Exhibit 10.1
AGREEMENT
AGREEMENT by and between Ben & Jerry's Homemade, Inc. (the "Company"),
a Vermont corporation with its principal place of business at 00 Xxxxxxxxx
Xxxxx, Xxxxx Xxxxxxxxxx, XX 00000, and Xxxxx X. Xxxx of Xxxxxxx Mansion, 000
Xxxxxxx Xxxx, Xxxx, Xxxxxxxxxxxx 00000 (the "Executive"), effective the 31st day
of December, 1996.
WHEREAS, the Executive is possessed of certain experience and
expertise that qualify him to provide the direction and leadership required by
the Company; and
WHEREAS, subject to the terms and conditions hereinafter set forth,
the Company wishes to employ the Executive as its Chief Executive Officer and
the Executive wishes to accept such employment;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual promises, terms, provisions and conditions set forth in this Agreement,
the parties hereby agree:
1. Employment. Subject to the terms and conditions set forth in this
Agreement, the Company hereby offers and the Executive hereby accepts employment
as an independent contractor and, commencing July 1, 1997, as an employee.
2. Term. Subject to earlier termination as hereafter provided and subject
to renewal as provided below, the Executive's employment under this Agreement
shall be for a term of three years commencing on the effective date hereof. The
term of this Agreement, as from time to time extended or renewed, is hereafter
referred to as "the Term of this Agreement" or "the Term hereof". This Agreement
shall continue on a year-to-year basis beyond the end of the third year (or a
later year if this Agreement has renewed), unless the Company notifies the
Executive in writing not less than 90 days prior to the end of the third year
(or applicable later year) that the Company does not wish to renew the
Agreement. The Company's decision not to renew this Agreement shall be treated
as a termination of the Executive constituting Other Than For Cause; provided,
however, that the Company, with the Executive's prior written consent, may elect
not to renew this Agreement without also terminating the employment status of
the Executive.
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3. Capacity and Performance.
a. During the term hereof, the Executive shall serve the Company as
its Chief Executive Officer. Effective July 1, 1997 the Executive shall
also become the President.
b. During the term hereof, the Executive shall be employed by the
Company on a full-time basis and shall have the leadership of and be
responsible to the Board of Directors for all operations of the Company and
shall have all powers and duties consistent with such position, in
accordance with the Bylaws of the Company, provided that it is understood
that the Executive has been delegated certain authority for the Term by the
Board of Directors of the Company as provided in an instrument dated
December 31, 1996, previously delivered, which delegation (the "Delegation
Agreement") is incorporated herein by reference and shall remain in effect
unless modified or terminated by mutual written agreement during the Term
hereof.
c. During the Term, the Executive shall devote his full business time
(other than vacations) and his best efforts, business judgment, skill and
knowledge exclusively (except as provided below) to the advancement of the
business and interests of the Company and to the discharge of his duties
and responsibilities hereunder. The Executive shall not engage in any other
business activity or serve in any industry, trade, governmental position or
as a director of any other business or organization during the term of this
Agreement, except as may be approved by a committee of the Board consisting
of three outside directors. The Company encourages participation by the
Executive in community and charitable activities, but said Committee shall
have the right to approve or disapprove the Executive's participation in
such activities if, in the judgment of said Committee, such participation
may conflict with the Company's interests or with the Executive's duties or
responsibilities or the time required for the discharge of those duties and
responsibilities. The Executive has previously delivered a letter
containing a true and correct list of all directorships or other
participation in committees, consulting or other business activities which
the Executive has or intends to maintain during the Term, which have been
approved by said Committee.
d. The Executive shall be elected to the Board of Directors by the
present Board of Directors as soon as practicable. The Company agrees to
propose and recommend to the shareholders of the Company at each
appropriate Annual Meeting of such shareholders during the term hereof the
election or re-election of the Executive as a member of the Board.
e. On work days the Executive shall perform his duties hereunder from
the Company's executive offices in Vermont, except when at other locations
on business travel for the Company or for other activities approved by the
Board. The Executive is relocating to a home in Vermont and shall be
reimbursed $25,000 for relocation expenses.
Prior to purchase or lease of a residence in Vermont, the Executive
shall be entitled to reimbursement by the Company for reasonable lodging
expense and reasonable weekend commuting expenses to Pennsylvania.
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f. In the event the Executive is terminated by the Company Other Than
For Cause or has terminated this Agreement with Good Reason in the first
three years of the Term, the Company will be obligated to purchase the
Executive's Vermont residence on a marketable title basis, free of any
liens, and on reasonable customary terms at his original purchase cost plus
initial improvements (but not exceeding $500,000 Company purchase
obligation in the aggregate), and the Company will then proceed to resell
the residence.
