EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is made and entered into as of this
first day of May, 1999, by and between ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & SON,
INC., a Delaware corporation ("the Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("Executive").
INTRODUCTION
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Executive is a party to that certain Stock Purchase Agreement
dated June 17, 1992 by and among Sunshine Nut Company, Inc.
("Sunshine"), the Company, ▇▇▇▇ ▇. ▇▇▇▇▇▇ ("▇▇▇▇") and Executive (the
"Stock Purchase Agreement"). Contemporaneously with the execution
thereof, and in accordance with the terms of the Stock Purchase
Agreement, Executive and ▇▇▇▇ sold, assigned and conveyed to the
Company, and the Company purchased from Executive and ▇▇▇▇, all of
the issued and outstanding capital stock of Sunshine (the "Stock
Purchase"). As a result of the Stock Purchase, Sunshine became a
wholly-owned subsidiary of JBSS. Executive is also a party to that
certain Employment Agreement dated June 17, 1992 between Executive
and Sunshine (the "Prior Employment Agreement") which provided for
Executive's Employment with Sunshine for an employment term expiring
on June 17, 2000 (the "Prior Employment Term Expiration Date").
The Company recently implemented certain organizational changes
at Sunshine and intends to merge Sunshine with and into the Company
on or before the end of the Company's current fiscal year (the
"Merger"). In connection with such organizational changes and the
Merger, Executive will cease to be an employee of Sunshine. However,
since Executive has served as the Vice President of Sunshine since
June 1980 and as "non-employee" Vice President of the Company since
1995, and consequently has extensive knowledge of the business and
operations of Sunshine and the Company, the Company desires to
employ Executive, and Executive desires to accept employment from the
Company, effective as of the date hereof on the terms and conditions
set forth in this Agreement including, without limitation, for a term
that extends beyond the Prior Employment Term Expiration Date by
approximately 36 months (the "Extended Term of Employment").
IT IS, THEREFORE, AGREED:
1. Employment with the Company. The Company hereby employs
Executive and Executive hereby accepts employment from the Company
upon the terms and conditions herein set forth. Executive's
employment by Sunshine shall cease contemporaneously with his
employment by the Company hereunder. Because of, and in
consideration of, Executive's employment by the Company hereunder and
the Extended Term of Employment, Executive shall not, however, be
entitled to, and hereby expressly waives, any benefits, compensation
or other remuneration or rights under the Prior Employment Agreement
or otherwise as a result of his termination of employment by
Sunshine.
2. Duties. During the Employment Term (as defined below),
Executive shall hold the position of the Company's Executive Vice
President. Executive shall have and perform all of the duties and
responsibilities customarily attributed to that position and any
additional duties and responsibilities as may be assigned or
delegated to him from time to time by the Company's Board of
Directors. Executive shall perform his duties and obligations during
the Company's normal business hours and at all other times reasonably
necessary to comply with the spirit and purpose of this Agreement.
In carrying out his duties and responsibilities hereunder, Executive
shall abide in all material respects by the policies of the Company
and shall devote his full time, attention, energies, skills and best
efforts exclusively to the performance of his duties and
responsibilities for and on behalf of the Company.
3. Employment Term and Termination.
3.1 Employment Term. Subject to the provisions of
subparagraph 3.2 below, Executive's employment hereunder shall be for
a term (the "Employment Term") commencing on the date hereof and
expiring on the third anniversary of the date hereof (the
"Termination Date"). Thereafter, the Employment Term may be renewed
only upon the mutual consent and agreement of the Company and
Executive.
3.2 Termination During Employment Term. The Employment Term,
and thus Executive's employment hereunder, may be terminated prior to
the Termination Date set forth in subparagraph 3.1 above for any of
the following reasons:
(a) Either party may terminate the Employment Term, at his or
its sole option, for "Reasonable Cause" effective
immediately upon giving the other party written notice of
termination. As used herein with respect to the Company's
right to terminate, "Reasonable Cause" shall generally
mean either (i) Executive's failure to perform in any
material way any of his responsibilities or duties
hereunder, and Executive does not cure such failure within
ten (10) days after receipt of written notice of such
failure from the Company or its Board of Directors, (ii)
any breach or default by Executive under either (A) this
Agreement and Executive does not cure such breach or
default within ten (10) days after receipt of written
notice thereof from the Company or its Board of Directors,
or (B) that certain Covenant Not to Compete Agreement of
even date herewith by and between Executive, Sunshine and
the Company (the "Non-Compete Agreement"), (iii) the
commission by Executive of any act of fraud, theft or
embezzlement against the Company, or (iv) the commission
by Executive of any felony (other than a traffic related
offense which does not result in liability to the Company
or which does not result in a penalty involving
incarceration for more than 30 days) whether or not
directed against the Company. As used herein with respect
to Executive's right to terminate, "Reasonable Cause"
shall mean either (1) the Company's failure to provide
Executive with his compensation or other material benefits
as agreed upon herein and the Company does not cure such
failure within ten (10) days after receipt of written
notice of such failure from Executive, or (1111) the
commission by the Company of any act of fraud, theft or
embezzlement against Executive.
