AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and
Restated Employment Agreement (“Agreement”) is entered
into as of June 18, 2009, by and between Bob Evans Farms,
Inc., a Delaware corporation (the “Company”), and
Steven A. Davis (the “Executive”).
WHEREAS,
the Company and the Executive previously entered into an employment
agreement effective May 1, 2006, as amended effective
December 24, 2008 (the “Prior
Agreement”);
WHEREAS,
the Company believes it to be in its best interest to provide for
continuity of management and to provide protection for its valuable
trade secrets and confidential information;
WHEREAS,
the Board of Directors of the Company (the “Board”) and
the Compensation Committee of the Board (the “Compensation
Committee”) have determined that it is in the best interests
of the Company to continue securing the services and employment of
the Executive, and the Executive is willing to continue rendering
such services on the terms and conditions set forth
herein.
NOW,
THEREFORE, in consideration of the premises and the mutual
terms and conditions hereof, the Company and the Executive hereby
agree to amend and restate the Prior Agreement as
follows:
1.
Employment . During the Term, (a) the Company
agrees to employ the Executive and the Executive hereby accepts
employment with the Company as the Company’s Chief Executive
Officer upon the terms and conditions hereinafter set forth, and
(b) the Board agrees to continue to nominate the Executive for
election as a member of the Board and to recommend that the
Company’s stockholders elect the Executive as a member of the
Board at each meeting of the Company’s
stockholders.
2.
Exclusive Services . During the Term, the Executive
agrees (a) to serve as the Company’s Chief Executive
Officer and to perform the services customarily performed by
persons in similar executive capacities, (b) to discharge any
other duties and responsibilities that the Board assigns,
(c) if elected, to serve as an officer and/or director of any
direct or indirect subsidiary of the Company, (d) to primarily
perform his duties hereunder at the Company’s principal
business offices, as such may be located from time to time, unless
otherwise agreed in writing between the Board and the Executive,
(e) except for periods of absence because of illness,
vacations of reasonable duration and any leaves of absence approved
by the Board to (i) devote his full attention and energies to
promoting the Company’s business, (ii) fulfill the
obligations described in this Agreement and (iii) exercise the
highest degree of loyalty and the highest standards of conduct in
the performance of his duties, and (f) in addition to the
obligations described in Section 10, not to engage in any
other business activity, whether or not for gain, profit or other
pecuniary advantage, that does not involve promoting the
Company’s business. However, the Executive may serve as a
director of entities that are not related to the Company if that
service (a) does not violate any term or condition of this
Agreement, (b) does not injure the Company or any entity
related to the Company, (c) is not prohibited by law or by
rules adopted by the Company, and (d) is approved in advance
by the Board.
The restrictions
described in this section will not be construed to prevent the
Executive from (a) investing his personal assets in
(i) businesses that do not compete or do business with the
Company and do not require the Executive to perform any services
connected with the operation or affairs of the businesses in which
the investment is made or (ii) stocks or corporate securities
described in Section 10 but subject to the limits described in
that section, or (b) participating in, or serving as a trustee
or director of, civic and charitable organizations or activities,
but only if this activity does not interfere with the performance
of his duties under this Agreement.
3.
Duties . The Executive shall perform the duties,
undertake the responsibilities, and exercise the authority
customarily performed, undertaken, and exercised by persons
employed in a similar executive capacity. The Executive shall
report to the Board.
4.
Term . Subject to earlier termination as hereinafter
provided, this Agreement is effective as of May 1, 2009 (the
“Effective Date” and shall have a term of five
(5) years commencing as of the Effective Date (the
“Term”). The Term may be extended or renewed only by
written agreement signed by the Executive and an expressly
authorized representative of the Board.
a.
As compensation for his services rendered under this Agreement, the
Executive shall be entitled to receive the following in addition to
any discretionary awards that the Compensation Committee determines
in its sole discretion from time to time:
i.
Base Salary . The Executive shall be paid an initial
base salary of $770,000.00 for the first fiscal year of the Term.
Thereafter, the base salary shall be determined by the Compensation
Committee in its sole discretion on an annual basis (“Base
Salary”) during the Term of this Agreement, payable in 26
equal bi-weekly installments or, if different, the Company’s
regular payroll schedule, prorated for any partial employment
month.
ii.
Annual Cash Bonus . The Executive shall be eligible
for an annual cash bonus (“Bonus”) as may be determined
and authorized in the sole discretion of the Compensation Committee
based upon reasonable performance goals that the Compensation
Committee establishes in good faith. Some or all of the Bonus may,
in the sole discretion of the Compensation Committee, be subject to
performance goals designed to comply with the performance-based
compensation exception under Section 162(m) of the Internal Revenue
Code of 1986, as amended (the “Code”), or any successor
rule or regulation. The Executive’s target Bonus opportunity
shall be determined by the Compensation Committee in its sole
discretion on an annual basis, except that the Executive’s
target Bonus opportunity for any given year during the Term will
not be less than 100% of his Base Salary unless the parties
mutually agree to reduce the percentage as part of a negotiated
restructuring of the Executive’s compensation.
iii.
