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EXHIBIT 10(n)
SENIOR EXECUTIVE AGREEMENT
AGREEMENT dated as of May 21, 1997 between Hanover Foods
Corporation (the "Company") and Xxxxxxx X. Xxxxxxxxx ("Executive").
BACKGROUND
Executive is employed by the Company in the position of Vice
President - Sales and Trade Marketing of the Company. In consideration of
Executive's past and present services to the Company, Company desires to
provide for the payment of termination compensation to Executive upon the
occurrence of certain circumstances specified in Section 3 of this Agreement,
but not under any other circumstances.
NOW, THEREFORE, the parties hereto, intending to be legally
bound hereby, agree as follows:
1. TERM AND TERMINATION. This Agreement will commence
on the date hereof and terminate on the earlier of the following dates (herein
called the "Term"): (a) ten years from the date hereof; (b) Executive's
removal or resignation from his position with the Company as stated above for
any reason whatsoever and whether with or without cause (unless Executive
continues to be employed by the Company or an affiliate in an equal or higher
position) if such resignation or removal occurs prior to a change of control as
defined in Section 2 hereof; (c) the death or permanent disability of
Executive, whether during or after his employment by the Company or any
affiliate; (d) the Executive's reaching his 65th birthday; or (e) mutual
written agreement of Executive and Company.
2. CHANGE OF CONTROL. A change of control of the
Company shall be deemed to have occurred if, during the Term, Xxxx X. Xxxxxxxx
for any reason ceases to hold the position of Chief Executive Officer of the
Company or ceases to have the powers and authority of the Chief Executive
Officer of the Company.
3. TRIGGERING EVENTS.
(a) If, within twenty-four (24) months after the
occurrence of a change of control of the Company,
(i) Executive's base salary, responsibilities
or duties are reduced and Executive terminates his employment by voluntary
resignation during the Term and during continuance of any of the foregoing
conditions (provided such resignation gives at least one month written notice
of intent to terminate employment), or
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(ii) Executive's employment is involuntarily
terminated during the Term by the Company for reasons other than the
Executive's gross misconduct, then
Executive shall become entitled to receive the
payments and benefits specified in Section 4 of this Agreement.
(b) The date on which Executive's employment ceases as
specified in Section 3(a) is hereinafter referred to as the "Triggering Event."
4. PAYMENTS AND BENEFITS.
(a) Commencing not later than thirty (30) days after the
Triggering Event, and subject to Executive's compliance with Section 7 of this
Agreement, the Company shall pay to Executive, in installments no less
frequently than monthly, during the two year period following the Triggering
Event (but not later than the last day of the Term of this Agreement), a
monthly amount equal to one-twelfth (1/12) of Executive's total cash
compensation received from the Company during calendar year 1997 (including
both base annual salary and bonus, if any).
The foregoing payments shall be reduced, to the extent
necessary, so that the sum of payments made pursuant to this Section 4(a), when
added to the total cash compensation to which the Executive is then entitled by
virtue of other employment, will not exceed, for any twelve (12) month period,
the Executive's total cash compensation received from the Company during
calendar year 1997 (including both base annual salary and bonus, if any).
(b) During the period that payments are due to Executive
pursuant to Section 4(a), and subject to Executive's compliance with Section 7
of this Agreement, Executive shall be entitled to the health, life and
disability insurance benefits which are no less, in the aggregate, than the
amount of the benefits to which the Executive is entitled on the date of this
Agreement. Notwithstanding the foregoing, if the Executive obtains other
full-time employment, which employment provides equivalent health, life and
disability insurance benefits, the benefits described in this Section 4(b)
shall cease.
(c) The Company may withhold from any payments or
benefits due under this Agreement all federal, state, city, or other taxes as
shall be required pursuant to any law or governmental regulation or ruling. In
no event shall the Company be obligated to make any payment or provide any
benefits pursuant to Section 4(a) or 4(b) hereof after the last day of the Term
of this Agreement.
(d) In the event Executive becomes entitled to receive
the payments or benefits specified in this Agreement, he will be deemed to have
waived the right to receive any severance pay to which he might otherwise be
entitled under the present or any future severance benefit policy of the
Company or any affiliate.
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5. SOURCE OF PAYMENT. All payments provided under
this Agreement shall be paid in cash from the general funds of the Company and
no special or separate fund shall be required to be established. Executive
shall have no right, title or interest whatever in or to any investment which
the Company may make to aid the Company in meeting its obligations hereunder.
Nothing contained in this Agreement, and no action taken pursuant to its
provisions, shall create or be construed to create a trust of any kind or a
fiduciary relationship between the Company and Executive or any other person.
6. ASSIGNMENT OR OTHER ALIENATION.
(a) Neither this Agreement nor any right or interest
hereunder shall be assignable by Executive or his legal representatives without
the Company's prior written consent.
(b) Except as required by law, the right to receive
payments under this Agreement shall not be subject to anticipation, sale,
encumbrance, charge, levy, or similar process or assignment by operation of
law.
7. COVENANTS. All payments to Executive under this
Agreement shall be subject to Executive's compliance with the provisions of
this Section 7. If Executive fails to comply with such provisions, the right
of Executive and all other persons to any future payments under this Agreement
shall terminate and the Company's obligations under this Agreement to make such
payments and provide such benefits shall cease.
(a) Executive shall not, directly or indirectly, at any
time, during or after his employment by the Company, disclose, use or knowingly
permit the use of any trade secrets, customer lists, or other proprietary
information relating to the Company or its affiliates except pursuant to the
lawful order of any judicial or administrative agency of government.
