Exhibit 10(aa)
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT (" Agreement"), made and entered into as of
the 30th day of March, 2003 (the "Effective Date"), by and between Crystal Food
Services, LLC, an Indiana limited liability company with offices at 0000
Xxxxxxxxxx Xxxxxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000-0000 (" Crystal"), and Xxxx X.
Bayt, an individual over the age of eighteen years of Indianapolis, Indiana
("Bayt").
WHEREAS, Crystal operates a food service, catering, cafeteria
management and vending business (the "Business"); and
WHEREAS, Crystal and Bayt entered into employment contract, effective
as of March 28, 1998 (the "Existing Contract"); and
WHEREAS, Crystal and Bayt acknowledge and agree that Crystal's
retention of Bayt's talents and future services is essential to Crystal's future
success because of Bayt's extensive experience and expertise in the food service
and catering businesses; and
WHEREAS, Crystal and Bayt desire to extend Bayt's employment as the
President and Chief Operating Officer of Crystal beyond the term of the Existing
Contract by entering into a new agreement on the terms and subject to the
conditions hereinafter set forth and concurrently canceling the Existing
Agreement;
NOW, THEREFORE, in consideration of the premises and in consideration
of the terms, conditions and covenants hereinafter set forth, Crystal and Bayt
agree as follows:
1. EMPLOYMENT. Crystal hereby employs Bayt as of the Effective
Date for the Term (hereinafter defined)on the terms and covenants and subject to
the conditions set forth in this Agreement to perform the services as President
and Chief Operating Officer of Crystal and Bayt agrees to and accepts such
employment, subject to the general supervision of the Chief Executive Officer of
Crystal, and the orders, advice and direction of the Board of Managers and the
Chief Executive Officer of Crystal. Bayt agrees to perform all duties
customarily performed by the chief operating officers of the operating divisions
of Crystal's affiliated companies and of similar businesses as that engaged in
by Crystal, and shall also perform such other and unrelated duties consistent
with the responsibilities of his position as may be assigned to him by the Chief
Executive Officer or Board of Managers of Crystal. During the Term, Crystal
shall not have the right to terminate Bayt except for fraud, theft or
embezzlement under applicable law, gross dereliction of his duties hereunder
(after notice and opportunity to cure), or his conviction of any crime in
connection with his employment with Crystal or any of its affiliated companies
(hereinafter referred to as "Cause"), and Bayt shall be entitled to all of the
benefits and payments to be made and provided by Crystal at all times during the
Term except as otherwise provided in paragraph 5 hereof.
2. TERM. The term of this Agreement (herein the "Term") shall
commence on the Effective Date and shall terminate upon expiration of the fifth
consecutive fiscal year of Crystal (herein the "Fiscal Year") thereafter. Except
as otherwise specifically provided in paragraph 5 hereof, all accrued rights,
including any right to a Bonus, shall survive the Term and the termination of
Bayt's employment.
3. SALARY. Crystal shall pay to Bayt an annual salary during the
Term of Three Hundred Ten Thousand and No/100 ($310,000.00), payable in thirteen
(13) approximately equal periodic installments concurrent with the salary
payments to senior management of
Crystal's affiliates (the "Salary"). During the Term, the Salary may be
increased by the Board of Managers of Crystal, but shall not be subject to any
decrease, except as provided in paragraph 5 hereof.
4. BONUS. Within ninety (90)day's after the end of each Fiscal
Year during the Term, Crystal shall pay to Bayt an incentive bonus equal to
twelve and one-half percent (12.5%) of the amount, if any, by which Crystal's
Incentive Plan Profit (hereinafter defined) in such Fiscal Year exceeds the
Adjusted Baseline (hereinafter defined) (the "Bonus"), except as otherwise
provided in paragraph 5 hereof. Except as otherwise provided in paragraph 5
hereof, in the event Bayt is not an employee of Crystal or any of its affiliates
at the end of any Fiscal Year during the Term, the Bonus for that Fiscal Year
and any successive Fiscal Year during the Term shall be equal to the greater of
(a) the Bonus calculated for that Fiscal Year prorated to the date of Bayt's
termination or (b) the amount of the Bonus paid to Bayt for the last full Fiscal
Year during which Bayt was employed by Crystal.
For purposes of this paragraph 4, the following terms shall have the
meanings ascribed to them below:
a. Incentive Plan Profit shall mean the actual profit before tax of
Crystal adjusted to exclude (i) the capital employed charge of
Crystal's parent company; (ii) net other interest expense/income; (iii)
the pre-tax loss, if any, of The Fountains (Unit #762)in excess of
Three Hundred Thousand and No/100 Dollars ($300,000.00); (iv) accrued
bonus expense for Bayt and Crystal's Executive Vice President; (iv) the
net income or loss of the Corporate cafeteria (Unit #781)of Crystal's
parent company; and (v) accounting changes and any other adjustments
mutually agreed to by the parties.
b. Adjusted Baseline shall mean the amount of Two Million One Hundred
Twenty Five Thousand and No/100 Dollars ($2,125,000.00)plus (i) the
Interest Charge (hereinafter defined)for the Fiscal Year; and (iii)
such other adjustments as may be mutually agreed to by the parties.
c. Interest Charge shall mean an amount equal to nine percent (9%)of
the difference between the Average Net Assets (hereinafter defined) for
the immediately preceding Fiscal Year and Eighteen Million Five Hundred
Fifty Thousand and No/100 Dollars ($18,550,000.00).
d. Average Net Assets shall mean the total assets of Crystal less the
total current liabilities of Crystal, excluding accrued federal income
taxes and accrued royalty fees.
