EMPLOYMENT AGREEMENT
This employment agreement ("Agreement") is made and entered into
effective as of the 4th day of February, 1997 ("Effective Date"), by and
between ▇▇▇▇▇ BROTHERS, INC. ("Company"), a Delaware corporation, and ▇▇▇▇▇
▇▇▇▇▇▇▇ ("Employee"), a married man.
In consideration of the mutual promises and covenants contained herein,
and other good and valuable consideration, the receipt of which is acknowledged,
Company and Employee agree as provided in this Agreement.
1. Employment. Company hereby employs Employee, and Employee accepts
employment by Company, upon the terms and conditions contained in this
Agreement.
2. Term. Employee's employment by Company shall commence on February
20, 1997, and shall continue until either Company or Employee gives to the other
party written notice of termination. Employee shall be an employee at will and
if Employee's employment is terminated, Employee's status as officer of Company
shall also be terminated. Either Company or Employee may terminate Employee's
employment by Company with or without cause upon written notice of termination
to the other party.
3. Title. During the period of Employee's employment by Company,
Employee shall be the Vice President--Sales & Marketing of Company and shall
have such rights, powers and authority in such positions as may be designated by
Company's Board of Directors from time to time.
4. Compensation. During the period of Employee's employment by Company,
Employee shall receive from Company an annual salary of $90,000.00, which shall
be payable proportionately on Company's regular payroll payment dates for its
employees. Employee's annual salary shall be subject to change at the discretion
of Company's compensation committee.
5. Bonuses. During and for the period of Employee's employment by
Company, Employee shall receive such bonuses, whether incentive, merit or
otherwise and whether cash, stock or otherwise, as Company's compensation
committee shall determine from time to time.
6. Fringe Benefits. During the period of Employee's employment by
Company, Employee shall be entitled to participate in all of Company's qualified
retirement plans and welfare benefit plans (e.g., group health insurance) on the
same basis as Company's other employees. In addition, during the period of
Employee's employment by Company, Employee shall be entitled to participate in
all non-qualified deferred compensation and similar compensation, bonus and
stock plans offered, sponsored or established by Company.
7. Automobile, Telephone and Credit Card. During the period of
Employee's employment by Company, Company shall furnish to Employee the
following:
(a) Company shall furnish to Employee a Company owned or
leased automobile to be used by Employee for Company purposes and Employee's
personal use. The year, make and model of such automobile shall be reasonably
agreed upon by Company and Employee from time to time. Company shall pay for all
of the insurance (with coverage reasonably satisfactory to Employee), gasoline,
oil, tires, warranty and routine service and other maintenance and repairs for
the automobile. Employee acknowledges that he may recognize taxable income in
connection with Company's furnishing the automobile for his use.
(b) Company shall furnish to Employee a mobile or cellular
telephone for Employee's use and shall pay all charges in connection therewith
(except Employee shall reimburse Company for the charges each month that are in
excess of $200 of charges in such month which are not accounted for by Employee
as charges for the purposes of Company). The telephone to be furnished to
Employee shall be agreed upon by Company and Employee from time to time.
(c) Company shall furnish to Employee a Company credit card
for Employee to use solely for purposes of Company.
8. Options. Company hereby grants to Employee the right and option to
purchase 75,000 shares of Company's $0.01 par value voting common stock ("Common
Stock"), in accordance with Company's 1995 Stock Option Plan ("Plan"), at a
price per share equal to $3.875 per share. These options will vest in equal
25,000 share increments on the first, second and third anniversaries of the
Effective Date. Employee acknowledges receipt of a copy of the Plan and agrees
to the terms set forth therein. Employee further recognizes that the Plan is
subject to change from time to time by the Board of Directors of Company. All of
the terms and conditions of the options described herein shall otherwise be
governed by the terms of the Plan including, without limitation, exercise dates
and times, payment of option prices, revisions of the options, expiration and
the like, all of the terms and
conditions of which Plan are incorporated by reference into this portion of this
Agreement as if fully rewritten herein.
9. Confidentiality.
(a) During the period of Employee's employment by Company and
for a one year period thereafter, Employee shall hold in confidence and shall
not disclose or publish, except in the performance of his duties under this
Agreement, any Confidential Information (as defined below) that is presented or
disclosed to him in connection with his employment by Company.
(b) Subject to the provisions of Section 9(c) below, for
purposes of this Agreement the term "Confidential Information" shall mean
information or material that is proprietary to and owned by Company. Such
Confidential Information shall include, without limitation, Company's recipes
for specialty potato chips, manufacturing processes, customer lists, supplier
lists and pricing information.
(c) Notwithstanding the foregoing, the term Confidential
Information shall not include any information or material that:
(i) is in, or has passed into, the public domain;
(ii) is lawfully received by Employee from a third
party;
(iii) is required to be disclosed by Employee by law
or pursuant to an order determination issued by a court or any
federal, state or municipal regulatory or administrative
agency; or
(iv) was in the possession of, or known by, Employee
prior to his Employment by Company.
(d) Employee acknowledges that the Confidential Information of
Company is unique in character and that Company would not have an adequate
remedy at law for a material breach or threatened material breach by Employee of
his covenants under this Section 9. Employee therefor agrees that, in the event
of any such material breach or threat thereof, Company may obtain a temporary
and/or permanent injunction or restraining order to enjoin Employee from such
material breach or threat thereof, in
addition to any other rights or remedies available to Company at law or in
equity.