4. Payments and Benefits. As payment for all services performed by the
Executive under and during the term hereof and subject to performance of the
Executive's duties and the obligations pursuant to this Agreement:
a. Base Amount. During the term hereof, the Company shall pay the
Executive a base amount at the rate of Three Hundred Thousand Dollars
($300,000) per annum, payable in appropriate installments, subject to
increase from time to time by the Board, in its sole discretion. Such base
amount, as from time to time in effect is hereafter referred to as the
"Base Amount".
b. Stock Options.
(i) The Executive shall receive options, which are non-statutory,
non-incentive stock options, to purchase an aggregate of 360,000
shares of Class A Common Stock of the Company exercisable at the
closing market price on NASDAQ on the effective date of the
grants thereof by the Compensation Committee of the Board of
Directors (the "Committee") under the Company's Equity Incentive
Plan (the "Plan");
(ii) the options have a term of ten years, will become exercisable, so
long as the Executive is an employee of the Company (prior to
July 1, 1997 a consultant to the Company) under this Agreement as
it may be renewed (or under some other agreement or as otherwise
provided in Section 5), as follows:
First Year
90,000 options become exercisable six months after the
effective date of this Agreement, namely June 30, 1997.
Second Year
None
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Third - Sixth Years
5,625 options become exercisable at the end of each month,
commencing at the start of the third year of the Term
(January 1999) and monthly thereafter through the end of the
sixth year.
(iii) provided, however, that the initial exercisability date of all
the 270,000 options that would otherwise vest during the third -
sixth years under clause (b) (ii) above shall automatically be
accelerated in accordance with the following:
When the fair market value of the Company's Class A Common Stock
(the "Stock"), as measured by the average of the daily closing
stock prices on NASDAQ for a period of 90 consecutive days, shall
have satisfied the Per Share Fair Market Value Threshold
specified below and the Committee shall have determined that the
Executive has substantially met the Non-Financial Objectives (as
defined below) for 1997 or the preceding calendar year, as the
case may be, then such options for 270,000 shares (after the
90,000 options that vest six months after the date hereof) shall
become exercisable as follows:
Defined Per Share Fair Number of Options
Market Value Threshold Becoming Vested
$16 Options for 50,000 shares
$20 Options for 50,000 shares
$23 Options for 50,000 shares
$27 Options for 60,000 shares
$30.50 Options for 60,000 shares
In each case the aggregate number of then unvested options
entitled to accelerated vesting (50,000 or 60,000 as the case may
be) shall be the options that would regularly vest the latest
under (b)(ii) above following the date when such acceleration has
become effective. The Committee shall be required to make a
determination during the first year of the Term, favorable or
unfavorable, within 30 days after the date such Per Share Fair
Market Value Threshold has been met for 90 days and thereafter
shall make one determination each year, by the end of February in
each year. The Non-Financial Objectives for each year, commencing
with the second year of the Term, shall be agreed between the
Committee and the Executive prior to the beginning of each such
year and for the first year of the Term shall be agreed between
the Committee and the Executive by June 30, 1997.
(iv) Options for 200,000 shares have been granted by the Committee,
effective December 31, 1996 and the balance of options for
160,000 Shares shall be granted by the Committee effective
January 1, 1997.
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The full terms of the Options shall be consistent with this
Section 4b and shall be set forth in Option Certificates, subject to
the provisions of the Plan. Matters set forth herein shall control in
the event of any ambiguity between the Option Certificate or the Plan
and this Agreement.
c. Medical and Hospitalization Insurance. The Executive (and his
family) shall be entitled to participate in the Medical and Hospitalization
Insurance benefit plan for Company employees on the terms applied to an
employee joining the Company July 1, 1997.
d. Life Insurance. The Executive shall be entitled to participate in
the Life Insurance benefit plan for Company employees on the terms applied
to an employee joining the Company July 1, 1997.
e. Other Benefits. During the term hereof and subject to any
contribution therefor generally required of executives of the Company, the
Executive shall be entitled to participate in the 401(k) plan and in any
other employee benefit plans from time to time in effect for executives of
the Company generally (in each case on terms applicable to an employee
joining the Company on July 1, 1997), except to the extent such other plans
are profit sharing or bonus plans or stock plans or are in a category of
benefit otherwise provided to the Executive under this Agreement. The
Company agrees to use its best efforts to obtain a waiver from the
insurance carrier for the benefit of the Executive of a 13 month waiting
period under the disability insurance policy of the Company unless the cost
of obtaining the waiver is unreasonable in the opinion of the Board of
Directors.
The Company may alter, modify, add to or delete its employee benefit
plans (including its medical and hospitalization and life insurance plans)
at any time as it, in its sole judgment, determines to be appropriate.
g. Business Expenses. The Company shall pay or reimburse the Executive
for all reasonable business expenses of the Executive in the performance of
his duties and responsibilities hereunder, subject to such reasonable
substantiation and documentation as may be specified by the Company from
time to time. The Executive shall be entitled to a leased car, as specified
by agreement between the parties, during the Term, which lease payments and
all car operating expenses shall be paid for by the Company.
