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EXHIBIT 10.8
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective as of the 27th day of February, 1997, by and between PREMIUM STANDARD
FARMS, INC., a Delaware corporation (the "Company"), and XXXXXXX X. XXXXXXXXX,
an individual (the "Employee").
WHEREAS, the Company and the Employee are parties to an Employment
Agreement dated as of October 1, 1996 (the "Old Contract");
WHEREAS, Company and Employee desire to replace the Old Contract with
this Agreement and, further, intend, that this Agreement shall be substituted
for, and supersede, the Old Contract in its entirety;
WHEREAS, the Company desires to employ the Employee and to assure
itself of the continued services of the Employee for the term of employment
provided for in this Agreement, and the Employee desires to be employed by the
Company for such a period, upon the terms and conditions hereinafter set forth;
and
WHEREAS, the Company and Employee desire to set forth, in writing, the
terms and conditions of their agreements and understandings.
NOW, THEREFORE, in consideration of the mutual premises and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Employment. The Company hereby employs Employee and Employee
hereby accepts employment with the Company, upon the terms and conditions
contained herein. During the term of Employee's employment hereunder, Employee
shall have the title, status and duties of Executive Vice President and Chief
Financial Officer of the Company. During the term of Employee's employment
hereunder, Employee will serve the Company faithfully and to the best of his
ability under the direction of the Board of Directors of the Company (the
"Board") and shall devote substantially all his working time and attention to
the business of the Company and to the performance of his duties hereunder.
Employee will also serve upon request of the Board, and for no additional
compensation, in the position, or positions, of an officer or director of any
subsidiary of the Company.
2. Term. The term of Employee's employment under this Agreement
shall commence as of the date hereof (the "Effective Date") and shall end
December 31, 1999, unless sooner terminated by either party in accordance with
the provisions of this Agreement (the "Initial Employment Term"); provided,
however, this Agreement shall be automatically extended without further action
by either party for additional one-year periods, unless written notice of
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either party's intention not to extend the term of Employee's employment
hereunder has been given to the other party at least six months prior to the
expiration of the then effective term.
3. Salary.
3.1 Base Salary. The Company will pay to Employee a
minimum annual base salary ("Base Salary") of Two Hundred Thousand and
No/100ths Dollars ($200,000.00), payable at such intervals consistent with the
Company's payroll policies for other senior executive officers, with such
annual increases as are necessary to reflect changes in the cost of living and
as may be provided under the terms of this Agreement. Once increased, such
greater amount shall constitute Employee's Base Salary.
3.2 Annual Review. Employee's Base Salary shall be
reviewed by the Compensation Committee of the Board on each anniversary of
Employee's initial hire date. Employee's Base Salary may be increased (but not
decreased) based upon Employee's performance. In addition to any increases
under this Section 3.2, the Board may, in its sole discretion, increase
Employee's Base Salary at any time.
4. Employee Benefits; Performance Bonus.
4.1 General. Employee will be included, to the extent
eligible thereunder by virtue of his position, tenure, salary, age and other
qualifications, in all employee benefit plans, programs or arrangements
(including, without limitation, any plans, programs or arrangements providing
for retirement benefits, incentive compensation, profit sharing, bonuses,
disability benefits, health and life insurance, or vacation and paid holidays)
which shall be established by the Company for, or made available to, its other
senior executive officers. For purposes of the aforesaid benefit plans and
other purposes of this Agreement, the Employee's employment with the Company
shall not be terminated or interrupted by termination of the Old Contract.
4.2 Executive Performance Bonus. Employee will be
eligible to participate in an executive performance bonus (the "Executive
Performance Bonus") as determined by the Board in its sole discretion, in
accordance with the Company's general management bonus policy; provided,
however, in no event will the norm Executive Performance Bonus paid to Employee
be an amount equal to or greater than fifty percent (50%) of Employee's Base
Salary.
4.3 Company Automobile. Employee will have the use of a
Class 1 automobile, as defined in the Company's automobile policy, owned or
leased by the Company for the performance of Employee's services hereunder.
The Company will reimburse Employee for reasonable expenses incurred in
connection with Employee's use of such automobile in accordance with the
Company's expense reimbursement policy.
4.4 Reimbursement of Expenses. The Company will reimburse
Employee for reasonable travel and other business expenses incurred by him in
the fulfillment of his duties
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hereunder upon Employee's presentation to the Company of an itemized account of
such expenditures.
5. Termination of Employment
5.1 Termination without Cause; Resignation for Good
Reason.
