Exibit 10.19
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT ("Agreement") is made as of December 31, 2004
between DI GIORGIO CORPORATION, a Delaware corporation, with its principal
office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the
"Corporation"), and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, with an address at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇-▇▇-▇▇▇-▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive").
W I T N E S S E T H:
WHEREAS, effective May 1, 1992, the Corporation and the Executive,
among others, entered into an employment agreement pursuant to which the
Executive agreed to serve the Corporation as Executive Vice President and Chief
Financial Officer; and such agreement was amended August 31, 1992 (the "1992
Agreement") and effective October 31, 1997 the 1992 Agreement was amended and
restated (the "1997 Agreement"), and effective April 1, 2000 such agreement was
amended and restated in a Second Amended and Restated Employment Agreement (the
"2000 Agreement"). In November 2000, the Executive was elected CEO and
Co-Chairman of the Board of Directors;
WHEREAS, the Corporation and the Executive desire to terminate the
Executive's employment earlier than provided for in the 2000 Agreement, on the
terms and conditions herein set forth:
NOW, THEREFORE, in consideration of the premises, the Executive's
prior services and the mutual covenants and agreements herein contained, the
parties hereby agree as follows:
1. Continuation of Employment. Executive shall continue as an employee
through December 31, 2004, pursuant to the terms of the 2000 Agreement, except
as the same may be modified in this Agreement.
2. Term and Annual Payment. The Corporation agrees to pay the
Executive severance pay, on the terms and conditions herein set forth for a term
of five (5) years commencing as of January 1, 2005 and ending on December 31,
2009, unless sooner terminated as herein provided.
2.1 Executive's severance pay per annum shall be $50,000, payable
quarterly in advance at the rate of $12,500 per calendar quarter commencing
January 1, 2005 and on the first day of each calendar quarter thereafter during
the five (5) year term unless terminated sooner as provided herein.
2.2. Upon a "Change of Control" as hereinafter defined, the
periodic payments set forth in Section 2.1 shall cease.
2.3. For the purpose of this Agreement, a "Change of Control"
shall mean:
2.3.1. The acquisition by any person, entity or "group",
within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the "Exchange Act"), (excluding, for this purpose, (A) the
Corporation or its subsidiaries, or (B) any employee benefit plan of the
-2-
Corporation or its subsidiaries which acquires beneficial ownership of voting
securities of the Corporation [within the meaning of Rule 13d-3 promulgated
under the Exchange Act]) of 50% or more of either the then outstanding shares of
common stock or the combined voting power of the Corporation's then outstanding
voting securities entitled to vote generally in the election of directors; or
2.3.2. Individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director subsequent
to the date hereof whose election, or nomination for election by the
Corporation's shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Corporation, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board; or
2.3.3. Approval by the stockholders of the Corporation of
(A) a reorganization, merger, consolidation, in each case, with respect to which
persons who were the stockholders of the Corporation (directly or indirectly)
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own (directly or indirectly) more than 50% of the
combined voting power entitled to vote generally in the election of directors of
-3-
the reorganized, merged or consolidated company's then outstanding voting
securities, or (B) a liquidation or dissolution of the Corporation or (C) the
sale of all or substantially all of the assets of the Corporation.
2.3.4. A sale or other transfer of the partnership interests
in Rose Partners, L.P. so that immediately thereafter more than 50% of the
combined voting power entitled to vote in the election of director of the
Corporation is held by persons other than those who held such voting power
immediately prior to such sale or other transfer.
3. Continued Benefits. At the Corporation's cost:
3.1. Unless earlier terminated as provided herein, for the five
(5) year term, the Executive shall continue to be provided the use of the office
he currently occupies and a secretary of his choice.
3.2. Until the Executive and his spouse reach age 65, the
Executive, his spouse and his eligible children shall continue to be covered by
the Corporation's health insurance and medical reimbursement plans.
4. Minimum Bonus for the Year Ended December 31, 2004. The Corporation
will pay the Executive, on or before December 31, 2004, a bonus of $99,955.34.
The Corporation shall withhold from such bonus: 8.97% New Jersey income tax;
1.45% Medicare tax; and 31.86% federal income tax. The net after-tax payment of
$57,693.72 shall be applied in full payment of the principal ($55,209.30) and
interest ($2,484.42) due from the Executive to the Corporation; and the
Corporation acknowledges that such payment is in full satisfaction of all loans
and notes due from the Executive to the Corporation.
