that the Employers shall be
obligated to pay to the Executive in exchange for a release in
form and substance acceptable to the Employers acting reasonably,
within 60 days of the date of termination, all unpaid Base Salary
accrued, and provide the Executive with all benefits and expense
reimbursement to which the Executive would otherwise be entitled,
through and including the date of termination.
4.4 Termination by Employers Without Cause;
Termination by the Executive for Good Reason.
4.4.1 Upon a Termination Without Cause (as
defined below) or a Voluntary Termination with Good Reason (as
defined below):
(a) the Employers shall pay to the
Executive, within 60 days of the date of termination, all unpaid
Base Salary accrued, and provide the Executive with all benefits
and expense reimbursement to which the Executive would otherwise
be entitled, through and including the date of termination,
(b) subject to Sections 4.4.4 and 4.4.6, the
Employers shall, in exchange for a release in form and substance
acceptable to the Employers acting reasonably, pay the following
to the Executive:
(i) the Employers shall continue
payments of Base Salary to the Executive (the
"Continued Salary"), at the rate and at such times as
are in effect on the date of termination (the "Base
Salary Upon Termination"), for the 12 month period
following the date of termination (the "Payment
Period"),
(ii) the Employers shall continue
medical, dental and life insurance benefits during the
Payment Period (the "Continued Benefits"),
(iii) the Employers shall pay
$30,000 on the date April 1 occurring during the
Payment Period in satisfaction of the Relocation Bonus
payable to the Executive on such date, and
(iv) the Employers shall pay to the
Executive, at the end of the Payment Period, a bonus
(the "Continued Bonus," and together with the Continued
Salary and the Continued Benefits, the "Continued
Payments") in an amount equal to 75% of the aggregate
base salary paid to the Executive during the period
commencing on the day after the last day of the last
fiscal year completed prior to the date of termination
and ending on the last day of the Payment Period; it
being understood that such 75% bonus level has been
agreed to because it is impossible to determine the
performance of the Employers for future periods.
4.4.2 Definitions:
(a) "Termination Without Cause" means the
termination of the Term by the Employers for reasons other than
those described in Sections 4.1, 4.2 or 4.3.
(b) "Good Reason" means the continuation of
any of the following (without the Executive's express prior
consent) after written notice provided by the Executive and the
failure by the Employers to remedy such event within thirty (30)
days after receipt of such notice:
(i) a reduction in the Executive's
Base Salary, as in effect at the date hereof pursuant
to Section 2.2 or as in effect pursuant to increases
from time to time made during the Term;
(ii) failure by the Employers to
pay to the Executive an Incentive Bonus or Relocation
Bonus, to the extent earned as provided for in this
Agreement;
(iii) a failure by the
Employers to provide any benefit or compensation plan
(including any pension, profit sharing, annuity, life
insurance, health, accidental death or dismemberment or
disability plan), or any substantially similar benefit
or compensation plan, which has been made available to
other comparable executives of Mother's on terms no
less favorable to the Executive than the terms offered
to such other executives; provided, however, that
nothing in this clause (iii) shall be construed to mean
that the Employers shall be constrained from amending
or eliminating any benefit or compensation plan as such
is applied to the Executive and to other comparable
executives of Mother's; provided, further, that a
failure by the Employers to include the Executive in
any stock option plan or bonus plan shall not
constitute Good Reason hereunder;
(iv) the assignment to the
Executive of any duties materially inconsistent with
the Executive's position as an executive officer of
Mother's;
(v) a materially adverse change in
the Executive's title or the line of authority through
which the Executive is required to report (it being
understood that the Executive shall at all times report
to either the Chief Executive Officer or the Chief
Operating Officer of SFC) without the prior written
consent of the Executive;
(vi) any reason whatsoever upon the
election of the Executive at any time during the period
occurring 90 to 180 days after the sale by SFC of a
majority of the capital stock of Holdings or Mother's
or all or substantially all of the assets of Mother's;
(vii) a relocation of the
corporate headquarters of Mother's requiring the
Executive to relocate to a place other than the greater
San Francisco Bay area; or
(viii) any material breach of
this Agreement by the Employers.
