EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") dated as of the 30th day of
December, 2008, is made by and between National Beef Packing Company, LLC, a
Delaware limited liability company ("National Beef"), and Xxxx X. Xxxxxx
("Executive").
WHEREAS, Executive has been employed by National Beef Packing Company, LLC,
a Delaware limited liability company, pursuant to an employment agreement dated
as of August 6, 2008, as amended (the "Prior Agreement");
WHEREAS, Executive and certain of his affiliates are members of National
Beef and have executed, in their capacities as members, the Limited Liability
Company Agreement of National Beef dated as of August 6, 2008 (the "LLC
Agreement"), which LLC Agreement contains certain rights and obligations of
National Beef and Executive relating to Executive's ownership of membership
interests in National Beef;
WHEREAS, National Beef desires to employ Executive and Executive desires to
be employed by National Beef, and National Beef and Executive desire to
terminate the Prior Agreement and supersede it, in its entirety, with this
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Employment. Subject to the terms and conditions herein, National Beef
will employ Executive, and Executive will be employed by National Beef,
hereunder as the Chief Executive Officer ("CEO") of National Beef, from the date
hereof (the "Effective Date") until and including the earlier of: (a) the last
day of the fiscal year ending on or about August 28, 2010, or such later date as
the parties may agree (the "Expiration Date"); or (b) the date such employment
shall otherwise have been terminated in accordance with Section 4 or the closing
of the transactions under the Membership Interest Purchase Agreement dated
February 29, 2008 between National Beef and the holders of its interests and JBS
S.A. (the "Termination Date") (the period from the Effective Date until the
earlier of the Expiration Date or the Termination Date being sometimes referred
to herein as the "Term"). The occurrence of either the Expiration Date or the
Termination Date and the resulting discontinuation of Executive's services to
National Beef hereunder shall not affect the rights and obligations of Executive
or any of his affiliates pursuant to the LLC Agreement, except as may be
otherwise expressly set forth in this Agreement or the LLC Agreement.
2. Location of Employment. Executive's principal places of employment shall
be at the principal executive offices of National Beef located in Kansas City,
Missouri, and the offices of Executive in Utah. Executive will typically spend a
minimum of one day per week in the Kansas City office.
3. Compensation.
a. Annual Salary. Executive shall be paid by National Beef a salary at the
annual rate of $1,100,000 for each 12-month period during the Term, pro-rated
for any portion
1
thereof, payable in substantially equal monthly installments on or before the
last day of each monthly period with respect to each such period, less normal
withholdings.
b. Annual Bonus. For each full fiscal year of National Beef during the
Term, Executive shall, if he is employed by National Beef hereunder as of the
last day of such fiscal year, or as otherwise described herein, be paid by
National Beef an annual incentive bonus (an "Annual Bonus") equal to: (a) if
National Beef's earnings before taxes ("EBT") for such fiscal year exceeds
$20,000,000, two and three-quarters percent (2.75%) of the amount of such
excess, up to EBT of $80,000,000; plus (b) if EBT for such fiscal year exceeds
$80,000,000, one percent (1%) of such excess. For the purposes of Annual Bonus,
the Executive is deemed to have been employed on the first day of the 2009
fiscal year beginning on August 31, 2008.
Any Annual Bonus accruing with respect to a fiscal year shall be payable,
less normal withholdings, on or before the date (the "Annual Bonus Date") that
is the later of: (a) sixty (60) days following the end of such fiscal year; or
(b) ten (10) days following receipt by the National Beef Board of Managers
("Board"), from National Beef's accountants, of all completed financial
statements that are relevant to the calculation of such Annual Bonus. For
purposes of calculating any Annual Bonus under this Section 3(b), National
Beef's EBT shall be determined by National Beef's accountants using generally
accepted accounting principles consistently applied.
c. Long-Term Incentive Plan.
