SECONDMENT AGREEMENT
EXHIBIT 99.1
This agreement is entered into to be effective as of the Effective Date (as defined in Section
9 below) between Swift & Company, a company organized under the laws of Delaware, United States
(“Swift”), and Australia Meat Holdings Pty. Limited, a company organized under the laws of
Australia (“AMH”), and Xxxxxxx X. Xxxxxxxxx (“Xxxxxxxxx”), hereinafter referred as “the Parties”.
WHEREAS
Swift has agreed to make available to AMH the services of its employee Xxxxxxxxx who will
perform the duties of President of AMH for a period of time (“Secondment Period”) pursuant to the
terms of this Agreement.
TERMS OF SECONDMENT
1. Swift Employee. During the Secondment Period, Xxxxxxxxx shall at all times remain
an employee of Swift and shall not at any time become an employee of AMH. Nothing in this Agreement
shall prohibit either Swift or Xxxxxxxxx from terminating his employment with Swift at any time,
with or without cause or notice. In the event of such termination, Swift shall promptly give AMH
written notice of the date such termination is, or will be, effective.
2. Direction of AMH. During the Secondment Period, Xxxxxxxxx shall work under the
exclusive direction, control and supervision of the Chief Executive Officer, or Board of Directors
(“Board”), of AMH, as determined by the Board. AMH shall accept full and exclusive responsibility
for the actions of Xxxxxxxxx during the Secondment Period.
3. No Authority to Bind Swift. During the Secondment Period, Xxxxxxxxx shall work
solely for AMH and shall not be authorized to enter into contracts for Swift or any of Swift’s U.S.
affiliates or otherwise bind Swift or any of Swift’s U.S. affiliates in any way.
4. Payment and Reimbursement of Employee Costs. During the Secondment Period, Swift
shall be responsible for the payment of salaries, incentives and any other compensation or benefits
payable to Xxxxxxxxx as an employee of Swift, including any costs related to Xxxxxxxxx’x secondment
to AMH as set forth in Exhibit A (collectively referred to as the “Employee Costs”); provided that
with respect to any Employee Costs that are reimbursable to Xxxxxxxxx as opposed to payable
directly by Swift or AMH, Xxxxxxxxx shall submit a reimbursement request directly to AMH. Swift
shall thereafter be reimbursed by AMH for all such Employee Costs incurred by Swift as set forth
below. Xxxxxxxxx will not at any time during the Secondment Period receive or be eligible for any
benefits under any AMH benefit plan or program, except as expressly set forth in Exhibit X.
Xxxxxxxxx will not be eligible to participate in any Swift Annual Incentive Plan during the
Secondment Period nor will his or Swift’s performance during the
Secondment Period be considered for purposes of determining any annual incentive bonus for
Xxxxxxxxx under any Swift Annual Incentive Plan, and the Letter Agreement between Swift and
Xxxxxxxxx, dated January 9, 2005, is hereby amended to be consistent with this sentence. At the
end of each Australian fringe benefits tax year ending on March 31, Xxxxxxxxx will be required to
complete a living away from home declaration.
5. Compliance with Laws. AMH shall comply with any and all labor and employment laws
applicable to the working conditions of Xxxxxxxxx in Australia.
6. Reimbursement by AMH of Employee Costs. Swift shall charge to AMH, on a monthly
basis, an amount equal to the Employee Costs incurred by Swift. AMH shall pay to Swift this
amount, subject to the submission by Swift of the relevant invoice indicating the amount payable.
The aforementioned invoice shall be submitted by Swift to AMH within a reasonable time after the
end of the month in which the Employee Costs were incurred, and shall be paid by AMH within ten
(10) business days of receipt.
7. No Severance. Swift shall not pay a severance payment, retirement payment or any
other benefit to Xxxxxxxxx at the time of the secondment and AMH shall have no obligation to pay a
severance payment, retirement allowance or any other benefit to Xxxxxxxxx at the time of the
termination of the secondment.
