EXHIBIT 10.17
CHANGE OF CONTROL AND
SEVERANCE AGREEMENT
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This Agreement made as of the 21st day of December 1998 by and between
Annie's Homegrown, Inc., a Delaware corporation with its principal place of
business at 000 Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx 00000 (the "Company") and
Xxxx Xxxxx, an individual whose mailing address is 00 Xxxxx Xxxx, Xxxx X-00,
Xxxxx, Xxxxxxxxxxxxx 00000 (the "Employee").
W I T N E S S E T H:
WHEREAS, Employee is Treasurer and Chief Financial Officer of the Company
and has made and is expected to continue to make major contributions to the
Company; and
WHEREAS, the Company desires to provide Employee with certain benefits in
the event of a change in control of the Company as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants and
promises herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Company and Employee
agree as follows:
Payment in Connection with a Merger or Sale of the Company. If, during the term
of Employee's employment, or within six (6) months of an Involuntary Termination
without Cause (as hereinafter defined) of Employee's employment with the Company
or a related entity, there shall be a Change of Control (as hereinafter
defined), Employee shall be entitled to receive from the Company an amount equal
to one percent (1%) of the Consideration (as hereinafter defined) paid in
connection with the Change in Control less the amount due, including all accrued
interest, on all notes due to the Company from Employee. For purposes hereof,
"Change in Control" means the occurrence of any of the following events during
the term of Employee's employment: (a) the Company is merged or consolidated or
reorganized into or with another corporation or other legal person (including a
purchase or exchange of the Company's stock), and as a result of such merger,
consolidation or any other reorganization or change of ownership of the
Company's stock less than a majority of the combined voting power of the then-
outstanding securities of such surviving, resulting or reorganized corporation
or person immediately after such transaction is held in the aggregate by the
holders of the then-outstanding securities entitled to vote generally in the
election of directors of the Company ("Voting Stock") immediately prior to such
transaction; or (b) the Company sells or otherwise transfers all or
substantially all of its assets to any other corporation or other legal person,
and as a result of such sale or transfer, less than a majority of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such sale or transfer is held in the aggregate by the holders
of Voting Stock in the Company immediately prior to such sale or transfer. For
purposes hereof, "Consideration" shall mean cash and securities paid to the
Company and/or its shareholders upon consummation of the Change in Control and
shall exclude (a) any amount to be paid after the consummation of the Change in
Control and (b) any debt assumed by the acquirer.
Termination of Employment.
Voluntary Termination. Employee may voluntarily terminate his employment
with the Company upon sixty (60) days written notice to the Company. In the
event that Employee voluntarily terminates his employment with the Company, the
Company will pay Employee any sums which accrued to Employee prior to the
effective date of termination, including any accrued bonus earned but not yet
paid, and any stock options granted by the Company that have accrued, but have
not yet been issued.
Involuntary Termination. Employee may be terminated by the Company at any
time with or without cause by a majority vote of the Board of Directors
("Involuntary Termination"). "Cause" shall be defined as: (a) Employee's
conviction of any crime (whether or not involving the Company) which constitutes
a felony in the jurisdiction involved; (b) any intentional act of theft, fraud
or embezzlement by Employee in connection with his work with the Company; or (c)
Employee's continuing, repeated and willful failure or refusal to perform his
duties and services (other than due to his incapacity due to illness or injury).
In the event of an Involuntary Termination for any reason other than Cause as
defined herein or Employee's own voluntary termination, the Company shall
continue to pay Employee's monthly Base Salary, as then in effect, in the
Company's normal payroll periods for six (6) months, and the Company shall
maintain health insurance and other fringe benefits, if any, for a period of six
(6) months following such termination. If Employee shall leave employment
within thirty (30) days of any material involuntary reduction in Employee's Base
Salary, bonus opportunity or responsibilities, any such cessation of employment
shall be deemed to be an Involuntary Termination for any reason other than Cause
or Employee's own voluntary termination, and Employee shall be entitled to the
severance payment and continuation of benefits described in this Section 2(b).