i. Executive shall, if he is continuously employed hereunder through the
last day of the fiscal year ending on or about August 28, 2010, or as otherwise
described herein, be paid by National Beef a long-term incentive bonus
("Long-Term Bonus") equal to: (a) if National Beef's cumulative EBIT during the
period from the first day of the fiscal year beginning on or about August 30,
2008 through the last day of the fiscal year ending on or about August 28, 2010
exceeds $76,667,000, six percent (6.0%) of such excess, up to cumulative EBIT of
$100,000,000; plus (b) if such cumulative EBIT exceeds $100,000,000, two percent
(2.0%) of such excess, up to cumulative EBIT of $116,667,000; plus (c) if such
cumulative EBIT exceeds $116,667,000, two percent (2.0%) of such excess. Any
Long-Term Bonus accruing under this Section 3(c)(i) shall be payable, less
normal withholdings, on or before the date ("Long-Term Bonus Date") that is the
later of: (a) sixty (60) days following the last day of the fiscal year ending
on or about August 30, 2010; or (b) ten (10) days following receipt by the Board
from National Beef's accountants, of all completed financial statements that are
relevant to the calculation of such Long-Term Bonus.
ii. For purposes of calculating the Long-Term Bonus under this Section
3(c), National Beef's EBIT shall be determined by National Beef's accountants
using generally accepted accounting principles consistently applied.
d. Other Benefits. Executive shall be entitled to paid vacations, personal
and sick days consistent with the policies of National Beef generally applicable
to its management employees, as adopted and amended from time to time by the
Board. Executive shall receive such other compensation as shall be approved by
the Board. Executive shall also be entitled to participate in all benefit plans
which are made available from time to time to management employees of National
Beef, on terms no less favorable than those applicable to any other
management employee (such plans including, without limitation, group medical,
life, disability and accidental death and dismemberment insurance).
e. Support. During his employment hereunder, National Beef shall, at its
expense, cause to be provided for Executive's use, office facilities at National
Beef's principal business locations and such secretarial services Executive may
reasonably require in carrying out his obligations under this Agreement.
f. Business Expenses. During his employment hereunder, Executive shall also
be reimbursed by National Beef for reasonable business expenses actually
incurred or paid by him, consistent with the policies of National Beef, in
rendering to National Beef the services provided for herein, upon presentation
of expense statements or such other supporting information as National Beef may
customarily and reasonably require of its executives. Such expenses shall
include, without limitation, travel expenses to and from Park City, Utah, and an
expense allowance for Executive's Kansas City condominium. Notwithstanding the
foregoing, expenses related to the Kansas City condominium will be limited to
$100.00 per night for each night for which Executive uses said condominium while
conducting business for National Beef in Kansas City.
g. Location of Residence. During his employment hereunder, Executive shall
not be required to relocate from his Park City, Utah home; however, consistent
with Section 2 hereof, Executive shall, in the exercise of his reasonable
judgment, spend sufficient time at National Beef's principal business locations
in Kansas City, Missouri, and Liberal and Dodge City, Kansas and Salt Lake City,
Utah in order to carry out Executive's responsibilities as set forth herein.
h. Aircraft Leases. National Beef agrees to continue to lease the two
aircraft owned by Executive on an arm's length commercially reasonable basis
pursuant to the existing leases of such aircraft. If during the term of the
existing leases on such aircraft, either of the existing leased aircraft is
replaced by Executive or his affiliates with the approval of the Board, then
Executive will be given the option to lease such replacement aircraft to
National Beef on an arm's length commercially reasonable basis.
4. Termination.
a. The employment of Executive hereunder may be terminated by National Beef
on at least thirty (30) days' prior written notice if the Board reasonably
determines that Executive has become permanently disabled (as hereinafter
defined). Such written notice shall provide reasonable detail regarding the
basis for such determination. Executive shall be deemed to be "permanently
disabled," as used in this subsection, if Executive has been substantially
unable to discharge his duties and obligations hereunder with or without
reasonable accommodation, by reason of illness, accident or disability for a
period of 180 days in any twelve-month period.
b. The employment of Executive hereunder shall be automatically terminated
on the date of Executive's death.
