Exhibit 10.6
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of December 31, 1996, by and between
MBW FOODS INC. (the "Company"), a Delaware corporation, and C. XXXX XXXXXXX (the
"Employee").
W I T N E S S E T H:
WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Company desires to employ the Employee and the Employee desires
to accept employment by the Company;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Employment. Upon the terms and subject to the conditions of this
Agreement, the Company hereby employs the Employee and the Employee hereby
accepts employment with the Company in the capacities hereinafter set forth.
2. Term of Employment. The term of this Agreement shall commence on
the date hereof and shall continue in effect through December 31, 1998, unless
earlier terminated pursuant to Section 6 below (the "Term"); provided that on
each anniversary of the date hereof, the Term of this Agreement shall be
automatically extended for an additional 12-month period.
3. Duties; Extent of Services.
(a) Duties. During the Term, the Employee shall serve as Executive
Vice President of the Company and shall perform the duties, undertake the
responsibilities and exercise the authority reasonably required of such an
employee of the Company, and shall have such other powers and perform such
additional executive duties as may be assigned to him from time to time by the
Board of Directors of the Company (the "Board") or by the President of the
Company (so long as such other powers and additional duties assigned by the
President are not inconsistent with those assigned by the Board). The Employee
shall report to the President. The Employee shall carry out the lawful
directions of the Board and the President.
(b) Extent of Services. Except for illness and permitted vacation
periods, during the Term the Employee shall (i) devote his full time and
attention during normal business hours to the businesses of the Company and its
subsidiaries and Affiliates (as
defined herein); (ii) use his best efforts to promote the interests of the
Company and its subsidiaries and Affiliates; (iii) discharge such executive and
administrative duties not inconsistent with his position as may be assigned to
him by the Board; and (iv) serve, without additional compensation, as a director
or officer of any subsidiary of the Company if elected as such.
4. Compensation.
(a) Base Salary. In consideration of the services rendered by the
Employee hereunder and provided that the Employee has substantially performed
all of his obligations provided for herein, the Company will pay to the Employee
a base salary (the "Base Salary") at the rate of $140,000 per year during the
Term. The Base Salary may be increased from time to time in an amount mutually
agreed to by the Employee and the Company to reflect the performance of the
Employee and additional responsibilities undertaken by the Employee. The Base
Salary shall be paid in accordance with the Company's normal payroll practice.
(b) Base Bonus. The Company shall pay the Employee a bonus with
respect to each fiscal year or portion thereof during the Term in accordance
with the following provisions:
(i) If the Financial Results of the Company for a fiscal year
during the Term are at least 90% but less than 95% of the EBITDA
Target for such year, Employee shall be paid an amount equal to 20%
of so much of his Base Salary as was paid with respect to such year.
(ii) If the Financial Results of the Company for a fiscal year
during the Term are at least 95% but less than 100% of the EBITDA
Target for such year, Employee shall be paid an amount equal to 30%
of so much of his Base Salary as was paid with respect to such year.
(iii) If the Financial Results of the Company for a fiscal
year equal or exceed 100% of the EBITDA Target for such year,
Employee shall be paid an amount equal to 40% of so much of his Base
Salary as was paid with respect to such year.
(c) Supplemental Bonus. In addition to the Base Bonus, if any, to
which the Employee may be entitled under clauses (i), (ii) or (iii) of Section
4(b), the Company shall pay the Employee a bonus with respect to such fiscal
year or portion thereof during the Term in accordance with the following
provisions:
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(i) If the Financial Results of the Company for a fiscal year
during the Term are at least 105%, but less than 110% of the EBITDA
Target for such year, Employee shall be paid an amount equal to 5%
of so much of his Base Salary as was paid with respect to such year.
(ii) If the Financial Results of the Company for a fiscal year
during the Term are at least 110%, but less than 115% of the EBITDA
Target for such year, Employee shall be paid an amount equal to 10%
of so much of his Base Salary as was paid with respect to such year.
