Exhibit 10(r)
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
THIS AMENDED AND
RESTATED AGREEMENT (“Agreement”) is dated as of
December 23, 2008, between TASTY BAKING COMPANY, a Pennsylvania
corporation (the “Company”), and CHARLES P. PIZZI
(“Executive”).
W I T N E S S E T
H:
WHEREAS, the
Company and Executive entered into an Amended and Restated
Employment Agreement dated as of July 27, 2006 and a First
Amendment to Amended and Restated Employment Agreement dated as of
September 25, 2007 (collectively, the “Original
Agreement”), regarding the employment of Executive as the
President and Chief Executive Officer of the Company effective
October 7, 2002.
WHEREAS,
Executive and the Company desire to amend and restate the Original
Agreement to incorporate the currently effective provisions of the
Original Agreement into a single document, to amend and/or modify
certain provisions and to conform the Original Agreement to the
non-qualified deferred compensation provisions of Section 409A of
the Internal Revenue Code of 1986, as amended and the regulations
promulgated thereunder (the “Code”), incorporate prior
amendments and make certain clarifying changes.
NOW, THEREFORE,
in consideration of the mutual covenants herein contained and of
the mutual benefits herein provided, and intending to be legally
bound hereby, the Company and Executive hereby amend and restate
the Original Agreement, effective as of January 1, 2009, except as
otherwise stated herein, as follows:
Section
1.
Term of Employment . The Company hereby employs
Executive as President and Chief Executive Officer of the Company,
and Executive accepts such employment by the Company, on the terms
and conditions herein contained and subject to termination only as
hereinafter provided. The term of employment of
Executive under this Agreement shall commence on October 7, 2002
(the “Commencement Date”) and effective, July 27, 2006,
July 27, 2007 and July 27, 2008, the Agreement renewed for a three
(3)-year term and shall be renewed for an additional three (3)-year
term on every one year anniversary of July 27, 2008 thereafter,
unless either party gives notice of non-renewal to the other party
in writing at least ninety (90) days prior to July 27 of the
applicable year. Upon termination of this Agreement,
Employee shall be eligible only for the benefits set forth in
Section 6 hereof and he shall be entitled to no other
benefits. The period from the Commencement Date through
the termination or expiration of the term of this Agreement
(including all renewal terms) is referred to as the
“Employment Period”. The Company shall use
best efforts consistent with the faithful discharge of the
fiduciary duties of the Board to cause Executive to be elected to
the Board and retained as a member of the Board during
the term hereof.
Section
2.
Duties .
(a) During
the Employment Period, Executive shall serve as President and Chief
Executive Officer of the Company and shall have such other duties,
responsibilities and authority and perform such other services for
the Company as are consistent with Executive’s background,
training and experience as may from time to time be assigned to
Executive by the Board of the Company.
(b) During
the Employment Period, Executive shall use his best efforts to
carry out his duties and responsibilities hereunder and devote his
entire working time and effort to the business and affairs of the
Company (except for permitted vacation, illness or disability) and
shall not, in any advisory or other capacity, work for any other
individual, firm or entity without first having obtained the
written consent of the Board. Notwithstanding the
foregoing, nothing contained in this Agreement shall preclude
Executive from devoting reasonable periods of time to serve on the
boards of directors of other organizations, including charitable
and community organizations, provided that such activities do not
interfere in any material fashion (as determined by the Board in
its sole discretion) with the regular and satisfactory performance
of Executive’s duties under this Agreement, and, in the sole
judgment of the Board (or any committee thereof), do not compete
with or present a conflict of interest with the interests of the
Company.
(c) Employee
agrees to provide reasonable cooperation at the request of the
Company in any efforts to obtain “key-man” life
insurance on Executive’s life.
Section
3.
Compensation .
