RETIREMENT AGREEMENT
Exhibit 10.16
This Retirement Agreement (this “Agreement”) is made and entered into as of this 2nd day of
March, 2009 by and between Xxx Xxxxx Farms, Inc., a Delaware corporation the “Company”) and Xxxxx
X. Xxxxxxxx (“Employee”).
WHEREAS, the parties acknowledge it is in their individual and mutual best interests to fully
dispose of any and all claims between them arising out of Employee’s employment with and retirement
from the Company;
NOW, THEREFORE, in exchange for and in consideration of the following mutual covenants and
promises, the undersigned parties, intending to be legally bound, hereby agree as follows:
1. Separation Date. Employee and the Company acknowledge and agree that the
Employee’s last day of employment with the Company was March 2, 2009 (“Separation Date”).
2. Retirement Compensation. In consideration for Employee’s (a) release of any and
all claims Employee may have against the Company, if any, and (b) adherence to each of the terms
and conditions of this Agreement, and provided that Employee has signed this Agreement and has not
later revoked the Agreement as provided herein, the Parties agree that the Company shall make a
lump sum payment to Employee in the amount of Seven Hundred Fifty-Eight Thousand Sixty-Nine Dollars
and Seventy-Six Cents ($758,069.76), less appropriate tax withholding amounts, representing:
| (i) | an amount equivalent to six (6) months of salary; | ||
| (ii) | an amount equal to one (1) week of pay for every two (2) years of service; | ||
| (iii) | a prorated portion of Employee’s annual cash bonus for the Company’s 2009 fiscal year based on the achievement of Employee’s bonus performance goals as of the end of the Company’s third fiscal quarter; | ||
| (iv) | an amount equivalent to salary for ten (10) days of unused vacation; and | ||
| (v) | an amount equivalent to the Company’s contribution for six (6) months worth of coverage under the Company’s Retiree Health Insurance Plan. Such amount will be appropriately increased to account for the taxes Employee will be required to pay on this amount. |
A check for such amount will be delivered to Employee within ten (10) days after this
Agreement becomes irrevocable as set forth herein.
3. Other Benefits, Plans and Agreements. All other benefits and remuneration of any
kind, including bonus plans, life insurance and long term disability insurance, company car and/or
car and gas allowances, shall terminate effective on the Separation Date, except as provided for in
this Agreement, and except for any accrued and vested rights Employee may have in any outstanding
equity awards, the Company’s 401(k) Retirement Plan, the Xxx Xxxxx Farms Third Amended and Restated
Executive Deferral Program (the “BEEDP”), and the Xxx
Xxxxx Farms, Inc. and Affiliates Third Amended and Restated Supplemental Executive Retirement
Plan (the “SERP”). Employee acknowledges and agrees that the Company has paid Employee all wages,
salary, benefits and other compensation (including any accrued but unpaid vacation pay) to which
Employee is entitled and owed. Moreover, except as provided for in this Agreement, Employee shall
not be entitled to receive any other compensation or benefits of any sort from the Company, its
affiliates, or their respective officers, directors, employees, agents, insurance companies,
attorneys, shareholders, or subsidiaries for, without limitation, salary, vacation, bonuses, stock,
stock options, health care continuation coverage or any other compensation or benefits. Employee
also understands and agrees that, by entering into this Agreement, any and all rights Employee had,
have or may hereafter have, under any and all change in control agreements between Employee and the
Company are hereby revoked, extinguished and released.
4. Confidential Information.
4.1 Without the written consent of the Company, Employee shall not use or divulge, furnish,
disclose or make accessible (other than for the benefit of the Company and its affiliates) to any
person or organization for use in any way any Confidential Information (as defined herein) of the
Company or its affiliates.
4.2 As used in this Agreement, “Confidential Information” means any and all confidential or
proprietary information of the Company and its affiliates, including without limitation: trade
secrets (as defined by the laws of the State of Ohio); business plans; financial information;
accounting data; employment or employee-related information; marketing plans and information; sales
information (including sales records, plans and projections); pricing information; supplier and
customer (current and prospective) information; product information (including new products,
recipes, formulas and samples); information related to the sitting of new or existing restaurants;
information related to the design or construction of the Company’s restaurants or plants;
manufacturing processes; hiring and recruitment information; all information relating to the
Company’s goods and services; research and development information; legal information (including
legal issues, cases and strategies) or other information, technology, data and materials, disclosed
verbally or in writing by the Company and its affiliates to Employee. “Confidential Information”
does not include information that is or becomes generally available to the public, other than
through disclosure by Employee.
