EMPLOYMENT AGREEMENT
BY AND BETWEEN
ANNIE'S HOMEGROWN, INC.,
AND
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Dated as of August 27, 1998
EMPLOYMENT AGREEMENT
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This Employment Agreement is made and entered into as of August 27, 1998
(the "Agreement") by and between Annie's Homegrown, Inc., a Delaware corporation
(the "Company") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Manager"). Capitalized terms not
defined herein shall have the meaning given to them in that certain Asset
Purchase Agreement of even date herewith.
BACKGROUND
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A. The Company has entered into an Asset Purchase Agreement with The
Tamarind Tree Ltd. ("Seller"), a New Jersey corporation of which Manager is the
Chief Executive Officer, to purchase certain assets of Seller. The asset
acquisition to occur under the Asset Purchase Agreement is referred to herein as
the Brand Acquisition.
B. It is a condition to the closing of the Brand Acquisition that the
Company and the Manager enter into this Agreement whereby Manager agrees to
serve as General Manager of the Company's Tamarind Tree division (the
"Division") and agrees that Manager shall not devalue the goodwill of the
Company is purchasing under the Brand Acquisition by competing with the Company.
NOW, THEREFORE, in consideration of the mutual obligations herein
contained, the parties hereto, covenant and agree as follows:
1. Employment.
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The Company hereby employs the Manager to render services to the Company in
the initial capacity of General Manager of the Division reporting to the
Company's Chief Operating Officer and shall perform such duties as the Company
shall from time to time designate. Manager shall initially be based in the
Company's offices in New Jersey.
The Manager shall devote his full business time and undivided attention to
the business and affairs of the Company and its subsidiaries/affiliates, except
for vacation, sick leave and disability leave in accordance with the Company's
policies. Nothing in this Agreement shall preclude the Manager, with the
consent of the Chief Operating Officer, from engaging in charitable and public
service activities provided such service or activities do not interfere with the
performance of his duties and responsibilities under this Agreement.
2. Term.
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This Agreement shall commence effective August 27, 1998 and shall continue
until the earlier of (i) August 27, 2003, or (ii) the date terminated pursuant
to Section 4 (Termination) of this Agreement. the obligations of the Company
and the Manager set forth in Sections 4 (Termination), 5 (Confidentiality and
Restrictive Covenant), 6 (Proprietary Information and
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Inventions), 7 (Withholding) and 8 (Miscellaneous), shall survive the
termination of this Agreement.
3. Compensation.
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For services rendered by the Manager during the term of this Agreement, and
for his performance of all additional obligations of employment, the Company
agrees to pay the Manager and the Manager agrees to accept the following salary,
other compensation and benefits:
(a) Base Salary. The Company shall pay the Manager a base salary in
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equal semi-monthly installments, at the annual rate of Forty Two Thousand
Dollars ($42,000). Commencing on January 1 of the calendar year following the
calendar year in which annual net sales by the Company of the "Base Products"
(as that term is defined in that certain Asset Purchase Agreement by and between
the parties) exceeds $1,000,000, the Manager's base salary shall increase to a
rate of Fifty Thousand Dollars ($50,000) per annum.
(b) Benefits. The Manager shall be entitled to participate, as long
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as he remains an employee of the Company, in any and all of the Company's
present or future employee benefit plans, which are generally applicable to the
Company's similarly situated employees; provided, however, that the accrual
and/or receipt by the Manager of benefits under and pursuant to any such present
or future employee benefit plan shall be determined by the provisions of such
plan.
(c) Reimbursable Expenses. The Manager will be reimbursed for all
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reasonable expenses incurred by him in connection with the conduct of the
Company's business upon presentation of evidence and approval by the Chief
Operating Officer of such expenditures.
4. Termination of Employment.
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(a) Resignation. This Agreement may be terminated by the Manager at
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any time on thirty (30) days written notice of resignation by the Manager to the
Company. If the Manager voluntarily terminates his employment then he shall
have no further right to receive any payments under this Agreement, except that
with respect to resignation and any other termination pursuant to Section 4, the
Manager shall be entitled to all base or incentive compensation earned and
unpaid as of the date of termination.
(b) Termination by the Company Other Than for Cause. The Company may
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terminate this Agreement and the Manager's employment for any reason by giving
the Manager thirty (30) days prior written notice. Upon the termination of the
Manager by the Company other than for death, disability or cause as defined in
Section 4(c) below, the Manager shall receive as his sole remedy the right to
continue to receive from the Company his base salary payable on a semi-monthly
basis until the [NUMBER] month anniversary of his termination together with all
base or incentive compensation accrued and unpaid as of the date of termination.