(a) During
the Employment Period, the Company shall pay Executive a base
salary at the annual rate of no less than Four Hundred Thousand
Dollars ($400,000), which amount may be increased from time to time
at the discretion of the Board in accordance with the
Company’s existing policy regarding general
increases. Payment shall be made in accordance with the
Company’s regular practice for Senior Executive (as defined
in Section 4(a) below) employees as in effect from time to
time.
(b) In
addition to Executive’s base salary, as increased from time
to time, Executive shall be entitled to participate in the normal
course of business in the Annual Incentive Plan of the Company (a
copy of which has been provided to Executive) and to receive
annually such cash bonus payments as may be granted to him under
such Plan from time to time. The target bonus, size of
the bonus pool and bonus allocated to each participant in any year
are subject to the discretion of the Compensation Committee of the
Board and to the approval of the Board.
Section
4.
Additional Perquisites .
(a) The
Company will reimburse Executive for all reasonable expenses
properly incurred by Executive in the performance of
Executive’s duties hereunder in accordance with policies
established from time to time by the Board for employees who have
either an Employment Agreement or a Change of Control Agreement
with the Company (“Senior Executives”).
(b) During
the Employment Period, Executive shall be entitled to participate,
in accord with the terms thereof, in any present or future bonus,
life insurance, disability insurance, medical insurance, pension,
Supplemental Executive Retirement Plan, Thrift, ESOP, Restricted
Stock Incentive Plan, long-term incentive plan, stock option
(whether incentive or non qualified) or other employee benefit,
compensation or incentive plan adopted by the Company in which
Senior Executives are generally permitted to
participate.
(c) In
the event Executive elects not to obtain life insurance (in excess
of the basic Ten Thousand Dollars ($10,000) of coverage paid for by
the Company) under the Company’s life insurance program for
executives, but maintains or obtains life insurance through other
policies, the Company agrees to reimburse Executive for the cost of
such other insurance up to the amount which the Company would have
paid for an equivalent amount of life insurance under the
Company’s life insurance program. Executive
acknowledges that the amount reimbursed by the Company will be
reported as W-2 income to Executive. In addition,
provided Executive is in good health and insurable at regular
rates, the Company shall obtain for the benefit of Executive, and
maintain at all times during the Employment Period and pay the
premiums for, a term life insurance policy in the amount of Two
Million Dollars ($2,000,000.00) for the period beginning on October
7, 2007 and ending on the termination or expiration of the
Employment Period. Executive shall be the owner of such
policy (unless such insurance is effected through the
Company’s group life insurance program) and shall have the
sole right to designate the beneficiaries of such
policy. Executive acknowledges that the company will
report as W-2 income to Executive the premiums paid on such
policy.
(d) During
the Employment Period, the Company shall provide Executive with the
exclusive personal and business use of an automobile (and bear all
costs of fuel, maintenance, repairs and insurance thereon) of a
make, quality and cost consistent with the Company’s policies
from time to time in effect with regard to vehicles for Senior
Executives, or a replacement automobile of similar prestige,
appointments and cost. Executive acknowledges that the
Company will report as W-2 income to Executive the value of the
personal use of such vehicle.
(e) Executive
shall be entitled to paid vacation (taken consecutively or in
segments) in accordance with the vacation policy of the Company as
it exists for Senior Executives from time to time, currently six
(6) weeks during each fiscal year, adjusted pro rata for any
partial fiscal year during the term hereof.
(f) During
the Employment Period, the Company shall reimburse Executive for
the dues and fees for membership at not more than two (2) business
or country clubs of his choosing, subject to the approval of the
Compensation Committee of the Board. Executive
acknowledges that the amount reimbursed by the Company will be
reported as W-2 income to Executive.
(g) The
Company shall provide to Executive supplemental retirement income
benefits in accordance with the terms of the supplemental executive
retirement plan agreement attached hereto as Exhibit A
(“SERP”).
(h) Beginning
July 27, 2006, and continuing during the term of this Agreement,
the Company shall reimburse Executive for up to Ten Thousand
Dollars ($10,000) per annum for personal professional services.
