CHANGE OF CONTROL AGREEMENT
Exhibit
99.2
THIS
AGREEMENT dated as of this ___ day of _________ ,
2006,
between TASTY BAKING COMPANY, a Pennsylvania corporation (the “Company”), and
________________(the “Executive”).
Background
Executive
serves as _________________________________ of the Company and, as such, has
made and is currently making a significant contribution to the Company’s
business. The Company considers the recruitment and maintenance of an able
and
experienced executive group to be essential to protecting and enhancing the
best
interests of the Company and its shareholders. The Company recognizes that
there
is a possibility of a change in control of the Company and that the uncertainty
and questions which such a possibility raise make the recruitment of senior
executives more difficult and/or may result in the departure or distraction
of
senior executives to the detriment of the Company and its
shareholders.
The
Company has determined that appropriate steps should be taken to recruit and
to
reinforce and encourage the continued dedication of key executives by providing
for severance payments in the event of termination of employment because of
a
change of control of the Company. Executive is willing to enter into a change
of
control agreement with the Company 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.
This
Agreement shall commence on the date hereof and shall remain in effect until
terminated in one of the following ways:
(a) Executive’s
death or Executive’s total disability within the meaning of the Company’s Long
Term Disability Plan; or
(b) Executive’s
employment is terminated for cause (as defined in Section 4(c) below) at any
time or Executive otherwise leaves the Company’s employ on a voluntary basis
other than as provided in Section 4(a), (b) or (e) below.
Section
2. Definition
of “Change of Control”.
A
“Change of Control” of the Company shall be deemed to occur:
(a) 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 5.01 of Form 8-K (or any successor
provisions thereto) promulgated under the Securities Exchange Act of 1934,
as
amended and the regulations thereunder (“Exchange Act”);
(b) upon
the
acquisition by any person or group of beneficial ownership (within the meaning
of Rule 13d-3 under the Exchange Act), directly or indirectly, 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 (e) (i) and (ii)
below are satisfied;
(c) if
individuals who constitute the Board of Directors of the Company (“Board”) as of
the date hereof (“Incumbent Board”), cease for any reason to constitute at least
a majority of the Board during any two (2) year 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;
(d)
the
consummation of a sale of all or substantially all of the assets of the Company
or the complete liquidation or dissolution of the Company; or
(e) upon
a
reorganization, merger, consolidation, division, or issuance of securities,
in
each case unless following such transaction (i) 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 (ii)
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
3. At-Will
Employment and Duties.
During
Executive’s employment, Executive shall have such duties, responsibilities and
authority and shall perform such services for the Company as are consistent
with
Executive’s background, training and experience and as may from time to time be
assigned to Executive by the President. The Company and Executive acknowledge
and agree that this Agreement does not constitute a contract for future
employment, and that Executive’s employment is and shall continue to be at-will,
as defined by applicable law. If the Executive’s employment terminates for any
reason, Executive shall not be entitled to any payments, compensation, benefits,
damages or awards under this Agreement other than as expressly provided by
this
Agreement, or otherwise as may be established under the Company’s then existing
employee benefit plans or policies applicable to executive officers at the
time
of termination.
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Section
4.
Termination
of Employment upon a Change of Control.
(a) If
within
one (1) year following a Change of Control (i) Executive’s employment is
terminated by the Company other than for cause (as defined in Section 4(c)
hereof), or (ii) Executive terminates her employment for “good reason” (as
defined in Section 4(d) hereof), then Executive shall be entitled to receive
those payments, compensation and benefits set forth in Section 5 as severance
and in lieu of any other damages which Executive may suffer as a direct or
indirect result of the termination of Executive’s employment with the
Company.
(b) In
addition to and notwithstanding the provisions of Section 4(a) above, Executive
shall have the right to terminate her employment with the Company at any time
beginning six (6) months after a Change of Control and ending twelve (12) months
after such Change of Control, for any or no reason, by providing not less than
thirty (30) days written notice to the Company and upon such termination
Executive shall be entitled to receive those payments, compensation and benefits
set forth in Section 5 as severance and in lieu of any other damages which
Executive may suffer as a direct or indirect result of the termination of
Executive’s employment with the Company.