5.1.1 General. Subject to the provisions of
Sections 5.1.2 and 5.1.3, if, prior to the expiration of the Initial Employment
Term, Employee's employment is terminated by the Company without Cause, as
defined in Section 5.3, or if Employee resigns from his employment for Good
Reason, as defined in Section 5.4, the Company shall continue to pay Employee
his annual Base Salary as of the date of termination or resignation for a
period of one (1) year following the date of termination or resignation (such
period, as applicable, being referred to hereinafter as the "Severance
Period"); provided, however, notice by either party of its intention not to
extend the Initial Employment Term beyond December 31, 1999 shall not
constitute termination without Cause or resignation for Good Reason. During
the Severance Period, Employee shall also be eligible to participate on the
same terms and conditions as in effect immediately prior to such termination or
resignation in all health, medical, supplemental medical and life insurance
plans or programs ("Employee Welfare Plans") provided to Employee by the
Company pursuant to Section 4 above at the time of such termination or
resignation and which are provided by the Company to its employees following
the date of such termination or resignation; provided, however, that Employee's
eligibility to participate in these Employee Welfare Plans shall end at such
time as Employee becomes eligible to receive coverage under comparable programs
of a subsequent employer. If, during the Severance Period, Employee is
precluded from participating in any Employee Welfare Plan by its terms or
applicable law, the Company will provide Employee with benefits that are
reasonably equivalent to those which Employee would have received under such
plan had Employee been eligible to participate therein. Anything to the
contrary herein notwithstanding, the Company shall have no obligation to
continue to maintain any Employee Welfare Plan during the Severance Period
solely as a result of this Agreement.
5.1.2 Employee will not be required to mitigate the
amount of any payment provided for in Section 5.1.1 by seeking other
employment, and the amount of any such payment will not be reduced by any
compensation earned by Employee as the result of his employment by another
employer subsequent to termination of Employee's employment with the Company.
5.1.3 Death During Severance Period. In the event
of Employee's death during the Severance Period, the Severance Period shall
immediately cease, the Company shall not be obligated to make any further
payments pursuant to this Section 5, and the provisions of Section 6.1 shall
apply as though Employee's death had occurred immediately prior to termination
of Employee's employment hereunder.
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5.1.4 Date of Termination. The date of termination
of employment without Cause shall be the date specified in a written notice of
termination to Employee. The date of resignation for Good Reason shall be the
date specified in the written notice of resignation from Employee to the
Company.
5.2 Termination for Cause; Resignation Without Good
Reason.
5.2.1 General. If Employee's employment hereunder
is terminated by the Company for Cause, or if Employee resigns from his
employment hereunder other than for Good Reason, Employee shall be entitled
only to payment of his Base Salary earned through and including the date of
termination or resignation. Employee shall have no further right to receive
any other compensation, or to participate in any other plan, arrangement, or
benefit, after such termination for Cause or resignation of employment other
than for Good Reason.
5.2.2 Date of Termination. Subject to Section 5.3,
the date of termination for Cause shall be the date of receipt by Employee of a
written Notice of Termination provided for in Section 5.2.3. The date of
resignation without Good Reason shall be the date specified in the written
notice of resignation from Employee to the Company, or if no date is specified
therein, ten (10) business days after receipt by the Company of written notice
or resignation from Employee.
5.2.3 Notice of Termination. Termination of
Employee's employment for Cause shall be communicated by delivery to Employee
of a copy of a resolution duly adopted by the affirmative vote of not less than
a majority of the entire membership of the Company's Board at a meeting of the
Board called and held for such purpose (after reasonable notice to Employee and
reasonable opportunity for Employee together with Employee's counsel, to be
heard before the Board prior to such vote), finding that in the good faith
opinion of the Board an event constituting Cause for termination in accordance
with Section 5.3 has occurred and specifying the particulars thereof (a "Notice
of Termination"). For purposes of this Agreement, no purported termination of
Employee's employment for Cause shall be effective without delivery of such
Notice of Termination.
