EXHIBIT 10.14
AMENDED EXECUTIVE EMPLOYMENT AGREEMENT
HORIZON ORGANIC HOLDINGS CORPORATION, a Delaware corporation ("HOH" or the
"Company") agrees with XXXX X. XXXXXXXX ("Xx. Xxxxxxxx") as follows ("Employment
Agreement") effective the 1st day of January, 1998.
1. PURPOSE. Xx. Xxxxxxxx is currently the Vice-President of Sales of HOH.
Xx. Xxxxxxxx and HOH are parties to an Employment Agreement dated July 1, 1996.
The parties desire to amend and replace the terms of Xx. Xxxxxxxx'x employment
by HOH in accordance with the terms and conditions set forth herein.
2. EMPLOYMENT. HOH hereby employs Xx. Xxxxxxxx, and Xx. Xxxxxxxx agrees
to be employed, as Vice-President of Sales of HOH. HOH may from time to time
designate other or additional titles for Xx. Xxxxxxxx as deemed appropriate by
the HOH Board of Directors, but HOH and Xx. Xxxxxxxx agree that at all times
during the term of this Employment Agreement Xx. Xxxxxxxx will be employed as
the Vice President of Sales of HOH. In addition, the Company shall use its best
efforts to cause Xx. Xxxxxxxx to be elected to the Company's Board of Directors
so long as this Employment Agreement or any extension hereof remains in effect.
3. DUTIES. During the term hereof, Xx. Xxxxxxxx will devote substantially
all of his full time and effort to the business of HOH. Xx. Xxxxxxxx shall have
the right to devote reasonable time to the management of his personal
investments and activities, participation in trade associations or other
organizations seeking to advance the cause of natural and/or organic foods, and
support of community activities; provided, however, that while employed with HOH
Xx. Xxxxxxxx shall not be employed by any other company, individual or entity on
a full or part-time basis nor shall he/she serve as an independent contractor or
a paid consultant. The parties intend that Xx. Xxxxxxxx'x initial duties
hereunder shall primarily involve duties of the type normally associated with a
senior managerial position in an organization of the size and type of HOH. HOH
may modify, reduce and/or eliminate Xx. Xxxxxxxx'x duties and objectives at its
reasonable discretion from time to time, provided that at no time will Xx.
Xxxxxxxx be required to perform duties or to meet objectives which are
inconsistent with or inappropriate for a member of senior management of HOH.
4. TERM. Unless otherwise terminated as set forth in paragraph 9 below,
the parties agree that this Employment Agreement shall continue in effect for a
period of 24 months from the Effective Date ("Employment Period"). Employment
with HOH shall terminate 24 months from the Effective Date unless otherwise
renewed. HOH will provide notice at least 90 days prior to the end of the
Employment Agreement as to whether it wishes to extend the Employment Agreement.
If it chooses to extend the Employment Agreement, its notice will include
provisions with respect to any increase in compensation or other changes which
would apply. Xx. Xxxxxxxx will have a period of 30 days after receipt of the HOH
notice to advise HOH of his decision to accept or reject the renewal. If HOH
proposes a renewal and if Xx. Xxxxxxxx agrees to the renewal, then the
Employment Agreement will be renewed for an additional term of 12 months, with
the initial renewal term therefore extending through December 31, 2000.
5. BASE COMPENSATION. Xx. Xxxxxxxx shall receive compensation from HOH as
follows:
(a) Starting on the date hereof, a base salary at an annual rate of
$120,000; and
(b) Annual increases in base compensation shall be established by and
at the sole discretion of the Compensation Committee appointed by the Board of
Directors of HOH.
6. INCENTIVE COMPENSATION. Xx. Xxxxxxxx shall be entitled to receive
incentive compensation in accordance with an incentive plan established by the
Compensation Committee or the HOH Board of Directors. Incentive compensation
will be based on both individual and corporate factors, but the factors
applicable to Xx. Xxxxxxxx will be consistent with those applicable to other
members of senior management. The corporate factors will typically be linked to
net operating income and gross sales. The maximum amount which may be awarded
pursuant to the incentive plan will be an amount equal to 60% of base salary.