3
c. National Beef may terminate Executive's employment hereunder for cause
(as hereinafter defined) by the vote of a majority of the full Board and in
accordance with the LLC Agreement following: (i) notice to Executive of not less
than fifteen (15) days setting forth in detail the nature of such cause; and
(ii) a hearing before the Board at which Executive shall be entitled to
representation by counsel. National Beef shall have "cause" to terminate
Executive, as used in this subsection, only if Executive has: (i) refused or
failed, after reasonable written notice that such refusal or failure would
constitute a default hereunder, to carry out any reasonable and material order
of the Board given to him in writing; (ii) materially and willfully breached the
terms of this Agreement; (iii) demonstrated gross negligence or willful
misconduct in the execution of his material assigned duties where such gross
negligence or willful misconduct has resulted, or would reasonably be expected
to result, in material damage to National Beef; or (iv) been convicted of a
felony (A) constituting fraud, embezzlement or other illegal conduct related to
his employment or (B) which has otherwise resulted, or would reasonably be
expected to result, in material damage to National Beef. With respect to clauses
(ii) and (iii) of the previous sentence, National Beef shall have "cause" to
terminate Executive only if the damage referred to therein or resulting
therefrom is not cured or avoided by Executive within thirty (30) days following
the giving of the notice referred to above.
d. In addition to the circumstances set forth above in subsections (a), (b)
and (c), National Beef may terminate Executive's employment for any reason or no
reason and with or without cause upon thirty (30) days' prior written notice to
Executive.
e. Executive may terminate his employment hereunder for any reason or no
reason upon thirty (30) days' prior written notice to National Beef.
f. Executive may terminate his employment hereunder forthwith at any time
for good reason (as hereinafter defined) upon written notice to National Beef.
For purposes of this subsection, "good reason" shall mean the occurrence of any
of the following (as would reasonably be determined by a chief executive officer
of a company comparable in size and scope to National Beef): (i) a material
reduction or adverse alteration in the duties, authorities or responsibilities
of Executive as set forth in Section 5 hereof; (ii) removal of Executive from,
or any failure to re-elect Executive to, any titles, offices or positions held
by Executive hereunder, (iii) a reduction by National Beef in Executive's basic
salary or bonuses herein provided or as the same may be increased from time to
time; and (iv) a material and willful breach by National Beef of any of its
obligations to Executive hereunder.
g. If Executive's employment is terminated pursuant to subsection (a) or
(b) above, Executive (or in the case of a termination pursuant to subsection (b)
above, his estate), shall be entitled to, and National Beef's obligation
hereunder shall be limited to: (i) the payment of the compensation accrued under
Section 3(a) hereof and the payment of other benefits under Section 3(d) hereof
to the date of such termination plus, until the earlier of the first anniversary
of such termination or the Expiration Date (such earlier date being the "Deemed
Termination Date"), monthly payments of salary pursuant to Section 3(a) and in
the case of disability, and all other benefits pursuant to Section 3(d); (ii)
the payment (A) on or before the Annual Bonus Date for the fiscal year in which
such termination occurs, of the Annual Bonus payable pursuant to Section 3(b)
for such fiscal year and (B) on or before the Annual Bonus Date for the fiscal
year
in which the Deemed Termination Date occurs, of a pro-rated amount (based on the
number of days in such fiscal year) through the Deemed Termination Date of the
Annual Bonus that would have accrued if Executive had remained employed
hereunder through the last day of such fiscal year, in each case less normal
withholdings; and (iii) the payment, on or before the Long-Term Bonus Date (if
the Long-Term Bonus has not already been paid), of a pro-rated amount (based on
the number of days in the period applicable to such bonus) through the Deemed
Termination Date of the amount of the Long-Term Bonus (if not already paid),
that would have accrued if Executive had remained employed hereunder for the
term applicable to such Long-Term Bonus less normal withholdings.
h. If Executive's employment is terminated by National Beef pursuant to
subsection (c) above, or if Executive terminates his employment pursuant to
subsection (e) above, National Beef's obligation hereunder shall be limited to
the payment of the compensation accrued under Section 3(a) hereof to the date of
such termination.