8. Indemnification. During the Secondment Period, AMH will indemnify and hold Swift
harmless from and against all liabilities that may arise as a result of Xxxxxxxxx’x acts of
omission in the course and scope of his performing services for the benefit of AMH.
PERIOD AND TERMINATION OF SECONDMENT
9. Secondment Period. The Secondment Period shall commence on December 19, 2006 (the
“Effective Date”) and shall continue for a period of nine (9) months, unless extended further or
terminated earlier, in accordance with the terms of this Agreement. Any extended period shall
thereafter be referred to as the Secondment Period.
10. Notice of Early Termination. This Agreement may be terminated by any party upon
the giving of one month written notice. Alternatively, upon the failure by one party to comply
with any of the terms of this Agreement, the other party may terminate this Agreement by giving
written notice of its intention to do so, such notice to specify the basis upon which the other
party is considered to have failed to comply with the terms of the Agreement. In such a case, the
Agreement shall be terminated with effect from 30 days after the date of such notice.
TAXATION
11. Payment of Taxes. Swift shall pay the income tax required to be paid by Xxxxxxxxx
to the Australian taxing authorities on the compensation paid to Xxxxxxxxx as such taxes become
due. For purposes of this paragraph, income tax shall mean any
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income taxes, and any other charges, fees, assessments or any other taxes that may be assessed
on Xxxxxxxxx’x annual base salary plus other taxable compensation paid to Xxxxxxxxx pursuant to any
law of Australia or governmental regulation thereunder. Notwithstanding the foregoing, social
security and Medicare taxes shall be remitted to the United States government, and Swift and
Xxxxxxxxx shall complete all applicable documentation required to exempt Xxxxxxxxx from Australian
social security taxes. Swift shall also withhold any other amounts as may be required pursuant to
federal, state or local regulations.
12. Tax Equalization. Xxxxxxxxx’x total compensation under this Agreement, including
all Employee Costs, will be subject to tax equalization so that Xxxxxxxxx will not incur a greater
income tax expense than he would if he were working in Greeley, Colorado for the same Annual Base
Salary, Annual Incentive Bonus, and Cost of Benefits (items 1, 2 and 3 of Exhibit A), plus any
personal income, deductions, losses or credits. Items 4-13 of Exhibit A will be delivered to
Xxxxxxxxx on a xxxxx basis. Xxxxxxxxx’x total compensation under this Agreement will be adjusted
to fulfill the tax equalization provisions of this paragraph.
MISCELLANEOUS
13. Governing Law. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Colorado, the United States and the State of Queensland, Australia,
as applicable.
14. Assignment. Neither Party may assign any of its rights or delegate any of its
obligations under this Agreement, or assign or create any security interest with respect to this
Agreement or its rights or obligations hereunder, except with the prior written consent of the
other Party (which consent may be granted or denied in the sole and absolute discretion of such
other Party).
15. Notice. All notices required or permitted by this Agreement to be given by any
Party shall be in writing.
16. Entire Agreement. This Agreement and any other contemporaneous written agreements
between the Parties, constitute the entire understanding between the Parties and supersede any
prior understandings, written or oral, respecting the subject matter hereof.
17. Modification. This Agreement shall not be amended, waived, released or discharged
except by a writing signed by an officer or authorized representative of each of the Parties.
18. Binding Effect. Subject to the specific restrictions on assignment contained
herein, this Agreement shall be binding upon and inure to the benefit of the successors and
permitted assigns of the Parties.
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19. Further Assurances. The Parties shall execute and deliver such further instruments
and perform such further acts as may reasonably be required to carry out the intent and purposes of
this Agreement.
20. Severability. If any provision contained in this Agreement shall for any reason
be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision had never been contained
herein.
21. Headings. All article, section and paragraph titles or captions contained in
this Agreement are for convenience only and shall not be deemed part of the text of this
Agreement.
22. Counterparts. This Agreement may be signed in any number of counterparts, each
of which shall be an original for all purposes, but all of which taken together shall constitute
only one Agreement.
23. Effectiveness. This Agreement shall be effective and binding on the parties from
and as of the Effective Date.