5. Termination of Employment and Severance Benefits. Notwithstanding the
provisions of Section 2 hereof, the Executive's employment hereunder shall
terminate prior to the expiration of the Term under the following circumstances:
a. Death. In the event of the Executive's death during the term
hereof, the Company shall pay to the Executive's designated beneficiary or,
if no beneficiary has been designated by the Executive, to his estate, any
earned and unpaid Base Amount that is earned but unpaid, reimbursement of
business expenses accrued prior to the date of death, and
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continuation of Base Amount payments (plus continued participation in the
Company's medical and hospital employee insurance) for six-months after the
Executive's death. Options exercisable at date of death may be exercised by
the Executive's estate for 12 months (but not beyond the stated term of the
option), and unvested options are terminated.
b. Disability.
i. The Company may terminate the Executive's employment
hereunder, upon thirty (30) days written notice to the Executive, in
the event that the Executive becomes disabled during his employment
hereunder through any illness, injury, accident or condition of either
a physical or psychological nature and, as a result, is unable to
perform substantially all of his duties and responsibilities hereunder
for one hundred eighty (180) consecutive days during any period of
three hundred and sixty-five (365) consecutive calendar days.
ii. The Board may designate another employee to act in the
Executive's place during any period of the Executive's disability
prior to termination as provided in b.i above. Notwithstanding any
such designation, the Executive shall continue to receive from the
Company (or under a disability plan) the Base Amount in accordance
with Section 4.a and benefits in accordance with the other provisions
of Section 4, to the extent permitted by the then-current terms of the
applicable benefit plans until the termination of his employment.
iii. The Executive shall be entitled to participate in the
Company's long-term disability plan, to the same extent as other
employees. No finding of disability under this Section 5b shall be
made in respect of any cause or condition which has not been approved
as a full disability under the applicable plan.
iv. If any question shall arise as to whether during any period
the Executive is disabled through any illness, injury, accident or
condition of either a physical or psychological nature so as to be
unable to perform substantially all of his duties and responsibilities
hereunder, the Executive may, and at the request of the Company shall,
submit to a medical examination by a physician selected by the
Executive or his duly appointed guardian, to whom the Company has no
reasonable objection, to determine whether the Executive is so
disabled and such determination shall for the purposes of this
Agreement be conclusive of the issue. If such question shall arise and
the Executive shall fail to submit to such medical examination, the
Company's determination of the issue shall be binding on the
Executive.
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v. Options exercisable at date of termination for disability may
be exercised for 12 months (but not beyond the stated term of the
option) thereafter, and unvested options are terminated.
c. By the Company for Cause. The Company may terminate the Executive's
employment hereunder for Cause ("Cause") any time upon written notice to
the Executive setting forth in reasonable detail the nature of such Cause,
and the Executive's failure to cure within thirty (30) days after such
notice. The following, as determined by the Board in its reasonable
judgment, shall constitute Cause for termination: the Executive's gross
negligence in the performance of his material duties and responsibilities
to the Company; the commission by the Executive of theft, embezzlement or
other serious and substantial crimes or intentional wrongful engagement in
competitive activity in violation of Section 9 below; or other deliberate
willful action by the Executive that is materially harmful to the business,
interests or reputation of the Company.
For purposes of Section 5c, no act, or failure to act, shall be
"willful" unless done, or omitted to be done, without reasonable belief
that the action or omission was in the best interests of the Company.
Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for Cause unless and until there shall have been
delivered to him a notice of termination, and such termination shall have
been approved by the vote of two-thirds of the members of the Board of
Directors (excluding the Executive) at a meeting of the Board (after
reasonable notice to the Executive and an opportunity for him, together
with counsel, to be heard before the Board of Directors) finding that, in
the good faith opinion of the Board of Directors, the above standard of
termination for Cause was met in such case and that such Cause was not
cured.
Upon the giving of notice of termination of the Executive's employment
hereunder for Cause following the determination of the Board under the
preceding paragraph, the Company shall have no further obligation or
liability to the Executive, other than for Base Amount earned and unpaid at
the date of termination, any options that are vested which shall continue
to be exercisable for 30 days (unless such options are terminated by vote
of the Committee as provided in the Plan), and payments or reimbursement of
business expenses accrued prior to the date of termination. All other
options shall terminate.