i. If Executive's employment is terminated pursuant to subsection (d) or
(f) above, Executive shall be entitled to, and National Beef's obligation
hereunder shall be limited to: (i) the payment of the compensation accrued under
Section 3(a) hereof to the date of such termination plus continued monthly
payment of salary under Section 3(a), and continuation of benefits under Section
3(d) (subject to any necessary consent of insurers, where applicable), in each
case through the Expiration Date; and (ii) the payment, on or before the Annual
Bonus Date for the fiscal year in which such termination occurs and each fiscal
year thereafter through the Expiration Date, of the Annual Bonus that would have
accrued for such fiscal year if Executive had remained employed hereunder
through the last day of such fiscal year, less normal withholdings; and (iii)
the payment, on or before the Long-Term Bonus Date (if the Long-Term Bonus has
not already been paid), of the amount of Long-Term Bonus (if not already paid)
that would have accrued if Executive had remained employed hereunder through the
Expiration Date, less normal withholdings. If consent of the applicable insurers
is not received within 30 days, then an amount in cash sufficient for Executive
to obtain comparable coverage will be paid to Executive in equal monthly
payments through the Expiration Date.
5. Responsibilities and Authority. In his capacity as CEO of National Beef,
Executive shall report to the Board and shall have such responsibilities and
authority to ensure effective management of National Beef as determined by the
Board in accordance with the LLC Agreement. Executive shall have the authority
to implement the business plan of National Beef as approved by the Board, and
shall consult with the Board on all major decisions regarding such business
plan. The Board shall not act through other agents without the knowledge of
Executive. In addition to the foregoing and those responsibilities and
authorities normally associated with the position of chief executive officer in
a business similar in size and scope to that of National Beef's, Executive's
responsibilities and authorities shall include, without limitation, the
following:
a. Responsibility for and authority over day-to-day business operations,
including the selection and dismissal of all employees, including those in key
positions except as noted below.
5
b. Responsibility and authority: (i) to develop and implement the business
plan of National Beef as well as capital plans, compensation plans and strategic
plans, subject to approval of the Board; (ii) to authorize any expenditure by
National Beef that is reasonably necessary to enable National Beef to conduct
its business and affairs, provided that any such expenditure (other than
expenditures contemplated by any annual or interim budget, plan or program
already approved by the Board) shall not exceed $1,000,000 without the approval
of the Board; (iii) to implement acquisitions, disposals or sales of properties
or assets of National Beef (whether effected by merger, sale of assets, lease or
equity exchange or otherwise) (A) in the ordinary course of business, (B) as may
be contemplated by any annual or interim budget, plan or program already
approved by the Board, or (C) in a transaction involving less than $1,000,000.
c. Responsibility and authority to develop an executive management
succession plan for key positions.
d. Responsibility and authority to implement an effective organizational
structure, provided that the decisions regarding the selection and dismissal of
the President and the Chief Financial Officer shall be subject to the mutual
approval of Executive and the Board. Executive must consult with the Board and
receive its approval prior to any change in the employment status of Xxxxxxx X.
Xxxxx with National Beef.
e. Responsibility and authority to negotiate the Cattle Purchase Agreements
(as defined in the LLC Agreement) and related pricing grids, with USPB, on
behalf of National Beef subject to Board approval before execution of any such
agreement and subject to the provisions of the LLC Agreement
f. Serving as Chief Executive Officer of aLF Ventures, LLC.
g. Responsibility and authority to hire and terminate the general counsel
(not special counsel for the Board), of National Beef subject to the Board's
authority to terminate such general counsel.
National Beef and Executive agree that up to two (2) persons shall be
identified by the Board as being members of the National Beef executive
management succession plan (each a "Successor" and collectively the
"Successors"). Executive may, without Board approval, terminate the employment
of any one Successor with National Beef provided Executive presents to the Board
a reasonably qualified replacement for such terminated Successor for inclusion
in the executive management succession plan within ninety (90) days of such
termination. Executive must first obtain Board approval if Executive desires to
terminate the employment of both Successors or to terminate the employment of
any remaining Successor.