(iii) If the Financial Results of the Company for a fiscal
year during the Term are at least 115% but less than 120% of the
EBITDA Target for such year, Employee shall be paid an amount equal
to 15% of so much of his Base Salary as was paid with respect to
such year.
(iv) If the Financial Results of the Company for a fiscal year
during the Term equal or exceed 120% of the EBITDA Target for such
year, the Employee shall be paid an amount equal to 20% of so much
of his Base Salary as was paid with respect to such year.
(d) For the purpose of this Agreement (1) the term "EBITDA Target"
shall mean the Company's projected earnings before interest, taxes, depreciation
and amortization, as contained in the Company's annual budget which is approved
by the Board (without reference to any adjustments or revision, upwards or
downwards, to such projected earnings which are subsequently approved by the
Board as part of any subsequent revision to such annual budget), (2) the term
"Financial Results" shall mean the Company's annual financial results reflected
in the Company's annual audited financial statements and (3) the Company's 1997
fiscal year shall be deemed to begin as of the date hereof.
(e) Any bonus due under Section 4(b) and (c) shall be paid to the
Employee within 30 days of the publication of the Company's annual audited
financial statements for the relevant year.
(f) Employee shall be entitled to receive a bonus (if any) with
respect to a fiscal year during the Term pursuant to the terms of Section 4(b)
and (c) of this Agreement if the Employee shall be employed by the Company on
the last day of such fiscal year. Such entitlement shall not thereafter be
affected by the subsequent termination of Employee's employment with the Company
pursuant to any provision of Section 6 of this Agreement.
5. Other Employee Benefits. During the Term, the Employee shall be
entitled (i) to vacation time in accordance with the Company's policy from time
to time in
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effect; (ii) to participate in all employee insurance and other fringe benefit
programs, including, without limitation, life, health, dental and accident
insurance plans and long term disability now or hereafter maintained by the
Company for senior executive or other salaried personnel for which the Employee
is eligible; and (iii) to participate in a pension plan with terms similar to
those applicable to executives of the Company.
6. Termination Provisions.
(a) Termination for Cause. The Board may terminate the Employee's
employment hereunder for Cause, as hereinafter defined, immediately upon written
notice to the Employee. For purposes of this Agreement, "Cause" shall mean (i)
embezzlement, theft or other misappropriation of any property of the Company or
any Affiliate, (ii) gross or willful misconduct resulting in substantial loss to
the Company or any Affiliate or substantial damage to the reputation of the
Company or any Affiliate, (iii) any act involving moral turpitude which results
in a conviction for a felony involving moral turpitude, fraud or
misrepresentation, (iv) gross neglect of his assigned duties to the Company or
any Affiliate, (v) gross breach of his fiduciary obligations to the Company or
any Affiliate, or (vi) any chemical dependence which materially affects the
performance of his duties and responsibilities to the Company or any Affiliate;
provided that in the case of the misconduct set forth in clauses (iv) and (vi)
above, such misconduct shall continue for a period of 30 days following written
notice thereof by the Company to the Employee. During the Term, the Employee
shall be entitled to only one such notice and right to cure for any single act
or event. If the Employee's employment is terminated for Cause, the Employee
shall be entitled to receive only the unpaid portion of the Base Salary then in
effect which has accrued to the date of termination, any other payments
generally available to departing employees of the Company (such as unused
vacation and personal days) and any bonus pursuant to Section 4 for the
preceding fiscal year which has not been paid as of the date of such
termination. The Employee shall not be entitled to receive any severance payment
with respect to such termination.