4.4.3 In the event of a Termination Without
Cause or a Voluntary Termination for Good Reason, the Executive
shall not be required to mitigate his damages hereunder;
provided, however, that, notwithstanding the foregoing, if there
are any damages hereunder by reason of the events of termination
described above which are "contingent on" a Section 280G Change
(as defined below) within the meaning of Section 280G(b)(2)(A) of
the Code after a Public Offering (as defined below) (i) the
Executive shall be required to mitigate such damages hereunder,
including any such damages theretofore paid, but not in excess of
the extent, if any, necessary to prevent the Employers from
losing any tax deductions to which they would otherwise be
entitled in connection with such damages if they were not so
"contingent on" a Section 280G Change (provided, that, the
parties agree that this clause (i) shall not require the
Executive to violate Section 5.2 hereof) and (ii) in addition to
any obligation under the preceding clause (i), and without
duplication of any amounts required to be paid to the Employers
thereunder, if any such termination occurs and the Executive,
whether or not required to mitigate his damages under clause (i)
above, thereafter obtains other employment, the total
compensation received in connection with such other employment,
whether paid to the Executive or deferred for his benefit, for
services prior to the end of the Modified Payment Period (as
defined below) (up to the aggregate amount of damages described
in Section 4.4.1(b)) shall be paid over to the Employers as
received with respect to such period. Notwithstanding the
provisions of this Section 4.4.3, the Employers shall not have
the right to enforce their rights under this Section 4.4.3 by set
off against or by otherwise withholding any amounts receivable by
the Executive (or payable on the Executive's behalf) under this
Agreement upon or following the time at which they are required
to be paid under this Agreement.
4.4.4 In the event that any amounts or other
benefit payable pursuant to Section 4.4 or 4.5 (other than
Section 4.4.6) (including, but not limited to, the Continued
Payments, the receipt of any security upon the exercise of any
Option, or the lapse of any direct or indirect restriction on the
ability to transfer any such security for the fair market value
thereof) would be deemed "contingent on" a Section 280G Change
(within the meaning of Section 280G(b)(2)(A) of the Code) that
occurs subsequent to a Public Offering:
(a) the Continued Salary shall be paid, the
Continued Bonus shall be calculated by reference to and the
Continued Benefits shall be provided for the shorter of (i) 12
months following the date of termination, and (ii) the remainder
of the Term (even if such remaining period is less than twelve
months) (the "Modified Payment Period"), and
(b) the Continued Salary and the Continued
Bonus (as modified in clause (a) of this Section 4.4.4) shall be
paid to the Executive by the Employers, within 60 days of the
date of termination, in a lump sum, which lump sum shall be
discounted to the present value, on the date of payment, of the
Continued Salary (as if paid at the times the Base Salary would
have been paid to the Executive under Section 2.2 if the
Executive had been employed by the Employers during the Modified
Payment Period) and the Continued Bonus (as if paid on the last
day of the Modified Payment Period) at the Discount Rate.
"Discount Rate" shall mean the discount rate described in Section
280G(d)(4) of the Code. The parties hereby elect, to the extent
permitted for purposes of such Section 280G(d)(4), to base the
Discount Rate on the applicable federal rate in effect on the
date hereof.
4.4.5 It is the intention of the parties that,
if there has been a Public Offering and a Section 280G Change
occurs, payments to be made to the Executive in the event of a
Termination Without Cause or a Voluntary Termination for Good
Reason qualify as "reasonable compensation for personal services
to be rendered on or after the date of the change" within the
meaning of Section 280G(b)(4)(A) of the Code and Q&A 42(b) of
Proposed Regulation Section 1.280G-1 thereunder (as amended from
time to time), and the provisions of this Agreement shall, in the
event of any ambiguity, be interpreted in a manner consistent
with the foregoing.