(b) Executive's death or permanent disability.
4. Compensation and Other Benefits. For the services to be
rendered during the Employment Term by the Executive hereunder Executive
shall be entitled to receive from the Company the following:
4.1 Annual Base Compensation. During the Employment Term,
Executive shall be entitled to receive annual base compensation
("Annual Base Compensation") in the amount of $195,000.00, payable in
equal periodic installments in accordance with the Company's
customary practices. The amount of Executive's Annual Base
Compensation may be increased from time to time in the sole
discretion of the Company's Board of Directors but generally in
accordance with the Company's customary practices for base salary
increases.
4.2 Employment Benefits. During the Employment Term,
Executive shall be eligible to receive and participate in all other
employment plans and benefits which the Company provides its
employees in substantially equivalent positions to that of Executive
hereunder ("Employment Benefits") payable to the beneficiary or
beneficiaries as Executive shall designate. Nothing in this
subparagraph shall prohibit or limit the right of the Company to
discontinue, modify or amend any plan or benefit in its absolute
discretion at any time provided such discontinuance, modification or
amendment is applied generally to employees of the Company and not
solely to Executive.
4.3 Expenses. The Company shall reimburse Executive for
reasonable and necessary expenses incurred by him on behalf of the
Company in the performance of his duties during the Employment Term.
Executive shall furnish the Company with the appropriate
documentation required by the Internal Revenue Code and the
applicable Treasury Regulations or otherwise required under the
Company's policy in connection with such expenses.
4.4 Relocation. The Company shall reimburse Executive for
reasonable and necessary expenses incurred by him in connection to
Chicago, Illinois from San Antonio, Texas, as follows:
(a) The Company will reimburse Executive for temporary housing
in the Chicago, Illinois area, including utilities, for a
period of six months beginning May 1, 1999. This
reimbursement or direct payment by the Company will
constitute taxable income to Executive.
(b) The Company will pay and contract for the reasonable
transportation of Executive's household goods from the San
Antonio, Texas area to Executive's permanent residence in
the Chicago, Illinois area. This payment will not be
considered taxable income to Executive.
(c) The Company will reimburse Executive for the real
estate commission pertaining to the sale of Executive's
primary residence in the San Antonio, Texas area to a
maximum of six percent (6%) of the sales price. This
reimbursement will be considered taxable income to
Executive.
(d) The Company will reimburse Executive for two (2) house
hunting trips by Executive's spouse to the Chicago,
Illinois area. This reimbursement will be considered
taxable income to Executive.
Executive shall furnish the Company with the appropriate
documentation required by the Internal Revenue Code and the
applicable Treasury Regulations or otherwise required under the
Company's policies in connection with such expenses.
5. Restrictive Covenants.
5.1 Proprietary Property. Executive acknowledges that while
employed by Sunshine prior to the date hereof he was, and during his
employment by the Company hereunder he will be, provided with (or
given access to) memoranda, files, records, trade secrets and such
other proprietary information and property, including information
regarding Sunshine's and the Company's operations, market structure,
processes, formulas, data, marketing plans, strategies and
techniques, forecasts, financial information, budgets, projections,
licenses, prices, costs, customer lists and supplier lists
(collectively, the "Proprietary Property") as was, is or will be in
the future necessary or desirable to assist Executive in the
performance of his responsibilities on behalf of the Company and its
subsidiaries, affiliates, predecessors, successors and assigners.