(b) Termination By Reason of Permanent Disability. If at any time
during the Term the Employee has been unable, as a result of physical or mental
illness or incapacity, to perform his duties hereunder for a period of four
consecutive months or for an aggregate of more than six months in any twelve
month period (a "Permanent Disability"), the Employee's employment hereunder may
be terminated by the Board upon thirty days' written notice to the Employee. If
the Employee's employment is terminated by reason of Permanent Disability, the
Employee shall be entitled to receive only the unpaid portion of the Base Salary
then in effect which has accrued to the date of termination, plus any other
payments generally available to departing employees of the Company (such as
unused vacation and personal days), plus any bonus pursuant to Section 4 for the
preceding fiscal
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year which has not been paid as of the date of such termination, plus an amount
equal to six months of Employee's Base Salary.
(c) Termination By Reason of Death. The Employee's employment
hereunder shall automatically terminate on the date of his death. If the
Employee's employment is so terminated by his death, the Company shall pay to
the Employee's estate in addition to the unpaid portion of the Base Salary then
in effect through date of Employee's death plus an amount equal to six months of
Employee's Base Salary, plus any other payments generally available to departing
employees of the Company (such as unused vacation and personal days), plus any
bonus pursuant to Section 4 for the preceding fiscal year which has not been
paid as of the date of the Employee's death. Such amount shall be paid within
thirty days after the date of his death if a personal representative has been
appointed by the end of such thirty day period or, if a personal representative
has not been appointed by the end of such thirty day period, promptly after a
personal representative has been appointed.
(d) Termination Without Cause. The Board may terminate the
Employee's employment hereunder at any time for any reason without Cause in
which case the Employee shall be entitled to receive an amount (the "Severance
Amount") equal to the Base Salary the Employee would have been entitled to
receive through the end of the then current Term (without giving effect to any
future extension pursuant to Section 2 hereof). The Severance Amount shall be in
lieu of any other severance payment to which Employee may be otherwise entitled
under any other severance plan maintained by the Company. The Severance Amount
shall be paid within 30 days of such termination. In addition, the Employee
shall be entitled to receive any other payments generally available to departing
employees of the Company (such as unused vacation and personal days), plus any
bonus pursuant to Section 4 for the preceding fiscal year which has not been
paid as of the date of such termination, plus, to the extent the Company
achieves the required percentage of the EBITDA Target for the fiscal year in
which such termination occurs, a pro rata portion of any Base Bonus under
Section 4(b) and of any Supplemental Bonus under Section 4(c) with respect to
such fiscal year that Employee would have earned if he had remained employed for
the entire fiscal year and not been terminated, based on the actual number of
days during such year that Employee was employed by the Company.
(e) Termination by Employee. Notwithstanding any other provisions of
this Agreement, Employee shall have the right to terminate the employment
relationship under this Agreement at any time prior to the expiration of the
Term for any of the following reasons: (i) a material breach by the Company of
any provision of this Agreement that remains uncorrected for 30 days following
written notice of such breach by Employee to the Company or (ii) for any other
reason whatsoever, in the sole discretion of the Employee, upon 90 days prior
written notice to the Company. If the Employee terminates his
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employment with the Company pursuant to clause (i) of this Section 6(e), the
Employee shall be entitled to receive the Severance Amount plus any other
payments generally available to departing employees of the Company (such as
unused vacation and personal days), plus any bonus pursuant to Section 4 for the
preceding fiscal year which has not been paid as of the date of such
termination. If the Employee terminates his employment with the Company pursuant
to clause (ii) of this Section 6(e), the Employee shall be entitled to receive
the unpaid portion of the Base Salary then in effect which has accrued to the
date of termination plus any other payments generally available to departing
employees of the Company (such as unused vacation and personal days), plus any
bonus pursuant to Section 4 for the preceding fiscal year which has not been
paid as of the date of such termination.
7. Covenants of the Employee.
(a) Non-Competition. Until the later of (x) the first anniversary of
the date of the termination of the Employee's employment hereunder and (y) the
end of the then current Term in effect on the date of such termination, the
Employee shall not, directly or indirectly, be associated with any entity which
competes with the Company or any of its Affiliates that are subsidiaries of MBW
Investors LLC or for which the Employee renders substantial services and whose
primary business is, or personally engage in, the same or similar grocery
product line of business of the Company or any of its Affiliates, whether as a
director, officer, employee, agent, consultant, partner, owner, independent
contractor or otherwise. For the purpose of this Agreement, the term "Affiliate"
means, with respect to the Company, any person or entity which, directly or
indirectly, controls, is controlled by or under common control with the Company,
with "control" to be based on the ownership of 50% or more of the voting
securities (or their equivalent) of a particular entity.