5. ADJUSTMENTS TO COMPENSATION. Notwithstanding anything
contained in paragraphs 3 or 4 of this Agreement to the contrary, in the event
Bayt (i) is terminated for Cause or (ii) voluntarily resigns his employment with
Crystal, he shall not be entitled to (a) a Bonus with respect to the Fiscal Year
in which any such termination or voluntary resignation occurs or any Fiscal Year
subsequent thereto, or (b) to a Salary for any period subsequent to the date of
any such termination or voluntary resignation in the Fiscal Year of any such
termination or resignation or in any Fiscal Year subsequent thereto.
6. BENEFITS. Bayt shall continue to be eligible to participate in
the fringe benefit plans of Crystal's parent company in which he is currently
participating and in any new fringe benefit plans to the extent hereafter made
available by Crystal or its parent company to executive officers of Crystal.
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7. BEST EFFORTS. Bayt covenants and agrees that he will at all
times while employed by Crystal faithfully, diligently, and to the best efforts
of his ability, experience and talents, perform all of the duties that may be
required of and from him pursuant to the express and implicit terms of this
Agreement. Such duties shall be rendered at such place or places as Crystal
shall in good faith require or as the interests, needs, business or opportunity
of Crystal shall reasonably require.
8. OTHER EMPLOYMENT. At all times while employed by Crystal, Bayt
shall devote all of his time, attention, knowledge and skills solely to the
business and interests of Crystal, and Crystal shall be entitled to all of the
benefits, profits or other issues arising from or incident to all work, services
and advice of Bayt. During the Term, Bayt shall not be interested, directly or
indirectly, in any manner, as partner, officer, director, shareholder, advisor,
employee, agent, consultant or any other capacity in any other business similar
to the Business.
9. RECOMMENDATIONS. Bayt shall make available to Crystal all
information related to the Business of which Bayt shall have knowledge and shall
make all suggestions and recommendations that he reasonably believes will be
beneficial to Crystal.
10. CONFIDENTIALITY. Bayt shall not at any time or in any manner,
either directly or indirectly, divulge, disclose or communicate to any person,
firm, corporation or other entity in any manner whatsoever any information which
is not known or publicly available concerning any matters affecting or relating
to the Business or the business of any of its affiliated companies, including
without limitation, any of its customers, prices, profits, sales, financial or
any other non-public information concerning the Business or the business of any
of its affiliated companies, the manner of their operations, their plans and
processes, or other data, without regard to whether all of the above stated
matters will be deemed confidential, material or important. Crystal and Bayt
specifically and expressly stipulate that, as between them, such nonpublic
information is important, material and confidential and would, if disclosed,
gravely affect the effective and successful conduct of the Business and
Crystal's affiliated companies, and their goodwill, and that any material breach
of the terms of this paragraph shall be a material breach of this Agreement. The
foregoing terms and conditions shall survive the Term for a period of two
(2)years.
11. COVENANT NOT TO COMPETE. Bayt agrees that during the Term and
for a period of one (1) year thereafter, Bayt will not, within a seventy-five
(75) mile radius of each location at which Crystal is then conducting business,
directly or indirectly engage in any food service, catering, cafeteria
management or vending business or businesses except on behalf of Crystal. The
phrase "directly or indirectly engaging in any food service, catering, cafeteria
management or vending business or businesses', shall include, but not be limited
to, engaging in such business as an owner, partner, investor, manager,
shareholder, consultant, advisor, member, employee or agent of any person, firm,
corporation or other entity engaged in such business or being interested
directly or indirectly in any such business conducted by any person, firm,
corporation or other entity; provided, however, this paragraph shall not
prohibit ownership of securities of any publicly traded company.
12. REMEDIES. Bayt agrees that in the event Bayt violates or
breaches the covenant not to compete set forth in paragraph 11, Bayt shall pay
as liquidated damages to Crystal the sum of Two Thousand Five Hundred Dollars
($2,500.00) per day for each day or part thereof that any such violation or
breach continues. Bayt and Crystal agree and recognize that damages in the event
of any breach or violation of this covenant by Bayt it would be difficult or
impossible to ascertain though great and irreparable, and that this Agreement
with respect
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to liquidated damages shall in no event disentitle Crystal to
injunctive relief in the event of any breach or violation by Bayt of the
covenant not to compete.
13. ENTIRE AGREEMENT. This Agreement contains the complete
agreement and understanding between the parties with regard Crystal's employment
of Bayt as of the Effective Date and supersedes all prior and other agreements,
understandings, representations, or statements regarding the subject matter
hereof, including, but not limited to, the Existing Contract which is hereby
terminated. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective representatives, successors and assigns.
IN WITNESS WHEREOF, Crystal and Bayt have executed this Agreement as
of the date first above written.
CRYSTAL FOOD SERVICES, LLC
By: /s/ Xxx X. Xxxxx
---------------------------------
Xxx X. Xxxxx, Chief Executive Officer
Attest: /s/ X. Xxxxxxxx Butt
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X. Xxxxxxxx Butt, Secretary
/s/ Xxxx X. Bayt
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Xxxx X. Bayt
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