For the purposes of this Agreement, "Base Salary" shall mean Employee's basic
compensation exclusive of bonuses, stock options and any other forms of
compensation or benefits.
Involuntary Termination - Change in Control. If after the effective date
of a Change in Control Employee's employment is terminated other than for Cause
or pursuant to Employee's own voluntary termination, the Company shall within
thirty (30) days pay to Employee, in one lump sum, severance equal to twelve
(12) months of Base Salary, as then in effect, and the Company shall maintain
for Employee health insurance and other fringe benefits, if any, for a period of
twelve (12) months following such termination. If after the effective date of a
Change in Control Employee shall leave employment within thirty (30) days of any
material involuntary reduction in Employee's Base Salary, bonus opportunity or
responsibilities, any such cessation of employment shall be deemed to be an
Involuntary Termination for any reason other than Cause or Employee's own
voluntary termination, and Employee shall be entitled to the severance payment
and continuation of benefits described in this Section 2(c).
Non-Disclosure. During the term of Employee's employment and thereafter, except
pursuant to his duties to the Company hereunder, Employee shall not disclose to
anyone any material or confidential information about the affairs of the
Company, including trade secrets, recipes, trade "know-how," inventions,
customer lists, business plans, operational methods, pricing policies, marketing
plans, sales plans, identity of customers, sales, profits or other financial
information which is confidential to the Company or is not generally known in
the relevant trade.
Notices. Notices will be hand delivered or sent by registered or certified
mail, postage prepaid, return receipt requested, or by a recognized expedited
delivery service with signature required for delivery, to the address set forth
on page one hereof, unless specifically changed by either party by written
notice to the other.
Miscellaneous.
This Agreement is a personal contract, and the rights and interests of Employee
hereunder may not be sold, transferred, assigned, pledged or hypothecated,
except as otherwise expressly permitted by the provisions of this Agreement.
Except as otherwise expressly provided herein, Employee shall not have any power
of anticipation, alienation or assignment of payments contemplated hereunder,
and all rights and benefits of Employee shall be for the sole personal benefit
of Employee, and no other person shall acquire any right, title or interest
hereunder by reason of any sale, assignment, transfer, claim or judgment or
bankruptcy proceedings against Employee, provided, however, that in the event of
Employee's death, Employee's estate, legal representative or beneficiaries (as
the case may be) shall have the right to receive all of the benefits that
accrued to Employee pursuant to and in accordance with the terms of this
Agreement prior to the date of Employee's death.
The Company shall assign this Agreement to any successor of substantially all of
its business or assets, and any such successor shall be bound by all of the
provisions hereof.
This Agreement may not be changed, amended, terminated, or superseded orally,
but only by an agreement in writing, nor may any of the provisions hereof be
waived orally, but only by an instrument in writing, in any such case signed by
the party against whom enforcement of any change, amendment, termination,
waiver, modification, extension or discharge is sought.
Except as otherwise provided herein, this Agreement shall be governed by and
construed and enforced in accordance with the laws of the Commonwealth of
Massachusetts, without giving effect to the principles of conflict of laws
thereof.
All descriptive headings of the several Sections of this Agreement are inserted
for convenience only and do not constitute a part of this Agreement.
If any provision of this Agreement, or part thereof, is held to be
unenforceable, the remainder of this Agreement and provision, as the case may
be, shall nevertheless remain in full force and effect.
Each of the parties hereto shall, at any time and from time to time hereafter,
upon the reasonable request of the other, take such further action and execute,
acknowledge and deliver all such instruments of further assurance as necessary
to carry out the provisions of this Agreement.
This Agreement contains the entire agreement and understanding between the
Company and Employee with respect to the subject matter hereof. No
representations or warranties of any kind or nature relating to the Company or
its affiliates or their respective businesses, assets, liabilities, operations,
future plans or prospects have been made by or on behalf of the Company to
Employee; nor have any representations or warranties of any kind or nature been
made by Employee to the Company, except as expressly set forth in this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
above first written.
ANNIE'S HOMEGROWN, INC.
By:
Title:
EMPLOYEE:
Xxxx Xxxxx