(c) Executive’s
employment may be terminated for cause at any time in which case Executive
shall
have no right to any payment under this Agreement. “Cause”
shall mean:
(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 her unfit
for
continuing employment, prevents her from effectively performing her duties
for
the Company, or materially and adversely affects the reputation or business
activities of the Company;
(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 and
correct such acts, such that there is no longer grounds for termination for
cause, and if Executive fails to cease and 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 effective
treatment within 15 days after being requested to do so by the Company;
or
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(iv) Executive’s
continuing material failure or refusal to perform the duties associated with
her
position with the Company, or to carry out in all material respects the lawful
directives of the President (other than such failure resulting from Executive’s
incapacity due to injury, physical or mental illness, disability or death);
provided that the Company shall give Executive written notice of the acts 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 and correct such acts, such that
there
is no longer grounds for termination for cause, and if Executive fails to cease
and correct such acts this Agreement shall be deemed terminated and Executive
shall have no right to receive the benefits/payments provided
herein.
(d) “Good
reason” shall mean the occurrence after a Change in Control of any of the events
or conditions described in subsections (i) through (vi) hereof:
(i)
a
material change in the authority, duties and responsibilities of the Executive
so as to be inconsistent with his or her background, training and experience;
(ii)
a
reduction in the Executive’s base salary or any failure to pay the Executive any
compensation or benefits to which he is entitled within thirty (30) days of
the
date due;
(iii)
the
Company’s requiring the Executive to be based at a place (other than the
Company’s Oxford plant) outside a 30-mile radius from her principal place of
employment immediately prior to such a Change in Control, except for reasonably
required travel on the Company’s business which is not greater than such travel
requirements prior to the Change in Control;
(iv)
the
failure by the Company to (A) continue in effect (without reduction in benefit
level, and/or reward opportunities) any compensation or employee benefit plan
in
which the Executive was participating immediately prior to the Change in
Control, unless a substitute or replacement plan has been implemented which
provides substantially identical compensation or benefits to the Executive
or
(B) provide the Executive with compensation and benefits, in the aggregate,
at
least equal (in terms of benefit levels and/or reward opportunities) to those
provided for under each other compensation or employee benefit plan, program
and
practice as in effect immediately prior to the Change in Control (or as in
effect following the Change in Control, if greater);
(v)
any
material breach by the Company of any provision of this Agreement, which failure
has not been cured within twenty (20) days after written notice of such failure
has been given by Executive to the Company; or
(vi)
the
failure of the Company to obtain an agreement, satisfactory to the Executive,
from any successor or assign of the Company to assume and agree to perform
this
Agreement.
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(e)
If
prior
to a Change of Control, (i) Executive’s employment is terminated by the Company
other than for cause (as defined in Section 4(c) hereof) or (ii) Executive
terminates her employment for any of the reasons described in Section 4(d)(i-vi)
and the Executive reasonably demonstrates that her termination or the event
or
conditions described in Section 4(d)(i-iv) (1) was at the request of a third
party who has indicated an intention or taken steps reasonably calculated to
effect a Change of Control and who effectuates a Change of Control (a “Third
Party”), or (2) otherwise occurred in connection with, or in the anticipation
of, a Change of Control which actually occurs, then Executive shall be entitled
to receive those payments, compensation and benefits set forth in Section 5
as
severance and in lieu of any other damages which Executive may suffer as a
direct or indirect result of the termination of Executive’s employment with the
Company.
Section
5.
Executive
Benefits Following Change of Control.
In the
event of termination of Executive’s employment upon a Change of Control as
provided in Sections 4(a) or (b) above, Executive shall be entitled to the
payments, compensation and benefits described below:
(a) Severance.
Except as provided in Section 5(g), below, 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)
her annual base salary then in effect payable over 12 months, (ii) a cash bonus
equal to the greater of the (x) Executive’s target bonus under Tasty Baking
Company’s Annual Incentive Plan for the fiscal year in which the Change of
Control occurred or (y) average of the annual bonuses paid or payable to the
Executive during the two full fiscal years immediately prior to the Change
of
Control, (iii) group medical and life insurance benefits for a period of 12
months after the date of termination equivalent to the same level of
Company-provided coverage Executive was receiving immediately prior to her
termination (provided Executive satisfies the insurability criteria and complies
with the conditions of such plans), (iv) any unpaid accrued benefits due to
Executive through the date of such termination, (v) reimbursement for any
expenses to which Executive is entitled through the date of such termination,
and (vi) any indemnification obligations to which Executive may become entitled
from the Company whether by contract or pursuant to the Company’s charter or
Bylaws. Except as otherwise provided in Section 5(g), below, payments due under
clause (i) of the first sentence of this subsection, shall be paid by the
Company periodically in accordance with normal payroll practices for senior
executives and the amount due under clause (ii) above shall be paid in the
same
quarter as such payments were made prior to the Change of Control. To the extent
that the Company deems it undesirable to cover Executive under the Company’s
group medical and life insurance plans, then the Company shall provide Executive
with the same level of coverage under individual policies or pay cash to
Executive equal to the cost to the Company for such benefits to Executive
immediately prior to termination of her employment.