Except as otherwise provided herein, Executive shall observe and carry into
effect all directions and resolutions of the Board, shall have authority to take
any and all actions on behalf of National Beef granted by the Board, and except
to the extent otherwise required by the Delaware Limited Liability Company Act,
as amended from time to time, may execute all bonds, notes, debentures,
instruments and documents providing for the acquisition, mortgage or disposition
of property and other instruments and agreements for and in the name of National
Beef to the extent that such authority is granted by the Board herein or
otherwise.
6. Covenant Not to Compete. Executive acknowledges that during his
employment with National Beef he, at the expense of National Beef, has been and
will be specially trained in the business of National Beef, has established and
will continue to establish favorable relations with the customers, clients and
accounts of National Beef and will have access to certain confidential and
proprietary information of National Beef, all of which having economic
significance to National Beef. Therefore, in consideration of this Agreement and
the training and relations incident to Executive's employment and to further
protect the confidential and proprietary information of National Beef, Executive
agrees that during his employment by National Beef hereunder during the Term and
for a period of eighteen (18) months thereafter, he will not, directly or
indirectly, without the prior written consent of National Beef:
a. own, have any interest in, or act as an officer, director, partner,
member, manager, principal, employee, agent, representative, consultant or
independent contractor of, or in any way assist in, any business located or
doing business in the United States of America or in Mexico that is engaged, or
hereafter may become engaged, in slaughtering, processing, marketing or
fabricating meat or boxed meat or which is otherwise engaged in competition in
any manner with any other business engaged in by National Beef or any subsidiary
of National Beef, at any time during the term of Executive's employment
hereunder;
b. divert, or attempt to divert, clients, customers (whether or not such
persons have done business with National Beef once or more than once) or
accounts of National Beef, regardless of their location; or
c. entice, induce or in any manner influence any person who is or shall be
in the employ or service of National Beef to leave such employment or service
(other than as contemplated by Section 5 hereof during his employment by
National Beef).
Notwithstanding the foregoing, Executive may: (i) own not more than five
percent (5%) of the outstanding equity securities of any entity engaged in
competition with National Beef (ii) invest in, or acquire any rights to
contracts of, businesses relating to lactoferrin in connection with medical or
other applications not related to beef, pork, poultry, fish, dairy, produce and
animal feed (for food safety purposes); and (iii) receive from the licensor
party to an Exclusive License Agreement dated December 10, 1999 with National
Beef, a portion of royalty payments paid and payable by National Beef to the
licensor pursuant to such Exclusive License Agreement.
If a final judicial determination is made that any of the provisions of
this Section is an unenforceable restriction against Executive, the provisions
of this Section shall be rendered void only to the extent that such judicial
determination finds such provisions unenforceable, and such unenforceable
provisions shall automatically be reconstituted and become a part of this
Section, effective as of the date first written above, to the maximum extent in
favor of National Beef that is lawfully enforceable. The obligations of
Executive and the rights of National Beef under this Section shall survive the
termination of this Agreement.
7
7. Specific Performance. Recognizing that the restrictions, covenants and
assurances contained in Section 6 hereof are reasonable and necessary in order
to protect the legitimate business interests of National Beef, that any breach
or threatened breach of any such restriction, covenant or assurance (a "Breach")
will result in substantial and irreparable damage to National Beef, and that the
remedies at law for any Breach will be inadequate, National Beef shall be
authorized and entitled to obtain from any court of competent jurisdiction: (a)
preliminary and permanent injunctive relief including, without limitation,
mandatory injunctive relief requiring compliance with such restrictions,
covenants and assurances or enjoining and restraining Executive, and each and
every person, firm or company acting in concert or participation with him, from
the continuation of any Breach; (b) an equitable accounting of all profits or
benefits arising out of any Breach; and (c) direct, incidental and consequential
damages to National Beef arising from any Breach, including, without limitation,
costs and reasonable attorney's fees sustained by National Beef by reason of the
Breach: the foregoing rights and remedies being cumulative and in addition to
such other rights and remedies which may be available to National Beef at law or
in equity.
