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EXHIBIT 10.37
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into as of the 26th day of February,
1997 (the "Agreement"), by and between MICHAEL FOODS, INC., a Delaware
corporation (hereinafter referred to as "Michael Foods") and STEPHEN PAPETTI
(hereinafter referred to as "Executive").
WHEREAS, Executive is an employee of Papetti's Hygrade Egg Products,
Inc. which will be merged as of the date hereof with and into Michael Foods
(the "Reorganization"); and
WHEREAS, Michael Foods desires to assure itself of the availability of
the services of the Executive following the Reorganization, and it is a
condition to the Reorganization that Executive and Michael Foods enter into
this Agreement on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the covenants and agreements
herein contained, the parties agree as follows:
1. EMPLOYMENT AND DUTIES. Michael Foods shall employ Executive
to serve as Executive Vice President of the Papetti's Hygrade Foods Division
and in such capacity Executive shall perform such duties as were being
performed prior to and as of the date of this Agreement subject at all times to
the direction of the President of Papetti's Hygrade Foods Division.
2. TERM. This Agreement shall be effective as of February 26,
1997 and shall continue through February 25, 2000, unless earlier terminated as
provided herein. This Agreement may be extended thereafter upon the written
agreement of the parties hereto.
3. BASE SALARY. For all services rendered by Executive, Michael
Foods agrees to pay Executive an annual Base Salary for each year of this
Agreement from February 26, 1997 through February 25, 2000 of at least
$180,000 payable in substantially equal semi-monthly installments.
4. ADDITIONAL BENEFITS AND WORKING FACILITIES.
a. Michael Foods shall provide Executive with medical
insurance and shall permit Executive to participate in other fringe
benefit plans as Michael Foods may from time to time provide for its
other executive officers. The terms of said benefits in all cases
shall be no less favorable to Executive than those offered to other
executive officers of Michael Foods.
b. Executive is entitled to take up to 4 weeks of
vacation per annum at reasonable times and for customary and reasonable
lengths of time consistent with his overall responsibilities hereunder.
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c. Michael Foods shall reimburse Executive for all
reasonable expenses incurred by Executive in connection with Michael
Foods' business, including but not limited to, expenses of travel and
entertainment, upon presentation of itemized statements therefor.
5. NON-COMPETE. During Executive's term of employment and for a
period of three years following termination of employment, Executive shall not
directly or indirectly, whether as an employee, agent, contractor, partner,
shareholder or otherwise, engage in the business of egg production, processing
or distribution in any geographic area where Michael Foods produces or
processes eggs or distributes egg products, except as specified in Schedule I
to this Agreement, nor shall Executive solicit the business of any customer of
Michael Foods on behalf of any company or business entity (other than Michael
Foods or its affiliates) which is engaged in the egg production, processing or
distribution business, whether or not such company or business directly
competes with Michael Foods.
6. EVENTS OF TERMINATION. The employment of Executive hereunder
shall terminate as follows:
a. Upon the Incapacity or death of Executive;
b. Upon thirty (30) days' written notice by either party
or by Executive if Executive's Duties Have Been Substantially Reduced
or Negatively Altered without Executive's prior written consent; or
c. Without notice by Michael Foods for Cause.
"Cause" for purposes hereof shall mean a determination by Michael
Foods that Executive has committed an illegal act that directly reflects upon
his fitness to act as an Executive of Michael Foods.
"Incapacity" for purposes hereof shall mean a determination by
Michael Foods in its sole discretion that Executive is unable to perform his
job responsibilities hereunder as a result of chronic illness, physical, mental
or any other disability for a period of six (6) months or more.
If Executive's employment is terminated under subsection (a) or by
Michael under subsection (b) or by Executive under subsection (b) based upon
the fact that Executive's Duties Have Been Substantially Reduced or Negatively
Altered without Executive's prior written consent, Executive shall receive as a
termination payment an amount equal to the Base Salary for the remaining term
of this Agreement. The termination payments provided above shall be made in
substantially equal monthly installments beginning on the first day of the
month following termination of employment for the balance of the term of this
Agreement. If Executive's employment is terminated by Executive under
subsection (b) for any reason other than that Executive's Duties Have Been
Substantially Reduced or Negatively Altered without Executive's prior written
consent or by Michael under subsection (c), Executive shall receive no
termination payment.