d. By the Company Other than for Cause. The Company may terminate the
Executive's employment hereunder other than for Cause ("Other Than For
Cause") at any time upon notice to the Executive, provided that the Board
of Directors determines, after consultation with the Executive and after
setting forth the reasons for the Board's actions, that retention of the
Executive as the Chief Executive Officer would no longer be in the best
interests of the Company. In the event of such termination during the first
year of the Term (or, upon vote of two-thirds of the members of the Board,
excluding the Executive, that a
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decision should not be made in the first year, then in the first 15 months
of the Term), the Company shall continue to pay the Executive the Base
Amount at the rate in effect on the date of termination for twenty-four
months. In the event of such termination following the first year of the
Term (or, upon vote of two-thirds of the members of the Board, excluding
the Executive, that a decision should not be made in the first year, then
following the first 15 months of the Term), the Company shall continue to
pay the Executive the Base Amount at the rate in effect on the date of
termination for twelve months. Subject to any employee contribution
applicable to the Executive on the date of termination, the Company shall
continue to contribute, for the period during which the Base Amount is
continued hereunder, to the cost of the Executive's participation
(including his family) in the Company's group medical and hospitalization
insurance plans and group life insurance plan, provided that the Executive
is entitled to continue such participation under applicable law and plan
terms. Upon any such termination, unvested options shall become exercisable
to the extent provided immediately below:
If terminated in the first year, i.e. 1997 (or, upon vote of
two-thirds of the members of the Board of Directors, excluding the
Executive, that a decision should not be made in the first year, then in
the first 15 months of the Term), 30,000 options if:
(i) the Earnings per share of Class A and Class B Common Stock
("EPS") for 1997 shall have increased 5% or more over EPS for
1995; or
(ii) the Consolidated Net Sales for 1997 have increased 12% or more
over Consolidated Net Sales for 1996; or
(iii)the Defined Per Share Fair Market Threshold of $16 (as defined
in Section 4b(iii) has been satisfied by the date of any such
termination and options have accelerated with respect to such
Threshold under Section 4b(iii).
In the event that results for the year 1997 are not available because
the year 1997 has not ended when the termination occurs, the above
thresholds shall be determined on a proportional basis on the basis of the
three months, six months or nine months results that are available.
If terminated in the second year (or only commencing within the fourth
month of the second year, upon vote of two-thirds of the members of the
Board of Directors, excluding the Executive), 50% of the unvested options
if
(i) EPS for 1998 shall have increased 10% over EPS for 1997 and 15%
over EPS for 1995; or
(ii) the Consolidated Net Sales for 1998 shall have increased 15% over
1997 (or, if higher, Consolidated Net Sales for 1996); or
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(iii)the Defined Per Share Fair Market Threshold of $23 (as defined
in Section 4b(iii) has been satisfied in 1998 and options have
accelerated with respect to such Threshold under Section 4b(iii).
If terminated in the third year, i.e., 1999, 50% of the then unvested
options if
(i) EPS for 1999 shall have increased 12% over EPS for 1998 (or, if
higher, EPS for 1997 or 1995); or
(ii) the Consolidated Net Sales for 1999 shall have increased 15% over
Consolidated Net Sales for 1998 (or, if higher, Consolidated Net
Sales for 1997 or 1996); or
(iii)the Defined Per Share Fair Market Value of $27 (as defined in
Section 4b(iii)) has been satisfied in 1999 and options have been
accelerated with respect to such Threshold under Section 4b(iii).
If terminated in the fourth year, or later, 50% of the then unvested
options.
All other unvested options shall terminate.
Vested options (after giving effect to the above paragraphs) shall be
exercisable for the following periods (but not beyond the stated
termination date of the options) after any such termination, as provided
immediately below:
If terminated in the first year (or upon vote of two-thirds of the
members of the Board of Directors, excluding the Executive, in the first 15
months of the Term), for three months after termination.
If terminated in the second year (or only commencing with the fourth
month of the second year, upon vote of two-thirds of the members of the
Board of Directors, excluding the Executive that a decision should not be
made in the first year) for nine months after termination.
If terminated in the third year, for nine months after termination.
If terminated in the fourth year, for 12 months after termination.
If terminated in the fifth year, for 18 months after termination.
If terminated thereafter, for 24 months after termination.
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In the event that certain provisions pertaining to the first year of
his Term are extended to the first 15 months of the Term by 2/3 vote of the
Board of Directors, excluding the Executive, the Company shall give the
Executive certain notice of at least 30 days prior to the end of the First
Year.
e. By the Executive for Good Reason in the Absence of Cause. The
Executive may terminate his employment hereunder for Good Reason ("Good
Reason"), upon notice to the Company setting forth in reasonable detail the
nature of such Good Reason, and the Company's failure to remedy such matter
within thirty (30) days after receipt of such notice. The following shall
constitute Good Reason for termination by the Executive:
i. Failure of the Company to continue the Executive in the position
of Chief Executive Officer;
ii. Diminution in the nature or scope of the Executive's
responsibilities, duties or authority;
iii. Failure of the Company to provide the Executive the Base Amounts
and benefits in accordance with the terms of Section 4 or to
observe any other material provision of this Agreement; or
iv. Failure of the shareholders of the Company to elect or re-elect
the Executive as a director of the Company at each annual meeting
during the term of this Agreement, commencing with the 1997
annual meeting to be held in June, 1997.
