EMPLOYMENT AGREEMENT
This Agreement, effective the 1 day of February, 2000
(the "Effective Date"), by and between IBP, inc., a Delaware
corporation (hereinafter referred to as "Employer"), and
Xxxxxx X. Xxxxx (hereinafter referred to as "Employee").
WITNESSETH:
WHEREAS, Employer is engaged in a very competitive
business, where the development and retention of extensive
trade secrets and proprietary information is critical to
future business success; and
WHEREAS, Employee, by virtue of its employment with
Employer, is involved in the development of, and has access
to, this critical business information which information, if
it were to get into the hands of competitors of Employer,
could do substantial business harm to Employer; and
WHEREAS, Employer has advised Employee that agreement
to the terms of this Agreement, and specifically the non-
compete and non-solicitation paragraphs, is an integral part
of this Agreement, and Employee acknowledges the importance
of the non-compete and non-solicitation paragraphs, and
having reviewed the agreement as a whole, is willing to
commit to the restrictions as set forth herein;
NOW, THEREFORE, Employer and Employee, in consideration
of the above and the terms and conditions contained herein,
hereby mutually agree upon the following terms and
conditions.
1. Duties. Employee shall perform the duties of
Chief Executive Officer - IBP Fresh Meat Co. or shall serve
in such other capacity and with such other duties for
Employer as Employer shall hereafter time to time prescribe.
Employee shall perform all such duties with diligence and
thoroughness. Employee shall be subject to and comply with
all rules, policies, procedures, supervision and direction
of Employer in all matters related to the performance of
Employee's duties.
2. Term of Employment. The term of employment shall
be for a period of five (5) years, commencing on the
Effective Date of this Agreement (the "Term"), unless
terminated prior thereto in accordance with the provisions
of this Agreement. The obligations of Employee under
Xxxxxxxxxx 0 x), x), x), x), x), x), h), and i) shall
continue to apply after the expiration of the Term for the
time periods specified in these sections.
3. Compensation. For the services to be performed
hereunder, Employee shall be compensated by Employer at the
rate of not less than Four Hundred Seventy-Five Thousand
Dollars ($475,000.00) per year payable monthly, and in
addition may receive awards under Employer's Cash Bonus Plan
subject to the discretion of the senior management of
Employer. Such compensation will be subject to review from
time to time when salaries of other officers and managers of
Employer are reviewed for consideration of increases
therein.
4. Participation in Benefit Programs. Employee shall
be entitled to participate in any benefit programs generally
applicable to officers of Employer adopted by Employer from
time to time.
5. Limitation on Outside Activities. Employee shall
devote full employment energies, interest, abilities and
time (except for personal investments) to the performance of
obligations hereunder and shall not, without the written
consent of the Chief Executive Officer of the Company,
render to others any service of any kind or engage in any
activity which conflicts or interferes with the performance
of duties hereunder.
6. Ownership of Employee's Inventions. All ideas,
inventions, and other developments or improvements conceived
by Employee, alone or with others, during the term of his
employment, whether or not during working hours, that are
within the scope of Employer's business operations or that
relate to any of the Employer's work or projects, are the
exclusive property of Employer.
Employee agrees to assist Employer, at its expense, to
obtain patents on any such patentable ideas, inventions, and
other developments, and agrees to execute all documents
necessary to obtain such patents in the name of the
Employer.
7. Termination.
(a) Voluntary Termination. Employee may terminate this
Agreement at any time by not less than one year's prior written
notice to Employer. Employee shall not be entitled to any
compensation from Employer for any period beyond Employee's
actual date of termination.
(b) Employer Right to Voluntary Termination. Employer
shall be entitled, at its election and with or without cause,
to terminate Employee's employment upon written notice to
Employee. Employer shall continue to pay Employee at the rate
and in the manner provided in Paragraph 3 above for a period
after such notice of termination equivalent to three (3) months.
During the time Employee is being compensated in lieu of
continued employment, the Employer shall have the right, at
its election, to a) relieve the Employee's duties effective
the date of notice of termination, or b) to require the
Employee to perform services from time to time on behalf of
the Employer during such three (3) months.
(c) Incapacity. If Employee is materially incapacitated
from fully performing his duties Pursuant to this Agreement
by reason of illness or other incapacity or by reason of any
statute, law, ordinance, regulation, order, judgement or decree,
Employer may terminate this Agreement by 30 days written notice to
Employee, but only in the event that such incapacity shall
aggregate not less than ninety (90) days during any one
year.
8. Confidential Information, Trade Secrets,
Limitations on Solicitation and Non-Compete Clause.