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(b) Accelerated
Vesting of Awards. In the event of a Change of Control and regardless of whether
Executive’s employment is terminated in connection with such Change of Control,
one hundred percent (100%) of any outstanding incentive awards (including
restricted stock and performance shares or units, stock options or stock
appreciation rights) shall vest or become exercisable immediately and any
restrictions thereon shall lapse; provided, however, nothing in this paragraph
shall prevent the Company from exercising any rights it may have pursuant to
any
employee benefit plan (or grant agreement executed thereunder) in the event
the
Executive is terminated for Cause.
(c) Aggregate
Cap. Executive and the Company expressly agree that in no event shall the
aggregate amount of change of control benefits payable to Executive hereunder
plus the amount of change of control benefits payable to all other Senior
Executives of the Company exceed three percent (3%) of the total transaction
value for such Change of Control, as such value and percentages are then
determined by a nationally-recognized executive compensation consulting firm
or
investment banking firm at the time of such Change of Control. The Company
shall
have an independent accounting firm (the “Accountants”) determine promptly after
a Change of Control the aggregate amount of Change of Control benefits payable
by the Company to Executive and all other senior executives of the Company,
and
the amount, if any, by which the cap set forth in the preceding sentence is
exceeded. Such excess shall be allocated among Executive and all other senior
executives of the Company receiving change of control benefits in the same
proportion as the total amount of their individual change of control benefits
relates to the aggregate amount of change of control benefits for all such
persons as a group.
(d) Golden
Parachute Excise Tax Cap. 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
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.
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(e) No
Duty to
Mitigate. The Executive shall not be required to mitigate the amount of any
payment contemplated by this Agreement, nor shall any such payment be reduced
by
any earnings that the Executive may receive from any other source. However,
the
Executive shall not be entitled to receive the medical coverage and benefits
contemplated by this Agreement in the event that the Executive receives similar
medical coverage and benefits as a result of new employment during the period
that severance payments are being paid to Executive hereunder.
(f) Release.
The payments and benefits made pursuant to this Section 5 are expressly
conditioned upon Executive’s first signing a valid general release and waiver in
a form reasonably acceptable to the Company, pursuant to which Executive shall
release and waive all claims that he may have against the Company arising during
or in any way related to Executive’s employment with the Company except for the
Company’s continuing obligations to Executive hereunder. The release shall be in
favor of the Company, its affiliates, officers, directors, employees,
representatives and agents. Payments by the Company shall commence within 30
days after delivery of such executed release provided Executive has not revoked
the release.
(g) Section
409A Restrictions. If and only to the extent necessary to satisfy the
requirements of Section 409A of the Internal Revenue Code of 1986 as amended
(the “Code”) and the regulations and other guidance promulgated thereunder by
the Internal Revenue Service (hereafter referred to as “Section 409A”), the
payments, compensation and benefits provided to the Executive by this Section
5
shall be subject to the restrictions of Section 409A. If any stock of the
Company is publicly traded on an established securities market or otherwise
as
of the date of Executive’s termination of employment and Executive is a “key
employee,” as defined in Section 416(i) of the Code (without regard to paragraph
(5) thereof), the Executive shall receive such payments, compensation and
benefits in accordance with Section 5(a), above, except as provided below or
as
otherwise permitted by Section 409A:
(i) Payments
of annual base salary and annual cash bonus amounts shall commence not earlier
than the date that is six months following the Executive’s termination of
employment. If the Executive would have otherwise received any salary and/or
bonus payments during the first six months after termination of employment
but
for this Section 5(g), such payments shall be made in a single sum to the
Executive on the first business day following the date that is six months after
her termination of employment. In addition, the Company shall pay the Executive
interest on payments that are delayed because of this Section 5(g) at the
Xxxxx’x Xx rate for corporate bonds as of the last business day preceding the
beginning of the calendar year in which such payments would have otherwise
been
paid to the Executive pursuant to Section 5(a), above.