8. Indemnification. National Beef agrees, to the fullest extent permitted
by the Delaware Limited Liability Company Act and other applicable law, to
indemnify Executive against any and all claims, losses, damages or costs related
in any way to Executive's employment with National Beef or to his service as an
officer or member of the Board or as a fiduciary or trustee of any benefit plan
maintained by National Beef or any of its subsidiaries. National Beef will pay
all attorney fees and other expenses relating in any way to this indemnification
agreement and shall advance any such fees and other expenses at the request of
Executive, and all payments hereunder will be fully grossed up for any tax
liabilities. This indemnification agreement will continue and survive following
the termination of all of Executive's services, in any capacity, to National
Beef, until the expiration of all applicable statutes of limitation. National
Beef will carry a directors' and officers' liability insurance policy throughout
the period during which the foregoing indemnification agreement survives, with
terms reasonably acceptable to Executive, but Executive's right to indemnity
hereunder shall not be limited by, or to the coverage of, such insurance policy.
The foregoing rights shall also not be exclusive of any other indemnification
rights arising under the LLC Agreement or other agreement or resolution or other
decision of the members or Board of National Beef and shall inure to the benefit
of the heirs and legal representatives of Executive. Notwithstanding the
foregoing, any such indemnification of Executive shall be limited to
circumstances or events where (a) either (i) the Executive, at the time of the
action or inaction in question, determined in good faith that his course of
conduct was in, or not opposed to, the best interests of the Company, or (ii) in
the case of inaction by the Executive, the Executive did not intend his inaction
to be harmful or opposed to the best interest of the Company, and (b) the
Executive's conduct did not constitute fraud or willful misconduct by the
Executive.
9. Executive's Representation. Executive represents and warrants to
National Beef that neither the execution nor delivery of this Agreement, nor the
performance of Executive's obligations hereunder will conflict with, or result
in a breach of, any term, condition, or provision of, or constitute a default
under, any obligation, contract, agreement, covenant or instrument to which
Executive is a party or under which Executive is bound, including without
limitation, the breach by Executive of a fiduciary duty to any former employer.
10. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the internal substantive law (but not the conflict
of law principles) of the State of Kansas.
11. Costs of Enforcement. Subject to the provisions of Section 19 hereof,
if either party brings any legal action against the other to enforce its rights
under this Agreement, the prevailing party in such dispute shall be entitled to
recover from the other party all fees, costs and expenses of enforcing its
rights under this Agreement including, without limitation, the reasonable fees
and expenses of attorneys, accountants and expert witnesses, which shall
include, without limitation, all fees, costs and expenses of appeals.
12. Entire Agreement. This Agreement, together with the Deferred Equity
Incentive Compensation Agreement, shall constitute the whole agreement of the
parties hereto in reference to any employment of Executive by National Beef and
in reference to any of the matters or things herein provided for or hereinabove
discussed or mentioned in reference to such employment, and all prior
agreements, promises, representations and understandings relative thereto are
hereby superseded. Without limiting the generality of the foregoing, this
Agreement, together with the Deferred Equity Incentive Compensation Agreement,
shall supersede and replace any and all existing employment agreements or
arrangements which Executive may have with National Beef or its predecessor in
interest, including, without limitation, the Prior Agreement.
13. Assignability.
a. In the event that National Beef shall merge or consolidate with any
other partnership, limited liability company, corporation, or business entity,
or all or substantially all of National Beef's business or assets shall be
transferred in any manner to any other partnership, limited liability company,
corporation or business entity, then this Agreement shall automatically be
assigned to the surviving entity of such merger or consolidation or the
purchaser of assets who shall thereupon succeed to, and be subject to, all
rights, interests, duties and obligations of, and shall thereafter be deemed for
all purposes hereof to be, National Beef hereunder.
b. This Agreement is personal in nature and none of the parties hereto
shall, without the written consent of the other parties hereto, assign or
transfer this Agreement or any rights or obligations hereunder, except by
operation of law or pursuant to the terms of Section 13(a).
c. Nothing expressed or implied herein is intended or shall be construed to
confer upon or give to any person, other than the parties hereto, any right,
remedy or claim under or by reason of this Agreement or of any term, covenant or
condition hereof.