Executive acknowledges that the Proprietary Property, and all
information and intellectual property and other data developed by
Executive in the performance of Executive's responsibilities during
his employment with Sunshine and his employment by the Company
hereunder, including any inventions, patents, trademarks, copyrights,
ideas, creations, and properties (also hereafter inclusive in the
term "Proprietary Property"), is the sole and exclusive property of
the Company and is not available to the public at large or other
persons engaging in any businesses which are the same as or similar
to any business of the Company. Executive shall not have any right,
title or interest of any kind or nature in the Proprietary Property
or any proceeds thereof, and upon request of the Company, Executive
shall execute such documents as the Company may reasonably request to
more effectively convey and vest in the Company and/or any of its
subsidiaries and affiliates, as the case may be, all rights, title
and interest in and to the Proprietary Property. Executive covenants
and agrees that he shall not, directly or indirectly, during the
Employment Term or thereafter, communicate or divulge to, or use for
the benefit of himself or any other corporation, person, firm, or
association, without the prior written consent of the Company the
Proprietary Property or any information in any way relating to the
Proprietary Property. The Proprietary Property shall remain the sole
and exclusive property of the Company and/or any of its subsidiaries
and affiliates, as the case may be, and upon termination or
expiration of the Executive's employment hereunder, for whatever
reason, Executive shall immediately thereupon return all Proprietary
Property in his possession or control to the Company.
5.2 Non-Solicitation of Employees. Executive agrees that
during the Non-Compete Term (as defined in Section 5.3 below),
neither Executive nor any person or enterprise controlled by
Executive (including without limitation Executive's spouse or other
family members acting for the benefit of Executive) will solicit for
employment any person employed by the Company or any of its
subsidiaries, affiliates, predecessors, successors, or assigns at any
time within one year prior to the time of the act of solicitation.
5.3 Non-Competition. In consideration for Executive's
employment by the Company hereunder, the Extended Employment Term,
the various other rights conferred on Executive under this Agreement
and the rights and benefits conferred on Executive under the Stock
Purchase Agreement and the Related Documents and Certificates (as
defined in the Stock Purchase Agreement), Executive hereby covenants
and agrees that during the term of his employment hereunder, for the
remaining (or unexpired) portion of the Employment Term in the event
Executive's employment hereunder is terminated prior to the
expiration of the Employment Term either by the Company for
Reasonable Cause or by Executive for other than Reasonable Cause, and
for a period of one (1) year after the expiration of this Agreement
(the "Non-Compete Term"), he shall not, directly or indirectly,
whether by, through or as an officer, director, stockholder, partner,
owner, employee, creditor, or otherwise, be engaged in any other
commercial activities or pursuits whatsoever which may in any way be
in competition or conflict with the business of Sunshine as it was or
is conducted by Sunshine prior to the Merger or the Company at any
time whether before or after the Merger (including without limitation
the manufacturing, processing and marketing of nuts and other snack
food items) in any market or geographic area in which the Company
and/or any of its subsidiaries or affiliates is then doing business.
Executive further covenants and agrees that during the Non-Compete
Term, he shall not, directly or indirectly, on his own behalf or on
behalf of any other person, firm or corporation, pursue any party
which was a customer of Sunshine, the Company and/or any of its
subsidiaries or affiliates as of the date on which Executive ceases,
for whatever reason, to be employed hereunder (the "Cessation of
Employment Date") or at any time within the 24-month period preceding
the Cessation of Employment Date for the purpose of soliciting and/or
providing to any of those customers any products, goods, or services
of the nature and type sold by either Sunshine, The Company and/or
any of its subsidiaries or affiliates. For purposes of the preceding
sentence, a "customer of Sunshine, the Company and/or any of the
Company's other subsidiaries or affiliates," includes, but is not
limited to, (a) any person, firm or corporation which Sunshine, the
Company or any of their respective affiliates, subsidiaries,
predecessors, successors or assigns has actually contacted for the
purpose of obtaining an order for its products, goods or services and
which any of Sunshine, the Company or any of their respective
affiliates, subsidiaries, predecessors, successors or assigns, as of
the Cessation of Employment Date or at any time within the 24-month
period preceding such date, is or was pursuing by regular contacts
with such person, and (b) any person, firm or corporation
specifically identified by Sunshine, the Company or any of their
respective affiliates, subsidiaries, predecessors, successors or
assigns in any of their respective marketing or strategic plans as a
target for solicitation of orders for products, goods or services of
Sunshine, the Company or any of their respective affiliates,
subsidiaries, predecessors, successors or assigns.