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(ii) If
the
Company determines to provide life insurance coverage to the Executive in
accordance with Section 5(a), above, that would otherwise be includible in
the
Executive’s income, the Executive must timely pay to the Company all premiums
for such coverage that are due prior to six months following Executive’s
termination of employment. The Company will pay all premiums that are due for
such life insurance coverage in accordance with Section 5(a) starting six months
after the Executive’s termination of employment and will reimburse the Executive
for the premiums that the Executive has paid on the first business day following
the date that is six months after the Executive’s termination of employment. If,
pursuant to Section 5(a), the Company decides to pay cash to the Executive
equal
to the cost of providing group or individual life insurance coverage to the
Executive in lieu of providing life insurance coverage, the Company shall pay
such cash to the Executive on the first business day following the date that
is
six months after the Executive’s termination of employment. If the Company
decides to pay cash to the Executive in lieu of life insurance coverage, the
Company shall give written notice to the Executive of such decision at least
15
days prior to the lapse of Company-provided life insurance coverage for the
Executive.
(iii) Reimbursement
for expenses which would be excludable from the Executive’s income or which
would be deductible business expenses under Section 162 of the Code (without
regard to adjusted gross income limitations) and payment of indemnification
obligations which would be excludable from the Executive’s income shall be
promptly made to the Executive in accordance with Section 5(a), but not later
than the end of the second calendar year following the date of the Executive’s
termination of employment, or such later date as may be permitted by Section
409A.
(iv) Reimbursement
for any expenses which would otherwise be includable in the Executive’s income
and payment of any indemnification obligations which would be includable in
the
Executive’s income shall be made in accordance with Section 5(a), provided that
any such reimbursements or payments shall be made not earlier than the date
that
is six months after the Executive’s termination of employment.
Section
6.
Assignment.
This
Agreement shall not be assignable by the Company except to a successor to the
Company or its business by way of merger, acquisition, purchase of all or
substantially all of its assets or otherwise. The Company will require any
successor (whether by purchase, merger, consolidation or otherwise) to all
or
substantially all the business and/or assets of the Company to assume and
expressly agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform if no such succession
had
taken place. This 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.
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Section
7. Confidential
Information; Non-Solicitation.
(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 her
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
requirements and names of suppliers. Executive’s obligations under this Section
7(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, except that notwithstanding anything herein which
may be construed to the contrary, in no event shall Executive be permitted
to
use or disclose any of the Company’s product recipes.
(b) Executive
agrees, as a condition to the performance by the Company of its obligations
hereunder, during the period of her employment and for the period specified
below after termination of Executive’s employment as provided in Sections 4(a)
or (b) above, that Executive shall not, within the applicable territory
specified below, 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) For
a
period of one (1) year after termination of employment as provided in Sections
4(a) or (b) above, solicit, entice or induce any Customer (as defined below)
located in any portion of the continental United States, to become a client,
customer, original equipment manufacturer, distributor or reseller of any other
person, firm or entity with respect to any products or services competing with
the products and services then sold, licensed or under development by the
Company or to cease doing business with the Company, or 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; or
(ii) For
a
period of one (1) year after termination of employment as provided in Sections
4(a) or (b) above, solicit, entice or induce, directly or indirectly, any person
who presently is an employee, route operator, contractor or business associate
of the Company to become employed in the Territory by any other person, firm,
entity or other association or to cease their employment or other business
relationship with the Company, and Executive shall not approach any such persons
for such purpose; or
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(iii) For
a
period of six (6) months after termination of employment as provided in Sections
4(a) or (b) above, render services to, consult for, become employed by, own
or
have a financial or other interest in any person or entity that manufactures
and/or provides products or services competing with the products or services
then sold, licensed or under development by the Company.
For
purposes of Section 7(b)(i), “Customer” shall mean (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, original equipment manufacturer, 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 date of termination of Executive’s employment with the Company. For purposes
of Section 7(b)(ii), “Territory” shall mean the states of Florida, North and
South Carolina, Virginia, West Virginia, Maryland, Ohio, Pennsylvania, Delaware,
New Jersey, New York, and Connecticut and the District of Columbia. For purposes
of Sections 7(b)(i) and (iii), products or services “competing” with those of
the Company shall include, but not be limited to, pre-packaged snack cakes
or
other bakery-type sweet products, pies, cakes, danish, donuts, pretzels,
cookies, granola bars, energy bars, and baked salty snacks, excluding, however,
bakery products intended to be purchased by the consumer as frozen.