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(c) Termination by the Company for Cause. The Company may terminate
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the Manager's employment at any time for Cause (defined below) by giving the
Manager written notice of such termination as defined below. in the event of
termination of the Manager by the Company for Cause, Manager will be entitled to
the rights set forth in Subsection 4(a) above.
As used in this Agreement, the term "Cause" means: (1) any act or omission
of gross negligence, willful misconduct, dishonesty, or fraud by the Manager in
the performance of his duties hereunder; (2) any willful and persistent failure
by the Manager to attend to his duties hereunder; (3) any other material breach
of this Agreement; (4) the Manager's conviction of or pleading guilty or nolo
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contendere to a felony or any misdemeanor involving dishonesty or moral
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turpitude; (5) fraud or embezzlement including assets of the Company, its
customers, suppliers or affiliates; (6) a physical or mental disability that
prevents Manager from working for 90 days or more in any 365 day period; or (7)
any other act or omission by the Manager in disregard of the Company's policies.
if as a result of mediation or if a court of competent jurisdiction later
determines that termination by the Company of the Manager's employment
purportedly for Cause was without Cause, the termination will be deemed a
termination by the Company other for Cause, and Manager will be entitled to the
benefits set forth in Subsection 4(b) above.
(d) Death. In the event of the death of the Manager during the term
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of this Agreement, the rights and benefits under employee benefit plans and
programs of the Company will be determined in accordance with the terms and
conditions of such plans and programs as in effect on his date of death, and the
Company shall thereafter have no obligation to make any payments to the Manager
pursuant to Section 3 of this Agreement except any already earned or vested up
to the date of death.
5. Confidentiality and Restrictive Covenants.
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(a) In consideration of the compensation and other benefits payable
hereunder, Manager agrees that during such time that he is employed by or
rendering services to the Company and for the period that ends on the earlier of
(i) the fifth anniversary the Closing Date, or (ii) the third anniversary of the
termination of this Agreement for any reason, he will not directly or
indirectly, alone or jointly with or on behalf of any other person, firm or
company:
(1) compete with the Company in the sale of heat and serve Indian
entree products in North America; or
(2) recruit, solicit or knowingly induce, or attempt to induce, any
employee or consultant of the Company to terminate his/her employment or
consulting relationship with, or otherwise cease his/her relationship with, the
Company.
(b) Manager further agrees that he will not solicit, divert or take
away, or attempt to divert or to take away, the business or patronage of any of
the clients, customers or accounts, or prospective clients, or interfere with
customers or accounts, of the Company in North America during
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the three (3) years prior to the termination of his employment with, or the
rendering of services to, the Company or the persons or entities supplying
components, materials, or services to the Company in North America during such
three (3) year period. For purposes of this Agreement, a prospective client,
customer or account is any individual or entity whose business is actively being
solicited by the Company, or, to Manager's knowledge based on written notice or
reports provided to Manager by the Company, is proposed to be solicited by the
Company within six (6) months from the termination of this Agreement, or who has
approached the Company with respect to possibly becoming a client, customer, or
account during the period of time during which Manager actively renders services
to the Company.
The restrictions against competition set forth in Subsections 5(a) and 5(b)
are considered by the parties to be reasonable for the purposes of protecting
the business of the Company. If any restriction set forth therein is found by
any court of competent jurisdiction to be unenforceable because its extends for
too long a period of time, over too great a range of activities or over too
broad a geographic area, it shall be interpreted to extend to the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
Manager acknowledges and agrees that his services to the Company are
unique, which gives his services a special value to the Company and for the loss
of which the Company cannot be reasonably or adequately compensated in damages.
The restrictions contained in this Agreement are necessary for the protection of
the business and goodwill of the Company and are considered by Manager to be
reasonable for such purpose. Manager agrees that any breach of this Agreement
will cause the Company substantial and irreparable damage and therefore, in the
event of any such breach, in addition to such other remedies which may be
available, the Company shall have the right to seek specific performance and
injunctive relief.
(c) The Manager will not at any time, whether while employed by the
Company or after voluntary or involuntary termination or after retirement,
reveal to any person, firm or entity any trade or business secrets or
confidential, secret or privileged information about the business of the Company
or its subsidiaries or affiliates or its suppliers, distributors, customers,
officers, directors or stockholders except as shall be required in the proper
conduct of the Company's business.