4.4.6 For purposes of this Agreement:
(a) A "Section 280G Change" shall mean a
"change in the ownership or effective control" of either Employer
or a "change .in the ownership of a substantial portion of the
assets" of either Employer, in each case within the meaning of
Section 280G(b)(2)(A)(i) of the Code.
(b) A "Public Offering" shall mean an
initial public offering of stock of either Employer if at any
time thereafter stock of either Employer is "readily tradable on
an established securities market or otherwise" (within the
meaning of Section 280G(b)(5)(A)(ii) of the Code).
5. Protection of Confidential Information: Non-
Competition; No Solicitation.
5.1 In view of the fact that the Executive's work for
the Employers will bring the Executive into close contact with
many confidential affairs of the Employers not readily available
to the public, and plans for future developments, the Executive
agrees:
5.1.1 To keep and retain in the strictest
confidence all confidential matters of the Employers, including,
without limitation, to the extent the following are confidential,
trade "know how," secrets, customer lists, pricing policies,
operational methods, technical processes, formulae, inventions
and research projects, and other business affairs of the
Employers, learned by the Executive heretofore or hereafter, and
not to disclose them to anyone outside of the Employers, either
during or after the Executive's employment with the Employers,
except in the course of performing the Executive's duties
hereunder or with the Employers' express written consent; and
5.1.2 To deliver promptly to the Employers on
termination of the Executive's employment by the Employers, or at
any time the Employers may so request, all memoranda, notes,
records, reports, manuals, drawings, blueprints and other
documents (and all copies thereof) relating to the Employers'
business and all property associated therewith, which the
Executive may then possess or have under the Executive's control
unless such information is necessary to enable the Executive to
file any federal or state tax return or make any other report or
filing or take any other action required by any law, regulation
or order of any court or regulatory commission, department or
agency.
Notwithstanding the foregoing, nothing contained
in this Section 5.1 shall restrict the Executive from using,
disclosing or retaining any information (i) which is in the
public domain or could readily be known or determined without
being employed by the Employers or which enters the public domain
through no breach of the Executive's obligations to the
Employers, (ii) which the Executive acquired prior to his
employment by the Employers, (iii) which the Executive properly
acquired or acquires from parties independent of the Employers,
(iv) which the Executive is required to disclose by law,
regulation, order or legal process, (v) which is desirable to
establish the Executive's claim or defense in any litigation
between the parties, provided that the Executive uses his best
efforts to ensure that confidential treatment will be afforded
such information.
5.2 During the term of the Executive's employment by
the Employers and, in the event of the termination of the
Executive's employment for any reason, for the 180-day period
immediately following the date of termination, the Executive
shall not, directly or indirectly, enter the employ of, or render
any services to, any person, firm or corporation engaged in any
business competitive with the business of the Employers or of any
of their subsidiaries; in any state in which any such business is
conducted or in which the Employers have specific plans to
conduct business at the time of such termination, the Executive
shall not engage in such business on the Executive's own account;
and the Executive shall not become interested in any such
business, directly or indirectly, as an individual, partner,
shareholder, director, officer, principal, agent, employee,
trustee, consultant, or in any other relationship or capacity;
provided, however, that nothing contained in this Section 5.2
shall be deemed to prohibit the Executive from acquiring, solely
as an investment, up to one percent (1%) of the outstanding
shares of capital stock of any public corporation. The Executive
shall not be deemed to be in breach of this Section 5.2 because
(i) a public corporation of which he owns more than 1% of the
outstanding capital stock begins to engage in any such prohibited
activities or (ii) his ownership interest in a public corporation
engaged in such activities increases to more than 1% of such
corporation's issued and outstanding capital stock in either case
without any volitional act on the part of the Executive, if, in
the case of either clause (i) or (ii) above, within sixty (60)
days of learning of such event, the Executive disposes of the
amount of capital stock necessary to cause his ownership to be
less than 1% of the amount of such capital stock issued and
outstanding.
