EMPLOYMENT AGREEMENT
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THIS AGREEMENT is dated as of August ____, 2002, between TASTY BAKING
COMPANY, a Pennsylvania corporation (the "Company"), and XXXXXXX X. XXXXX
("Executive").
W I T N E S S E T H:
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WHEREAS, the Company is one of the largest independent baking companies
in the United States and is the leading snack cake provider in the
middle-Atlantic region; and
WHEREAS, the Board of Directors of the Company (the "Board") desires to
employ Executive as the President and Chief Executive Officer of the Company,
and Executive desires to accept such employment; and
WHEREAS, Executive and the Company are willing to enter into this
employment agreement upon the terms and conditions set forth below;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained and of the mutual benefits herein provided, and intending to be
legally bound hereby, the Company and Executive hereby agree as follows:
Section 1. Term of Employment. The Company hereby employs Executive as
President and Chief Executive Officer of the Company, and Executive accepts such
employment by the Company, on the terms and conditions herein contained and
subject to termination only as hereinafter provided. The term of employment of
Executive under this Agreement shall commence on October 7, 2002 (the
"Commencement Date") and shall continue, unless terminated in accordance with
the provisions of Section 5 hereof, through the second anniversary of the
Commencement Date and shall be automatically renewed on the second anniversary
of the Commencement Date and every anniversary thereafter for an additional one
year period, unless either party gives notice of non-renewal to the other party
in writing at least 90 days prior to the end of the then current term. Upon
termination of this Agreement, Employee shall be eligible only for the benefits
set forth in Section 6 hereof and he shall be entitled to no other benefits. The
period from the Commencement Date through the expiration of the term of this
Agreement (including all renewal terms) is referred to as the "Employment
Period". The Company shall use best efforts consistent with the faithful
discharge of the fiduciary duties of the Board to cause Executive to be elected
to the Board and retained as a member of the Board during the term hereof.
Section 2. Duties.
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(a) During the Employment Period, Executive shall serve as President
and Chief Executive Officer of the Company and shall have such other duties,
responsibilities and authority and perform such other services for the Company
as are consistent with Executive's
background, training and experience as may from time to time be assigned to
Executive by the Board of the Company.
(b) During the Employment Period, Executive shall use his best efforts
to carry out his duties and responsibilities hereunder and devote his entire
working time and effort to the business and affairs of the Company (except for
permitted vacation, illness or disability) and shall not, in any advisory or
other capacity, work for any other individual, firm or entity without first
having obtained the written consent of the Board. Notwithstanding the foregoing,
nothing contained in this Agreement shall preclude Executive from devoting
reasonable periods of time to serve on the boards of directors of other
organizations, including charitable and community organizations, provided that
such activities do not interfere in any material fashion (as determined by the
Board in its sole discretion) with the regular and satisfactory performance of
Executive's duties under this Agreement, and, in the sole judgment of the Board,
do not compete with or present a conflict of interest with the interests of the
Company.
(c) Employee agrees to provide reasonable cooperation at the request of
the Company in any efforts to obtain "key-man" life insurance on Executive's
life.
Section 3. Compensation.
(a) During the Employment Period, the Company shall pay Executive a
base salary at the annual rate of no less than $400,000, which amount may be
increased from time to time at the discretion of the Board in accordance with
the Company's existing policy regarding general increases. Payment shall be made
in accordance with the Company's regular practice for Senior Executive employees
as in effect from time to time.
(b) In addition to the Executive's base salary, as increased from time
to time, Executive shall be entitled to participate in the normal course of
business in the Management Incentive Plan of the Company (a copy of which has
been provided to Executive) and to receive annually such cash bonus payments as
may be granted to him under such Plan from time to time. Executive shall be
designated a "Key Executive" of the Company by the Board. The target bonus, size
of the bonus pool and bonus allocated to each participant in any year are
subject to the discretion of the Compensation Committee of the Board and to the
approval of the Board. Executive shall be entitled to be considered for a cash
bonus for 2002 prorated for his period of employment during 2002.