(c) Executive
agrees that in the event of breach of any of her obligations under this Section
7, the Company would suffer irreparable harm for which there is no adequate
remedy at law, and that such harm may be impossible to measure in monetary
damages. Accordingly, in addition to any other remedies which the Company may
have at law or in equity, the Company shall have the right to have all
obligations, undertakings, agreements and other provisions of this Agreement
specifically performed by Executive, and the Company shall be entitled to an
injunction restraining Executive from violating the provisions hereof and shall
have the right to obtain preliminary and permanent injunctive relief to secure
specific performance, and to prevent a breach or contemplated breach, of this
Agreement. In such event, the Company shall be entitled to an accounting and
repayment of all profits, compensation, remunerations or benefits which
Executive, directly or indirectly, has realized or may realize as a result
of,
growing out of, or in conjunction with, any violation of this Agreement. Such
remedies shall be in addition to and not in limitation of any relief or other
rights or remedies to which the Company is or may be entitled at law or in
equity or under this Agreement.
(d) If
any
part of this Section or the application thereof is construed to be invalid
or
unenforceable, then the other parts of this Section or the application thereof
shall not be affected and shall be given full force and effect without regard
to
the invalid or unenforceable provisions. If any provision in this Section is
held to be unenforceable because of the area covered, the duration, or the
scope
thereof, then the court making such determination shall have the power to reduce
the area and/or duration and/or scope thereof, and the provision shall then
be
enforceable in its modified form.
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(e) Executive
acknowledges that she will be able to earn a livelihood without violating the
provisions of Section 7 of this Agreement. Executive further acknowledges that
her rights have been limited by this Agreement only to the extent reasonably
necessary to protect the legitimate interests of the Company and as
consideration for the Company’s entering into this Agreement.
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) To
Executive:
(b) To
Company:
Tasty Baking Company
Attention:
Secretary
0000
Xxx
Xxxxxx
Xxxxxxxxxxxx,
XX 00000
Addresses
may be changed by notice in writing signed by the addressee.
Section
9.
Legal
Fees.
The
Company shall reimburse the Executive for all reasonable legal fees and expenses
incurred in good faith by the Executive as a result of any dispute with any
party (including, but not limited to, the Company and/or any affiliate of the
Company) regarding the payment of any benefit provided for in this Agreement
pursuant to Sections 5(a), 5(b) and 9, (including, but not limited to, all
such
fees and expenses incurred in connection with any tax audit or proceeding to
the
extent attributable to the application of Section 4999 of the Code), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872 (f)(2)(A) of the Code. Such payments shall be
made
within five (5) business days after delivery of the Executive’s written requests
for payment accompanied by such evidence of fees and expenses incurred as the
Company reasonably may require.
Section
10. Mandatory
Mediation/Arbitration.
The
procedures set forth in this Section 10 shall constitute the sole and exclusive
procedures for the resolution of (i) any dispute under this Agreement or (ii)
any other dispute between the parties, except for any dispute related to an
alleged violation of Section 9 hereof or any claims by the Company for
injunctive relief. The parties shall first attempt to resolve any dispute
through mediation conducted in Philadelphia, Pennsylvania. The party seeking
relief shall notify the other party in writing of the basis of the claim and
the
relief sought, and the parties shall meet to agree upon a neutral mediator.
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
fees and expenses of the arbitrator, shall be paid by the Company. The
arbitrator shall not be permitted to award punitive or similar type damages
under any circumstances. With respect to an alleged violation of Section 9
hereof or any claim by the Company for injunctive relief, the 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.
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Section
11. Miscellaneous.
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. 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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This
Agreement shall in all respects be governed by and construed and enforced in
accordance with the laws of the Commonwealth of Pennsylvania.
IN
WITNESS
WHEREOF, the parties hereto have executed and delivered this Agreement as of
the
first above written.
| ATTEST: | TASTY BAKING COMPANY | |
| ___________________ | By:_______________________ | |
| Secretary |
Xxxxxxx
X. Xxxxx
|
|
|
President
and CEO
|
||
|
WITNESS:
|
||
| ___________________ | ____________________ |
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