(a) Employee shall receive, in addition to all
regular compensation for services as described in Section 3
of the Employment Agreement, as additional consideration for
signing this Employment Agreement and for agreeing to abide
and be bound by the terms, provisions and restrictions of
this Section 8, the following:
(i) an award of such number of shares of
Common Stock of Employer under the terms and conditions of
the Employer's IBP Officer Long-Term Stock Plan and/or 1996
Officer Long-Term Stock Plan as shall be equal to an
aggregate value of $600,000 less $550,000 previously awarded
(ii) a grant of options to purchase an
aggregate of Seven Thousand (7,000) shares of Common Stock
of Employer under the terms and conditions of the Employer's
IBP Stock Option Plan and each year on the annual grant date
for stock options an annual option grant of options to
purchase shares of Common Stock of the Employer under the
terms and conditions of the Employer's Stock Option Plan
which is equal to three times (3x) the annual option level
of the Employee's officer-position band option level,
provided that the Employee has been on the payroll, whether
as an officer or otherwise, at least six months prior to the
annual grant date; and
(iii) the right to receive bonus option
grants, pursuant to the terms and conditions made available
by the Plans Administration Committee of Employer's Board of
Directors, from the employer's stock option plans, upon the
Employee's exercise of options granted to the Employee.
(b) Employee recognizes that, as a result of his
employment hereunder (and his employment, if any, with
Employer for periods prior to the Effective Date), he has
had and will continue to have access to confidential
information, trade secrets, proprietary information,
intellectual property, and other documents, data, and
information concerning methods, processes, controls,
techniques, formula, production, distribution, purchasing,
financial analysis, returns and reports (in addition if
Employee is involved with marketing, sales or procurement he
has had and will continue to have access to lists of
customers, suppliers, livestock vendors, and accounts, other
sensitive information and data regarding the Employers
customers, suppliers, vendors, services, sales, pricing, and
costs which are highly confidential and constitute trade
secrets or confidential business information) which is the
property of and integral to the operations and success of
Employer, and therefore agrees to be bound by the provisions
of this Section 8, which Employee agrees and acknowledges to
be reasonable and to be necessary to protect legitimate and
important business interests and concerns of Employer.
(c) Employee agrees that he will not divulge to
any person, nor use to the detriment of Employer or any of
its subsidiaries, nor use in any business or process of
manufacture competitive with or similar to any business or
process of manufacture of Employer or any of its
subsidiaries, at any time during the term of this Agreement
or thereafter, any of the Employer's trade secrets, without
first obtaining the express written permission of Employer.
A trade secret shall include any formula, pattern, device or
compilation of information used by Employer in its business.
For purposes of this Section 8, the compilation of
information used by Employer in its business shall include,
without limitation, the identity of customers and suppliers
and information reflecting their interests, preferences,
credit-worthiness, likely receptivity to solicitation for
participation in various transactions and related
information obtained during the course of his employment
with Employer.
(d) Employee agrees that at the time of leaving
the employ of Employer he will deliver to Employer, and not
keep or deliver to anyone else, any and all notebooks,
memoranda, documents and, in general, any and all materials
relating to Employer's business, or constituting Employer's
property. Employee further agrees that he will not,
directly or indirectly, request or advise any customers or
suppliers of employer or any of its subsidiaries to
withdraw, curtail or cancel its business with Employer or
any of its subsidiaries.
(e) During the term of Employee's employment with
the Employer and for a period of one (1) year from the
earlier of 1) the termination of Employee's employment for
any reason whatsoever, or 2) the expiration of the Term (it
is expressly acknowledged that this clause is intended to
survive the expiration of the "Term"), Employee will not
directly or indirectly, in the United States, participate in
any Position, in any business in direct competition with the
business of the Employer. The Term "Position" as used in
this section shall include, without limitation, a partner,
director, holder of more than 5% of the outstanding voting
shares, principal, executive, officer, manager or any
employment or consulting position. It is acknowledged and
agreed that the scope of the clause as set forth above is
essential, because 1) a more restrictive definition of
"Position" (e.g. limiting it to the "same" position with a
competitor) will subject the Employer to serious,
irreparable harm by allowing competitors to describe
positions in ways to evade the operation of this clause, and
substantially restrict the protection sought by Employer,
and 2) by allowing the Employee to escape the application of
this clause by accepting a position designated as a "lesser"
or "different" position with a competitor, the Employer is
unable to restrict the Employee from providing valuable
information to such competing company to the harm of the
Employer.