(c) Effective on the first day of Executive's employment hereunder, the
Company shall (i) issue to Executive 4,000 shares of common stock of the
Company, which shares shall not be subject to forfeiture or other restriction
(except for customary resale restrictions under applicable federal securities
laws), and (ii) award to Executive under the Company's 1994 or 1997 Long Term
Incentive Plans, options to purchase, in the aggregate, 25,000 shares of common
stock of the Company at an exercise price equal to the closing price on the New
York Stock Exchange on such date, which shall vest 20% on such date and 20% on
each anniversary of the date thereof until fully vested. The stock options will
be subject to the Company's standard stock option grant agreement. With regard
to the shares of Company common stock awarded under clause (i) of the first
sentence of this subsection (c), the Company
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shall pay to the applicable taxing authorities amounts sufficient to satisfy the
Company's federal, state and local withholding obligations; Executive
acknowledges that such amounts will be reported as W-2 income to Executive.
Section 4. Additional Perquisites.
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(a) The Company will reimburse Executive for all reasonable expenses
properly incurred by Executive in the performance of Executive's duties
hereunder in accordance with policies established for Senior Executives of the
Company from time to time by the Board.
(b) During the Employment Period, Executive shall be entitled to
participate, in accord with the terms thereof, in any present or future bonus,
life insurance, disability insurance, medical insurance, pension, Supplemental
Executive Retirement Plan, Thrift, ESOP, Restricted Stock Incentive Plan,
long-term incentive plans, stock option (whether incentive or non qualified) or
other employee benefit, compensation or incentive plan adopted by the Company in
which Senior Executives are generally permitted to participate.
(c) In the event Executive elects not to obtain life insurance (in
excess of the basic $10,000 of coverage paid for by the Company) under the
Company's life insurance program for executives, but maintains or obtains life
insurance through other policies, the Company agrees to reimburse Executive for
the cost of such other insurance up to the amount which the Company would have
paid for an equivalent amount of life insurance under the Company's life
insurance program. Executive acknowledges that the amount reimbursed by the
Company will be reported as W-2 income to Executive. In addition, provided
Executive is in good health and insurable at regular rates, the Company shall
obtain for the benefit of the Executive a term life insurance policy in the
amount of One Million Dollars ($1,000,000.00) and maintain and pay the premiums
on such policy for a period of five (5) years. Executive shall be the owner of
such policy (unless such insurance is effected through the Company's group life
insurance program) and shall have the sole right to designate the beneficiaries
of such policy. Executive acknowledges that the Company will report as W-2
income to Executive the premiums paid on such policy.
(d) During the Employment Period, the Company shall provide Executive
with the exclusive personal and business use of an automobile (and bear all
costs of fuel, maintenance, repairs and insurance thereon) of a make, quality
and cost consistent with the Company's policies from time to time in effect with
regard to vehicles for Senior Executive, or a replacement automobile of similar
prestige, appointments and cost. Executive acknowledges that the Company will
report as W-2 income to Executive the value of the personal use of such vehicle.
(e) Executive shall be entitled to paid vacation (taken consecutively
or in segments) in accordance with the vacation policy of the Company as it
exists for Senior Executives from time to time, currently six (6) weeks during
each fiscal year, adjusted pro rata for any partial fiscal year during the term
hereof.
(f) During the Employment Period, the Company shall reimburse Executive
for the dues and fees for membership at not more than two (2) business or
country clubs of his
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choosing. Executive acknowledges that the amount reimbursed by the Company will
be reported as W-2 income to Executive.
(g) The Company shall provide to Executive supplemental retirement
income benefits in accordance with the terms of the supplemental executive
retirement plan agreement attached hereto as Exhibit A ("SERP").
Section 5. Termination of Employment.
(a) This Agreement and the Employment Period shall cease and terminate
upon the occurrence of any of the events specified below:
(i) On the date of the death of the Executive;
(ii) By the Company in the event Executive shall become and remain
"totally disabled" as defined in Section 5(c) below;
(iii) By the Company for "cause" as defined in Section 5(b) below;
(iv) By the Company at any time without cause;
(v) By the Executive for "good reason" as defined in Section 5(d)
below;
(vi) Upon the expiration of the then current term of this
Agreement if either the Company or Executive gives timely notice of its or his
election not to renew this Agreement;
(vii) By Executive at any time without good reason by resigning
and giving Company 90 days prior written notice thereof;
(viii) By Executive at any time during the period beginning six
(6) months after a "change of control" as defined in Section 5(e) below and
ending 18 months after such change of control, by giving written notice to the
Company 90 days prior to the effective date of such termination; and
(ix) By either the Company or the Executive, on the "normal
retirement date" (as defined in the Company's Pension Plan) of Executive, by
giving 90 days notice prior to the effective date of such termination.