4.3 Employee acknowledges that any information shall be presumed to be Confidential
Information if the Company takes or has taken measures designed to prevent it, in the ordinary
course of business, from being available to persons other than those selected by the Company to
have access thereto for limited purposes.
4.4 All information disclosed to Employee or to which Employee obtains or has obtained access
to during the period of Employee’s employment, which Employee has a reasonable basis to believe to
be Confidential Information, shall be presumed to be Confidential Information.
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4.5 Upon Employee’s retirement from the Company, all records of Confidential Information,
including, but not limited to, all notes, memos, plans, records, letters, reports or other tangible
materials, including copies thereof in Employee’s possession, and including any and all documents
and copies thereof provided to Employee’s attorney, whether prepared by Employee or by others,
shall be left with, or delivered by Separation Date to the Company. Notwithstanding the foregoing,
Employee may retain any and all documents relating to his compensation and benefits, including, but
not limited to, documents relating to the health insurance plan, outstanding equity awards, the
401(k) Retirement Plan, the BEEDP, and the SERP.
4.6 Employee agrees, unless compelled by legal process, not to discuss with any person or
entity, including any current, future or former employees of the Company and its affiliates
(collectively, “Company Employees”), their attorney(s) or other representatives, any information
concerning: (a) the existing, former or potential claims of any Company Employees against the
Company and/or any of its affiliates, and its or their past present or future stockholders,
officers, directors, parents, subsidiaries, divisions, successors, assigns, employees, managers,
members, agents or representatives (collectively, “Related Parties”) or (b) any Confidential
Information, including the business sensitive policies, personnel or business practices of Company
and its Related Parties. If Employee is compelled to give testimony pursuant to legal process,
Employee shall immediately notify the Company as soon as Employee becomes aware of such legal
process pursuant to Section 21.
4.7 Employee understands and agrees that, even after his employment with the Company ends, he
is still bound by the provisions of the Company’s “Policy Statement Against Xxxxxxx Xxxxxxx,” which
provides, in relevant part, that:
This Policy Statement continues to apply to your transactions in
our securities even after your service with us ends. If you are
aware of material nonpublic information when your service with
us ends, you may not trade in our securities until that
information has become public or is no longer material.
5. Cooperation. Employee agrees to cooperate fully with the Company in its defense of
any lawsuit filed over matters that occurred during the tenure of Employee’s employment with the
Company, and agrees to provide full and accurate information with respect to same. Employee
further agrees not to counsel or otherwise assist any party in investigating, pursuing,
prosecuting, or maintaining any claim, charge, or lawsuit against the Company or any of its Related
Parties, and will not provide any information to any outside parties concerning the Company and its
Related Parties, unless compelled to do so by valid subpoena or other court order, and in such case
only after first notifying the Company in advance of such subpoena or court order.
6. Non-Competition. During the one-year (1) period following the Employee’s
Separation Date, Employee shall not, without the prior written consent of the Company, engage,
either directly or indirectly, as a principal or for his own account or solely or jointly with
others, or as a stockholder or equity owner of, or officer, director, employee or consultant of,
any
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corporation or other entity that is engaged in any state within the United States of America
(i) in the development or operation of “family dining” restaurants, including without limitation
Cracker Barrel Old Country Store, Inc., Golden Corral Corporation, DineEquity, Inc., Friendly Ice
Cream Corporation and Denny’s, Inc. or (ii) in the manufacture or sale of food products that are
the same or similar to those food products manufactured or sold by the Company on the effective
date of this Agreement, including fresh and frozen sausage products, refrigerated side dishes, and
frozen convenience food items, including without limitation Xxxx Xxx Corporation, Xxxx’x Tennessee
Pride Sausage, Inc., and Xxxxx’x Fine Foods, Inc. (each, a “Competing Business”); provided, that
subsection (ii) of this Section 6 shall not apply to a Competing Business primarily engaged in the
manufacture or sale of smoked sausage products and nothing herein shall prohibit the acquisition by
Employee of an interest representing one percent (1%) or less of the outstanding shares of any
publicly-traded corporation engaged in a Competing Business.