Executive acknowledges that any such reimbursements will be
reported by the Company as W-2 income to Executive.
Section
5.
Termination of Employment .
(a) This
Agreement and the Employment Period shall cease and terminate upon
the occurrence of any of the events specified below:
(i) On
the date of the death of Executive;
(ii) By
the Company in the event Executive shall become and remain
“totally disabled” as defined in Section 5(c)
below;
(iii) By
the Company for “cause” as defined in Section 5(b)
below;
(iv) By
the Company at any time without cause;
(v) By
Executive for “Good Reason” as defined in Section 5(d)
below;
(vi) Upon
the expiration of the then current term of this Agreement if either
the Company or Executive gives timely notice of its or his election
not to renew this Agreement;
(vii) By
Executive at any time without Good Reason by resigning and giving
the Company 90 days prior written notice thereof;
(viii) Either
by Executive at any time during the period beginning six (6) months
after a “Change of Control” as defined in Section 5(e)
below and ending eighteen (18) months after such Change of Control,
by giving written notice to the Company ninety (90) days prior to
the effective date of such termination, or by the Company (other
than for cause) at any time during the period ending on the last
day of the eighteenth (18th) calendar month following the date of
such Change of Control; and
(ix) By
either the Company or Executive, on the “normal retirement
date” (as defined in the Company’s Pension Plan) of
Executive, by giving ninety (90) days notice prior to the effective
date of such termination;
(b) For
purposes of this Agreement, “cause” shall mean any of
the following:
(i) Executive’s
conviction in a court of law of any crime or offense which
constitutes a felony, which conviction, in the good faith judgment
of the Board, makes him unfit for continuing employment, prevents
him from effective management of the Company, or materially and
adversely affects the reputation or business activities of the
Company;
(ii) Dishonesty
or willful misconduct which materially and adversely affects the
reputation or business activities of the Company and which, if
capable of cure, continues after written notice thereof to
Executive (provided that prior to termination for such reason, the
Company shall give Executive written notice of the acts
constituting grounds for such termination and in the event such
acts are capable of being cured, the Company shall give Executive a
period of twenty (20) days within which to cease or correct such
acts, such that there is no longer grounds for termination for
cause, and if Executive fails to cease or correct such acts the
Agreement shall be deemed terminated), or misappropriation of
funds;
(iii) Substance
abuse, including abuse of alcohol or use of illegal narcotics, or
other drugs or substances, for which Executive fails to undertake
and maintain treatment within 15 days after being requested so to
do by the Company; or
(iv) Executive’s
continuing material failure or refusal to perform his duties
substantially in accordance with the terms of this Agreement, or to
carry out in all material respects the lawful directives of the
Board (other than such failure resulting from Executive’s
incapacity due to injury, physical or mental illness, disability or
death); provided that prior to any termination of employment
pursuant to this clause (iv), the Company shall give Executive
written notice of the acts constituting grounds for such
termination and in the event such acts are capable of being cured,
the Company shall give Executive a period of twenty (20) days
within which to cease or correct such acts, such that there is no
longer grounds for termination for cause, and if Executive fails to
cease or correct such acts the Agreement shall be deemed
terminated
(c) For
purposes of this Agreement, “totally disabled” shall
mean a physical or mental incapacity or disability which renders
Executive unable, with reasonable accommodation, to perform the
services required of him under this Agreement for a period of one
hundred eighty (180) days or more during any period of twelve (12)
consecutive months. Such disability shall be subject to
the written determination of a qualified physician who shall be
reasonably acceptable to the Company and Executive (or his personal
representative in the event that Executive does not have the legal
capacity at such time to make such judgment). In the
event that Executive qualifies as being “totally
disabled” within the meaning of the Company’s Long Term
Disability Plan, Executive shall be entitled to receive long term
disability payments under such plan notwithstanding any termination
of his employment hereunder, during such period of disability, and
Executive shall be entitled to the same benefits that any other
employee of the Company would enjoy under the Company’s Long
Term Disability Plan.