(b) For purposes of this Agreement, "cause" shall mean any of the
following:
(i) Executive's conviction in a court of law of any crime or
offense which constitutes a felony, which conviction, in the good faith judgment
of the Board, makes him unfit for continuing employment, prevents him from
effective management of the Company, or materially and adversely affects the
reputation or business activities of the Company;
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(ii) Dishonesty or willful misconduct which materially and
adversely affects the reputation or business activities of the Company and which
continues after written notice thereof to Executive (provided that prior to
termination for such reason, the Company shall give Executive written notice of
the acts constituting grounds for such termination and in the event such acts
are capable of being cured, the Company shall give Executive a period of 20 days
within which to cease or correct such acts, such that there is no longer grounds
for termination for cause, and if Executive fails to cease or correct such acts
the Agreement shall be deemed terminated), or misappropriation of funds;
(iii) Substance abuse, including abuse of alcohol or use of
illegal narcotics, or other drugs or substances, for which Executive fails to
undertake and maintain treatment within 15 days after being requested so to do
by the Company; or
(iv) Executive's continuing material failure or refusal to perform
his duties substantially in accordance with the terms of this Agreement, or to
carry out in all material respects the lawful directives of the Board (other
than such failure resulting from Executive's incapacity due to injury, physical
or mental illness, disability or death); provided that prior to any termination
of employment pursuant to this clause (iv), the Company shall give Executive
written notice of the acts constituting grounds for such termination and in the
event such acts are capable of being cured, the Company shall give Executive a
period of 20 days within which to cease or correct such acts, such that there is
no longer grounds for termination for cause, and if Executive fails to cease or
correct such acts the Agreement shall be deemed terminated.
(c) For purposes of this Agreement, "totally disabled" shall mean a
physical or mental incapacity or disability which renders the Executive unable,
with reasonable accommodation, to perform the services required of him under
this Agreement for a period of 180 days or more during any period of 12
consecutive months. Such disability shall be subject to the written
determination of a qualified physician who shall be reasonably acceptable to the
Company and the Executive (or his personal representative in the event that
Executive does not have the legal capacity at such time to make such judgment).
In the event that Executive qualifies as being "totally disabled" within the
meaning of the Company's Long Term Disability Plan, the Executive shall be
entitled to receive long term disability payments under such plan
notwithstanding any termination of his employment hereunder, during such period
of disability, and Executive shall be entitled to the same benefits that any
other employee of the Company would enjoy under the Long Term Disability Plan.
(d) For purposes of this Agreement, "good reason" shall mean (i) a
material change in the authority, duties and responsibilities of the Executive
so as to be inconsistent with those of president and chief executive office of
the Company, (ii) the relocation of the Executive's place of employment to a
place (other than the Company's Oxford plant) outside a radius of 30 miles from
the Company's Hunting Park Avenue plant in Philadelphia, or (iii) the Company's
continued failure to perform its duties hereunder in any material respect, which
failure has not been cured within 20 days after written notice of such failure
(with specific reference to this Section of the Agreement) has been given by
Executive to the Company.