In the event of such termination, Base Amount, benefits and options
(including acceleration, period of exercisability and termination of
options) shall be paid or provided in the same manner and extent as for a
termination Other Than For Cause under 5d above.
f. Notwithstanding the foregoing, in the event of a termination under
5d or 5e prior to six months after the date hereof, the options for 90,000
shares that vest six months after the date hereof shall be accelerated and
become exercisable for 90 days upon any such termination.
6. Effect of Termination. The provisions of this Section 6 shall apply to
termination due to the expiration of the term, termination pursuant to Section
5, non-renewal or otherwise.
a. Except for benefits expressly continued pursuant to Section 5,
benefits shall terminate pursuant to the terms of the applicable
benefit plans based on the date of termination of the Executive's
employment without regard to any continuation of Base Amounts to the
Executive following such date of termination.
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b. The provisions of this Agreement shall survive any termination
if so provided herein or if necessary or desirable fully to accomplish
the purposes of such provision, including without limitation the
obligations of the Executive under Sections 7, 8 and 9 hereof and all
indemnifications provided for in this Agreement (including Sections 12
and 15). The obligation of the Company to make payments to or on
behalf of the Executive under Section 5d and 5e hereof is expressly
conditioned upon the Executive's continued full performance of
obligations under Sections 7, 8 and 9 hereof. The Executive agrees
that, except as expressly provided in Section 5 with respect to
continuation of Base Amount and stock options as expressly provided,
no compensation is earned after termination of this Agreement, its
non-renewal or termination of employment or as a result of the
non-renewal of this Agreement or other termination of employment.
6A. Change in Control.
In the event of Termination Other than for Cause or Termination for Good
Reason, after a Change in Control (as defined below) all unvested options at the
date of any such termination shall accelerate and become immediately exercisable
at the date of such termination.
A Change in Control shall be deemed to have occurred if (a) any "person"
(as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Act), directly or indirectly, of securities of the Company representing 50%
or more of the combined voting power of the Company's then outstanding
securities in the election of directors; (b) the Company is a party to a merger,
consolidation, sale of assets or other reorganization, or a proxy contest, as a
consequence of which members of the Board of Directors in office immediately
prior to such transaction or event constitute less than a majority of the Board
of Directors thereafter, or (c) during any period of twelve consecutive months,
individuals who at the beginning of such period constituted the Board of
Directors (including for this purpose any new director whose election or
nomination for election by the Company's stockholders was approved by a vote of
at least two-thirds of the directors then still in office who were directors at
the beginning of such period) cease for any reason to constitute at least a
majority of the Board of Directors. Notwithstanding the foregoing provisions of
this Section 6A, a "Change in Control" will not be deemed to have occurred
solely because of (i) the acquisition of securities of the Company (or any
reporting requirement under the Act relating thereto) by an employee benefit
plan maintained by the Company for the benefit of employees or an acquisition by
Xxx Xxxxx, Xxxxx Xxxxxxxxxx, Xxxx Xxxxx, Xxxxxxx Xxxxxx and Xxxxx Xxxx or their
"affiliates" or "associates" (as such terms are defined in Rule 12b-2 under the
Act) or members of their families (or trusts for their benefit) or charitable
trusts established by any of them or other related management group.
Moreover, notwithstanding the foregoing provision, if such transaction
takes place after June 30, 1998 and follows a decision by Xxx Xxxxx or his
estate or heirs) (and the Board of
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Directors in the event that Xxx Xxxxx (his estate or heirs) is no long a
controlling stockholder in the reasonable judgment of the Board of Directors) to
change the present policy of independence for the Company, in order to thereby
continue to realize its potential, to a policy of favorably considering the
prospect of a sale of all or substantially all assets or a merger or other
business combination or sale of outstanding stock in which a change pursuant to
the preceding paragraph is made as a result of performance of the Company which
is not satisfactory in his or their judgment, then such transaction shall not
constitute a Change in Control (it being understood that a change in the policy
of independence of the Company as a result of a hostile or an unsolicited bid
for control of the Company shall not constitute a Change in Control for this
purpose).
Notwithstanding the provisions of Section 5d or e, the vested options
(including those accelerated hereunder) may be exercised for 30 months
thereafter in the event of a termination under Sections 5d or 5e after a Change
in Control has occurred.
7. Confidential Information.
a. The Executive acknowledges that the Company and its Subsidiaries
continually develop Confidential Information, as defined in Section 14
hereof, that the Executive may develop Confidential Information for the
Company or its Subsidiaries and that the Executive may learn of
Confidential Information during the course of employment. The Executive
will comply with the policies and procedures of the Company and its
Subsidiaries for protecting Confidential Information and shall never
disclose to any Person (except as required by applicable law or legal
process or for the proper performance of his duties and responsibilities to
the Company and its Subsidiaries, or in connection with any litigation
between the Company and the Executive (provided that the Company shall be
afforded a reasonable opportunity in each case to obtain a protective
order), or use for his own benefit or gain, any Confidential Information
obtained by the Executive incident to his employment or other association
with the Company or any of its Subsidiaries. The Executive understands that
this restriction shall continue to apply after his employment terminates,
regardless of the reason for such termination.
b. All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the Company
or its Subsidiaries and any copies, in whole or in part, thereof (the
"Documents"), whether or not prepared by the Executive, shall be the sole
and exclusive property of the Company and its Subsidiaries. The Executive
shall safeguard all Documents and shall surrender to the Company at the
time his employment terminates, or at such earlier time or times as the
Board or its designee may specify, all Documents then in the Executive's
possession or control.