7. Agreement Not to Solicit Employees. Employee agrees that during the one-year (1)
period following his retirement from the Company, he shall not, either directly or indirectly, on
his own behalf or in the service or on behalf of others, solicit or divert, or attempt to solicit
or divert any person then employed by the Company or any of its affiliates.
8. Agreement Not to Hire Certain Employees. Employee agrees that during the one-year
(1) period following his retirement from the Company, he shall not, either directly or indirectly,
on his own behalf or in the service or on behalf of others, hire or attempt to hire any person then
employed by the Company or any of its affiliates as an officer, Area Director, Market Partner or
Market Coach.
9. No Disparagement. Employee agrees that he shall not make or publish any statement
(orally or in writing) that becomes or reasonably could be expected to become publicly known or
otherwise impact the Company’s business, or instigate, assist or participate in the making or
publication of any such statement, which would libel, slander or disparage (whether or not such
disparagement legally constitutes libel or slander) the Company or any person affiliated with the
Company, or the reputations of any of its past or present shareholders, officers, directors,
agents, representatives and employees. Except as necessary to communicate to its Board of
Directors and/or its officers the circumstances surrounding Employee’s retirement, the Company
agrees that it shall not make or publish any statement (orally or in writing) that becomes or
reasonably could be expected to become publicly known or otherwise impact Employee’s subsequent
employment, business ventures, or reputation, or instigate, assist or participate in the making or
publication of any such statement, which would libel, slander or disparage (whether or not such
disparagement legally constitutes libel or slander) Employee.
10. Release of Claims.
10.1 In consideration of the receipt of the sums and covenants stated herein, Employee does
hereby, on behalf of himself, his heirs, administrators, executors, agents, and assigns, forever
release, requite, and discharge the Company and its Related Parties, from any and all charges,
claims, demands, judgments, actions, causes of action, damages, expenses, costs, attorneys’ fees,
and liabilities of any kind whatsoever, whether known or unknown, vested or
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contingent, in law, equity or otherwise, which Employee has ever had, now has, or may
hereafter have against said Company and its Related Parties for or on account of any matter, cause
or thing whatsoever which has occurred prior to the date Employee signed this Agreement, including,
without limitation of the generality of the foregoing, any and all claims which are related to
Employee’s employment with the Company and the termination thereof, and any and all rights which
Employee has or may have under the Age Discrimination in Employment Act, as amended; the Older
Worker Benefit Protection Act; Title VII of the Civil Rights Act of 1964, as amended by the Equal
Employment Opportunity Act of 1972; the Civil Rights Act of 1991; the Employee Retirement Income
Xxxxxxxx Xxx, 00 X.X.X. §0000 et seq.; 42 U.S.C. §1981; the Americans With
Disabilities Act; Ohio Revised Code Sections 4101.17 and 4112.02 et seq. and other
federal and state statutes which regulate employment; and the laws of contract, torts, and other
subjects. Nothing contained herein shall be construed as a waiver or release of Employee’s accrued
and vested rights in the Company’s 401(k) Retirement Plan, any outstanding equity awards, the
BEEDP, or the SERP.
10.2 It is hereto agreed that this Agreement constitutes, among other things and except to the
extent that rights are retained as noted above, a full and complete release of any and all claims
which Employee may have against the Company and its Related Parties, upon or by reason of any
matter or thing whatsoever which has occurred prior to the signature date of this Agreement,
including without limitation all age discrimination claims under the Age Discrimination in
Employment Act, as amended, and it is the intention of the parties hereto that this Agreement is
and shall be a complete and absolute defense to anything released hereunder. Employee expressly
and knowingly waives his rights to assert any claims against the Company and its Related Parties
that are released hereunder, and covenants not to xxx the Company and its Related Parties based
upon any claims released hereunder.