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(e) For purposes of this Agreement, a "change of control" of the
Company shall be deemed to occur (i) upon any change of control of a nature that
would be required to be reported in response to Item 6(e) of Schedule 14A or
Item 1 of Form 8-K promulgated under the Securities Exchange Act of 1934, as
amended and the regulations thereunder ("Exchange Act"); (ii) upon the
acquisition by any person or group of beneficial ownership (within the meaning
of Rule 13d-3 under the Exchange Act) of twenty-five percent (25%) or more of
the combined voting power of the Company's outstanding securities then entitled
to vote generally in the election of directors, excluding however acquisitions
by the Company or any of its subsidiaries, or any employee benefit plan
sponsored or maintained by the Company, or by a corporation pursuant to a
reorganization, merger, consolidation, division or issuance of securities if the
conditions described in clauses (vi) (A) and (B) below are satisfied; (iii) if
individuals who constitute the Board as of the date hereof ("Incumbent Board"),
cease for any reason to constitute at least a majority of the Board during any
twenty-four (24) month period; provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding for this purpose any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest or
other actual or threatened solicitation of proxies or consents by or on behalf
of a person other than the Incumbent Board; (iv) if the Company shall meet the
delisting criteria of the New York Stock Exchange (or any successor stock
exchange or automated trading system on which the Company's common stock is then
traded); (v) if the Board shall approve the sale of all or substantially all of
the assets of the Company or recommend the adoption of a plan of complete
liquidation or dissolution of the Company; or (vi) upon approval by the
shareholders of the Company of a reorganization, merger, consolidation,
division, or issuance of securities, in each case unless following such
transaction (A) not less than sixty percent (60%) of the outstanding equity
securities of the corporation resulting from or surviving such transaction and
of the combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned by the holders of the Company common stock immediately prior
to such transaction in substantially the same proportions as their ownership
immediately prior to such transaction, and (B) at least a majority of the
members of the board of directors of the resulting or surviving corporation were
members of the Incumbent Board.
Section 6. Effect of Termination.
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(a) Upon termination of this Agreement as a result of the death of
Executive (as provided in Section 5(a)(i) above), the Company shall pay
Executive's base salary through the end of the month in which his death occurs,
such payments being made to the Executive's estate. In addition, the Company
shall pay to Executive's estate (i) any bonus to which Executive is entitled
under Section 3(b) hereof for the fiscal year ending on or immediately prior to
the date of Executive's death, (ii) any bonus to which Executive is entitled
under Section 3(b) hereof for the fiscal year in which his death occurs, which
bonus shall be commensurate with bonuses paid to other Senior Executives for
such year relative to bonuses previously paid to such Senior Executives,
prorated for the period during such year that Executive actually worked, (iii)
any unpaid accrued benefits through the date of his death due to Executive under
this Agreement,
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the SERP or any employee benefit plan in which the Executive was a participant,
(iv) reimbursement for any expenses to which Executive is entitled through the
date of his death under the terms of this Agreement, and (v) any indemnification
obligations to which Executive may become entitled from the Company whether by
contract or pursuant to the Company's charter or Bylaws.
(b) Upon termination of this Agreement by reason of the Executive's
becoming totally disabled (as provided in Section 5(a)(ii) above), Executive
shall be entitled to the benefits, and the Company shall be obligated to provide
benefits to Executive, equivalent to those due upon termination of this
Agreement as a result of death of the Executive (as provided in Section 6(a)
above), plus all benefits accruing under any long term disability insurance plan
maintained by the Company. The bonus under clause (i) of Section 6(a) shall be
calculated for the fiscal year prior to the year in which this Agreement is
terminated under Section 5(a)(ii) above; the bonus under clause (ii) of Section
6(a) shall be calculated for the fiscal year in which such termination occurs.
All other benefits and expenses shall be determined as of the date such
termination occurs.
(c) Upon termination of this Agreement by the Company for cause (as
provided in Section 5(a)(iii) above), by the Executive without good reason (as
provided in Section 5(a)(vii) above), by the Executive as a result of his
non-renewal of this Agreement (as provided in Section 5(a)(vi) above), or by
either the Company or Executive effective upon the normal retirement date of
Executive (as provided in Section 5(a)(ix) above), then Executive shall have no
further right, title or interest to any payments required to be made in
accordance with this Agreement, and the Company shall have no further obligation
to Executive hereunder, except for (i) the unpaid portion, if any, of base
salary computed on a pro rata basis through the effective date of such
termination, (ii) any bonus to which Executive is entitled under Section 3(b)
hereof for the fiscal year ending on or immediately prior to the effective date
of such termination, (iii) any unpaid accrued benefits due to Executive through
the date of such termination under this Agreement, the SERP (except that the
Executive shall have no rights under the SERP in the event his employment is
terminated by the Company for cause under Section 5(a)(iii) above) or any
employee benefit plan in which Executive was a participant, (iv) reimbursement
for any expenses to which Executive is entitled through the date of such
termination under the terms of this Agreement, and (v) any indemnification
obligations to which Executive may become entitled from the Company whether by
contract or pursuant to the Company's charter or Bylaws.
