EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into
as of this 17th day of June, 1992, by and between SUNSHINE NUT
COMPANY, INC., a Texas corporation ("Sunshine"), and STEVEN G.
TAYLOR ("Executive").
INTRODUCTION
Executive is a party to that certain Stock Purchase
Agreement dated as of the date hereof by and among Sunshine,
John B. Sanfilippo & Son, Inc. ("JBSS"), John C. Taylor
("John") and Executive (the "Stock Purchase Agreement").
Contemporaneously with the execution hereof, and in accordance
with the terms of the Stock Purchase Agreement, Executive and
John are selling, assigning and conveying to JBSS, and JBSS is
purchasing from Executive and John, all of the issued and
outstanding capital stock of Sunshine (the "Stock Purchase").
As a result of the Stock Purchase, Sunshine shall become a
wholly-owned subsidiary of JBSS.
Executive has been the Vice President of Sunshine
since June, 1980. In view of Executive's knowledge of the
business and operations of Sunshine and his past contributions
to the success of Sunshine, Sunshine desires to employ
Executive, and Executive desires to accept employment from
Sunshine, on the terms and conditions set forth in this
Agreement effective as of the closing of the Stock Purchase.
IT IS, THEREFORE, AGREED:
1. Employment. Sunshine hereby employs Executive
and Executive hereby accepts employment from Sunshine upon the
terms and conditions herein set forth.
2. Duties. During the Employment Term (as defined
below), Executive shall hold the position of Sunshine's 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 Sunshine's
Board of Directors. Executive shall perform his duties and
obligations during Sunshine'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 Sunshine 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 Sunshine.
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 eighth anniversary of
the date hereof (the "Termination Date"). Thereafter,
the Employment Term may be renewed only upon the mutual
consent and agreement of Sunshine 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 Sunshine'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
Sunshine 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 Sunshine
or its Board of Directors, (B) the Stock
Purchase Agreement (but in this instance, only
to the extent that the breach or default is one
giving rise to indemnifiable damages to JBSS,
which damages have not been recovered by JBSS),
(C) that certain Covenant Not to Compete
Agreement of even date herewith by and between
Executive, Sunshine and JBSS (the "Non-Compete
Agreement") or (D) any of the other Related
Documents and Certificates (as defined in the
Stock Purchase Agreement), and Executive does
not cure such breach or default within ten (10)
days after receipt of written notice thereof
from Sunshine or its Board of Directors, (iii)
the commission by Executive of any act of
fraud, theft or embezzlement against Sunshine
or JBSS, or (iv) the commission by Executive of
any felony (other than a traffic related
offense which does not result in liability to
Sunshine or which does not result in a penalty
involving incarceration for more than 30 days)
whether or not directed against Sunshine or
JBSS. As used herein with respect to
Executive's right to terminate, "Reasonable
Cause" shall mean either (I) Sunshine's failure
to provide Executive with his compensation or
other material benefits as agreed upon herein
and Sunshine does not cure such failure within
ten (10) days after receipt of written notice
of such failure from Executive, (II) the
commission by Sunshine of any act of fraud,
theft or embezzlement against Executive, or
(III) a material breach by JBSS of its material
obligations under the Stock Purchase Agreement
or the Convertible Debenture and Registration
Rights Agreement and JBSS does not cure such
breach within ten (10) days after receipt of
written notice thereof from Executive.
(b) Executive's death or permanent disability.
4. Compensation and Other Benefits. For the
services to be rendered during the Employment Term by Executive
hereunder Executive shall be entitled to receive from Sunshine
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 $150,000, payable in equal periodic
installments in accordance with Sunshine's customary
practices. The amount of Executive's Annual Base
Compensation may be increased from time to time in the
sole discretion of Sunshine's Board of Directors but
generally in accordance with Sunshine's customary
practices for base salary increases.
4.2 Other Sunshine Employment Benefits. During the
Employment Term, Executive shall be eligible to receive
and participate in all other employment plans and
benefits which Sunshine provides its employees in
substantially equivalent positions to that of Executive
hereunder ("Sunshine Employment Benefits") payable to the
beneficiary or beneficiaries as Executive shall
designate. Nothing in this subparagraph shall prohibit
or limit the right of Sunshine 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 Sunshine
and not solely to Executive.