(f) Employee recognizes that he posses
confidential information and trade secrets about other
employees of Employer and its subsidiaries relating to their
education, experience, skills, abilities, salary and
benefits, and interpersonal relationships with customers and
suppliers of Employer and its subsidiaries. Employee
recognizes that the information he possesses about these
other employees is not generally known, is of substantial
value to Employer in securing and retaining customers and
suppliers, and was acquired by Employee because of his
business position with Employer. Employee agrees that
during his employment hereunder, and for a period of three
(3) years from the earlier of 1) the termination of
Employee's employment for any reason whatsoever, or 2) the
expiration of the Term (it is expressly acknowledged that
this clause is intended to survive the expiration of the
"Term"), Employee shall not, directly or indirectly, solicit
or contact any employee or agent of Employer or any of its
subsidiaries, with a view to inducing or encouraging such
employee or agent to leave the employ of Employer or any of
its subsidiaries, for the purpose of being hired by
Employee, and employer affiliated with Employee, or any
competitor of Employer or any of its subsidiaries. Employee
agrees that he will not convey any such confidential
information or trade secrets about other employees to anyone
affiliated with Employee or to any competitor of Employer or
any of its subsidiaries.
(g) Employee acknowledges that the restrictions
contained in this Section 8 are reasonable and necessary to
protect Employer's interest in this agreement and that any
breach thereof will result in an irreparable injury to
Employer for which Employer has no adequate remedy at law.
Employee therefore agrees that , in the event that Employee
breaches any of the provisions contained in this Section 8,
Employer shall be authorized and entitled to seek from any
court of competent jurisdiction (i) a temporary restraining
order, (ii) preliminary and permanent injunctive relief,
(iii) an equitable accounting of all profits or benefits
arising out of such breach, and (iv) direct, incidental and
consequential damages arising from such breach. Employee
agrees to reimburse Employer for all reasonable legal fees,
as well as costs of defense related to any actions taken by
Employer to enforce Section8.
(h) Employer and Employee have attempted to
specify a reasonable period of time, a reasonable area and
reasonable restrictions to which this Section 8 shall apply.
Employer and Employee agree that if a court or
administrative body should subsequently determine that the
terms of this Section 8 are greater than reasonable
necessary to protect Employer's interest, Employer agrees to
waive those terms which are found by a court or
administrative body to be greater than reasonably necessary
to protect Employer's interest and to request that the court
or administrative body reform this Agreement specifying a
reasonable period of time and such other reasonable
restrictions as the court or administrative body deems
necessary.
(i) Employee further agrees that this Section 8 is an
integral part of this agreement, and that should a court
fail or refuse to enforce the restrictions contained herein
in the manner expressly provided in Sections 8(a) through
8(g) above, the Employer shall recover from Employee, and
the court shall award as damages to the Employer, the
consideration (or a pro-rata portion thereof to the extent
these provisions are enforced but the time frame is reduced
beyond that specified above) provided to and elected by
Employee under the terms of Section 8(a) above (or the
monetary equivalent thereof), its cost and its reasonable
attorney's fees.
9. Modification. This Agreement contains all the
terms and conditions agreed upon by the parties hereto, and
no other agreements, oral or otherwise, regarding the
subject matter of this Agreement shall be deemed to exist or
bind either of the parties hereto, except for a
confidentiality agreement between the parties dated October
29, 1981. This Agreement cannot be modified except by a
writing signed by both parties.
10. Assignment. This Agreement shall be binding upon
Employee, his heirs, executors and assigns and upon
Employer, its successors and assigns.
11. Applicable Law. This Agreement is made and
entered into in the State of South Dakota. The validity,
interpretation, performance and enforcement of this
agreement shall be governed by the internal laws of said
State of South Dakota, without giving effect to the conflict
of laws provisions thereof.
12. Jurisdiction and Venue of Disputes. The South
Dakota First Judicial Circuit shall have jurisdiction and be
the venue of all disputes between the Company and Employee,
whether such disputes arise from this Agreement or
otherwise.
13. Severability. If, for any reason, any one or more
of the provisions contained in this Agreement are held to be
invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect
any other provision hereof, and this Agreement shall be
construed as if such invalid, illegal or unenforceable
provision had never been contained herein.
IN WITNESS WHEREOF , the parties hereto have executed
this Agreement effective as of the day and year first above
written.
EMPLOYEE ACKNOWLEDGES THAT HE/SHE HAS READ THE ABOVE,
AND HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO
SIGNING. EMPLOYEE AGREES TO THE TERMS AND CONDITIONS OF THE
EMPLOYEE AGREEMENT AS WRITTEN ABOVE.
____________________________________
(Employee)
____________________________________
(Date)
Accepted this ____ day of _________________, 19___.
IBP, inc.
By_________________________________