14. Amendments; Waivers. This Agreement may be amended, modified,
superseded, canceled, renewed or extended and the terms or covenants hereof may
be waived only by written instrument executed by the parties hereto or, in the
case of a waiver, by the party waiving compliance. The failure of any party at
any time or times to require performance of any provisions hereof shall in no
manner affect the right at a later time to enforce the same. No waiver by any
party of the breach of any term or provision contained in this Agreement,
whether
9
by conduct or otherwise, in any one or more instances, shall be deemed to be, or
construed as, a further or continuing waiver of any such breach, or a waiver of
the breach of any other term or covenant contained in this Agreement.
15. Notice. All notices, requests and other communications hereunder shall
be in writing and: (i) if given by telegram or telex, shall be deemed to have
been validly served, given or delivered when sent; (ii) if given by personal
delivery, shall be deemed to have been validly served, given or delivered upon
actual delivery; (iii) if sent by overnight courier service, shall be deemed to
have been validly served, given or delivered on the next business day after
delivery to such overnight courier service; (iv) if mailed, shall be deemed to
have been validly served, given or delivered three business days after deposit
in the United States mail, as registered or certified mail, with proper postage
prepaid and, in the case of (iii) or (iv) hereof, addressed to the party or
parties to be notified, at the following addresses (or such other address(es) as
a party may designate for itself by like notice); and (v) if sent by facsimile,
shall be deemed to have been validly served, given or delivered upon receipt of
facsimile confirmation;
If to National Beef:
National Beef Packing Company, LLC
c/o U.S. Premium Beef, LLC
00000 Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Fax: (000) 000-0000
With a copy to:
Stoel Rives LLP
Suite 4200
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Fax: (000) 000-0000
If to Executive:
Xxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Fax: (000) 000-0000
With a copy to:
Ropes & Xxxx LLP
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attention: C. Xxxx Xxxx
Fax: 000-000-0000
16. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
17. Survivability. The rights and obligations of the parties to this
Agreement under Sections 4, 6, 7, 8, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 21,
22, and all provisions of this Agreement necessary for the enforcement of those
rights and obligations, shall survive the termination of this Agreement.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall be deemed one Agreement.
19. Dispute Resolution.
a. To the fullest extent permitted by law, and subject to the provisions of
Section 4(c) and Section 7 hereof, the parties agree in the event of any alleged
breach hereof to submit the dispute for resolution by "mini-trial," unless
either party believes that such procedure is inappropriate for the matter in
controversy. Such mini-trial shall be conducted in accordance with the Center
for Public Resources (CPR) Mini-Trial Agreement for Business Disputes before a
panel consisting of a person with full decision-making authority designated by
each party and a neutral advisor selected jointly by the parties. Limited
discovery shall be permitted as agreed by the parties. The mini-trial shall be
conducted in Kansas City, Missouri at an agreed time, place and date. Arguments
may be presented by counsel or others as each party deems appropriate. Each
party shall have no more than three hours (which may be extended by mutual
agreement) to present exhibits, testimonies, summaries of testimony and
argument. No recording of the proceeding shall be permitted. Executive may have
present and consult with other advisors as deemed appropriate. Such proceeding
shall be confidential and, unless a mutually agreeable settlement is reached, no
portion of the proceeding shall be used for any purpose in any subsequent
proceeding. If a mutually agreeable settlement is reached, the panel shall
prepare or cause to be prepared a written settlement agreement setting forth the
terms and conditions of the settlement which shall be executed by each party and
shall be enforceable by and binding upon each party. In the event a mutually
agreeable settlement is not reached through use of the mini- trial proceeding,
either party may initiate arbitration as provided in subsection (b) below. The
neutral advisor shall be disqualified as a witness, consultant or expert in any
subsequent proceeding.