(d) For
purposes of this Agreement, “Good Reason” shall mean
(i) a material change in the authority, duties and responsibilities
of Executive so as to be inconsistent with those of president and
chief executive officer of the Company, (ii) the relocation of
Executive’s place of employment to a place (other than the
Company’s Oxford plant) outside a radius of thirty (30) miles
from the Company’s Hunting Park Avenue plant in Philadelphia,
(iii) the failure of the Company to obtain an agreement,
satisfactory to Executive, from any successor or assign of the
Company to assume and agree to perform this Agreement, (iv) the
Company’s continued failure to perform its duties hereunder
in any material respect, which failure has not been cured within
twenty (20) days after written notice of such failure (with
specific reference to this Section of the Agreement) has been given
by Executive to the Company, (v) a material reduction in
indemnification provided by the Company to Executive, except in the
event that such a reduction in indemnification is applicable to all
directors and officers of the Company on a uniform basis, or (vi)
Executive ceases involuntarily to be a member of the Board of
Directors (other than by reason of death, disability or termination
for cause).
(e) For
purposes of this Agreement, a “Change of Control” of
the Company shall be deemed to occur (i) upon any Change of Control
of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A or Item 5.01 of Form 8-K (or any
successor provisions thereto) promulgated under the Securities
Exchange Act of 1934, as amended and the regulations thereunder
(“Exchange Act”); (ii) upon the acquisition by any
person or group of beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act), directly or indirectly, of
twenty-five percent (25%) or more of the combined voting power of
the Company’s outstanding securities then entitled to vote
generally in the election of directors, excluding however
acquisitions by the Company or any of its subsidiaries, or any
employee benefit plan sponsored or maintained by the Company, or by
a corporation pursuant to a reorganization, merger, consolidation,
division or issuance of securities of the Company if the conditions
described in clauses (v) (A) and (B) below are satisfied; (iii) if
individuals who constitute the Board as of the date of this
Agreement (“Incumbent Board”), cease for any reason to
constitute at least a majority of the Board during any twenty-four
(24) month period; provided, however, that any individual becoming
a director subsequent to the date of this Agreement whose election,
or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding
for this purpose any such individual whose initial assumption of
office occurs as a result of either an actual or threatened
election contest or other actual or threatened solicitation of
proxies or consents by or on behalf of a person other than the
Incumbent Board; (iv) the consummation of a sale of all or
substantially all of the assets of the Company or the complete
liquidation or dissolution of the Company; or (v) upon a
reorganization, merger, consolidation, division, or issuance of
securities of the Company, in each case unless following such
transaction (A) not less than sixty percent (60%) of the
outstanding equity securities of the corporation resulting from or
surviving such transaction and of the combined voting power of the
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned
by the holders of the Company’s common stock immediately
prior to such transaction in substantially the same proportions as
their ownership immediately prior to such transaction, and (B) at
least a majority of the members of the board of directors of the
resulting or surviving corporation were members of the Incumbent
Board.
Section
6.
Effect of Termination .
(a) Upon
termination of this Agreement as a result of the death of Executive
(as provided in Section 5(a)(i) above), the Company shall pay
Executive’s base salary through the end of the month in which
his death occurs, such payments being made to Executive’s
estate. In addition, the Company shall pay to
Executive’s estate (i) any bonus to which Executive is
entitled under Section 3(b) hereof for the fiscal year ending on or
immediately prior to the date of Executive’s death, (ii) any
bonus to which Executive is entitled under Section 3(b) hereof for
the fiscal year in which his death occurs, which bonus shall be
commensurate with bonuses paid to other Senior Executives for such
year relative to bonuses previously paid to
such Executive, prorated for the period during such year
that Executive actually worked, (iii) any unpaid accrued benefits
through the date of his death due to Executive under this
Agreement, the SERP or any employee benefit plan in which Executive
was a participant, (iv) reimbursement for any expenses to which
Executive is entitled through the date of his death under the terms
of this Agreement, and (v) any indemnification obligations to which
Executive may become entitled from the Company whether by contract
or pursuant to the Company’s charter or Bylaws.