5.3 Cause. Termination for "Cause" means termination of
Employee's employment because of (i) any willful material violation by Employee
of any law or regulation applicable to the business of the Company or any of
its subsidiaries or Employee's conviction for, or guilty plea to, a felony or a
crime involving moral turpitude, or any willful perpetration by Employee of a
common law fraud, (ii) Employee's commission of an act involving gross
negligence on the part of Employee in the conduct of his duties under this
Agreement or any other employment or consulting agreement with another employer
having a business relationship with the Company, (iii) Employee's commission of
an act of personal dishonesty which involves personal profit in connection with
the Company or any other employer having a business relationship with the
Company, (iv) any material breach by Employee of any provision of this
Agreement or any other employment or consulting agreement with another employer
having a business relationship with the Company including, without limitation,
the continued failure or
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refusal of Employee to perform the material duties required of him as an
employee of the Company, or (v) any other misconduct by Employee which is
materially injurious to the financial condition or business reputation of, or
is otherwise materially injurious to, the Company or any of its subsidiaries or
affiliates; provided, however, that if any such Cause relates to Employee's
obligations under this Agreement and (x) is susceptible to cure and (y) does
not constitute a repetition of such Cause, the Company shall not terminate
Employee's employment hereunder unless the Company first gives Employee a
Notice of Termination, and Employee has not, within ten (10) business days
following receipt of the notice, cured such Cause, or in the event such Cause
is not susceptible to cure within such ten (10) business day period, Employee
has not taken all reasonable steps within such ten (10) business day period to
cure such Cause as promptly as practicable thereafter.
5.4 Good Reason. For purposes of this Agreement, "Good
Reason" means:
5.4.1 A diminution in Employee's position,
authority, duties or responsibilities, excluding for
this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of
notice thereof given by Employee; provided, however,
that the creation of additional officer positions
shall not be considered a diminution in Employee's
authority so long as Employee continues to hold the
office of Executive Vice President and Chief
Financial Officer and performs the duties, functions
and responsibilities within the Company as performed
by him prior to the date hereof;
5.4.2 The Company's failure or refusal to
comply with the provisions of this Agreement; or
5.4.3 The Company (i) files a petition in
bankruptcy court or is adjudicated a bankrupt; (ii)
institutes or suffers to be instituted any procedure
in bankruptcy court for reorganization or
rearrangement of its financial affairs; (iii) has a
receiver of its assets or property appointed because
of insolvency; or (iv) makes a general assignment for
the benefit of creditors.
6. Death or Permanent Disability.
6.1 Death. If Employee's employment hereunder is
terminated by death, the Company shall, within ninety (90) days of the date of
death, make a lump sum payment to Employee's estate (or other beneficiary
designated by him in writing) equal in amount to Employee's Base Salary as in
effect on the date of death that would have been paid to Employee over a period
of twelve months. Thereafter, the Company shall have no further obligation to
Employee under the Agreement.
6.2 Permanent Disability. In the event Employee shall
become physically or mentally disabled while employed by the Company under this
Agreement so that Employee is unable to render the services provided for by
this Agreement for a period of six consecutive months, or for shorter periods
aggregating six months during any twelve-month period, the
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Company may at any time after the last day of the six consecutive months of
disability or the day on which the shorter periods of disability equal an
aggregate of six months, terminate Employee's employment hereunder for
"Permanent Disability" by written notice to Employee. The Company shall,
following such termination, continue to pay Employee's Base Salary as then in
effect for a period of twelve months, and shall continue during such period
Employee's participation in medical benefits programs then maintained for the
Company's senior executive officers (or shall provide reasonably equivalent
benefits). Employee will use his reasonable best efforts to cooperate with any
physician engaged by the Company to determine whether or not Permanent
Disability exists, and the determination of such physician made in writing to
the Company and Employee shall be final and conclusive for all purposes of this
Agreement. Any payments provided for in this Section 6.2 shall be offset (but
not below zero) by any salary continuation payments received by Employee under
any plan, program or arrangements in which Employee participated pursuant to
Section 4.1 of this Agreement. Except as provided in this Section 6.2, upon
termination of the Employee's employment hereunder by virtue of Employee's
Permanent Disability, the Company shall have no further obligation to Employee
under this Agreement.
7. Change of Control.
7.1 Notwithstanding anything to the contrary contained
herein, if the Company terminates Employee without Cause upon or within six (6)
months following a Change of Control, as defined below, the Company will pay to
Employee an amount equal to the greater of (i) Employee's annual Base Salary as
of the date of the Change of Control, or (ii) if the Change of Control occurs
during the Initial Employment Term, the remaining portion of Employee's Base
Salary for the Initial Employment Term as of the date Employee's employment is
terminated, as severance pay, and the covenant not to compete set forth in
Section 8.3.1 below will not apply to Employee.
7.2 For purposes of this Agreement, "Change of Control"
means:
(a) A consolidation, merger or similar
transaction involving the Company which has one or more of the following
results: (i) the Company is not the surviving entity; (ii) a single person or
entity or a group of persons and/or entities acting in concert (an "Acquiring
Entity") acquire a majority amount or more of the Company's Common Stock,
followed by a change in a majority of the membership of the Board, other than
as a result of death or voluntary resignation (for reason unrelated to the
transaction) of any member or members of the Board, within six months from the
date the Acquiring Entity acquires a majority amount or more of the Company's
common stock; (iii) there is a sale or transfer of all or substantially all of
the Company's assets; or (iv) the Company is dissolved or liquidated; or
(b) A consolidation, merger or similar
transaction involving PSF Holdings, L.L.C. ("Holdings") which has one or more
of the following results: (i) Holdings is not the surviving entity; (ii) an
Acquiring Entity acquires a majority amount or more of
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Holdings' Units, as defined in the Plan; (iii) there is a sale or transfer of
all or substantially all of Holdings' assets; or (iv) Holdings is dissolved or
liquidated.