5.4 Remedies. Acknowledging that a breach of any provision of
subparagraph 5.1, 5.2 or 5.3 may cause substantial injury to the
Company or its affiliates, subsidiaries, predecessors, successors or
assigns which may be irreparable and/or in amounts difficult or
impossible to ascertain, Executive hereby covenants and agrees that
in the event he materially
breaches any of the provisions of subparagraph 5.1, 5.2 or 5.3 the
Company (or its affiliates, subsidiaries, predecessors, successors or
assigns) shall have, in addition to all other remedies available in
the event of a breach of this Agreement, the right to injunctive or
other equitable relief. In addition, in the event Executive
materially breaches any of the provisions set forth in this Section
5, the Company shall have the right to set-off any damages resulting
from such breach against all benefits, accruals and/or payments due
Executive under this Agreement (including without limitation Annual
Base Compensation).
5.5 Severability. If at the time of the enforcement of
subparagraph 5.1, 5.2, 5.3 or 5.4 a court shall hold that the period
or scope of the provisions thereof are unreasonable under the
circumstances then existing, the parties hereby agree that the
maximum period or scope under such circumstances shall be substituted
for the period or scope stated in such subparagraphs.
5.6 Executive's Acknowledgment. Executive hereby expressly
acknowledges that the restrictions and obligations set forth in and
imposed under Section 5(a) of this Agreement will not prevent him
from obtaining gainful employment in his field of expertise or cause
him undue hardship in that there are numerous other employment and
business opportunities available to him that are not affected by the
restrictions and other obligations imposed hereunder, and (b) are
reasonable and necessary to protect the legitimate business interests
of the Company and its subsidiaries and affiliates, and that any
violation thereof would result in irreparable damage to the Company
and /or its subsidiaries and affiliates.
6. Notices. Any notice given pursuant to this Agreement
shall be in writing and shall be deemed given on the earlier of the
date the same is (a) personally delivered to the party to be
notified, or (b) mailed, postage prepaid, certified with return
receipt requested, addressed as follows, or at such other address as
a party may from time to time designate in writing.
To the Company: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & Son, Inc.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a Copy To: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Jenner & Block
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
To Executive: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
7. Limitation on Outside Activities. Executive shall devote
his full employment energies, interest, authorities and time to the
performance of the obligations hereunder and shall not, without the
express written consent of the Company, render to others any service
of any kind and, in addition, shall not engage in any activities
which directly or indirectly conflict or interfere with the
performance of the duties provided hereunder or the business affairs
of the Company.
8. Modification. No modification, amendment or waiver of the
provisions of this Agreement shall be effective unless in writing
specifically referring hereto and signed by both parties.
9. Assignability and Binding Effect. Executive shall not
assign his rights or delegate the performance of his obligations
hereunder without the prior written consent of the Company. Subject
to the provisions of the preceding sentence, all terms of this
Agreement shall be binding upon and shall inure to the benefit of the
parties and their legal representatives, heirs, successors and
assigns.
10. Governing Law. This Agreement and the rights of the
parties hereunder shall be governed by and interpreted in accordance
with the laws of the State of Illinois. The unenforceability or
invalidity of any provisions of this Agreement shall not affect the
enforceability or validity of the balance of this Agreement.
11. Waiver. No provision of this Agreement may be waived
except by a writing signed by the party to be bound thereby. The
waiver by either party of a breach of any provision of this Agreement
by the other party shall not operate or be construed as a waiver of
any subsequent breach.
12. Captions. Captions contained in this Agreement are
inserted for convenience only and in no way define, limit, or extend
the scope or intent of any provision of this Agreement.
13. Entire Agreement. This Agreement constitutes the entire
Agreement between the parties with respect to Executive's employment
by the Company and supersedes all prior and contemporaneous
agreements, representations, and understandings of the parties
relating to Executive's employment by the Company.
14. Effect on Covenant Not To Compete Agreement. Nothing in
this Agreement shall be deemed to, in any way, modify, amend,
diminish or otherwise affect the terms, conditions or enforceability
of that certain Covenant Not To Compete Agreement dted June 17, 1992
by and between Executive, Sunshine and the Company.
15. Effect On Prior Employment Agreement. Effective as of the
date hereof, the Employment Term Executive's employment by Sunshine
pursuant to the Prior Employment Agreement shall cease and any rights
of Executive to employment by and compensation therefor from the
Company and/or any of its subsidiaries or affiliates shall be
governed solely by this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first above written.
ATTEST: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ & SON, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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Its: Chairman of the Board and
Chief Executive Officer
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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