8. Assignment of Rights to Intellectual Property.
The Executive shall promptly and fully disclose all Intellectual Property
to the Company. The Executive hereby assigns and agrees to assign to the Company
(or as otherwise directed by the Company) the Executive's
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full right, title and interest in and to all Intellectual Property which can be
registered or which is capable of being protected by the Company as a trade
secret. The Executive agrees to execute any and all applications for domestic
and foreign patents, copyrights or other proprietary rights and to do such other
acts (including without limitation the execution and delivery of instruments of
further assurance or confirmation) requested by the Company to assign such
Intellectual Property to the Company and to permit the Company to enforce any
patents, copyrights or other proprietary rights to such Intellectual Property.
The Executive will not charge the Company for time spent in complying with these
obligations. All copyrightable works that the Executive creates shall be
considered "work made for hire".
9. Restricted Activities.
The Executive agrees that some restrictions on his activities during and
after his employment are necessary to protect the goodwill, Confidential
Information and other legitimate interests of the Company and its Subsidiaries,
and that the agreed restrictions set forth below will not deprive the Executive
of the ability to earn a livelihood:
a. While the Executive is employed by the Company and, after his
employment terminates, for the greater of one year or the period during
which severance payments of Base Amount are being made (the
"Non-Competition Period"), the Executive shall not, directly or indirectly,
whether as owner, partner, investor, consultant, agent, employee,
co-venturer or otherwise, compete with the business of the Company or any
of its Subsidiaries within the United States, or within any foreign county
in which the Products are sold at the date of termination of employment, or
undertake any planning for any business competitive with the Company or any
of its Subsidiaries. Specifically, but without limiting the foregoing, the
Executive agrees not to engage in any manner in any activity that is
directly or indirectly competitive with the business of the Company or any
of its Subsidiaries as conducted or which has been proposed by management
to the Board within six months prior to termination of the Executive's
employment. Restricted activity also includes without limitation accepting
employment or a consulting position with any Person who is, or at any time
within twelve (12) months prior to termination of the Executive's
employment has been, a distributor of the Company or any of its
Subsidiaries. For the purposes of this Section 9, the business of the
Company and its Subsidiaries shall mean the manufacture or sale of the
Products.
b. The Executive further agrees that during the Non-Competition Period
or in connection with the Executive's termination of employment, the
Executive will not hire or attempt to hire any employee of the Company or
any of its Subsidiaries, assist in such hiring by any Person, encourage any
such employee to terminate his or her relationship with the Company or any
of its Subsidiaries, or solicit or encourage any customer or vendor of the
Company or any of its Subsidiaries to terminate its relationship with them,
or, in the case of a customer, to conduct with any Person any business or
activity which such customer conducts or could conduct with the Company or
any of its Subsidiaries.
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c. The provisions of this Section 9 shall not be deemed to preclude
the Executive from employment or engagement during the Non-Competition
Period following termination of employment hereunder by a corporation, some
of the activities of which are competitive with the business of the
Company, if the Executive's activities do not relate, to such competitive
business, and nothing contained in this Section 9 shall be deemed to
prohibit the Executive, during the Non-Competition Period following
termination of employment hereunder, from acquiring or holding, solely as
an investment, publicly traded securities of any competitor corporation so
long as such securities do not, in the aggregate, constitute one-half of 1%
of the outstanding voting securities of such corporation.
Without limiting the foregoing, it is understood that the Company
shall not be obligated to continue to make the payments specified in
Section 5d and 5e in the event of a material breach by the Executive of the
provisions of Sections 7, 8 or 9 of this Agreement, which breach continues
without having been cured within 30 days after written notice to the
Executive specifying the breach in reasonable detail.
10. Enforcement of Covenants.
The Executive acknowledges that he has carefully read and considered all
the terms and conditions of this Agreement, including the restraints imposed
upon him pursuant to Sections 7, 8 and 9 hereof. The Executive agrees that said
restraints are necessary for the reasonable and proper protection of the Company
and its Subsidiaries and that each and every one of the restraints is reasonable
in respect to subject matter, length of time and geographic area. The Executive
further acknowledges that, were he to breach any of the covenants contained in
Sections 7, 8 or 9 hereof, the damage to the Company would be irreparable. The
Executive therefore agrees that the Company, in addition to any other remedies
available to it, shall be entitled to seek preliminary and permanent injunctive
relief against any breach or threatened breach by the Executive of any of said
covenants, without having to post bond. The parties further agree that, in the
event that any provision of Section 7, 8 or 9 hereof shall be determined by any
court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area or too great a range
of activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.