(d) Upon termination of this Agreement by the Company without cause (as
provided in Section 5(a)(iv) above), by the Company as a result of its
non-renewal of this Agreement (as provided in Section 5(a)(vi) above), by the
Executive for "good reason" (as provided in Section 5(a)(v) above), or by the
Executive upon a change of control (as provided in Section 5(a)(viii) above),
then the Executive shall be entitled to receive, in lieu of all other damages
and benefits to which Executive may otherwise be entitled as a direct or
indirect result of such termination, (i) two times his annual base salary then
in effect payable over 24 months, (ii) for each of the first two fiscal year's
of the Company ending after the date of termination, one-half of the average
annual cash bonus he received during the five fiscal years of the Company
immediately preceding the year in which such termination occurs (and if
Executive
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has been then employed by the Company for less than five full years, the average
shall be calculated for the period Executive was so employed) multiplied by the
percentage derived by dividing (x) the aggregate bonuses awarded to other Senior
Executives for each such year, by (y) the average annual cash bonuses received
by such Senior Executives during the five fiscal years of the Company
immediately preceding the year of calculation, (iii) any unpaid accrued benefits
due to Executive under this Agreement, the SERP or any employee benefit plan in
which Executive was a participant, through the date of such termination, (iv)
reimbursement for any expenses to which Executive is entitled under the terms of
this Agreement through the date of such termination, and (v) any indemnification
obligations to which Executive may become entitled from the Company whether by
contract or pursuant to the Company's charter or Bylaws. The amounts payable
under clause (ii) above shall be calculated separately for each year after
termination, and the amounts due shall be paid when and as bonuses, if any, for
such year are paid to other Senior Executives of the Company. Payments due under
clauses (i) and (ii) of the preceding sentence shall be paid by the Company
periodically in accordance with normal payroll practices for Senior Executives.
The payments made pursuant to this Section 6(d) are expressly conditioned upon
Executive's first signing a valid general release and waiver in a form
reasonably acceptable to each of Executive and the Company, pursuant to which
Executive shall release and waive all claims that he may have against the
Company arising during or related in any way to the Executive's employment with
the Company, except for the Company's continuing obligations hereunder.
Executive shall release the Company, its affiliates, officers, directors,
employees and agents. Payments by the Company hereunder shall commence within 30
days after delivery of such executed release provided Executive has not revoked
acceptance of the release.
(e) Executive shall have no mitigation obligation with respect to the
benefits payable to Executive under this Section 6. Notwithstanding any
termination of this Agreement, Executive shall remain obligated under the
provisions of Sections 9 and 10 of this Agreement.
(f) Notwithstanding the foregoing provisions of this Agreement, if the
aggregate present value of the payments and benefits to be made or afforded to
the Executive under this Section, plus other payments and benefits to be made or
afforded to Executive in the event of a change of control, would equal or exceed
three times the Executive's "base amount" (as defined in Section 280G(b)(3) of
the Internal Revenue Code of 1986, as amended, and any successor provision
thereto) as of the date of the change of control, the payments and benefits to
be made or afforded to the Executive under this Agreement shall be reduced to
the extent necessary to ensure that such aggregate present value is one dollar
($1.00) less than three times such base amount. The allocation of the reduction
required hereby among the payments and benefits shall be determined by the
Executive prior to the later of the change of control and the date Executive
gives notice under Section 5(a) (viii) above. The determination of whether the
aggregate present value of payments and benefits to be made or afforded to the
Executive in the event of a change of control would equal or exceed three times
the Executive's base amount, and the amount of the reduction necessary to ensure
that such aggregate present value is one dollar ($1.00) less than three times
such base amount, shall be made by a certified public accountant or other
competent professional selected by the Company and reasonably acceptable to the
Executive.
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(g) Upon termination of this Agreement by the Company without cause (as
provided in Section 5(a)(iv) above), by the Company as a result of its
non-renewal of this Agreement (as provided in Section 5(a)(vi) above), or by the
Executive for "good reason" (as provided in Section 5(a)(v) above), in addition
to the benefits provided in Section 6(d) above, the Company agrees to accelerate
the vesting of all outstanding stock options previously awarded to Executive.