11. No Acknowledgement of Liability. It is understood that this Agreement is, among
other things, a compromise of disputed claims, and no party, by entering into this Agreement,
acknowledges the validity of the other’s claims or defenses, and the above-mentioned payments and
covenants are not, and should not be construed as, an admission or acknowledgment by the Company or
its Related Parties of any liability whatsoever to Employee or any other person or entity.
12. Remedies for Breach by Employee. Employee agrees that it would be difficult to
compensate the Company fully for damages for any violation of the provisions of this Agreement,
including without limitation the provisions of Sections 4, 6, 7 and 8. Employee agrees that any
breach of this Agreement by Employee would cause the Company and/or its affiliates great and
irreparable injury and damage, the actual amount of which cannot be reasonably or adequately
compensated in damages in an action at law. Employee acknowledges that the Company shall,
therefore, be entitled, in addition to any other remedies that it may have under this Agreement or
at law, to receive injunctive and other equitable relief (including without limitation specific
performance) to enforce any of the rights and privileges of the Company or any of the covenants or
obligations of the Employee hereunder. In addition to any and all other remedies available to the
Company, Employee agrees that the Company shall be entitled to recover from Employee liquidated
damages in an amount no less than Seventy-Five Thousand, Eight Hundred Dollars ($75,800.00) per
breach of this Agreement. Nothing
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contained herein, and no exercise by the Company of any right or remedy, shall be construed as
a waiver by the Company of any other rights or remedies that the Company may have. Further, if
Employee can demonstrate that the Company breached the terms of this Agreement, the Company agrees
to pay Employee for any damages proven and suffered as a result of such breach.
13. Employee’s Acknowledgements.
13.1 Employee states and represents that he has carefully read this Agreement and knows the
contents thereof, and that he has executed the same as his own free act and deed.
13.2 Employee acknowledges that he has been and is hereby advised in writing to consult with
an attorney concerning this Agreement and that he had the opportunity to seek the advice of legal
counsel in connection with the negotiation and execution of this Agreement. Employee further
acknowledges that he has had the opportunity to ask questions about each and every provision of
this Agreement and that he fully understands the effect of the provisions contained in this
Agreement upon his legal rights. Employee acknowledges that he has been given at least 21 days to
consider the terms of this Agreement before signing it, and that he may revoke his signature at any
time before the expiration of seven (7) days after he signs and returns this Agreement. This
Agreement does not take effect until eight (8) days after he signs it. If Employee intends to
revoke his signature, he shall notify the Company pursuant to Section 21.
13.3 Employee agrees that he has: (i) received all compensation due him as a result of
services performed for the Company with the receipt of his final paycheck; (ii) reported to the
Company any and all work-related injuries incurred by Employee during him employment by the
Company; and (iii) been properly provided any leave of absence due to his or a family member’s
health condition and has not been subjected to any improper treatment, conduct or actions due to a
request for or taking such leave.
14. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Ohio. If any provision or provisions hereof shall at any
time be found or declared invalid or unenforceable, such finding or declaration shall not impair
the remaining provisions hereof, but the same shall remain valid and enforceable.
15. Successors and Assigns. Employee’s obligations and agreements under this
Agreement shall be binding on the Employee’s heirs, executors, legal representatives and assigns
and shall inure to the benefit of any successors and assigns of the Company. The Company’s
obligations and agreements under this Agreement shall be binding upon the Company’s affiliates,
divisions, successors, and assigns and shall inure to the benefit of Employee’s heirs, executors,
and assigns.
16. Entire Agreement; Amendment. This Agreement constitutes the entire agreement
between the parties hereto in respect of the subject matter hereof and this Agreement supersedes
all prior and contemporaneous agreements between the parties hereto in connection with the subject
matter hereof, except as otherwise provided herein. No change, termination or attempted
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waiver of any of the provisions of this Agreement shall be binding on any party hereto unless
in writing and signed by the party affected.
17. Waiver. The failure of any party hereto to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a waiver of any such provision, nor
in any way to affect the validity of this Agreement or any part thereof or the right of any party
thereof to enforce each and every such provision. No waiver or any breach of this Agreement shall
be held to be a waiver of any other or subsequent breach.