-4-
5. Retirement Bonus for the Calendar Year 2004. The Corporation shall
pay the Executive a discretionary retirement bonus (the "Retirement Bonus") for
services rendered in the 2004 calendar year, up to December 31, 2004; provided,
however, that the Retirement Bonus shall not be less than eighty (80%) percent
of the result of multiplying the Executive's 2003 bonus of $440,000 times a
fraction: the numerator of which is the Corporation's EBITDA for the eleven (11)
accounting periods ended November 20, 2004 and the denominator of which is
$40,109,000 (representing the Corporation's EBITDA for the eleven (11)
accounting periods ended November 22, 2003). The determination of the minimum
Retirement Bonus in accordance with the preceding formula (the "Minimum Amount")
shall be made as soon as practicable following the execution of this Agreement
by ▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, CPAs, whose decision shall be final and binding upon
all parties, and the Executive shall be paid the Minimum Amount on or before
December 31, 2004. To the extent, if any, that the Retirement Bonus exceeds the
Minimum Amount, such excess amount shall be paid to the Executive on or before
March 31, 2005.
6. The Di Giorgio Supplemental Pension Plan. The Executive is a
participant in the Di Giorgio Supplemental Pension Plan ("Plan"). The
Corporation agrees to amend the Plan as soon as reasonably possible to provide
for a lump sum payment to the Executive of his entire balance.
7. Legal and Professional Fees. The Corporation will reimburse the
Executive for all legal and professional fees incurred by the Executive in
-5-
negotiating, drafting and executing this Agreement and concurrent agreements
between the Executive and (i) Las Plumas Partners, L.P. and (ii) Rose Partners,
L.P.
8. Confidentiality; Injunctive Relief.
8.1. Executive recognizes and acknowledges that the knowledge,
information, and relationship with resources, suppliers, and customers of the
Corporation, and the knowledge of the Corporation's business methods, systems,
plans, and policies which he has heretofore obtained as an employee of the
Corporation, are valuable and unique assets of the business of the Corporation.
Accordingly, Executive agrees that he will not, during the period that he is
serving as Co-Chairman of the Corporation's Board of Directors and for one (1)
year thereafter (the "Covenant Period") disclose or use, without the prior
written consent of the Board of Directors of the Corporation, directly or
indirectly, any non-public information (whether written or unwritten) relating
to the Corporation or any of its divisions, operations, subsidiaries or
affiliated companies, or any of their respective management, financial
condition, subscription, mailing or customer lists, sources of supply, business,
personnel, policies, or prospects, to any individual or entity for any purpose
whatsoever. The provisions of this Section 8.1 shall not apply to information
which is or shall become generally known to the public or the trade (except by
reason of Executive's breach of his obligations hereunder), information which is
or shall become available in trade or other publications, or information which
Executive is required to disclose by order of a court of competent jurisdiction
(but only to the extent specifically ordered by such court and, when reasonably
-6-
possible, if Executive shall give the Corporation prior notice of such intended
disclosure so that it has the opportunity to seek a protective order if it deems
appropriate).
8.2. Executive acknowledges and agrees that all memoranda, notes,
reports, records, and other documents made or compiled by Executive, or made
available to Executive prior to or during the term of this Agreement, concerning
the Corporation's business, shall be the Corporation's property and shall be
delivered to the Corporation on request by the Board of Directors of the
Corporation.
9. No Raid; Non-Compete.
9.1. Executive agrees that until the expiration of the Covenant
Period Executive shall not, without the prior written approval of the Board of
Directors of the Corporation directly or indirectly through any other person,
firm or corporation, solicit, raid, entice, or induce any person who is, at the
time of such solicitation (or was at any time during the eighteen (18) months
immediately preceding such solicitation, raid, enticement, or inducement), an
employee of the Corporation or any of its subsidiaries or affiliates, to become
employed by such person, firm, or corporation, and Executive shall not approach
any such employee for such purpose or authorize or knowingly approve the taking
of such actions by any other person.
9.2. Executive agrees that, until the expiration of the Covenant
Period, Executive will not, whether individually or as a partner, owner,
officer, director, stockholder, or employee, own, manage, operate, or control or
have a financial interest in, or serve as a consultant to, any person, firm,
corporation, or other entity which is engaged in any business activity in
competition with the business of the Corporation in the markets in which the
-7-
Corporation competes. The foregoing restrictions shall not be deemed to include
Executive's direct or indirect ownership of any securities in a publicly-traded
business entity which does not, and will not with the passage of time, result in
his obtaining, directly or indirectly, more than two (2%) percent of the
securities of such entity.