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"Duties are Substantially Reduced or Negatively Altered" means,
without Executive's express written consent:
(i) the assignment to Executive of any duties
inconsistent with Executive's positions, duties, responsibilities and
status with Michael Foods or a change in Executive's reporting
responsibilities, titles or offices, or any removal of Executive from,
or any failure to re-elect Executive to, any of such positions, except
in connection with the termination of Executive's employment for
Cause, upon the Incapacity or death of Executive, or upon the
voluntary termination by Executive;
(ii) a reduction in Executive's Base Salary below the
minimum Base Salary in Section 3 hereof;
(iii) Michael Foods requiring Executive to be based
anywhere other than the geographic location at which Executive was
based at the effective date of this Agreement except for required
travel on business to an extent substantially consistent with the
business travel obligations of Executive;
(iv) the failure by Michael Foods to continue in effect
benefit and compensation plans substantially equivalent to the benefit
or compensation plans or arrangements in effect at the effective date
of this Agreement; the taking of any action by Michael Foods not
required by law which would adversely affect Executive's participation
in or materially reduce Executive's benefits under any of such plans
or deprive Executive of any material fringe benefit enjoyed by
Executive; or the failure by Michael Foods to provide Executive with
the number of paid vacation days, holidays and personal days to which
Executive was then entitled in accordance with Michael Foods' normal
leave policy in effect at the effective date of this Agreement.
7. ADDITIONAL DOCUMENTS. The parties shall each, without further
consideration, execute such additional documents as may be reasonably required
in order to carry out the purposes and intents of this agreement and to fulfill
the obligations of the respective parties hereunder.
8. WAIVER. Any waiver of any term or condition of this Agreement
shall not operate as a waiver of any other breach of such term or condition, or
of any other term or condition, nor shall any failure to enforce a provision
hereof operate as a waiver of such provisions or of any other provision hereof.
9. NOTICES. All communications with respect to this agreement
shall be considered given if delivered or sent as follows:
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a. To Executive by first class, certified mail, postage prepaid,
return receipt requested, addressed as follows:
Stephen Papetti
c/o Papetti Hygrade Foods Division
100 Trumbull Street
Elizabeth, New Jersey 07206
Copy to:
Martin B. O'Connor, II
O'Connor, Morss & O'Connor
Liberty Hall Center
1085 Morris Avenue
Union, New Jersey 07083
b. To Michael Foods by first class, certified mail, postage
prepaid, return receipt requested, addressed as follows:
Michael Foods, Inc.
5353 Wayzata Boulevard
324 Park National Bank Building
Minneapolis, Minnesota 55416
or mailed to such other addresses as the parties hereto may designate by notice
given in like manner. Notice shall be effective three (3) days after mailing
or upon personal delivery.
10. ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement of the parties hereto with respect to the subject matter hereof and
no party shall be liable or bound to another in any manner by any warranties,
representations or guarantees, except as specifically set forth herein.
11. MODIFICATIONS, AMENDMENTS AND WAIVERS. The parties hereto at
any time may by written agreement extend or modify this Agreement. This
Agreement shall not be altered or otherwise amended except pursuant to an
instrument in writing executed by the parties hereto.
12. SEVERABILITY. No finding or adjudication that any provision
of this Agreement is invalid or enforceable shall affect the validity or
enforceability of the remaining provisions herein, and this Agreement shall be
construed as though such invalid or unenforceable provisions were omitted.
13. MISCELLANEOUS.
a. The terms and conditions of this Agreement shall
inure to the
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benefit of and be binding upon the respective legal representatives,
successors and assigns of the party thereto.
b. This Agreement is made pursuant to and shall be
construed under the laws of the State of Minnesota.
c. This Agreement may be executed in one or more
counterparts and each of such counterparts shall for all purposes be
deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement the day
and year first above written.
MICHAEL FOODS, INC.
By: Greg A. Ostrander
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Its: President
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Stephen Papetti
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Executive
Stephen Papetti
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SCHEDULE I
(STEPHEN PAPETTI)
1. Together, Alfred Papetti (25%), Arthur J. Papetti (25%), Tina Marie Noll
(25%) and Stephen Papetti (25%) own Shell Egg Technology, L.L.C., which
entity owns 0.5% of Pasteurized Egg, L.P.
2. Together, William T. Rechsteiner (25%), David Rechsteiner (8.33%), Arthur
J. Papetti (22.23%), Alfred Papetti (22.22%) and Stephen Papetti (22.22%)
own Papetti Farms, Inc., which entity owns 50% of Sunbest-Papetti Farms.