(b) Non-Solicitation of Employees of the Employer. Until the later
of (x) the first anniversary of the date of the termination of the employment of
the Employee hereunder and (y) the end of the then current Term in effect on the
date of such termination, the Employee shall not, and shall cause each business
or entity with which he shall become associated in any capacity not to, solicit
for employment or employ any person who is then, or who was at any time after
the date four months prior to the date of such termination, employed in a
professional or managerial position by the Company, its subsidiaries or
Affiliates.
(c) Confidentiality. The Employee agrees and acknowledges that the
Confidential Information (as hereinafter defined) of the Company and its
subsidiaries and affiliates, is valuable, special and unique to their business;
that such business depends on such Confidential Information; and that the
Company wishes to protect such Confidential Information by keeping it
confidential for the use and benefit of the Company and its
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subsidiaries and Affiliates. Based on the foregoing, the Employee agrees to
undertake the following obligations with respect to such Confidential
Information:
(i) the Employee agrees to keep any and all Confidential
Information in trust for the use and benefit of the Company and its
subsidiaries and Affiliates;
(ii) the Employee agrees that, except as required by
applicable law or as authorized in writing by the Board, he will not
at any time during or after the termination of his employment
hereunder, disclose, directly or indirectly, any Confidential
Information of the Company or any of its subsidiaries or Affiliates;
(iii) the Employee agrees to take all reasonable steps
necessary, or reasonably requested by the Company, to ensure that
all Confidential Information is kept confidential for the use and
benefit of the Company and its subsidiaries and Affiliates; and
(iv) the Employee agrees that, upon termination of his
employment hereunder or at any other time the Company may in writing
so request, he will promptly deliver to the Company all materials
constituting Confidential Information (including all copies thereof)
that are in his possession or under his control. The Employee
further agrees, that if requested by the Company, to return any
Confidential Information pursuant to this subparagraph (iv), he will
not make or retain any copy or extract from such materials.
For purposes of paragraph (c) of this Section 7, "Confidential
Information" means any and all information developed by or for the Company or
any of its subsidiaries or Affiliates of which the Employee gains or has
acquired knowledge during or prior to the Term by reason of his employment with
the Company that is (A) not generally known in any industry in which the Company
or any of its subsidiaries or Affiliates is or may become engaged or (B) not
publicly available. Confidential Information includes, but is not limited to,
any and all information developed by or for the Company or any of its
subsidiaries or Affiliates concerning plans, marketing and sales methods,
customer lists, materials, processes, business forms, procedures, devices, plans
for development of products, services or expansion into new areas or markets,
internal operations, and any trade secrets and proprietary information of any
type owned by the Company or any of its subsidiaries or Affiliates, together
with all written, graphic and other materials relating to all or any part of the
same.
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8. Successors; Assignment.
(a) The Company. The Company may assign any of its rights and
obligations hereunder, without the written consent of the Employee, in
connection with a merger, consolidation or sale of all or substantially all of
the business or assets of the Company. This Agreement shall be binding upon and
shall inure to the benefit of the Company and its successors and assigns.
(b) The Employee. Neither this Agreement nor any right or interest
hereunder may be assigned by the Employee, his beneficiaries, or legal
representatives without the prior written consent of the Board; provided,
however, that nothing in this Section 8 shall preclude (i) the Employee from
designating a beneficiary to receive any benefit payable hereunder upon his
death, or (ii) the executors, administrators, or other legal representatives of
the Employee or his estate from assigning any rights hereunder to distributees,
legatees, beneficiaries, testamentary trustees or other legal heirs of the
Employee.
9. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been given when delivered by hand, mailed
by first-class registered or certified mail, postage prepaid and return receipt
requested, or delivered by overnight courier addressed as follows:
(i) If to the Company:
MBW Foods Inc.
Community Corporate Center
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
with a copy to:
MBW Investors LLC
c/o Dartford Partnership, L.L.C.
000 Xxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
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with a copy to:
XxXxxx De Leeuw & Co.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxxx
(ii) If to the Employee:
0000 Xxxxxxx Xxxxx
Xxxxxxxxxxx, Xxxx 00000
or, in each case, at such other address as may from time to time be specified to
the other party in a notice similarly given.
10. Governing Law; Jurisdiction. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of New York applicable to contracts executed and to be performed
entirely within said State. Any judicial proceeding brought against any of the
parties to this Agreement or any dispute arising out of this Agreement or any
matter related hereto may be brought in the courts of the State of New York or
in the United States District Court for the Southern District of New York, and,
by execution and delivery of this Agreement, each of the parties to this
Agreement accepts the jurisdiction of said courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement. The
foregoing consent to jurisdiction shall not be deemed to confer rights on any
person other than the respective parties to this Agreement.
11. Expenses. If a dispute arises out of or related to this
Agreement, if either party to the Agreement brings legal action to enforce the
terms of the Agreement, the party who prevails in such legal action, whether
plaintiff or defendant, in addition to the remedy or relief obtained in such
legal action, shall be entitled to recover his or its expenses incurred in such
legal action, including without limitation, court costs and attorneys fees. A
party shall be deemed to have prevailed in such a legal action if such action is
concluded pursuant to a court order or final judgment in favor of such party
which is not subject to appeal, a settlement agreement or dismissal of the
principal claims.
12. Entire Agreement. This Agreement contains the entire agreement
of the parties and their Affiliates relating to the subject matter hereof and
supersedes all prior agreements, representations, warranties and understandings,
written or oral, with respect thereto.
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13. Severability. If any term or provision of this Agreement or the
application thereof to any person, property or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons, property or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall remain valid and enforceable to
the fullest extent permitted by law.
14. Remedies.
(a) Injunctive Relief. The Employee acknowledges and agrees
that the covenants and obligations of the Employee contained in subsections (a),
(b) and (c) of Section 7 hereof relate to special, unique and extraordinary
matters and are reasonable and necessary to protect the legitimate interests of
the Company and its subsidiaries and Affiliates and that a breach of any of the
terms of such covenants and obligations will cause the Company irreparable
injury for which adequate remedies at law are not available. Therefore the
Employee agrees that the Company shall be entitled to an injunction, restraining
order, or other equitable relief from any court of competent jurisdiction,
restraining the Employee from any such breach.
(b) Remedies Cumulative. The Company's rights and remedies
under this Section 14 are cumulative and are in addition to any other rights and
remedies the Company may have at law or in equity.
15. Withholding Taxes. The Company may deduct any federal, state or
local withholding or other taxes from any payments to be made by the Company
hereunder in such amounts which the Company reasonably determine are required to
deduct under applicable law.
16. Amendments, Miscellaneous, etc. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated except by an
instrument in writing signed by the party against which such change, waiver,
discharge or termination is sought to be enforced. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same instrument. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
17. Survival. The covenants set forth in Sections 4(f), 6 and 7 of
this Agreement shall survive and shall continue to be binding upon the parties
notwithstanding the termination of this Agreement for any reason whatsoever. The
covenants set forth in Section 7 of this Agreement shall be deemed and construed
as separate agreements independent of any other
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provision of this Agreement. The existence of any claim or cause of action by
the Employee against Company, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Company of any or all
covenants.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
MBW FOODS INC.
By:/s/ Xxx Xxxxx
----------------------------------------
Title: Executive Vice President
/s/ C. Xxxx Xxxxxxx
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