(c) The provisions of (a) and (b) above
notwithstanding, it is not the intent of the Company to include within the
definition of "Change of Control" changes in the ownership of the Company
and/or Holdings which are occasioned by the transfer or sale of Units and/or
Company common stock to one or more parties who acquire the Units and/or
Company common stock for purposes of maintaining a passive investment in the
Company and/or Holdings. For these reasons, the parties agree that the Board
reserves the authority to determine, in good faith, and in its sole discretion,
whether the occurrence of a particular event (such as the sale of Units and/or
Company common stock to an affiliate, a current investor, or another
third-party passive investor) falls within the definition of a "Change of
Control" for purposes of this Agreement.
8. Confidentiality.
8.1 Confidentiality. Employee covenants and
agrees with the Company that he will not at any time, except in performance of
his obligations to the Company hereunder or with the prior written consent of
the Company, directly or indirectly, disclose any secret or confidential
information that he may learn or has learned by reason of his association with
the Company or any of its subsidiaries and affiliates. The term "confidential
information" includes information not previously disclosed to the public or to
the trade by the Company's management, or otherwise in the public domain, with
respect to the Company's or any of its affiliates' or subsidiaries' products,
facilities, applications and methods, trade secrets and other intellectual
property, systems, procedures, manuals, confidential reports, product price
lists, customer lists, technical information, financial information (including
the revenues, costs or profits associated with any of the Company's products),
business plans, prospects or opportunities.
8.2 Exclusive Property. Employee confirms that
all confidential information is and shall remain the exclusive property of the
Company. All business records, papers and documents kept or made by Employee
relating to the business of the Company shall be and remain the property of the
Company.
8.3 Noncompetition.
8.3.1 If the Company terminates Employee's
employment for Cause, as defined in Section 5.3, or Employee terminates his
employment with the Company other than for Good Reason, as defined in Section
5.4, Employee will not, for the two (2) year period following the termination
of Employee's employment under this Agreement, without the prior written
consent of the Board, be or remain employed or retained by, or consult with or
render any services for any person, firm, partnership, joint venture, limited
liability company, association, corporation or other business organization,
entity or enterprise engaged in any business, which competes directly or
indirectly with the business in which the Company, or any of its subsidiaries
or affiliates, is engaged at any time during the term of this Agreement;
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provided, however, (i) nothing contained in this Section 8.3.1 shall prevent
Employee from being employed by a company whose business activities compete,
directly or indirectly, with the Company so long as Employee is employed in a
capacity or a division, unit or separate portion of that other company which
does not compete with the business of the Company, and (ii) the provisions of
this Section 8.3.1 shall not apply if Employee elects to give notice of
non-extension as provided in Section 2 prior to the end of the Initial
Employment Term or any one-year renewal period thereafter. Employee hereby
further agrees that Employee will not solicit or endeavor to entice away from
the Company, or any of its affiliates or subsidiaries, any person who is, or
was during the then most recent twelve month period, employed by or associated
with the Company, nor will Employee solicit or endeavor to entice away from the
Company, or any of its affiliates or subsidiaries, any person or entity who is,
or was within the then most recent twelve month period, a customer, client or
prospect of the Company. The period during which the obligations of this
Section 8.3 shall apply to Employee shall be extended by a period of time equal
to any period during which Employee shall be in breach of such obligations.
8.3.2 If the Company gives Employee notice
of its intention not to extend this Agreement for an additional one-year period
beyond December 31, 1999 in accordance with Section 2 above, the Company, in
its sole discretion, shall have the option and right, by giving notice to
Employee and paying to Employee an amount equal to Employee's Base Salary as
currently in effect (such amount to be payable at intervals consistent with the
Company's payroll practices for other senior executives) to prevent Employee
from competing with the Company for a period of one (1) year following the
termination of Employee's employment under this Agreement in the same manner as
set forth in Section 8.3.1 above.
