EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of April 29, 1996, by and between
Xxxxx Xxxx Pet Food Company, Inc. (the "Company"), a Delaware corporation, and
Xxxxxx X. Xxxx (the "Employee").
W I T N E S S E T H:
WHEREAS, the Employee and Xxxxx Xxxx Pet Food Company, L.L.C., a
Delaware limited liability company ("Xxxxx Xxxx LLC"), are parties to that
certain employment agreement dated May 8, 1995 (the "Former Employment
Agreement");
WHEREAS, Xxxxx Xxxx LLC has transferred all of its assets and
liabilities to the Company through its parent, Xxxxx Xxxx Pet Food Holdings,
Inc., a Delaware corporation;
WHEREAS, from the date hereof, the Company will transact the
business formerly transacted by Xxxxx Xxxx LLC;
WHEREAS, the Company desires to employ the Employee on the same
terms and conditions as he was employed by Xxxxx Xxxx LLC; and
WHEREAS, the parties desire to terminate the Former Employment
Agreement and enter into this Agreement upon the terms and subject to the
conditions set forth herein.
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 hereby agree as follows:
1. Termination of Former Employment Agreement. The Former Employment
Agreement is hereby terminated in its entirety and shall no longer be of any
force or effect.
2. 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.
3. Term of Employment. (a) The initial term of this Agreement shall
commence on the date hereof (the "Commencement Date") and shall continue in
effect through May 1, 1998; provided, however, that (i) commencing on the first
anniversary of the Commencement Date and each anniversary thereafter (subject to
clause (ii) of this Section 3(a)), the term of this Agreement shall
automatically be extended for one additional year so that such term ends two
years after any such anniversary unless, not later than 30 days prior
to such automatic extension date, the Company or the Employee shall have given
notice that such party does not wish to extend the term of this Agreement; and
(ii) if a Change of Control of the Company shall occur during the initial or
extended term of this Agreement, the term of this Agreement shall automatically
be extended to the date that is two years after the date such Change of Control
occurs and the automatic extension set forth in clause (i) of this Section 3(a)
shall be of no further force and effect.
(b) A "Change of Control" of the Company shall mean (i) the sale,
exchange or other disposition of more than 50% of the shares of capital stock of
the Company to or with a person or entity (other than the Company or an
affiliate of the Company), (ii) the sale of all or substantially all of the
assets of the Company to a person or entity (other than an affiliate of the
Company), or (iii) the merger, consolidation or other business combination of
the Company with or into another entity not controlled by the Company or an
affiliate of the Company.
4. Duties; Extent of Services.
(a) Duties. During the term of this Agreement, as extended in
accordance herewith (the "Term"), the Employee shall serve in such executive
capacity as may be reasonably designated by the board of member managers of the
Company (the "Board"), initially as President of the Company and shall perform
the duties, undertake the responsibilities and exercise the authority
customarily performed, undertaken and exercised by a person in such position in
the business in which the Company is engaged. The Employee shall report to and
carry out the lawful directions of the Board.
(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; (ii) use his best efforts to promote the interests of the
Company and its subsidiaries; (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.
5. 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 $190,000 per year
during the Term. The Board may in its discretion increase, but not decrease, the
Base Salary. The Base Salary shall be paid in accordance with the Company's
normal payroll practice.
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(b) Bonus. The Employee shall be eligible to be paid a bonus
pursuant to the terms and conditions of any bonus policy of the Company then in
effect and applicable to the Employee.
6. 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 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.
7. 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 (A) dishonesty of the Employee detrimental to the best interests of
either the Company or any of its subsidiaries or affiliates or conviction of the
Employee of a crime which constitutes a felony, (B) any material act or omission
by the Employee during the Term involving willful malfeasance or gross
negligence in the performance of his duties hereunder, or (C) repeated failure
of the Employee to follow the reasonable instructions of the Board (other than
inattention or neglect resulting from illness or disability of the Employee)
which inattention and neglect does not cease within fifteen days after written
notice thereof specifying the details of such conduct is given by the Board 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.
(b) Termination By Reason of Permanent Disability. If at any
time during the Term the Board reasonably determines that the Employee has been
or will be 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.
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(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 a lump sum amount equal to the unpaid portion of the Base
Salary then in effect through the end of the month in which his death occurs.
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) Other Termination Provisions. The Board may terminate the
Employee's employment hereunder at any time for any reason without Cause in
which case the Employee shall remain entitled to receive all compensation
hereunder until the earlier of the end of the current two year term or his
earlier Permanent Disability or death. Notwithstanding the foregoing, in the
event the Board (or the Board or similar body of any successor or assign of the
Company) terminates the Employee's employment without Cause within two years
after a Change of Control, any compensation by way of salary or cash bonuses
received by the Employee from any person, business or entity with respect to
full or part-time employment for the period from the date of such termination to
the second anniversary of such Change of Control shall reduce, on a
dollar-for-dollar basis, any obligation of the Company (or its successors or
assigns) to pay to Employee any Base Salary or cash bonus hereunder with respect
to such period.
8. Covenants of the Employee.
(a) Non-Competition. Except with respect to a termination
described in Section 7(d) hereof or for a termination resulting from a notice
given by the Company under Section 3(a)(i) hereof, until the first anniversary
of the date of the termination of the Employee's employment hereunder, the
Employee shall not, directly or indirectly, be associated with any entity which
competes with the Company and whose primary business is, or personally engage
in, the same or similar line of business of the Company, whether as a director,
officer, employee, agent, consultant, partner, owner, independent contractor or
otherwise.
(b) Non-Solicitation of Employees of the Employer. Until the
first anniversary of 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.
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(c) Confidentiality. The Employee agrees and acknowledges that
the Confidential Information of the Company and its subsidiaries and affiliates,
as hereinafter defined, 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 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 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 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 8, "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
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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.
9. 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 Change of Control. 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 9 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.
10. 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:
Xxxxx Xxxx Pet Food Company, Inc.
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Chief Executive Officer
(ii) If to the Employee:
Xxxxxx X. Xxxx
Xxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 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.
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11. Governing Law; Expenses.
(a) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee without giving
effect to the conflicts of law principles thereof.
(b) Expenses. All costs and expenses (including attorneys'
fees) incurred in connection with any claim, dispute or litigation pertaining to
this Agreement shall be paid by the party incurring such expenses.
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.
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 8 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.
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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. Counterparts. This Agreement may be executed in one or more
counterparts and shall be the valid and binding agreement of the parties when
such counterparts have been duly executed and delivered by each party hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
XXXXX XXXX PET FOOD COMPANY, INC.
By: /s/ Xxxxxx X. Xxxx
---------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President Finance
/s/ Xxxxxx X. Xxxx
------------------------------------
XXXXXX X. XXXX
With respect to Section 1 only:
XXXXX XXXX PET FOOD COMPANY, L.L.C.
By: /s/ Xxxxxx X. Xxxx
---------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President Finance
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