7. BENEFITS. Xx. Xxxxxxxx will receive four weeks of paid vacation
during each year in which this Agreement remains in effect, plus such public
holidays as are generally recognized by businesses in Colorado, not to exceed 10
days per year. Up to two weeks of unused vacation time may be carried over to
any subsequent year. Xx. Xxxxxxxx will be entitled to participate in any benefit
plans provided to employees of HOH, including health and dental insurance. HOH
shall also provide to Xx. Xxxxxxxx life insurance in the minimum amount of
$100,000, disability insurance providing at least 60% of Xx. Xxxxxxxx'x covered
base salary or $6,000 per month (whichever amount is less), provided that Xx.
Xxxxxxxx qualifies for such insurance, and reimbursement of reasonable business
expenses in such manner as the Board of Directors of HOH shall approve from time
to time at its sole discretion. All benefits except those provided by law, shall
cease at the termination of this Employment Agreement.
8. STOCK RIGHTS. HOH agrees to grant to Xx. Xxxxxxxx the following stock
option rights under HOH's Incentive Stock Option plan dated October 25, 1995.
(a) Effective upon execution of this Employment Agreement, Xx.
Xxxxxxxx shall be granted an option to purchase 12,500 shares of HOH common
stock for a purchase price of $6.50 per share, payable in cash at the time of
issuance. Such option shall terminate if not exercised January 10, 2003.
(b) All rights to acquire shares hereunder are granted as incentive
stock options and in accordance with such other terms and conditions as HOH may
reasonably establish, including requirements that Xx. Xxxxxxxx execute and
comply with all standard agreements of HOH, including an Incentive Stock Option
Agreement, Subscription Agreement and Shareholders Agreement from time to time
in effect with respect to HOH's common shares. Xx. Xxxxxxxx shall be solely
responsible for the payment of any individual income taxes which accrue as a
result of the issuance of such options. All options shall lapse, if not
previously exercised, three months after termination of Xx. Xxxxxxxx'x
employment hereunder.
9. TERMINATION OF EMPLOYMENT. Xx. Xxxxxxxx and HOH each acknowledge that either
Party has the right to terminate Xx. Xxxxxxxx'x employment with HOH pursuant to
the following:
2.
(a) TERMINATION BY THE COMPANY FOR CAUSE. HOH will have the right to
terminate Xx. Xxxxxxxx'x employment with HOH at any time for "cause". "Cause"
for termination will mean only: (i) Xx. Xxxxxxxx has committed any material act
of embezzlement, fraud and/or is convicted of a felony; (ii) Xx. Xxxxxxxx
engages in direct unfair competition with HOH and, in any material respect,
willfully breaches his obligations under this Agreement; (iii) Xx. Xxxxxxxx
causes material damage to HOH through intentional misconduct or gross neglect of
the duties customary to his/her office. No activities or inactivities covered by
items (ii) and (iii) will be deemed to be "cause" unless HOH has notified Xx.
Xxxxxxxx of such activity or inactivity in writing and Xx. Xxxxxxxx has failed
to cure the same within 15 days. In the event Xx. Xxxxxxxx is terminated for
cause he/she will not be entitled to Severance Pay (as defined below), pay in
lieu of notice or any other such compensation set forth in paragraphs 5-8
herein, but he/she will be entitled to all compensation, benefits and
unreimbursed expenses accrued through the date of termination.
(b) TERMINATION BY THE COMPANY WITHOUT CAUSE. HOH will have the right
to terminate Xx. Xxxxxxxx'x employment with HOH at any time without cause. In
the event Xx. Xxxxxxxx is terminated without cause, and upon the execution of a
release by Xx. Xxxxxxxx, releasing all claims arising under this Employment
Agreement against HOH as of the date Xx. Xxxxxxxx signs such release, HOH shall
pay Xx. Xxxxxxxx the following "SEVERANCE PAY": (i) Xx. Xxxxxxxx'x then
applicable base salary for a period of the longer of (A) 12 months after the
termination without cause date or (B) the remainder of the Employment Period,
and (ii) substantially equivalent health, medical, life, disability and other
benefits to the extent permitted by HOH insurance policies or plans, for the
same 12 month period. Severance Pay will further include the payment of any
incentive bonuses which become due under paragraph 6, for the year in which
termination occurs, prorated for the portion of the year during which Xx.
Xxxxxxxx continued to be employed by HOH. Such prorated bonus, if any, shall be
paid at the same time as bonuses are paid to other employees who participate in
the incentive bonus plan.