(h) Except as otherwise expressly provided herein, this Agreement and
all of the liabilities and obligations of the parties hereunder shall cease and
terminate effective upon the termination of the Employment Period.
Section 7. Assignment. This Employment Agreement shall not be
assignable by the Company except to a majority-owned subsidiary or parent entity
of the Company or to a successor to the Company and its business by way of
merger, acquisition, purchase of assets or otherwise and this Employment
Agreement is and shall be binding upon and inure to the benefit of any such
parent, subsidiary or successor. This Employment Agreement shall not be
assignable by Executive but it shall be binding upon and inure to the benefit of
Executive's heirs, executors, administrators and legal representatives.
Section 8. Notices. All notices, requests, demands and other
communications hereunder must be in writing and shall be deemed to have been
given if delivered by hand or mailed by first class, registered mail, return
receipt requested, postage and registry fees prepaid, and addressed as follows:
(a) If to the Company, to: Tasty Baking Company
0000 Xxxxxxx Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Secretary
(b) If to the Executive, to: Xxxxxxx X. Xxxxx
0000 Xxxxxx Xxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Addresses may be changed by notice in writing signed by the addressee.
Section 9. Confidential Information; Non-Solicitation.
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(a) Executive agrees to hold in a fiduciary capacity for the benefit of
the Company all of the Company's business secrets and confidential information,
knowledge and data relating to the Company or any of its affiliated companies
and their respective businesses, which shall have been obtained by the Executive
during his employment by the Company or any of its affiliated companies,
including without limitation, information relating to such matters as finances,
operations, processes, product recipes, new products in development, sales
methods, equipment, techniques, plans, formulae, products, methods and know-how,
customer
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requirements and names of suppliers. Executive's obligations under this Section
9(a) shall not be deemed violated in the event that (i) Executive discloses any
such information pursuant to order of a court of competent jurisdiction,
provided Executive has notified the Company of such potential legal order and
provided the Company with the opportunity to challenge or limit the scope of the
disclosure, or (ii) such information becomes generally available from a source
other than the Company, any of its affiliates, or any of their employees when
such source is legally entitled, to the best of Executive's knowledge, to make
such information available.
(b) Executive agrees, as a condition to the Company's agreeing to
employ him pursuant to the terms of this Agreement and to the performance by the
Company of its obligations hereunder, including but not limited to payments to
Executive after termination of this Agreement, during the term of this Agreement
and any renewals or extensions hereof, and for a period of two (2) years
thereafter, Executive shall not, without the prior written approval of the
Board, directly or indirectly through any other person, firm or entity, whether
individually or in conjunction with any other person, or as an employee, agent,
consultant, representative, partner or holder of any interest in any other
person, firm, entity or other association:
(i) Solicit, entice or induce any Customer (as defined below) to
become a client, customer, OEM, distributor or reseller of any other person,
firm or entity with respect to products and services then sold or under
development by the Company or to cease doing business with the Company, and
Executive shall not approach any such person, firm or entity for such purpose or
authorize or knowingly approve the taking of any such actions by any other
person; provided however, this paragraph (i) shall be effective after
termination of this Agreement only as a result of termination by the Company
without cause (as provided in Section 5(a)(iv) above), by the Company as a
result of its non-renewal of this Agreement (as provided in Section 5(a)(vi)
above), by the Executive for "good reason" (as provided in Section 5(a)(v)
above), or by the Executive upon a change of control (as provided in Section
5(a)(viii) above, and only for as long as the Company is obligated to make the
payments to Executive provided in Section 6(d)(i) and (ii) above; or
(ii) Solicit, entice or induce, directly or indirectly, any person
who presently is or at any time during the term hereof, including any renewals
or extensions hereof, was an employee, contractor or business associate of the
Company to become employed by any other person, firm or entity or to cease their
employment or other business relationship with the Company, and Executive shall
not approach any such employee for such purpose.
For purposes of this Section 9(b), a "Customer" means (x) any person or
entity which at the time of determination is, or shall have been within two
years prior to such time, a client, customer, OEM, distributor or reseller of
the Company, or (y) any person or entity to whom a detailed written proposal has
been made within twelve (12) months immediately preceding the time of
determination.