11. Conflicting Agreements.
The Executive hereby represents and warrants that the execution of this
Agreement and the performance of his obligations hereunder will not breach or be
in conflict with any other agreement to which the Executive is a party or is
bound and that the Executive is not now subject to any covenants against
competition or similar covenants that would affect the performance of his
obligations hereunder. The Executive will not disclose to or use on behalf of
the Company any proprietary information of a third party without such party's
consent.
12. Indemnification.
The Company shall indemnify the Executive to the extent provided for
Company executive officers in its then current Articles of Incorporation or By-
Laws, and in any event shall indemnify the Executive to the fullest extent
permitted under the
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Vermont Corporation Law, including an undertaking to advance litigation
expenses. The Executive agrees to promptly notify the Company of any actual or
threatened claim arising out of or as a result of his employment with the
Company. The Company agrees to maintain Directors and Officers Liability
Insurance for the benefit of Executive during the Term of this Agreement and for
any other period during which Executive shall be employed having coverage and
policy limits no less favorable to directors and officers than those in effect
at the date of this Agreement.
13. No Duty to Mitigate.
Following a termination of employment, the Executive shall not be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement
and such amounts shall not be reduced whether or not the Executive obtains other
employment.
14. Definitions.
Words or phrases which are initially capitalized or are within quotation
marks shall have the meanings provided in Section 14 and as provided elsewhere
herein. For purposes of this Agreement, the following definitions apply:
a. "Confidential Information" means any and all information of the
Company and its Subsidiaries that is not generally known by others with
whom they compete or do business, or with whom they plan to compete or do
business and any and all information not readily available to the public,
which, if disclosed by the Company or its Subsidiaries could reasonably be
of benefit to such person or business in competing with or doing business
with the Company. Confidential Information includes without limitation such
information relating to (i) the development, research, testing,
manufacturing, plant operational processes, marketing and financial
activities, including costs, profits and sales, of the Company and its
Subsidiaries, (ii) the Products and all formulas therefor, (iii) the costs,
sources of supply, financial performance and strategic plans of the Company
and its Subsidiaries, (iv) the identity and special needs of the customers
and suppliers of the Company and its Subsidiaries and (v) the people and
organizations with whom the Company and its Subsidiaries have business
relationships and those relationships. Confidential Information also
includes comparable information that the Company or any of its Subsidiaries
have received belonging to others or which was received by the Company or
any of its Subsidiaries with an agreement by the Company that it would not
be disclosed. Confidential Information does not include information which
(a) is or becomes available to the public generally (other than as a result
of a disclosure by the Executive), (b) was within the Executive's
possession prior to the date hereof or prior to its being furnished to the
Executive by or on behalf of the Company, provided that the source of such
information was not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the
Company or any other party with respect to such information, (c) becomes
available to the Executive on a non-confidential basis from a source other
than the Company, provided that such sources is not bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with
respect to such information, or (d) was independently developed by you
without reference to the Confidential Information.
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b. "Intellectual Property" means inventions, discoveries,
developments, methods, processes, formulas, compositions, works, concepts
and ideas (whether or not patentable or copyrightable or constituting trade
secrets) conceived, made, created, developed or reduced to practice by the
Executive (whether alone or with others, whether or not during normal
business hours or on or off Company premises) during the Executive's
employment that relate to the Products of the Company or any of its
Subsidiaries.
c. "Products" mean all products planned, researched, developed,
tested, manufactured, sold, licensed, leased or otherwise distributed or
put into use by the Company or any of its Subsidiaries, together with all
services provided to third parties or planned by the Company or any of its
Subsidiaries, during the Executive's employment; as used herein, "planned"
refers to a Product or service which the Company has decided to introduce
within six-months from the date as of which such term is applied.
d. "Employment" shall mean employment of the Executive as an
independent contractor prior to July 1, 1997 and as an employee commencing
July 1, 1997.
e. "Termination of Employment" prior to July 1, 1997 shall mean
termination of the Executive's status as an independent contractor.
15. Withholding.
The Company acknowledges that the Executive presently has a consulting
engagement and as a result is unable to become an employee prior to July 1,
1997, although he will start under the Agreement on the date hereof, at the
request of the Company. Commencing July 1, 1997 the Executive shall be
designated President in addition to being the Chief Executive Officer and shall
be an employee of the Company. Accordingly, prior to July 1, 1997, the Executive
shall be the Chief Executive Officer but shall act as an independent contractor
to the Company as provided above. For services in any period in which the
Executive is an independent contractor, the Executive agrees to pay all FICA tax
due on payments to him and all other taxes due thereon and further agrees to
indemnify the Company from and against any and all withholding taxes, and from
any interest and penalties arising from the Company's failure to withhold on
amounts paid by the Company to the Executive. It is understood, notwithstanding
any of the foregoing provisions of this Agreement, that the Executive shall not
be entitled to participate in benefit and welfare plans and policies of the
Company that are applicable to employees while the Executive is an independent
contractor, and the Executive shall indemnify the Company from any liabilities,
penalties and interest or disqualification of any qualified plans from the
related decision (hereby consented to by the Executive) not to include the
Executive in any such plans except as a person becoming an employee on July 1,
1997. The Executive agrees that all payments made by the Company under this
Agreement shall be reduced by any tax or other amounts required to be withheld
by the Company under applicable law.
