Exhibit 99.2
EMPLOYMENT AGREEMENT
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THIS AGREEMENT dated June 11, 2007 is entered into by and between J &
J SNACK FOODS CORP., a New Jersey Corporation ("Company") and VINCENT MELCHIORRE
("Employee").
Company desires to employ Employee as Executive Vice President- Food
Group and President of Country Home Bakers, A subsidiary of the Company and
Employee desires to be so employed.
NOW, THEREFORE, in consideration of the mutual promises and conditions
contained herein, and intending to be legally bound hereby, Company and Employee
agree as follows:
1. Services. Company hereby employs Employee as Executive
Vice-President Food Group of the Company, and President of County Home Bakers,
Inc. In addition, Employee shall be named as a corporate officer of the Company.
Employee shall report to and receive instructions from Company's Chairman and
Chief Executive Officer, Gerald. B. Shreiber, and shall assume such duties and
responsibilities as may be reasonably assigned to Employee. Initially, Employee
shall be responsible for direct leadership of the Sales, Marketing and R&D
Organizations of the Food Group of Company. The Food Group is defined as the
following annual report product groups: Soft Pretzels, Churros, bakery Products,
and Other Products. This includes all channels of distribution for these product
groups.
2. Compensation. In consideration of the services rendered by Employee
to Company hereunder, and as Employee's entire compensation hereunder, Company
shall pay Employee as follows:
2.1 Base Compensation. Company shall pay Employee a "Base
Compensation" of $286,000.00 per annum. Base Compensation for purposes herein
shall mean Employee's salary paid by Company in regular bi-weekly installments.
Such salary shall be subject annually to review and adjustment in accordance
with general policies established by Company.
2.2 Annual Bonus. For the 2007 Fiscal Year Employee shall be
guaranteed a bonus equal to sixty five percent (65%) of full year Base
Compensation in the amount of One Hundred and Eighty Six Thousand Dollars
($186,000.00). This amount will be paid during the month of January, 2008. For
subsequent fiscal years, the target bonus shall be seventy five percent (75%) of
Base Compensation.
2.3 Signing Bonus. Employee shall receive a signing bonus on
the date of execution hereof equal to Sixty Five Thousand Dollars ($65,000.00).
2.4 Stock Discount Purchase Program. Employee shall be
eligible to purchase shares of Company stock at a discount according to the
rules and regulations of the plan.
2.5 Stock Grant. Employee shall be issued 10,000 shares of
Company's common stock upon execution of this Agreement. Said shares shall be
held by the company and released as follows:
A. If Employee is employed by the Company on
June 1, 2009 then 5,000 shares shall be released to Employee.
B. If Employee is employed by the Company on
June 1, 2010 then 5,000 shares shall be released to Employee.
In connection with any release of stock Employee
shall be responsible for depositing with Employer sufficient funds to satisfy
any applicable requirement for withholding taxes. Any stock not released as
provided above shall revert to the Company.
2.6 Stock Options.
A. Upon execution of this Agreement Employee shall be
issued options for 10,000 shares of the Company's common stock. Such options
will be issued under the Company's stock option plan upon the same terms and
conditions as are issued to employees regularly but will be non-qualified under
the Internal Revenue Code. These stock options shall become vested and
exercisable, as follows: Five Thousand (5,000) shares shall vest on June 1, 2009
and Five Thousand (5,000) shares shall vest on June 1, 2010.
B. Employee will also annually receive incentive
stock options of a minimum of $100,000.00 in stock
value to be issued at the same time and upon the same conditions as other
employees of the Company. The first such grant will occur in September 2007.
C. The stock options will contain the following
language: In the event of any change in the outstanding shares of the Common
Stock by reason of a stock dividend, stock split, combination of shares,
recapitalization, merger, consolidation, transfer of assets, reorganization,
merger, consolidation, transfer of assets, reorganization, conversion of what
the Committee deems in its sole discretion to be similar circumstances, the
number and kind of shares subject to this option and the option price of such
shares will be appropriately adjusted in a manner to be determined in the sole
discretion of the Committee.
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2.7 Vehicle Allowance. Company agrees to provide Employee with
the use of a personal vehicle to be selected by Employee with a lease cost
payment by the Company of Six Hundred and Fifty Dollars ($650.00) monthly.
Company shall reimburse Employee for all business related fuel and toll
expenses.