5.3 When the Executive's employment by the Employers
terminates for any reason whatsoever, then during the period
commencing on the date of such termination and ending on the
second anniversary thereof, the Executive shall not without the
express written consent of SFC, directly or indirectly, (i)
solicit any employee of the Employers or of any of their
subsidiaries to terminate his employment with the Employers or
with such subsidiary or (ii) hire any such employee.
5.4 If the Executive commits a breach, or threatens to
commit a breach, of any of the provisions of Sections 5.1, 5.2 or
5.3 hereof, the Employers shall have, in addition to any other
remedies they may have, the following rights and remedies:
5.4.1 The right and remedy to have the
provisions of this Agreement specifically enforced by any court
having equity jurisdiction, it being acknowledged and agreed that
any such breach or threatened breach will cause irreparable
injury to the Employers and that money damages will not provide
an adequate remedy to the Employers; and
5.4.2 The right and remedy to require the
Executive to account for and pay over to the Employers all
compensation, profits, monies, accruals, increments or other
benefits (collectively "Benefits") derived or received by the
Executive as the result of any transactions constituting a breach
of any of the provisions of the preceding paragraph, and the
Executive hereby agrees to account for and pay over such Benefits
to the Employers.
5.4.3 Each of the rights and remedies
enumerated above shall be independent of the other, and shall be
severally enforceable, and all of such rights and remedies shall
be in addition to, and not in lieu of, any other rights and
remedies available to the Employers under law or in equity.
5.5 If any of the covenants contained in Section 5.1,
5.2 or 5.3, or any part thereof, hereafter is construed to be
invalid or unenforceable, the same shall not affect the remainder
of the covenant or covenants, which shall be given full effect,
without regard to the invalid portions.
5.6 If any of the covenants contained in Section 5.1,
5.2 or 5.3, or any part thereof, is held to be unenforceable
because of the duration of such provision or the area covered
thereby, the parties agree that the court making such
determination shall have the power to reduce the duration and/or
area of such provision and, in its reduced form, said provision
shall then be enforceable.
5.7 The parties hereto intend to and hereby confer
jurisdiction to enforce the covenants contained in Sections 5.1,
5.2 and 5.3 upon the courts of any state within the geographical
scope of such covenants where the Executive is engaged in
activities in violation of such covenants or the Employers are
damaged or harmed in any way by the Executive's violation of such
covenants. In the event that the courts of any one or more of
such states shall hold such covenants wholly unenforceable by
reason of the breadth of such covenants or otherwise, it is the
intention of the parties hereto that such determination not bar
or in any way affect the Employers' right to the relief provided
above in the courts of any other states within the geographical
scope of such covenants as to breaches of such covenants in such
other respective jurisdictions, the above covenants as they
relate to each state being for this purpose severable into
diverse and independent covenants.
6. Inventions and Patents. The Executive agrees that all
processes, technologies and inventions (collectively
"Inventions"), including new contributions, improvements, ideas
and discoveries, whether patentable or not, conceived, developed,
invented or made by him while employed by the Employers shall
belong to the Employers, provided that such Inventions grew out
of the Executive's work with the Employers or any of their
subsidiaries or affiliates, are related in any manner to the
business (commercial or experimental) of the Employers or any of
their subsidiaries or affiliates or are conceived or made on the
Employers' time or with the use of the Employers' facilities or
materials. The Executive shall further: (a) promptly disclose
such Inventions to the Employers; (b) assign to the Employers,
without additional compensation, all patent and other rights to
such Inventions for the United States and foreign countries; (c)
sign all papers necessary to carry out the foregoing; and (d)
give testimony in support of the Executive's inventorship.