(b) Upon
termination of this Agreement by reason of Executive’s
becoming totally disabled (as provided in Section 5(a)(ii) above),
Executive shall be entitled to the benefits, and the Company shall
be obligated to provide benefits to Executive, equivalent to those
due upon termination of this Agreement as a result of death of
Executive (as provided in Section 6(a) above), plus all benefits
accruing under any long term disability insurance plan maintained
by the Company. The bonus under clause (i) of Section
6(a) shall be calculated for the fiscal year prior to the year in
which this Agreement is terminated under Section 5(a)(ii) above;
the bonus under clause (ii) of Section 6(a) shall be calculated for
the fiscal year in which such termination occurs. All
other benefits and expenses shall be determined as of the date such
termination occurs.
(c) Upon
termination of this Agreement: by the Company for cause (as
provided in Section 5(a)(iii) above); by Executive without Good
Reason (as provided in Section 5(a)(vii) above); by Executive as a
result of his non-renewal of this Agreement (as provided in Section
5(a)(vi) above); or by either the Company or Executive effective
upon the normal retirement date of Executive (as provided in
Section 5(a)(ix) above), then Executive shall have no further
right, title or interest to any payments required to be made in
accordance with this Agreement, and the Company shall have no
further obligation to Executive hereunder, except for (i) the
unpaid portion, if any, of base salary computed on a pro rata basis
through the effective date of such termination, (ii) any bonus to
which Executive is entitled under Section 3(b) hereof for the
fiscal year ending on or immediately prior to the effective date of
such termination, (iii) any unpaid accrued benefits due to
Executive through the date of such termination under this
Agreement, the SERP (except that Executive shall have no rights
under the SERP in the event his employment is terminated by the
Company for cause under Sections 5(b)(i), 5(b)(ii) or 5(b)(iii)
above) or any employee benefit plan in which Executive was a
participant, (iv) reimbursement for any expenses to which Executive
is entitled through the date of such termination under the terms of
this Agreement, and (v) any indemnification obligations to which
Executive may become entitled from the Company whether by contract
or pursuant to the Company’s charter or Bylaws.
(d) Upon
termination of this Agreement: by the Company without cause (as
provided in Section 5(a)(iv) above); by the Company as a result of
its non-renewal of this Agreement (as provided in Section 5(a)(vi)
above); or by Executive for “Good Reason” (as provided
in Section 5(a)(v) above), then Executive shall be entitled to
receive, in lieu of all other damages and benefits to which
Executive may otherwise be entitled as a direct or indirect result
of such termination, (i) a lump sum payment equal to
Executive’s annual base salary compensation then in effect
which otherwise would have been payable for the remainder of the
current term of this Agreement, (ii) a lump sum payment equal to
two (2) times the greater of (x) Executive’s target bonus
under Tasty Baking Company’s Annual Incentive Plan for the
fiscal year in which the termination occurred, or (y) the average
of the annual bonuses paid or payable to Executive during the two
(2) full fiscal years immediately prior to the termination, (iii)
medical and life insurance benefits under the Company’s group
health and life plans equivalent to those provided to Executive
prior to termination (provided Executive satisfies the insurability
criteria and complies with the conditions of such plans and, with
respect to the life insurance, to the extent the Company can
provide such coverage under its plan) for a period equal to the
remainder of the current term of this Agreement, (iv) continued
reimbursement for the premium cost of the $2 million life insurance
coverage as described in Section 4(c) for the remainder of the
current term of this Agreement, (v) a lump sum payment equal to any
payments to which Executive would have been entitled to have
contributed to the SERP, based on Executive’s base salary and
b