6. Proprietary Information and Inventions.
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6.1 Manager agrees to keep confidential and, except in performance of
Manager's duties hereunder or as the Company may otherwise consent in writing,
not to disclose or make any use of at any time either during or subsequent to
the termination of this Agreement, any Inventions (as hereinafter defined) or
Confidential Information. For purposes of this Agreement, "Confidential
Information" shall mean all information and know-how, whether or not in writing,
of a private, secret or confidential nature concerning the Company's business or
financial affairs, including, without limitation, any and all trade secrets,
confidential information (including, without limitation, any information in
respect of which the Company is bound by an obligation of confidence to any
third party), knowledge, data or other information relating to the Company's
inventions, products,
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processes, know-how, designs, formulas, test data, customer and supplier lists
and details of contracts with or requirements of customers, business plans,
advertising, marketing or public relations plans, methods, techniques and
strategies, prices and pricing strategies, personnel or technical data,
unpublished and price-sensitive information relating to securities listed on any
recognized stock exchange, the movements and whereabouts and all personal or
private matters concerning senior employees, officers and directors of the
Company, or other subject matter pertaining to any business of the Company which
he may produce, obtain or otherwise acquire during the course of his employment,
whether or not copyrightable, trademarkable or licensable. Manager hereby
acknowledges and agrees that all Confidential Information is and will be the
exclusive property of the Company.
6.2 Upon the request of the Company's Chief Operating Officer made at
any time during the course of Manager's employment or the event Manager's
employment with the Company terminates for any reason whatsoever, Manager agrees
to promptly surrender and deliver to the Company all Confidential Information in
his possession, along with any and all files, letters, memoranda, reports,
records, data, sketches, drawings, notebooks, notes, specifications, programs,
computer program listings, or other written, photographic, or other tangible
material containing Confidential Information, whether created by Manager or
others, which comes into his custody or possession containing or pertaining to
any Confidential Information.
6.3 For purposes of this Agreement, "Inventions" shall mean all
inventions, discoveries, approaches, processes, designs, software, technologies,
devices, methods, works of authorship or improvements in any of the foregoing or
other ideas or concepts, whether or not patentable and whether or not reduced to
practice, made or conceived by Manager (whether solely or jointly with others)
during the period of Manager's employment with the Company which relate in any
manner to the actual or demonstrably anticipated business, work, or research and
development of the Company, or result from or are suggested by any task assigned
to Manager or any work performed by Manager for or on behalf of the Company,
whether or not during normal working hours or on the premises of the Company.
6.4 Manager hereby acknowledges and agrees that the Company is the
owner of all Inventions and that Manager irrevocably assigns to the Company all
his rights, title and interest in and to all Inventions to the Company. Manager
hereby irrevocably appoints the Company to be his attorney in his name and on
his behalf to sign, execute or do any instrument or thing and generally to use
Manager's name for the purpose of giving to the Company or its nominee the full
benefit of the provisions of this Section 6 and in favor of any third party a
certificate in writing signed by any director or the secretary of the Company
that any instrument or act falls within the authority conferred by this Section
shall be conclusive evidence that such is the case. All rights and obligations
in respect of Inventions made or discovered by Manager during Manager's
employment shall continue in full force and effect after the termination of
Manager's employment and shall be binding upon Manager's legal personal
representatives after Manager's death.
6.5 Manager agrees that Schedule A hereto and made a part hereof
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constitutes a full, complete and accurate disclosure to the Company of all Prior
Inventions. For purposes of this Agreement, "Prior Inventions" shall mean all
inventions, discoveries, approaches, processes, designs,
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software, technologies, devices, methods, works of authorship or improvements in
any of the foregoing or other ideas or concepts, whether or not patentable and
whether or not reduced to practice, made or conceived by Manager (whether solely
or jointly with others) during the period of Manager's employment with any prior
employer which relate in any manner to the actual or demonstrably anticipated
business, work, or research and development of such employer, or result from or
are suggested by any task assigned to Manager or any work performed by Manager
for or on behalf of such employer, whether or not during normal working hours or
on the premises of such employer.
6.6 Manager will immediately disclose to the Company any Inventions
Manager may create during the term of this Agreement and will execute all
necessary documents to properly assign all rights, title and interest in such
Inventions to the Company.