18. Interpretation. In this Agreement, (a) the word “including” means including
without limiting the generality of any description preceding such term and (b) references to any
agreement or plan means such agreement or plan as amended and modified and in effect from time to
time in accordance with the terms of such agreement or plan.
19. Withholding Taxes. The Company may withhold from all compensation payable pursuant
hereto all sums required to be withheld under all federal, state and city laws, or governmental
regulation or ruling, with respect to payment of compensation, benefits or perquisites.
20. Severability. To the extent any provision of this Agreement shall be invalid or
unenforceable, it shall be considered deleted and the remainder of such provision and of this
Agreement shall be unaffected and shall continue in full force and effect. In furtherance and not
in limitation of the foregoing, should the duration or geographical extent of, or business
activities covered by any provision of this Agreement be in excess of that which is valid and
enforceable under applicable law, then such provision shall be construed to cover only that
duration, extent or activities which may validly and enforceably be covered. Employee acknowledges
the uncertainty of the law in this respect and expressly stipulates that this Agreement shall be
given the construction that renders the provisions valid and enforceable to the maximum extent (not
exceeding its express terms) possible under applicable law.
21. Notices. All notices or other communications required or permitted hereunder
shall be in writing and shall be deemed given or delivered when delivered personally or four (4)
days after being mailed by registered or certified mail, return receipt requested, or one (1) day
after being sent by private overnight courier addressed as set forth below, or if sent by facsimile
transmission, on the first business day after transmission provided that an original copy has been
deposited in the U.S. mail:
If to Employee, to:
Xxxxx X. Xxxxxxxx
____________________
____________________
Fax:
____________________
____________________
Fax:
With a copy to:
[Name of Attorney]
[Name of Attorney]
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[Address]
Fax:
Fax:
If to the Company, to:
Xxx Xxxxx Farms, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Legal Department
Fax: (000) 000-0000
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Legal Department
Fax: (000) 000-0000
With copies to:
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attention: Xxxxx Xxxxx
Fax: (000) 000-0000
or to such other address as such party may indicate by a notice delivered to the other party
hereto.
EMPLOYEE ACKNOWLEDGES THAT HE HAS CAREFULLY READ AND FULLY UNDERSTANDS ALL THE PROVISIONS OF THIS
RELEASE AND SETTLEMENT AGREEMENT, THAT HE HAS BEEN GIVEN AT LEAST TWENTY-ONE DAYS WITHIN WHICH TO
CONSIDER SIGNING THIS AGREEMENT, THAT HE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY, THAT HE MAY
REVOKE THIS AGREEMENT WITHIN SEVEN DAYS AFTER HE SIGNS IT AND THAT HE KNOWINGLY AND VOLUNTARILY HAS
ENTERED INTO THIS AGREEMENT IN EXCHANGE FOR VALUABLE CONSIDERATION, INCLUDING THE PAYMENTS
IDENTIFIED IN PARAGRAPH 2 , TO WHICH HE WOULD NOT OTHERWISE BE ENTITLED ABSENT THIS AGREEMENT.
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
written above.
| /s/ Xxxxx X. Xxxxxxxx | ||||
| XXXXX X. XXXXXXXX | ||||
STATE OF OHIO
|
: | |
| : SS | ||
COUNTY OF FRANKLIN
|
: |
The foregoing instrument was acknowledged before me this 2nd day of March, 2009 by Xxxxx X.
Xxxxxxxx.
| /s/ Xxxxxx X. Xxxxxx | ||||
| Notary Public | ||||
| XXX XXXXX FARMS, INC. |
||||
| By: | /s/ Xxxxxx X. Xxxxxxxx | |||
| XXXXXX X. XXXXXXXX | ||||
| Its: Chief Financial Officer, Treasurer, and Assistant Secretary |
||||
STATE OF OHIO
|
: | |
| : SS | ||
COUNTY OF FRANKLIN
|
: |
The foregoing instrument was acknowledged before me this 3rd day of March, 2009 by Xxxxxx X.
Xxxxxxxx, Chief Financial Officer, Treasure and Assistant Secretary, of Xxx Xxxxx Farms, Inc. on
behalf of the corporation.
| /s/ Xxxx Xxxxx | ||||
| Notary Public | ||||
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