10. Injunctive Relief. Executive acknowledges that the services
rendered by him were of a special, unique, and extraordinary character, and if
he violates any of the provisions of this Agreement with respect to
confidentiality, non-competition, or solicitation, the Corporation would sustain
irreparable harm. Accordingly, Executive consents and agrees that if he violates
any of the provisions of Sections 8 or 9 hereof, in addition to any other
remedies which the Corporation may have under the Agreement or otherwise, the
Corporation shall be entitled to apply to any court of competent jurisdiction
for an injunction restraining Executive from committing or continuing any such
violation of this Agreement, and Executive shall not object to any such
application. Nothing in this Agreement shall be construed as prohibiting the
Corporation from pursuing any other remedy or remedies including, without
limitation, recovery of damages.
11. Deductions and Withholding. Executive agrees that the Corporation
shall withhold from any and all payments and compensation required to be made to
Executive pursuant to this Agreement all Federal, state, local, and/or other
taxes which the Corporation determines are required to be withheld in accordance
with applicable statutes and/or regulations from time to time in effect.
-8-
12. No Conflict. Executive represents and warrants that there is no
restriction, agreement or limitation on his right or ability to enter into and
perform the terms of this Agreement.
13. Miscellaneous.
13.1. This Agreement cancels and supersedes any and all prior
agreements and understandings between the parties hereto respecting the
employment of and severance of employment of the Executive by the Corporation
and constitutes the complete understanding between the parties with respect to
the employment of and severance of employment of the Executive hereunder. No
statement, representation, warranty, or covenant has been made by either party
with respect thereto except as expressly set forth herein. This Agreement may
not be altered, modified, or amended except by written instrument signed by each
of the parties hereto.
13.2. Waiver by either party hereto of any breach of default by
the other party to any of the terms and provisions of this Agreement, shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived.
13.3. All notices, consents, requests, demands, and other
communications hereunder shall be in writing and shall be delivered personally,
by Federal Express or other prepaid, internationally recognized receipted
overnight or courier service, or sent by registered or certified mail, return
receipt requested, first class postage prepaid, to the other party hereto at its
or his address as set forth in the beginning of this Agreement. Either party may
-9-
change the address to which notices, requests, demands, and other communications
hereunder shall be directed by giving written notice of such change of address
to the other party in the manner above stated.
13.4. This Agreement shall inure to the benefit of
and shall be binding upon the
heirs, executors, administrators, successors, and legal representatives of
Executive and shall inure to the benefit of and be binding upon the Corporation
and its successors. This Agreement is personal as to Executive and, except for
transfer to his heirs or personal representative, the Executive may not assign,
transfer, pledge, encumber, hypothecate, or otherwise dispose of this Agreement
or any of his rights hereunder and any such attempt of assignment, transfer,
pledge, encumbrance, hypothecation, or other disposition shall be null and void
and without effect.
13.5. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey.
13.6. The paragraph headings of this Agreement are for
convenience of reference only and shall not limit or define the text thereof.
13.7. In the event that any one or more of the provisions of this
Agreement shall be invalid, illegal, or unenforceable in any respect, the
validity, legality, and enforceability of the remaining provisions contained
herein shall not in any way be affected thereby.
13.8. This Agreement may be executed in two or more counterparts
and by fax, each of which shall be deemed an original and all of which, when
taken together shall be deemed to constitute one and the same instrument.
Delivery of a signed counterpart by fax shall constitute sufficient delivery.
-10-
13.9. Any dispute regarding this Agreement shall be resolved
exclusively by arbitration in New Jersey in accordance with the employment rules
of, and under the aegis of, the American Arbitration Association then in effect.
The Corporation shall pay Executive's reasonable legal expenses in connection
with any such arbitration; provided, however, that Executive shall reimburse the
Corporation for such expenses if the arbitrator(s) shall decide the material
issues in favor of the Corporation and provide in their award for such
reimbursement.
IN WITNESS WHEREOF, the parties hereto have entered into
this Agreement as of the day and year first above written.
DI GIORGIO CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ 12/30/04
--------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇, EVP
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ 12/29/04
-------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Confirmed and Approved:
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chairman of the
Compensation Committee of the Board of
Directors
-11-