(c) VOLUNTARY TERMINATION BY XX. XXXXXXXX. Xx. Xxxxxxxx may
voluntarily terminate his employment with HOH at any time, after which no
further compensation will be paid to Xx. Xxxxxxxx. To permit HOH to make
arrangements to fill the vacancy created by Xx. Xxxxxxxx'x departure, Xx.
Xxxxxxxx agrees to give HOH 30 days advance notice of any intended resignation.
In the event Xx. Xxxxxxxx voluntarily terminates his employment, he will not be
entitled to Severance Pay, pay in lieu of notice or any other such compensation
set forth in paragraphs 5-8 herein, but he will be entitled to all compensation,
benefits and unreimbursed expenses accrued through the date of termination.
(d) TERMINATION BY XX. XXXXXXXX WITH CAUSE. Xx. Xxxxxxxx will have
the right to terminate his employment with HOH at any time for "cause". "Cause"
for termination will mean only a material breach of this Agreement by HOH which
breach is not cured by HOH within 15 days after receipt of written notice
thereof from Xx. Xxxxxxxx. In the event Xx. Xxxxxxxx terminates his agreement
for "cause," the non-competition obligations of this Agreement will terminate
and Xx. Xxxxxxxx will be entitled to "SEVERANCE PAY" as defined in 9(b) above.
(e) AUTOMATIC TERMINATION OR EXPIRATION. If not terminated earlier,
or renewed by agreement of the parties, Xx. Xxxxxxxx'x employment with HOH will
terminate at the
3.
end of the Employment Period. If the Company does not offer to continue Xx.
Xxxxxxxx'x employment following the expiration of this Employment Agreement
(unless there shall have been cause for termination (as defined above)), or if
Xx. Xxxxxxxx'x employment is continued by mutual agreement following termination
of this Employment Agreement but is thereafter terminated by the Company without
cause (as defined above), the Company shall pay Xx. Xxxxxxxx the Severance Pay,
subject to the execution of a general release as set forth in paragraph 9(b).
10. NON-COMPETITION OBLIGATIONS. In consideration of his employment by
HOH and the Severance Pay to be paid to Xx. Xxxxxxxx as further set forth in
paragraph 9 above, Xx. Xxxxxxxx agrees that during his employment, and for a
period of 24 months after the termination or expiration of his employment with
HOH, he will not, without first obtaining the express written consent of HOH,
own more than 5% of the outstanding stock of a publicly-traded Competitive
Company (as defined below) or any stock of a privately held Competitive Company,
or participate in the financing, operation, management or control of, any
Competitive Company. A "Competitive Company" is a person, firm, corporation or
business located in the United States that is primarily engaged in the
production or wholesale distribution of organic dairy products sold by HOH, or
which HOH has express plans to sell as of the termination or expiration of Xx.
Xxxxxxxx'x employment with HOH. Xx. Xxxxxxxx further agrees that he will not
induce any employee of HOH to leave the employ of HOH for a period of twenty-
four months after the termination or expiration of his employment with HOH. This
paragraph 10 shall survive the termination or expiration of this Employment
Agreement for any reason.
11. ENFORCEMENT. HOH and Xx. Xxxxxxxx agree that any violation or
threatened violation of the terms of this Employment Agreement could cause
immediate and irreparable harm to HOH for which monetary damages would be
inadequate and difficult to ascertain. The parties therefore agree that upon the
existence of any such violation or threatened violation, provided that HOH has
paid and continues to pay Xx. Xxxxxxxx his salary, bonus and benefits as
required hereunder, and to honor Xx. Xxxxxxxx'x stock option rights if any, HOH
may obtain a temporary restraining order, preliminary injunction, or other
appropriate form of equitable relief from any court of competent jurisdiction.
Such relief shall be in addition to and not substitution for any monetary
damages to which HOH might otherwise be entitled.
12. CONTROLLING AGREEMENT. This Employment Agreement supersedes and
replaces in its entirety all prior agreements and understandings between HOH and
Xx. Xxxxxxxx relating to Xx. Xxxxxxxx'x employment by HOH, including without
limitation the Executive Employment Agreement between the parties dated July 1,
1996.