WITNESSETH: The Parties hereby conclude this Agreement:
/s/
Xxxx Xxxxxxxx |
January 3, 2007 | |||||
/s/
Xxxx Xxxx |
January 3, 2007 | |||||
/s/
Xxxxxxx X. Xxxxxxxxx |
January 3, 2007 | |||||
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EXHIBIT A
SECONDMENT AGREEMENT — EMPLOYEE COSTS
| 1. | Annual Base Salary: U.S.$325,000, and any increases approved by the Board of Directors of Swift. | |
| 2. | Annual Incentive Bonus: Up to 50% of Base Salary as determined by Board of Directors of Swift, payable in U.S. dollars and based upon Xxxxxxxxx’x performance and the performance of AMH during the fiscal year for which the bonus may be awarded. A pro rata portion of the bonus, if any, shall be deemed to have been earned as of the end of the Secondment Period notwithstanding that payment of any bonus may be made at a later date. | |
| 3. | Cost of Benefits: Cost of insurance coverage for Xxxxxxxxx and/or his family, as applicable, under Swift’s benefit plans and policies, including but not limited to medical/dental/vision (under Swift’s international medical plan), travel, short term disability, long term disability, workers’ compensation, life insurance and indemnity, and the cost of 401(k) matching under Swift’s 401(k) plan; and vacation, sick and holiday pay under the applicable Swift policies. Nothing contained in this Agreement shall prevent Swift from modifying or terminating any of its plans, policies, benefits or programs, including the above referenced plans, policies, benefits and programs. | |
| 4. | Housing Allowance: Xxxxxxxxx will receive a living away from home allowance (“LAFHA”) to compensate him for the additional housing costs incurred as a consequence of being required to live away from his usual place of residence during the Secondment Period. This LAFHA will be paid by AMH directly. The housing allowance will be payable at the rate of AUS$1,400 per week on provision of receipts or documentation verifying the amount incurred. | |
| 5. | Food Allowance: A food allowance will be payable at the rate of AUS$275 per week and is in recognition of only the excess costs incurred above normal. The amount will be reviewed in April 2007 and adjusted according to Australian table rates published annually. | |
| 6. | U.S. House Maintenance: Reimbursement in an amount up to U.S.$250 per month for monthly maintenance of Xxxxxxxxx’x home in the U.S. | |
| 7. | Trips to/from U.S./Australia: In addition to reimbursement for the travel cost for the relocation trip to Australia for Xxxxxxxxx and his relocated family members (and the one-way trip back to the U.S. at the end of the Secondment Period), reimbursement during the Secondment Period in an amount equal to the greater of (a) up to an aggregate U.S.$40,000 for additional air travel by Xxxxxxxxx and/or one or more of his relocated family members or (b) the actual air travel cost for one trip from Australia to the U.S. and back to Australia for Xxxxxxxxx and his relocated family members, if such trip is taken, and additional trips as approved by Swift for family medical emergencies and bereavement. |
| Initials: | ||||||
| 8. | Miscellaneous Expenses: One month salary to cover miscellaneous expenses. | |
| 9. | Tuition Reimbursement: Private school tuition reimbursement for Xxxxxxxxx’x relocated children. | |
| 10. | Moving Expenses: All reasonable expenses, including customs and import duties, for transporting the Swift approved personal effects of Xxxxxxxxx and his family to Australia and back to the U.S. | |
| 11. | Payment of Foreign Taxes: See Paragraph 11 of the Secondment Agreement. | |
| 12. | Tax Equalization: See Paragraph 12 of the Secondment Agreement. | |
| 13. | Tax Preparation Services: Reimbursement of the cost of mutually agreeable professional tax preparation services, in the U.S. and Australia, for the preparation of Xxxxxxxxx’x income tax return(s) for any year included in the Secondment Period, but excluding any tax returns filed separately by his spouse. |
Swift may require that Xxxxxxxxx submit to Swift receipts, invoices or other documentation
evidencing the amount of any Employee Cost as a condition of payment of such cost.
| Exhibit A – Page 2 | Initials: | |||||