16. Assignment.
Neither the Company nor the Executive may make any assignment of this
Agreement or any interest herein, by operation of law or otherwise, without the
prior
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written consent of the other; provided, however, that, in the event that the
Company shall hereafter effect a reorganization, consolidate with, or merge
into, any other Person or transfer all or substantially all of its properties or
assets to any other Person, the Company shall require such Person or the
resulting entity to assume expressly and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
it. This Agreement shall inure to the benefit of and be binding upon the Company
and the Executive, their respective successors, executors, administrators, heirs
and permitted assigns.
17. Severability.
If any portion or provision of this Agreement shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
18. Waiver.
No waiver of any provision hereof shall be effective unless made in writing
and signed by the waiving party. The failure of either party to require the
performance of any term or obligation of this Agreement, or the waiver by either
party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
19. Notices.
Any and all notices, requests, demands and other communications provided
for by this Agreement shall be in writing and shall be effective when delivered
in person or deposited in the United States mail, postage prepaid, registered or
certified, and addressed to the Executive at his last known address on the books
of the Company or, in the case of the Company, at its principal place of
business, attention Chief Financial Officer, with a copy to Ropes & Xxxx, Xxx
Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000, Attention: Xxxxxx X. Xxxxxx, Esq., or to
such other address as either party may specify by notice to the other.
20. Entire Agreement.
This Agreement (and any letters referred to herein and including a letter
on Non-Financial Objectives) constitutes the entire agreement between the
parties and supersedes all prior communications, representations and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment.
21. Amendment.
This Agreement may be amended or modified only by a written instrument
signed by the Executive and by a expressly authorized officer of the Company.
22. Governing Law, Arbitration and Consent to Jurisdiction.
This contract and shall be construed and enforced under and be governed in
all respects by the laws of the State of New York, without regard to the
conflict of laws principles thereof. The parties each agree to promptly select a
mediator and promptly mediate in good faith any controversy, claim or dispute
arising between the parties hereto arising out of or related to this Agreement,
its
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performance or any breach or claimed breach thereof. In the event that such
mediation does not resolve any such matter, then such matter other than any
matter in which injunctive relief or other equitable relief is sought. shall be
definitively resolved through binding arbitration conducted in the City of New
York, by a panel of three (3) arbitrators in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association, provided,
however, that notwithstanding anything to the contrary in such Commercial
Arbitration Rules, the parties shall be entitled in the course of any
arbitration conducted pursuant to this Section to seek and obtain discover from
one another to the same extent and by means of the same mechanisms authorized by
Rules 27 through 37 of the Federal Rules of Civil Procedure. The power and
office of the arbitrators shall arise wholly and solely from this Agreement and
the then current Commercial Arbitration Rules of the American Arbitration
Association. The award of the panel or a majority of them so rendered shall be
final and binding, and judgment upon the award rendered by the arbitrators may
be entered in any court having jurisdiction thereto.
To the extent a dispute is not to be arbitrated in accordance with the
foregoing, each of the Company and the Executive (i) irrevocably submits to the
jurisdiction of the United States District Court for the Southern District of
New York and to the jurisdiction of the state courts of the State of New York
for the purpose of any suit or other proceeding arising out of or based upon
this Agreement or the subject matter hereof and agrees that any such proceeding
shall be brought or maintained only in such court, and (ii) waives, to the
extent not prohibited by applicable law and agrees not to assert in any such
proceedings, any claim that it is not subject personally to the jurisdiction of
the above-named courts, that he or it is immune from extraterritorial injunctive
relief or other injunctive relief, that any such proceeding brought or
maintained in a court provided for above may not be properly brought or
maintained in such court, should be transferred to some other court or should be
stayed or dismissed by reason of the pendency of some other proceeding in some
other court, or that this Agreement or the subject matter hereof may not be
enforced in or by such court.
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IN WITNESS WHEREOF, this Agreement has been executed by the Company, by its
duly authorized officer, and by the Executive, as of the date first above
written.
THE EXECUTIVE: BEN & JERRY'S HOMEMADE, INC.
/s/Xxxxx X. Xxxx /s/Xxxxx Xxxxxxxxxx
---------------- -------------------
Xxxxx Xxxx Xxxxx Xxxxxxxxxx
Vice Chairperson of the
Board of Directors
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