6.7 Manager agrees to assist the Company or its nominee (at the
Company's expense) in every reasonable way to obtain for the Company's or its
nominee's own benefit patents, trademarks or copyrights for Inventions in any
and all countries. Such patents, trademarks and copyrights shall be and remain
the sole and exclusive property of the Company or its nominee. Manager agrees
to perform such lawful acts as the Company deems to be necessary to allow it to
exercise all right, title and interest in and to such patents, trademarks or
copyrights. Manager agrees to execute, acknowledge and deliver to the Company
or its nominee upon request and at its expense all documents, including
assignments of title, patent, trademark or copyright applications, assignments
of such applications and assignments of patents, trademarks or copyrights upon
issuance, as the Company may determine necessary or desirable to protect the
Company's or its nominee's interest in Inventions, and/or to use in obtaining
patents, trademarks or copyrights in any and all countries and to vest title
thereto in the Company or its nominee to any of the foregoing.
6.8 Manager represents that Manager's performance of all the terms of
this Agreement and as an employee of the Company does not and will not breach
any agreement to keep confidential proprietary information, knowledge or data
acquired by Manager in confidence or in trust prior to Manager's employment with
the Company, and that Manager will not disclose to the Company, or induce the
Company to use, any confidential or proprietary information or material
belonging to any previous employer or others. Manager agrees not to enter into
any agreement, written or oral, in conflict herewith.
6.9 The Company's rights as set forth in this Section 6 shall not
apply to any Invention about which Manager can prove that (i) it was developed
(so long as the same does not contain Confidential Information), entirely on
Manager's own time and by Manager's own effort; (ii) no equipment, supplies,
facility, trade secrets or Confidential Information of the Company was used in
the development thereof; (iii) it does not relate to the business of the Company
or to the Company's actual or anticipated research and development activities;
and (iv) it does not result from any work performed by Manager for the Company.
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7. Withholding.
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all amounts payable hereunder which are or may become subject to
withholding under pertinent provisions of law or regulation shall be reduced for
applicable income and/or employment taxes required to be withheld.
8. Miscellaneous.
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(a) This Agreement supersedes any prior agreements or understandings,
oral or written, with respect to employment of Manager and constitutes the
entire Agreement with respect thereto. It cannot be altered or terminated
orally and may be modified only by a subsequent written agreement executed by
both of the parties hereto.
(b) This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
(c) This Agreement shall be binding upon and shall inure to the
benefit of the Company and its successors and assigns. In that this Agreement
constitutes a non-delegable personal services agreement, it may not be assigned
by the Manager and any attempted assignment by the Manager in violation of this
covenant shall be null and void.
(d) The failure of either party to insist on strict compliance with
any of the terms of this Agreement will not be deemed to be a waiver of any
terms of this Agreement or of the part's right to require strict compliance of
the terms of this Agreement in any other instance.
(e) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions, which shall remain in full force and effect.
(f) No party to this Agreement may initiate litigation with regard to
any dispute with respect to this Agreement until after all remedies set forth in
this Subsection 8(f) have been exhausted. In the event of any dispute arising
under or relating to this Agreement, either party shall have the right by giving
written notice to the other party (the "Mediation Notice") to initiate non-
binding mediation to be conducted by a mediator mutually agreed to by the
parties or, in the event the parties are unable to reach such agreement within
thirty (30) days of the giving of the Mediation Notice, by a mediator appointed
by the American Arbitration Association ("AAA") in accordance with the rules and
regulations of the AAA, or by any other body mutually agreed upon by the
parties. Mediation shall take place at Boston, Massachusetts or any other
location mutually agreeable to the parties. In the event the parties resolve
their dispute in mediation, they shall enter into a mutual written agreement,
which shall be binding on both parties. In the event such agreement has not
been entered into by the parties within ninety (90) days after the selection of
the mediator pursuant to this Subsection 8(f), either party may initiate civil
litigation provided that any such litigation shall take place only in the
Superior Court for Suffolk County, Massachusetts.
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(g) Attorney's Fees. In the event of any breach of this Agreement
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that results in litigation between the parties, the prevailing party shall be
entitled to its reasonable attorney's fees, expert witness fees and costs of
suit. The prevailing party shall be determined by the court, based upon an
assessment of which party's major arguments or positions taken in the
proceedings could fairly be said to have prevailed over the other party's major
arguments or positions on major disputed issues in the court's decision.
(h) Counterparts. This Agreement may be executed in one or more
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counterparts. Any copy of this Agreement with the original signatures of all
parties appended shall constitute an original.
(The signature page follows)
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
and year first above written.
ANNIE'S HOMEGROWN, INC.
By:
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Its:
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MANAGER
By:
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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