2.8 Other benefits. In addition to Employee's Base
Compensation, Employee shall be entitled to such benefits afforded employees of
Company which will be equivalent to those benefits offered to senior executives
at J & J and shall include healthcare, life insurance, vacations and 401(k)
contributions.
3. Expenses. Company shall reimburse Employee for all expenses
reasonably incurred by him in carrying out his duties hereunder, upon
presentation to Company by Employee, from time to time, of an itemized account
of such expenses together with such receipts and/or forms as are required
pursuant to Company's normal current practices.
4. Term of Employment. The term of Employee's employment ("Term") shall
commence on the Effective Date hereof. Thereafter, Employee shall be an at-will
Employee, with either the Company or Employee being able to terminate this
Agreement on 30 days written notice.
5. Termination.
5.1 Upon termination of Employee's employment hereunder for
any reason, Employee's employment and all rights to compensation hereunder shall
automatically terminate. Employee or his estate shall be entitled to earned
compensation and bonus up to the date of termination.
6. Change of Control.
6.1 For purposes of this Agreement. "Change in
Control" shall mean an occurrence of one or more of the following events:
A. an acquisition (other than directly from Company)
of any voting securities of Company (the "Voting
Securities") by any "person" or "group" (within
the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934) other than an
employee benefit plan of Company, immediately
after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 under the
Exchange Act) of more than fifty percent (50%) of
the combined voting power of Company's then
outstanding Voting Securities; or
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B. within any 12-month period, the individuals who
were directors of the Company as of the date the
Board of Directors approved this Agreement (the
"Incumbent Directors") ceasing for any reason
other than death, disability or retirement to
constitute at least a majority of the Board of
Directors, provided that any director who was not
a director as of the date the Board of Directors
approved this Agreement shall be deemed to be an
Incumbent Director if such director was appointed
or nominated for election to the Board of
Directors by, or on the recommendation or approval
of, at least a majority of directors who then
qualified as Incumbent Directors, provided further
that any director appointed or nominated to the
Board of Directors to avoid or settle a threatened
or actual proxy contest shall in no event be
deemed to be an Incumbent Director; or
C. Satisfaction of all conditions to a merger,
consolidation, or reorganization involving Company
that results in the stockholders of Company
immediately before such merger, consolidation or
reorganization owning, directly or indirectly,
immediately following such merger, consolidation
or reorganization, less than fifty percent (50%0)
of the combined voting power of the corporation
which survives such transaction as the ultimate
parent entity, unless either (A) such merger,
consolidation or reorganization is not thereafter
consummated, or (B) the Chief Executive Officer
immediately prior to such transaction remains
Chief Executive Officer or becomes co-Chief
Executive Officer or Chairman of the corporation
which survives such transaction as the ultimate,
parent entity and prior to the satisfaction of all
such conditions, the Board of Directors determines
that such transaction shall not constitute a
Change in Control; or
D. a sale of all or substantially all of the assets
of Company.
6.2 Upon a Change in Control, all of the Stock Options granted
under this Agreement shall immediately fully vest and become exercisable.
6.3 Within thirty (30) days after a Change in Control,
Employee shall be entitled to receive an amount equal to two (2) times the sum
of Employee's current Base Compensation plus Employee's Annual Bonus for the
previous year.
6.4 "Prohibition on Excess Parachute Payments. The parties
acknowledge and agree that the Deferred Bonus is intended to be deferred
compensation rather than a "parachute payment" under section 280G of the
Internal Revenue code of 1986, as amended (the "Code"). Nevertheless, prior to
payment of the Deferred Bonus, the Accountants shall determine whether payment
of the Deferred Bonus would constitute "excess Parachute payment," as defined in
Sections 280G and 4999 of the Code and the regulations there under (or any
successor provision). If payment would give rise to an excess parachute payment,
then, notwithstanding any other provision to the contrary, the Deferred Bonus
shall be automatically reduced to the extent necessary (as determined by the
Accountants) to prevent the payment of an excess parachute payment to the
Employee and that amount of the reduction shall be forfeited and not paid.
Company shall promptly notify the Employee of any such reduction."
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7. Non-Disclosure.