b. Subject to the provisions of Section 4(c) and Section 7 hereof, in the
event either party has determined that the mini-trial procedure is not
appropriate or if no mutually agreeable settlement is reached through use of the
mini-trial procedure, the dispute shall be resolved by binding arbitration in
Kansas City, Missouri in accordance with the rules of the Uniform Arbitration
Act. Such arbitration shall be initiated by either party by notifying the other
11
party in the same manner as a summons or by registered mail return receipt
requested and requesting a panel of five arbitrators from the American
Arbitration Association. Alternate strikes shall be made to the panel commencing
with the party requesting the arbitration until one name remains. Such
individual shall be the arbitrator for the controversy. The party requesting the
arbitration shall notify the arbitrator in the same manner as a summons or by
registered mail return receipt requested who shall hold a hearing(s) within
sixty (60) days of the notice. To the fullest extent permitted by law,
reasonable discovery, including depositions, shall be permitted. Discovery
issues shall be decided by the arbitrator. Post-hearing briefs shall be
permitted. The arbitrator shall render a decision within twenty (20) days after
the conclusion of the hearing(s). Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. All fees for
such arbitration will be divided equally among the participating parties.
20. Special Reporting. Within fifteen (15) days of the end of each fiscal
quarter during the Term, Executive shall ensure that the Chief Financial Officer
of National Beef delivers to the Chairman of the Board a written report which
reasonably details the costs and expenses incurred by National Beef in respect
of: aircraft leases; lodging or lodges; offices located in Salt Lake City; the
condominium in Kansas City; and any other properties or assets owned by
Executive, Xxx Xxxxx or Xxxxx Xxxxx, or any affiliates of such persons: which
expenses and costs are being charged, allocated or reimbursed by National Beef
at the request of Executive.
21. Confidentiality.
a. Executive acknowledges that he will obtain certain confidential
information and trade secrets ("Confidential Information") about National Beef
during his employment, that this information was obtained by National Beef at
great expense and the information is zealously guarded by National Beef from
unauthorized disclosure. In recognition of the foregoing, the Executive will not
at any time during his employment or following his termination of employment for
any reason, disclose, use or make otherwise available to any third party any
Confidential Information relating to National Beef's business, including, but
not limited to: its products, business methods and techniques; trade secrets,
data, specifications, developments, and research activity; marketing and sales
strategies, information and techniques; long and short term plans; business
policies; current and prospective customer lists, contacts and information;
financial, personnel and information system information; and any other
information concerning the business of National Beef, except for disclosure
necessary in the course of the Executive's duties. Confidential Information
shall not include information that (i) at the time of disclosure or thereafter
is (x) in the public domain or becomes generally known to the public through no
fault of Executive or (y) not treated as confidential by National Beef; (ii) was
available to the Executive on a non-confidential basis from a source other than
National Beef, provided that such source was not known by the Executive to be
bound by a confidentiality agreement with National Beef; (iii) is known to
Executive prior to receipt thereof from National Beef (or any predecessor of
National Beef); or (iv) the Executive is legally compelled to disclose. This
confidentiality provision is intended by the parties to be enforceable
regardless of whether the protected information legally constitutes "trade
secrets."
b. Executive agrees that, upon termination of his employment with National
Beef whether voluntary or involuntary, he will promptly deliver to National Beef
(and will not keep in his possession or deliver to anyone other than National
Beef) all Confidential Information in his possession, including, without
limitation, all records, data, notes, reports, proposals, lists, correspondence,
business plans, and other documents or property pertaining to the Confidential
Information and all reproductions and extracts thereof. Executive acknowledges
and agrees that all such materials are the sole property of National Beef and
that he will certify to National Beef at the time of his termination that he has
complied with this obligation.
22. Offset. National Beef shall not offset any amounts owing on the
compensation payable pursuant to Section 3(a) hereof, the Annual Bonus or the
Long-Term Bonus, absent a final judicial determination of a monetary damage
award payable by Executive to National Beef.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
date first above written.
"Executive"
/s/ Xxxx X. Xxxxxx
---------------------------------
Xxxx X. Xxxxxx
"National Beef"
National Beef Packing Company, LLC
By: /s/ Xxxxxx X. Xxxx
-----------------------------
Its: Chair
-----------------------------
13