(c) Executive agrees that in the event of breach of any of his
obligations under this Section 9, Company shall be entitled to an injunction
restraining Executive from violating the provisions hereof and he further agrees
that an action for damages does not provide an
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adequate remedy for his violation of this Section 9. The obligations of
Executive under this Section 9 shall survive the termination of this Agreement
for any reason whatsoever.
Section 10. Mediation/Arbitration. Except as provided in Section 9
above or any claims by the Company for injunctive relief, the parties shall
attempt to resolve any dispute through mediation conducted in Philadelphia,
Pennsylvania. If the parties do not promptly agree on a neutral mediator, then
any of the parties may notify J.A.M.S./Endispute, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, to initiate selection of a mediator from the J.A.M.S/Endispute Panel of
Neutrals. The Company shall pay the fees and expenses of the mediator. If the
mediator is unable to facilitate a settlement of the dispute within a reasonable
period of time, as determined by the mediator, the mediator shall issue a
written statement to the parties to that effect and the aggrieved party(ies) may
then seek relief through arbitration, which shall be binding, before a single
arbitrator pursuant to the Commercial Arbitration Rules ("Rules") of the
American Arbitration Association (the "Association"). The place of arbitration
shall be Philadelphia, Pennsylvania. Arbitration may be commenced at any time
(after the mediator issues the written statement provided in the fourth sentence
of this Section 10) by any party seeking arbitration by written notice to the
other party(ies) by first class mail, postage prepaid. The arbitrator shall be
selected by the joint agreement of the parties, but if the parties do not so
agree within (30) business days after the date of the notice referred to above,
the selection shall be made pursuant to the Rules from the panels of arbitrators
maintained by the Association, and such arbitrator shall be neutral, impartial,
independent of the parties and others having any known interest in the outcome,
shall abide by the ABA and AAA Code of Ethics for neutral arbitrators and shall
have no ex parte communications about the dispute with either party. The
arbitrator shall render a written decision within 60 days of completion of the
arbitration. Any award rendered by the arbitrator shall be final, conclusive and
binding upon the parties hereto and there shall be no right of appeal therefrom.
Judgment upon the award rendered by the arbitrator may be entered by any court
having jurisdiction thereof. The costs and expenses of arbitration, including
legal fees and expenses of the arbitrator, shall be paid by the parties as the
arbitrator may assess. The arbitrator shall not be permitted to award punitive
or similar type damages under any circumstances. The procedures set forth in
this Section 10 shall constitute the sole and exclusive procedures for the
resolution of any dispute under this Agreement, except for any dispute related
to an alleged violation of Section 9 hereof or any claims by the Company for
injunctive relief, in which case Company, without prejudice to or compliance
with the procedures set forth in this Section 10, is expressly permitted to
institute legal proceedings to obtain a temporary restraining order, a
preliminary and permanent injunction or other equitable relief.
Section 11. Miscellaneous.
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(a) This Agreement is the entire agreement and understanding between
the parties hereto and supersedes all prior agreements and understandings, oral
or written, relating to the subject matter hereof, and no change, alteration or
modification hereof may be made except in writing signed by both parties hereto.
(b) The headings in this Agreement are for convenience of reference
only and shall not be considered as part of this Agreement nor limit or
otherwise affect the meaning hereof.
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(c) This Agreement shall in all respects be governed by and construed
and enforced in accordance with the substantive laws of the Commonwealth of
Pennsylvania.
(d) If any section, paragraph, term or provision of this Agreement, or
the application thereof, is determined by a competent court or tribunal to be
invalid or unenforceable, then the other parts of such section, paragraph, term
or provision shall not be affected thereby and shall be given full force and
effect without regard to the invalid or unenforceable portions; and the parties
specifically authorize and agree that the court or tribunal shall modify the
section, paragraph, term or provision hereof which is so determined to be
invalid or unenforceable, and the parties specifically authorize and agree to
such modification.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
ATTEST: TASTY BAKING COMPANY
By:
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Secretary Xxxx X. Xxxxx, President and CEO
(SEAL)
-------------------------- -----------------------------------------------
Witness Xxxxxxx X. Xxxxx
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