13. MISCELLANEOUS.
(a) The rights and duties of the parties shall not be assignable by
either party, except that HOH may assign its rights but shall continue to
guarantee its obligations, to any corporation or other business entity which is
controlled by HOH, which controls HOH, or which is a successor by purchase,
merger or otherwise to HOH. The heirs, successors, personal representatives and
assigns of Xx. Xxxxxxxx shall have the right to collect any accrued benefits due
Xx. Xxxxxxxx hereunder.
4.
(b) This Employment Agreement and all provisions hereof shall bind
and inure to the benefit of HOH, Xx. Xxxxxxxx, and their respective personal
representatives, heirs, successors, and permitted assigns, but Xx. Xxxxxxxx is
not entitled to assign his rights and obligations hereunder.
(c) This Agreement will be deemed to have been entered into, and it
will be construed and enforced in accordance with the laws of the State of
Colorado as applied to contracts made and to be performed entirely within
Colorado.
(d) Any action to enforce or requiring interpretation of this
Agreement must be brought in a forum located within the State of Colorado.
(e) In the event that any provision of this Employment Agreement
shall be held to be invalid, illegal, or unenforceable, such provision may be
severed, modified or enforced to the extent possible, and such invalidity,
illegality, or unenforceability shall not affect the remainder of this
Employment Agreement, unless such severance would defeat the fundamental
purposes of this Employment Agreement.
(f) This Employment Agreement may be amended or modified only by
written agreement subscribed to by both of the parties hereto.
(g) The waiver by either party of a breach of any provision of this
Employment Agreement by the other party shall not operate or be construed as a
waiver of any subsequent breach of the same provision or any other provision of
this Employment Agreement .
(h) The section headings contained herein are for reference purposes
only and will in no way affect the meaning or interpretation of this
Agreement.
(i) All notices which are required or may be given under this
Employment Agreement shall be given by certified mail, return receipt
requested, registered mail, or personal service to the following addresses:
(i) If intended for HOH:
Horizon Organic Holdings Corporation
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx Godward LLP
0000 Xxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
5.
(ii) If intended for Xx. Xxxxxxxx:
c/o Horizon Organic Holdings Corporation
X.X. Xxx 00000
Xxxxxxx, Xxxxxxxx 00000
A party may direct from time to time that notices be sent to a different
address by giving the other party notice in writing of the new address.
(j) To ensure rapid and economical resolution of any and all disputes
directly or indirectly arising out of or in any way connected with Xx.
Xxxxxxxx'x employment with HOH or the termination of that employment or this
Employment Agreement, with the sole exception of disputes which arise under Xx.
Xxxxxxxx'x obligations pursuant to paragraph 10 above (collectively, the
"Arbitrable Claims"), HOH and Xx. Xxxxxxxx each agree that any and all such
disputes, whether of law or fact of any nature whatsoever, will be resolved by
final and binding arbitration under the then existing American Arbitration
Association ("AAA") arbitration procedures. The Arbitrable Claims will include,
but will not be limited to: any and all such claims related to salary, bonuses,
commissions, stock, stock options, or any other ownership interests in HOH,
vacation pay, fringe benefits, expense reimbursements, severance benefits, or
any other form of compensation; claims pursuant to any federal, state or local
law or cause of action including, but not limited to, the federal Civil Rights
Act of 1964, as amended; the federal Age Discrimination in Employment Act, as
amended ("ADEA"); the federal Americans with Disabilities Act of 1990; the
Colorado Anti Discrimination Act of 1957, as amended; the Wage Claim Act, C.R.S.
(S)(S)8-4-101, et seq., tort law; contract law; wrongful discharge;
discrimination; fraud; defamation; and emotional distress; and breach of the
implied covenant of good faith and fair dealing. Xx. Xxxxxxxx and HOH
acknowledge and agree that any and all rights they may otherwise have to resolve
such Arbitrable Claims by jury trial, by a court, or in any forum other than the
AAA, are hereby expressly waived. The arbitrators shall be authorized, in
addition to any other action they may take, to award reasonable attorneys' fees
and costs of arbitration in favor of the prevailing party.
Executed effective the day and year first set forth above.
HORIZON ORGANIC HOLDINGS CORPORATION XXXX XXXXXXXX
By:/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxx Xxxxxxxx
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Title: Chairman
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Date: 4/21/98 Date: 4/21/98
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6.