Performance Incentive Plan . As may be determined and
authorized from time to time in the sole discretion of the
Compensation Committee, and subject to the terms and conditions of
any equity compensation plans and award agreements governing the
grant of equity awards, the Executive shall be eligible to
participate in the Company’s
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Performance
Incentive Plan or successor program (the “PIP”), with a
targeted equity award (“TEA”) based upon a percentage
of the Executive’s Base Salary. Per the terms of the PIP,
after the end of each fiscal year, the Compensation Committee shall
make an equity grant to the Executive, the value of which will be
based on the Executive’s TEA. Any equity grants made pursuant
to the PIP shall be dependent upon the achievement of performance
goals, and the vesting and other terms and conditions of such
equity grants shall be determined by the Compensation Committee in
its sole discretion.
iv.
Long-Term Performance-Based Incentive Award . The
Executive shall be entitled to receive a special long-term
performance-based incentive award (the “Long-Term
Performance-Based Incentive Award”) for the five-year
performance period beginning on April 25, 2009 and ending on
April 25, 2014 (the “Five-Year Performance
Period”). The Long-Term Performance-Based Incentive Award
shall be comprised of five individual grants of performance shares
at the beginning of each fiscal year during the Five-Year
Performance Period, the vesting of which will be based upon the
attainment of both annual performance objectives as well as overall
performance objectives for the Five-Year Performance Period. The
terms and conditions of the Long-Term Performance-Based Incentive
Award and the individual grants of performance shares comprising
the Long-Term Performance-Based Incentive Award shall be
substantially similar to the terms and conditions set forth in
Appendices A (the CEO Long-Term Performance-Based Incentive Award
Program — Conditions for the Five-Year Performance Period)
and B (the CEO Long-Term Performance-Based Incentive Award Program
— Fiscal Year Performance Share Award Agreement) hereto. The
Company’s obligation to provide this Long-Term
Performance-Based Incentive Award shall not extend to any renewal
or amendment of this Agreement, unless expressly provided in such
renewal or amendment.
6.
Benefits . In addition to the compensation to be paid
to the Executive pursuant to Section 5 hereof, the Executive
shall be entitled to receive the following benefits, subject to the
Company continuing to sponsor and maintain such benefits for its
senior executive officers and subject to any modification or
amendment to the plans or policies governing such
benefits:
a.
Participation in Employee Plans . In addition to the
plans described in this Agreement, the Executive shall be entitled
to participate in any health, disability, or grouplife insurance
plan; any pension, retirement, or profit sharing plan; any
executive bonus plan; and any other perquisites and fringe
benefits, in which the Executive is eligible to participate and
which may be extended from time to time to the Company’s
senior executive officers.
b.
Non-Qualified Deferred Compensation Plans . In
accordance with the terms contained therein, the Executive shall be
eligible to participate in the Company’s Supplemental
Executive Retirement Plan and the Company’s Executive
Deferral Program.
c.
Vacation . The Executive shall be entitled to a
minimum of four weeks vacation with full salary and benefits each
fiscal year. Under current Company policy (which may be changed at
the discretion of the Company) no cash or other payment will be
due, however, for unused vacation and vacation may not be carried
over from any fiscal year to the next. Upon any termination of the
Executive’s employment, earned and unused vacation
accrued
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in the fiscal
year in which the termination occurs will be paid in accordance
with the Company’s policy then in effect.
d.
Automobile . The Company shall provide the Executive
with the use of an automobile or a monthly allowance in accordance
with the Company’s automobile policy for officers, as
approved by the Compensation Committee. If a monthly allowance is
provided pursuant to this Section 6(d), such allowance shall
be paid to the Executive in substantially equal bi-weekly
installments or, if different, the Company’s regular payroll
schedule, which will be not less than monthly
installments.
7.
Reimbursement of Expenses .
a.
Business Expense Reimbursements . Subject to such
rules and procedures as from time to time are specified by the
Company and in accordance with the Company’s expense
reimbursement policy (which may be changed at the discretion of the
Company), the Company shall reimburse the Executive for reasonable
business expenses necessarily incurred in the performance of his
duties under this Agreement.
b.