7. Intellectual Property. The Employers shall be the
exclusive owners of all the products and proceeds of the
Executive's services with the Employers, including, but not
limited to, all materials, ideas, concepts, formats, suggestions,
developments, arrangements, packages, programs and other
intellectual properties that the Executive may acquire, obtain,
develop or create in connection with and during the Executive's
employment by the Employers, free and clear of any claims by the
Executive (or anyone claiming under the Executive) of any kind or
character whatsoever (other than the Executive's right to receive
payments hereunder). The Executive shall, at the request of the
Employers, execute such assignments, certificates or other
instruments as the Employers may from time to time deem necessary
or desirable to evidence, establish, maintain, perfect, protect,
enforce or defend their right, title or interest in or to any
such properties.
8. Notices. All notices, requests, consents and other
communications required or permitted to be given hereunder shall
be in writing and shall be deemed to have been duly given if
delivered personally, sent by overnight courier or mailed first-
class, postage prepaid, by registered or certified mail (notices
mailed shall be deemed to have been given on the date mailed) or
sent by telecopier, as follows (or to such other address as
either party shall designate by notice in writing to the other in
accordance herewith):
If to the Employers, to:
Specialty Foods Acquisition Corporation
Specialty Foods Corporation
000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Telecopier: 847/405-5310
Attention: Chief Executive Officer
If to the Executive, to:
Xx. Xxxxxxx X. X'Xxx
c/o Mother's Cake & Cookie Co.
000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Telecopier: 510/613-0621
9. General.
9.1 This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Illinois
applicable to agreements made and to be performed entirely in
Illinois.
9.2 The section headings contained herein are for
reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
9.3 This Agreement sets forth the entire agreement and
understanding of the parties relating to the subject matter
hereof, and supersedes all prior agreements, arrangements and
understandings, written or oral, relating to the subject matter
hereof. No representation, promise or inducement has been made
by either party that is not embodied in this Agreement, and
neither party shall be bound by or liable for any alleged
representation, promise of inducement not so set forth.
9.4 This Agreement, and the Executive's rights and
obligations hereunder, may not be assigned by the Executive. The
Employers may assign their rights, together with their
obligations, hereunder (i) to any subsidiary of or successor-in-
interest to any of them, or (ii) to third parties in connection
with any sale, transfer or other disposition of all or
substantially all of the business or assets of any of them; in
any event the obligations of the Employers hereunder shall be
binding on their successors or permitted assigns, whether by
merger, consolidation or acquisition of all or substantially all
of either of their businesses or assets.
9.5 This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or
covenants hereof may be waived, only by a written instrument
executed by the parties hereto, or in the case of a waiver, by
the party waiving compliance. The failure of a party at any time
or times to require performance of any provision hereof shall in
no manner affect the right at a later time to enforce the same.
No waiver by either party of the breach of any term or covenant
contained in this Agreement, whether by conduct or otherwise, in
any one or more instances, shall be deemed to be, or construed
as, a further or continuing waiver of any such breach, or a
waiver of the breach of any other term or covenant contained in
this Agreement.
9.6 This Agreement or any amendment hereto may be
signed in any number of counterparts, each of which shall be an
original, but all of which taken together shall constitute one
agreement (or amendment as the case may be).
9.7 Survival. The provisions of Sections 5, 6 and 7
shall survive any termination of this Agreement.
10. Certain Definitions.
10.1 As used herein the term "subsidiary" shall mean
any corporation or other business entity controlled directly or
indirectly by the corporation or other business entity in
question, and the term "affiliate" shall mean and include any
corporation or other business entity directly or indirectly
controlling, controlled by or under common control with the
corporation or other business entity in question.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
SPECIALTY FOODS CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: President & CEO
MCC-DSD HOLDINGS, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Vice President
MOTHER'S CAKE & COOKIE CO.
By: /s/ Xxxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Vice President
/s/ Xxxxxxx X. X'Xxx
--------------------
XXXXXXX X. X'XXX