4.3 JBSS Employment Benefits. During the
Employment Term, Executive shall be entitled to receive,
in addition to the Sunshine Employment Benefits, the pay
increases, bonuses and stock options comparable to those
available annually to the upper level management
employees of JBSS, all as determined by the board of
directors of Sunshine based on formulas, performance
standards and other standards comparable to those used by
the board of directors of JBSS establishing, setting and
granting the foregoing benefits to its upper level
management employees. In addition, if Sunshine is not
able to provide Executive with 401-K Plan coverage
substantially the same as that available to employees of
JBSS in substantially equivalent positions to that of
Executive hereunder, Sunshine shall provide additional
compensation to Executive to replace the loss of such
benefit.
4.4 Expenses. Sunshine shall reimburse Executive
for reasonable and necessary expenses incurred by him on
behalf of Sunshine in the performance of his duties
during the Employment Term. Executive shall furnish
Sunshine with the appropriate documentation required by
the Internal Revenue Code and the applicable Treasury
Regulations or otherwise required under Sunshine's policy
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 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 JBSS'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 Sunshine. 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 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 Sunshine and/or
JBSS, as the case may be, 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
businesses of Sunshine and/or JBSS. 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 Sunshine and/or JBSS, as the case may be,
Executive shall execute such documents as Sunshine may
reasonably request to more effectively convey and vest in
Sunshine, 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
Sunshine or JBSS, as the case may be, 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 Sunshine and/or
JBSS, 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 Sunshine or JBSS.
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 Sunshine, JBSS or any
of their respective 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 Sunshine hereunder, the various
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, and 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 Sunshine for reasonable cause or by Executive
for other than reasonable cause (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 or JBSS (including without limitation the
manufacturing, processing and marketing of nuts and other
snack food items) in any market or geographic area in
which Sunshine or JBSS 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 and/or JBSS 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 or JBSS. For purposes of the preceding
sentence, a "customer of Sunshine or JBSS" includes, but
is not limited to, (a) any person, firm or corporation
which Sunshine, JBSS or any of their respective
affiliates, 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, JBSS or any of their respective affiliates,
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, JBSS or
any of their respective affiliates, 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,
JBSS or any of their respective affiliates, 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 Sunshine, JBSS or their respective
affiliates, 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 Sunshine and/or JBSS, as
applicable, (or their affiliates, 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, Sunshine and JBSS 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), the Stock Purchase Agreement or that
certain Convertible Debenture and Registration Rights
Agreement dated as of the date hereof between Executive,
John and JBSS (the "Convertible Debenture and
Registration Rights Agreement").
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 Acknowledgement. Executive hereby
expressly acknowledges that (a) the restrictions and
obligations set forth in and imposed under this Section 5
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
that are not affected by the foregoing, and (b) in view
and consideration of the substantial benefits he is
receiving from JBSS on the date hereof pursuant to the
Stock Purchase Agreement and the current and future
rights, options and benefits granted by JBSS to him
pursuant to the Convertible Debenture and Registration
Rights Agreement, the restrictions and obligations
imposed on him under this Section 5 are reasonable and
necessary to protect the legitimate business interests of
Sunshine and JBSS and that any violation thereof would
result in irreparable damage to JBSS and/or Sunshine.
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 Sunshine: c/o John B. Sanfilippo & Son, Inc.
Attn: Larry D. Ray
2299 Busse Road
Elk Grove Village, Illinois 60007
With A Copy To: Timothy R. Donovan
Jenner & Block
One IBM Plaza
Chicago, Illinois 60611
(312) 222-9350
To Executive: P.O. Box 7246
San Antonio, Texas 78207
With A Copy To: Douglas Becker
300 Convent Street
Suite 2300
San Antonio, Texas 78250
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
Sunshine, 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 Sunshine.
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
Sunshine. Subject to the provisions of the preceding sentence,
all the 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 Sunshine and supersedes all prior and
contemporaneous agreements, representations, and understandings
of the parties relating to Executive's employment by Sunshine.
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 dated as of the date hereof by and between,
Executive, Sunshine and JBSS.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first above written.
SUNSHINE NUT COMPANY, INC.
ATTEST:
By: /s/ Larry D. Ray
--------------------
Larry D. Ray
Its: Vice President
/s/ Steven G. Taylor
--------------------
STEVEN G. TAYLOR
GUARANTEE BY JBSS
For good and valuable consideration, receipt of
which is acknowledged by it, JBSS hereby guarantees payment and
performance of all debts and obligations owing by Sunshine Nut
Company, Inc. to Steven G. Taylor under the foregoing
Employment Agreement in accordance with and subject to the
terms thereof.
JOHN B. SANFILIPPO & SON, INC.
By: /s/ Larry D. Ray
--------------------
Larry D. Ray
Its: Executive Vice President