EXHIBIT 10.35
STAY BONUS AGREEMENT
THIS STAY BONUS AGREEMENT is made by and between
Foodbrands America, Inc., a Delaware corporation (the "Corpora-
tion"), and ________________________ ("Executive") and dated as
of the 31st day of December, 1996.
W I T N E S S E T H:
WHEREAS, the Corporation and Executive are parties to
an existing Transition Employment Agreement ("Executive's
Employment Agreement") which provides for certain compensation to
Executive if Executive is terminated by the Corporation after a
Change of Control Event (as defined below) but the Company
presently provides no additional incentive to Executive to remain
in the employ of the Company before or after a Change of Control
Event; and
WHEREAS, Executive is a key employee of the Corporation
and the Corporation desires to provide sufficient incentive to
Executive to remain in the employ of the Corporation both before
and after a Change of Control Event;
NOW, THEREFORE, in consideration of the mutual
covenants and representations contained herein, the parties
hereto agree as follows:
1. Accounting Treatment. In the event that the
Corporation becomes a party to a transaction which is otherwise
intended to qualify for "pooling of interests" accounting
treatment then (A) this Agreement shall, to the extent
practicable, be interpreted so as to permit such accounting
treatment, and (B) to the extent that the application of clause
(A) of this sentence does not preserve the availability of such
accounting treatment, then, to the extent that any provision of
this Agreement disqualifies the transaction as a "pooling"
transaction (including, if applicable, this entire Agreement),
such provision shall be null and void as of the date hereof. All
determinations under this paragraph shall be made by the
accounting firm whose opinion with respect to "pooling of
interests" is required as a condition to the consummation of
such transaction.
2. Definitions.
(a) "Beneficial Owner" and "Beneficial Ownership"
shall have the meaning used in Rule 13d-3 promulgated under the
Exchange Act.
(b) "Cause" shall have the same meaning as in
Executive's Employment Agreement.
(c) "Change of Control Event" means each of the
following:
(i) A change in stockholder ownership of the
Corporation, whereby any person or Group other than Xxxxxx
Xxxxxxxxxx & Xxxx Fund, L.P. or any of its affiliates, acquires
Control of the Corporation after the date of this Agreement;
(ii) A merger or consolidation of the
Corporation with and into another company, other than with or
into a wholly-owned subsidiary of the Corporation, where:
(1) the Corporation is not the
surviving company; or
(2) the Corporation is the surviving
company and the members of the Board of Directors of the Corpora-
tion immediately prior to the merger or consolidation do not
constitute a majority of the Board of Directors of the surviving
company after the merger or consolidation;
(iii) The sale of all or substantially all of
the assets of the Corporation; or
(iv) Any other kind of a corporate
reorganization or takeover where:
(1) the Corporation is not the
surviving company; or
(2) the Corporation is the surviving
company and the members of the Board of Directors of the Corpora-
tion immediately prior to the reorganization do not constitute a
majority of the Board of Directors of the surviving company.
(v) Whether such transaction results in a
Change of Control Event pursuant to subparagraphs (i) or (iv)
above or not, the following events shall be deemed a Change of
Control Event (i) a transaction or series of transactions
pursuant to which Xxxxxx Xxxxxxxxxx & Levy Fund, L.P., transfer
all of its Beneficial Ownership in the capital stock of the
Corporation to any other person or Group, or (ii) all of the
outstanding capital stock of the Corporation is acquired by any
person or Group in one or more related transactions.
With respect to the events described in subparagraphs
(ii), (iii) and (iv) above, the "Change of Control Event" shall
be deemed to occur on the later to occur of the transaction
described in such subparagraph or a shareholder vote approving
such a transaction.
(d) "Control" shall mean the record or Beneficial
Ownership of the outstanding stock of the Corporation which, when
voted together with the shares of outstanding stock of all other
stockholders of the Corporation with proxies or written consents
or held by such person or Group would constitute 50% or more of
all voting power of the Corporation.
(e) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(f) "Good Reason" shall have the meaning assigned
to such term in Executive's Employment Agreement.
(g) "Group" shall have the same meaning as such
term has been construed pursuant to Section 13(d)(3) or 14(d)(2)
of the Exchange Act.
3. Stay Bonus. Subject only to death, disability,
termination of employment by the Executive for Good Reason or
termination of employment by the Corporation, the Executive
agrees to continue his employment during the one-year period
immediately following the Change of Control Event (the "Stay
Period"). The Executive shall be entitled to and shall be paid a
cash bonus equal to $_____________ (the "Stay Bonus") (i) upon
the completion of the Executive's employment by the Corporation
for the Stay Period or (ii) if earlier, upon his termination of
employment with the Corporation for Good Reason or the
termination of his employment by the Corporation for reasons
other than for Cause (excluding death or permanent disability).
The Stay Bonus shall be paid within fifteen (15) days after the
Executive becomes entitled to payment pursuant to the immediately
preceding sentence. If, however, during the Stay Period the
Executive should voluntarily terminate his employment other than
for Good Reason or if he should die or if he should become
permanently disabled, he shall nonetheless receive a
proportionate part of the Stay Bonus computed by multiplying the
Stay Bonus by a fraction, the numerator of which is the number of
days in the Stay Period the Executive is employed by the Corpora-
tion before the occurrence of his resignation, death or permanent
disability and the denominator is 365.
4. Additional Payments. This Stay Bonus Agreement is
in addition to all of the rights, duties and obligations of the
parties under any other employment arrangements or welfare or
benefit plans applicable to Executive.
5. Non-Competition. In the event Executive's employ-
ment is terminated after a Change of Control of Event (a) for
Cause, (b) voluntarily by Executive for other than Good Reason,
or (c) voluntarily by Executive less than one (1) year after the
Stay Period, Executive may not, directly or indirectly, (i)
conduct any activities involving the developing, manufacturing or
marketing or selling of products that are competitive with the
products marketed by the Corporation immediately prior to the
Change of Control Event (the "Prohibited Business"); (ii) engage
(as an individual or as a stockholder, trustee, partner,
financier, agent, employee or representative, firm, corporation,
or association), or have any interest, direct or indirect in any
Prohibited Business; and (iii) may not assist or engage in any
business related activities involving those products currently
produced or under development by the Corporation, all for a
period of two (2) years after termination of employment. The
parties hereto agree that the duration and geographic area for
which the covenant not to compete set forth in this paragraph 5
is to be effective or reasonable, however, in the event that any
court determines that the time period or geographic area, or both
of them, are unreasonable, and that such covenant is, to that
extent, unenforceable, the parties hereto agree that the
covenant shall remain in full and effect for the greatest time
period and for the greatest area that would not render it unen-
forceable. The parties hereto agree that the covenant shall be
deemed to be a series of separate covenants, one for each and
every state or county of a geographic area where the covenant not
to compete is intended to be effective. Notwithstanding anything
to the contrary in this paragraph 5, ownership of less than 5% of
the voting stock of any publicly held corporation shall not
constitute a violation of this paragraph 5.
6. Amendments. Subject to applicable law, this
Agreement may be amended only in writing signed by each of the
parties hereto.
7. Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only
and do not constitute a part of this Agreement.
8. Agreement. This Agreement shall constitute the
entire agreement between the parties as to the subject matter
hereof and shall be in full force and effect as herein provided.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
CORPORATION: FOODBRANDS AMERICA, INC.
By___________________________
R. Xxxxxxxx Xxxxxxxx
Chairman, Chief Executive
Officer and President
EXECUTIVE: ___________________________
Executive