(b) For a period of two years after the Triggering
Event, neither Executive nor any employer or business associate of Executive
shall enter into any business arrangement with, or solicit for employment or
employ in any capacity, any person who was an employee of the Company or any of
its affiliates at any time within six months prior to Executive's Triggering
Event, or attempt to enter into any business arrangement with or employ any
such person, or induce or attempt to induce any such person to leave his or her
employment with the Company for any reason.
(c) For a period of two years after the Triggering
Event, Executive shall not directly or indirectly own, manage, operate, join,
control, or participate in or be connected with (whether as an officer,
employee, partner, stockholder, consultant or in any other capacity) any
individual proprietorship, partnership, business trust, limited liability
company, corporation or other entity or business which is engaged principally
or significantly in a business which competes with any significant business of
the Company or its affiliates. This provision shall not apply, however, to
Executive's acquiring or holding less than 1% of the securities of any entity
whose securities are listed on a national securities exchange or traded on
NASDAQ.
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(d) Promptly upon commencing new employment, and
thereafter, Executive shall keep the Company advised of the cash compensation
to which he is entitled by virtue of such employment. Not later than February
15 of each year after the Triggering Event, Executive shall provide to the
Company (Attention: Chief Financial Officer) copies of all W-2 forms relating
to income paid to Executive during the prior calendar year.
8. CONSOLIDATION, MERGER, OR SALE OF ASSETS. Nothing
in this Agreement shall preclude the Company from consolidating or merging into
or with or transferring all or substantially all of its assets to another
corporation. In that event, such other corporation shall assume this Agreement
and all obligations of the Company hereunder. Upon such a consolidation,
merger, or transfer of assets and assumption, the term "the Company" as used
herein, shall mean such other corporation and this Agreement shall continue in
full force and effect.
9. ACCELERATION. If the Company fails to pay the
Executive any of the amounts due to him under Section 4(a) hereof, thirty (30)
days after having received written notice from the Executive of such failure to
pay, the Executive shall have the right to accelerate future payments of all
sums due the Executive under Section 4(a) hereof, without discount.
10. REIMBURSEMENT. If the Company fails to pay the
Executive any of the amounts due to him under Section 4(a) hereof or fails to
provide the Executive with any of the benefits due to him under Section 4(b)
hereof, thirty (30) days after having received written notice from the
Executive of such failure, the Executive shall be entitled to full
reimbursement from the Company for all costs and expenses (including reasonable
attorneys' fees) incurred by the Executive in enforcing his rights under this
Agreement, plus interest at the rate of 9% per annum on the improperly withheld
amounts or improperly withheld benefits due to the Executive under Section 4(a)
hereof or Section 4(b) hereof, respectively.
11. MISCELLANEOUS.
(a) This Agreement shall not limit or infringe upon the
right of the Company or any affiliate to terminate the employment of Executive
at any time for any reason whatsoever, nor upon the right of Executive to
terminate his employment by the Company or any affiliate. Nothing contained
herein shall confer upon Executive the right to continue as an employee of the
Company or any affiliate.
(b) This Agreement contains the entire agreement between
Executive and Company regarding the subject matter hereof and supersedes any
prior oral or written understanding.
(c) This Agreement may not be amended or supplemented,
nor may any provision be waived, except by an instrument in writing signed by
the parties hereto. This Agreement shall be binding upon and inure to the
benefit of the Executive and his personal representatives, executors,
administrators and heirs; provided, however, no payment shall be due hereunder
after the death or permanent disability of Executive.
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(d) If any provision of this Agreement shall be held
invalid in part, such invalidity shall in no way affect the rest of such
provisions not held so invalid. The rest of such provision, together with all
other provisions of this Agreement, shall to the full extent consistent with
law continue in full force and effect.
(e) The headings of the Sections of this Agreement are
included solely for convenience of reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.
(f) This Agreement has been executed and delivered in
the Commonwealth of Pennsylvania and its validity, interpretation, performance,
and enforcement shall be governed by the internal laws of such Commonwealth,
without regard to any conflict of laws principles. The principle of
construction that ambiguities are construed against the draftsperson shall not
apply to this document.
(g) Any dispute or disagreement between Executive and
the Company with respect to any portion of this Agreement or its validity,
construction, meaning, performance or Executive's rights hereunder shall be
settled by arbitration in accordance with the Commercial Arbitration Rules of
the American Arbitration Association or its successor, as amended from time to
time. However, prior to submission to arbitration Executive will attempt to
resolve any disputes or disagreements with the Company over this option
amicably and informally, in good faith, for a period not to exceed two weeks.
Thereafter, the dispute or disagreement will be submitted to arbitration. At
any time prior to a decision from the arbitrator(s) being rendered, Executive
and the Company may resolve the dispute by settlement. Executive and the
Company shall equally share the costs charged by the American Arbitration
Association or its successor, but Executive and the Company shall otherwise be
solely responsible for their own respective counsel fees and expenses. The
decision of the arbitrator(s) shall be made in writing, setting forth the
award, the reasons for the decision and award and shall be binding and
conclusive on Executive and the Company. Further, neither Executive nor the
Company shall appeal any such award. Judgment of a court of competent
jurisdiction may be entered upon the award and may be enforced as such in
accordance with the provisions of the award.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
HANOVER FOODS CORPORATION
/s/ Xxxxxxx X. Xxxxxxxxx (SEAL) By: /s/ Xxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxxx Xxxx X. Xxxxxxxx, Chairman
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