7.1 At all times after the date hereof and at all times
following the termination of Employee's employment hereunder, Employee shall
not, except with the express prior written consent of the Managers of Company,
directly or indirectly, communicate, disclose or divulge to any Person, or use
for his own benefit or the benefit of any Person, any knowledge or information
which he may have acquired, no matter from whom or in what manner such knowledge
or information may have been acquired, heretofore or hereafter, concerning the
conduct and details of the business of Company, or an entity affiliated with or
related to Company, including but not limited to, names of customers, purchasers
and suppliers, properties, equipment, materials, costs, marketing methods,
specifications, recipes, methods of production, ingredients, operations,
policies, prospects and/or financial condition.
8. Covenants, Agreements, Representations and Warranties of Employee.
In consideration of Employee's employment with the Company, and for other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Employee covenants, agrees, represents and warrants as follows:
A. All of the Confidential Information is a valuable asset of
the Company and is, will be and shall, at all times, remain the sole and
exclusive property of the Company.
B. But for Employee's employment by the Company, the
Confidential Information would not have been disclosed to Employee.
C. Company derives a competitive advantage in the marketplace
by maintaining the Confidential Information and knowledge thereof as secret and
unavailable to the Company's competitors and the public.
D. Employee shall deal with the Confidential Information
strictly in accordance with the terms of this Agreement.
E. Employee's representations and warranties set forth herein
shall be revived continuously throughout Employee's employment by the Company.
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F. Company is materially relying upon each of Employee's
covenants, agreements, representations and warranties in employing Employee for
the Company.
9. Notices. All notices and other communications which are required or
permitted hereunder shall be given in writing and either delivered by hand or
mailed by certified mail, return receipt requested, postage prepaid, in the
following manner, and shall be deemed effective upon receipt:
If to Employee, to:
Vincent Melchiorre
5 McCoy Court
Malvern, PA 19355
With a required copy to:
William Sasso, Esquire
Stradley, Ronon, Stevens & Young, LLP
2005 Market Street
Philadelphia, PA 19019
If to Company, to:
J & J Snack Foods Corp.
6000 Central Highway
Pennsauken, NJ 08109
Attention: Gerald B. Shreiber, President & Chief Executive
Officer
With a required copy to:
Flaster Greenberg, P.C.
1810 Chapel Avenue West
Cherry Hill, NJ 08002
Attention: A. Fred Ruttenberg, Esquire
or such other address or addresses as the parties shall notify each other in
accordance with Paragraph 7.
10. Governing Law and Arbitration. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the State of New
Jersey. Any controversy or claim arising out of or relating to this contract, or
the breach thereof, shall be settled by arbitration in Camden County, New Jersey
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator may be
entered in any court of competent jurisdiction.
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11. General Provisions.
11.1 The provisions of this Agreement shall survive the
termination of Employee's employment hereunder and the payment of all amounts
payable and delivery of all post-termination compensation and benefits pursuant
to this Agreement incident to any such termination of employment.
11.2 This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the successors and assigns of Company and the
heirs, estate, personal representatives and beneficiaries of Employee.
11.3 This Agreement constitutes the entire understanding of
the parties with respect to the subject matter hereof, supersedes all prior or
contemporaneous agreements, and shall not be modified, supplemented or
terminated except by a writing signed by all of the parties hereto.
11.4 No failure to exercise, delay in exercising, or single
or partial exercise of any right, power or remedy hereunder shall preclude any
other or further exercise of the same or any other right, power or remedy. In
any litigation or arbitration proceeding (whether or not arising out of the
relationship established hereby) in which any of Company, any Affiliates or
Employee are parties, the parties hereto waive trial by jury and the right
thereof.
11.5 Paragraphs and headings as used in this Agreement have
been inserted for convenience of reference only and shall neither constitute a
part of this Agreement nor affect its meaning, construction or effect.
11.6 As used herein, "Person" shall mean a natural person,
sole proprietorship, joint venture, partnership, Company, association,
cooperative, trust, estate, government (or any branch, subdivision or agency
thereof), or any other entity.
11.7 Any right to receive payments hereunder shall not be
voluntarily or involuntarily assigned, transferred, alienated, encumbered or
disposed of without Company's prior written consent.
11.8 This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same Agreement, and shall become effective
when all of the counterpart signatures have been delivered.
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WITNESS THE DUE EXECUTION HEREOF, as of the date first above written.
COMPANY:
J & J SNACK FOODS CORP.
By: /s/ GERALD B. SHREIBER
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EMPLOYEE:
/s/ VINCENT A. MELCHIORRE
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