Attorneys’ Fees . The Company agrees to pay
directly to the Executive’s counsel or to reimburse the
Executive for his legal fees incurred in connection with the
negotiation and documentation of this Agreement, any additional
amendments to this Agreement and any renewal or extension of this
Agreement; subject to the approval of the Compensation Committee,
whose approval shall not be unreasonably withheld. Any payment or
reimbursement under this Section 7(b) shall be made no later than
the 15th day of the third month following the later of (i) the
end of the Executive’s taxable year during which the
applicable fees are incurred or (ii) the end of the
Company’s taxable year during which the applicable fees are
incurred.
8.
Confidentiality/Trade Secrets . The Executive
acknowledges that his position with the Company is one of the
highest trust and confidence both by reason of his position and by
reason of his access to and contact with the trade secrets and
confidential and proprietary business information of the Company.
Both during the Term of this Agreement and thereafter, the
Executive covenants and agrees as follows:
a.
He shall use his best efforts and exercise reasonable diligence to
protect and safeguard the trade secrets and confidential and
proprietary information of the Company, including but not limited
to financial information, the identity of its customers and
suppliers, its arrangements with customers and suppliers, and its
technical and financial data, records, compilations of information,
processes, recipes and specifications relating to its customers,
suppliers, products and services;
b.
He shall not disclose any of such trade secrets and confidential
and proprietary information, except as may be required in the
course of his employment with the Company or by law; and
c.
He shall not use, directly or indirectly, for his own benefit or
for the benefit of another, any of such trade secrets and
confidential and proprietary information.
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All files,
records, documents, drawings, specifications, memoranda, notes, or
other documents relating to the business of the Company, in
whatever form, format or medium, whether prepared by the Executive
or otherwise coming into his possession, shall be the exclusive
property of the Company and shall be delivered to the Company and
not retained by the Executive upon termination of his employment
for any reason whatsoever or at any other time upon request of the
Board, or, at the option of the Company, he may destroy all such
material and certify such destruction in writing to the Company
within ten (10) days following the termination of his
employment or such request by the Company.
9.
Discoveries . The Executive covenants and agrees that
he will fully inform the Company of and disclose to the Company all
inventions, designs, improvements, discoveries, and processes
(“Discoveries”) that he has now or may hereafter have
during his employment with the Company and that pertain or relate
to the business of the Company or to any experimental work,
products, services, or processes of the Company in progress or
planned for the future, whether conceived by the Executive alone or
with others, and whether or not conceived during regular working
hours or in conjunction with the use of any Company assets. All
such Discoveries shall be the exclusive property of the Company
whether or not patent or trademark applications are filed thereon.
The Executive shall assist the Company, at any time during or after
his employment, in obtaining patents and other intellectual
property protection on all such Discoveries deemed patentable or
otherwise protectable by the Company and shall execute all
documents and do all things necessary to obtain letters patent,
vest the Company with full and exclusive title thereto, and protect
the same against infringement by others, all at the expense of the
Company. If such assistance takes place after his employment is
terminated, the Executive shall be paid by the Company for any time
actually spent in rendering such assistance at the request of the
Company at an hourly rate equivalent to fifty percent (50%) of the
Executive’s Base Salary as in effect on the date of
termination of his employment divided by 2500.
10.
Non-Competition . The Executive covenants and agrees
that during the period of his employment, and for a period of two
(2) years following the effective date of the termination of
his employment for any reason, he shall not, without the prior
written consent of the Board, directly or indirectly, as an
employee, employer, consultant, agent, principal, partner,
shareholder, officer, director, member, manager or through any
other kind of ownership (other than ownership of securities of
publicly held corporations of which the Executive owns less than
three percent 3% of any class of outstanding securities),
membership, affiliation, association, or in any other
representative or individual capacity, engage in or render, or
agree to engage in or render, any services to any Competing
Business. For purposes of this Agreement, “Competing
Business” shall mean any business in North America that
(a) is engaged in the family or casual dining restaurant
industry; (b) offers products that compete with products
offered by the Company or any of its affiliates; (c) offers
products that compete with products the Company or its affiliates
have taken substantial steps toward launching during the
Executive’s employment with the Company; or (d) is
engaged in a line of business that competes with any line of
business that the Company or its affiliates enter into, or have
taken substantial steps to enter into, during the Executive’s
employment with the Company. During the two-year period following
the Executive’s separation from employment with the Company,
the Executive may request, in writing, the approval of the Board to
provide services to a Competing Business in a capacity that is
unrelated to the business and products of the Company and its
affiliates and that will not result
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in the
unauthorized use or disclosure of trade secrets and confidential
information to which the Executive had access by virtue of his
employment with the Company. The Executive agrees to provide any
information the Board deems necessary to make this determination,
and the Board shall not unreasonably withhold its
approval.
11.
Non-Solicitation . The Executive agrees that during
the period of his employment, and for a period of two
(2) years following the effective date of the termination of
the Executive’s employment for any reason, he will not,
either dire
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