(e) Notwithstanding the foregoing, Employee may disclose
Confidential Information to his attorneys and other advisors on a need to know
basis provided the recipient is directed and required to maintain the disclosed
Confidential Information in confidence.
10. Indemnification.
(a) Company shall indemnify and hold Employee harmless and
defend Employee for, from and against all claims, liabilities, obligations,
fines, penalties and other matters and all costs and expenses relating thereto
that Company and/or such subsidiary or affiliated entity is permitted by
applicable law, except as any of the foregoing arises out of or relates to
Employee's negligence, willful malfeasance and/or breach of this Agreement.
(b) Company represents and warrant to Employee that neither
its articles of incorporation nor its bylaws nor any resolutions of its
shareholders or board of directors restricts or limits Companies rights or
obligations to indemnify Employee as provided in subsection (a) of this Section
10, except to the extent such restrictions or limitations are required by
applicable law.
11. Noncompete. During the period of Employee's employment by Company,
Employee shall not, directly or indirectly, whether as principal, consultant,
employee, agent, officer, director, trustee or otherwise, engage in the business
of manufacturing specialty potato chips, salted snack foods or popcorn or engage
in the business of distributing specialty potato chips, salted snack foods or
popcorn. In addition, Employee shall not, for a period of one year beginning on
the date of termination of his employment, directly or indirectly, whether as
principal, consultant, employee, agent, officer, director, trustee or otherwise,
engage in the United States in the business of manufacturing specialty potato
chips, salted snack foods or popcorn or engage in the United States in the
business of distributing specialty potato chips, salted snack foods or popcorn.
Employee acknowledges that the foregoing limitations are minimum limitations
which are necessary to protect the legitimate interests of Company because of
Employee's sensitive executive position with Company. Therefore, if a breach of
the foregoing shall occur, in addition to any action for damages which Company
may have, Company shall have the right to obtain an injunction as
a matter of right prohibiting Employee's competition in violation of the
foregoing. In the event that the time period of non-competition is deemed to be
unreasonable, Employee acknowledges that 11 months shall be deemed reasonable.
In the event 11 months is deemed unreasonable, then 10 months is deemed
reasonable, and so on, until the foregoing covenant is enforceable to the
fullest extent permitted by law. Similarly, in the event the entire United
States is deemed unreasonable, states shall be eliminated one by one beginning
with Maine, continuing down the east coast of the United States and in roughly
in north to south linear fashion across the United States until the geographical
limit set forth above is deemed reasonable to the fullest extent permitted by
law.
12. Additional Provisions.
(a) This Agreement shall not be assigned by either Company or
Employee without the other party's prior written consent; otherwise, this
Agreement shall be binding upon, and shall inure to the benefit of, the heirs,
personal representatives, successors and assigns of Company and Employee
respectively.
(b) This Agreement and the rights and obligations of Company
and Employee shall be governed by, and shall be construed in accordance with,
the laws of the State of Arizona without the application of any laws of
conflicts of laws that would require or permit the application of the laws of
any other jurisdiction.
(c) Time is of the essence of this Agreement and each
provision hereof.
(d) This Agreement sets forth the entire understanding of
Company and Employee with respect to the matters set forth herein and cannot be
amended or modified except by an instrument in writing signed by the party
against whom enforcement is sought.
(e) This Agreement is the result of negotiations between
Company and Employee, and Company and Employee hereby waive the application of
any rule of law that otherwise would be applicable in connection with the
interpretation and construction of this Agreement that ambiguous or conflicting
terms or provisions are to be interpreted or construed against the party who (or
whose attorney) prepared the executed Agreement or any earlier draft of the
same.
(f) If any provision or any portion of any provision of this
Agreement shall be deemed to be invalid, illegal or unenforceable, the same
shall not alter the remaining portion of such provision or any other provision
of this Agreement, as each provision of this Agreement and portion thereof shall
be deemed severable.
(g) Except as may be otherwise required by law, any notice
required or permitted to be given under this Agreement shall be given in writing
and shall be given either by (i) personal delivery, or (ii) overnight courier
service, or (iii) facsimile transmission, or (iv) United States certified or
registered mail, in each case with postage prepaid to the following address or
to such other address as Company or Employee may designate by notice given to
the other party pursuant to this section. Notice shall be effective on (v) the
day notice is personally delivered, if notice is given by personal delivery, or
(vi) the first business day after the date of delivery to the overnight delivery
service, if notice is given by such a delivery service, (vii) the day notice is
received, if notice is given by facsimile, or (viii) the fourth business day
after notice is deposited in the United States mail, if notice is given by
United States certified or registered mail.
Company: ▇▇▇▇▇ Brothers, Inc.
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▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Employee: ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. -- ______________
(h) If any action, suit or proceeding is brought in connection
with this Agreement, or on account of any breach of this Agreement, or to
enforce or interpret any of the terms, covenants and conditions of this
Agreement, the prevailing party shall be entitled to recover from the other
party or parties, the prevailing party's reasonable attorneys' fees and costs,
and the amount thereof shall be determined by the court (not by a jury) or the
arbitrator and shall be made a part of any judgment or award rendered.
▇▇▇▇▇ BROTHERS, INC.
By___________________________________
Its________________________________
[Company]
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▇▇▇▇▇ ▇▇▇▇▇▇▇
[Employee]