8.3.3 If this Agreement is extended for
additional one-year periods beyond December 31, 1999 in accordance with Section
2 above and, thereafter, either (i) the Company gives Employee notice of its
intention not to extend the terms of this Agreement for additional one-year
periods, or (ii) the Company terminates Employee without Cause, or (iii)
Employee resigns for Good Reason, the Company, in its sole discretion, shall
have the option and right, by giving notice to Employee and paying to Employee
an amount equal to Employee's Base Salary as currently in effect (such amount
to be payable at intervals consistent with the Company's payroll practices for
other senior executives) to prevent Employee from competing with the Company
for a period of one (1) year following the termination of Employee's employment
under this Agreement in the same manner as set forth in Section 8.3.1.
8.3.4 Employee shall not be required to
mitigate the amount of any payment provided in Sections 8.3.2 and 8.3.3 by
seeking other employment; provided, however, if Employee violates or breaches
the non-competition provisions set forth in Sections 8.3.2 and 8.3.3, the
amount of any payment provided in Sections 8.3.2 and 8.3.3 will be
discontinued, in addition to all other legal and equitable remedies available
to the Company.
8.3.5 The restrictions set forth in this
Section 8 are considered by the parties to be reasonable. However, if any such
restriction is found to be unenforceable because it extends for too long a
period of time or over too great a range of activities or is too broad a
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geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable. In the event of a breach or a threatened breach of this Section
8, the Company shall be entitled to an injunction restraining Employee from
committing or continuing such breach, as well as to any and all other legal and
equitable remedies permitted by law but only if the Company has fulfilled all
its obligations to Employee pursuant to this Agreement.
9. Miscellaneous.
9.1 Notices. All notices and communications
hereunder shall be in writing, addressed as follows:
To the Company:
Premium Standard Farms, Inc.
000 X. 0xx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
To Employee:
Xxxxxxx X. Xxxxxxxxx
Premium Standard Farms, Inc.
000 X. 0xx Xxxxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
Any such notice or communication shall be delivered in person, by cable, by
telecopy (with confirmation copy of such telecopied material delivered in
person or by registered or certified mail, return receipt requested) or by
certified or registered mail, return receipt requested, addressed as above (or
to such other address as such party may designate in writing from time to
time), and the actual date of receipt, as shown by the receipt therefor, shall
determine the time at which notice was given.
9.2 Severability. If any provision of this
Agreement shall be prohibited by or invalid under applicable law or otherwise
determined to be unenforceable, such provision shall be ineffective to the
extent of such prohibition or invalidity without invalidating the remainder of
this Agreement.
9.3 Disputes. Any controversy, claim or dispute
between the parties arising out of this Agreement shall be settled by
arbitration in Kansas City, Missouri in accordance with the Expedited Labor
Arbitration Rules of the American Arbitration Association.
9.4 Entire Agreement; Modification. This
Agreement constitutes the entire agreement among the parties hereto and
supersedes any and all prior contracts, arrangements or understandings between
the parties, including without limitation the Old Contract. This
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Agreement may be amended or modified at any time only by mutual written
agreement of the parties.
9.5 Withholding. The Company may withhold from
any amounts payable under this Agreement such federal, state and local taxes as
may be required to be withheld pursuant to any applicable law or regulation.
9.6 Governing Law. This Agreement shall be
construed, interpreted, and governed in accordance with the laws of the state
of Missouri without regard to conflict of law principles.
9.7 Successors. This Agreement shall be binding
upon and inure to the benefit of, and shall be enforceable by Employee and the
Company, their respective heirs, executors, administrators and assigns. In the
event the Company is merged, consolidated, liquidated by a parent corporation,
or otherwise combined into one or more entities, the provisions of this
Agreement shall be binding upon and inure to the benefit of the parent
corporation or the entity resulting from such merger or to which the assets
shall be sold or transferred, which entity from and after the date of such
merger, consolidation, sale or transfer shall be deemed to be the Company for
purposes of this Agreement. In the event of any other assignment of this
Agreement by the Company, by operation of law or otherwise, the Company shall
remain primarily liable for its obligations hereunder. Employee may not assign
this Agreement.
9.8 Headings. The headings of Sections herein
are included solely for convenience of reference and shall not control the
meaning or interpretation of any of the provisions of this Agreement.
9.9 Counterparts. This Agreement may be executed
by either of the parties hereto in counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
9.10 Survival. All Sections of this Agreement
shall survive beyond the period during which Employee is employed hereunder,
except as otherwise specifically stated.
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THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH
MAY BE ENFORCED BY THE PARTIES HERETO
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed as of the date first above written.
PREMIUM STANDARD FARMS, INC.
/s/ Xxxxxx X. Xxxxx
--------------------------------
By: Xxxxxx X. Xxxxx
Title: Chief Executive Officer
EMPLOYEE
/s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxxx
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