EMPLOYMENT AGREEMENT

Exhibit 10.15

THIS AGREEMENT is made effective as of September 1, 2003 by and between Xxxx X. Xxxxxxx (hereafter “Xxxxxxx”) and CHS, Inc., a Minnesota cooperative corporation (together with all affiliates, the “Company”).

Employment

The Company hereby agrees to and does hereby employ Xxxxxxx as its Chief Executive Officer, and Xxxxxxx hereby agrees to accept employment with the Company as Chief Executive Officer, for the period set forth in Paragraph 2 below (the period of employment) upon the other terms and conditions set forth in this Agreement.

Period of Employment; Termination of Agreement

The period of employment shall commence on the date of this Agreement and, subject to the provisions of Paragraphs 5 and 6 below, shall continue for a rolling three (3) year period, provided that Xxxxxxx’x employment may be earlier terminated by either party subject to the rights and obligations of the parties set forth herein.

Performance

Throughout the period of employment, Xxxxxxx agrees to devote his full time and attention during normal business hours to the business of the Company, except for earned vacations and except for illness or incapacity.

Compensation

(a)

For all services to be rendered by Xxxxxxx in any capacity during the period of employment, Xxxxxxx shall be paid as annual compensation a base salary of at least $850,000. The Board will annually review Xxxxxxx’x annual compensation and determine what is appropriate for a cost of living increase, merit increase, and/or increase in responsibilities or duties.

(b)

During the term of his employment hereunder, Xxxxxxx shall be compensated pursuant to the plan in effect on September 1, 2003 with annual variable pay pursuant to the plan in effect during the term of this agreement. In addition, Xxxxxxx shall be eligible for long term variable pay.

(c)

Xxxxxxx shall be entitled to receive all benefits set forth in the Special Supplemental Executive Retirement Plan, effective the day of , 2003 (the “Special SERP”) or any successor plan. Xxxxxxx shall further be entitled to any additional employee benefits separately made available to him from time to time by the Board in its discretion.

(d)

The Company shall bear such ordinary and necessary business expenses incurred by Xxxxxxx in performing his duties hereunder as the Company determines from time to time, provided that Xxxxxxx accounts promptly for such expenses to the Company in the manner prescribed from time to time by the Company.

5. Termination with Severance Allowance

(a)

Termination by the Company Not for Cause. In the event of termination of the employment of Xxxxxxx by the Company during the period of employment for any reason other than for cause, as defined in paragraph 6(a), death or disability, the Company shall:

(i) pay Xxxxxxx a severance allowance in the amount of 2.99 times the greater of

(A) his then-current base salary plus short-term and long-term target bonus (“Target Bonus”), or

(B) the amount payable in base salary plus Target Bonus for calendar year 2003;

(ii) provide a five-year enhancement to his retirement plan, except that no such enhancement shall be provided if the termination occurs after Xxxxxxx has attained the age of 60;

(iii) include the amount of the severance paid as salary or wages for purposes of computing the pension cash balance and Special SERP calculation;

(iv) bear the entire cost of Xxxxxxx’x COBRA family health insurance coverage for one (1) year;

(v) continue his family health insurance thereafter up to age 65 (or any revised age for Medicare eligibility), upon Xxxxxxx’x payment of the retiree premium rate, except for any period during which Xxxxxxx is eligible for coverage, without any exclusions for preexisting conditions, through another employee group plan; and

(vi) continue his existing executive perquisites for a period of three (3) years.

Said severance allowance shall be in lieu of all other severance payable to Xxxxxxx under Company severance policies.

(b)

Termination by Xxxxxxx in the event of Consolidation. In the event of a full consolidation of the Company’s business with the business of any other entity, if Xxxxxxx is not offered the position of Chief Executive Officer of the combined entity, this may be deemed at Xxxxxxx’x option to be an event of termination without cause. In that event, the Company shall:

(i) pay Xxxxxxx a severance allowance in the amount of 2.99 times the greater of

(A) his then-current base salary plus Target Bonus, or

(B) the amount payable in base salary plus Target Bonus for calendar year 2003;

(ii) provide a five-year enhancement to his retirement plan, except that no such enhancement shall be provided if the termination occurs after Xxxxxxx has attained the age of 60;

(iii) include the amount of the severance paid as salary or wages for purposes of computing the pension cash balance and Special SERP calculation;

(iv) bear the entire cost of Xxxxxxx’x COBRA family health insurance coverage for one (1) year;

(vi) continue his existing executive perquisites for a period of three (3) years.

Said severance allowance shall be in lieu of all other severance payable to Xxxxxxx under Company severance policies.

(c) Additional Payments. In the event that Xxxxxxx becomes entitled to payments under paragraph 5(a) or 5(b) of this Agreement, the Company shall cause its independent auditors promptly to review, at the Company’s sole expense, the applicability of Section 4999 of the Code to such payments. If such auditors shall determine that any payment or distribution of any type by the Company to Xxxxxxx or for his benefit, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the “Excise Tax”), then Xxxxxxx shall be entitled to receive an additional cash payment (a “Gross-Up Payment”) within 30 days of such determination equal to an amount such that after payment by Xxxxxxx of all taxes (including any interest or penalties imposed with respect to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, Xxxxxxx would retain an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. For purposes of the foregoing determination, Xxxxxxx’x tax rate shall be deemed to be the highest statutory marginal state and Federal tax rate (on a combined basis) (including Xxxxxxx’x share of F.I.C.A. and Medicare taxes) then in effect. If no determination by the Company’s auditors is made prior to the time a tax return reflecting the Total Payments is required to be filed by Xxxxxxx, he will be entitled to receive a Gross-Up Payment calculated on the basis of the Total Payments reported by Xxxxxxx in such tax return, within 30 days of the filing of such tax return. In

all events, if any tax authority determines that a greater Excise Tax should be imposed upon the Total Payments than is determined by the Company’s independent auditors or reflected in Xxxxxxx’x tax return pursuant to this Section 6, Xxxxxxx shall be entitled to receive the full Gross-Up Payment calculated on the basis of the amount of Excise Tax determined to be payable by such tax authority from the Company within 30 days of such determination.

(d) Request and Release. In order to obtain the severance allowance provided for in this Agreement, Xxxxxxx must submit a request for severance and must sign a complete release of all claims. The Company shall have no obligation to pay any severance allowance unless and until Xxxxxxx shall have submitted the request for severance and signed a full and complete release of all claims, to be drafted by Legal Counsel for the Company.

6. Termination without Severance Allowance

(a)

Termination by the Company for Cause. The Company may terminate Xxxxxxx’x employment for cause without incurring further obligation. For the purpose of this Agreement, termination of Xxxxxxx’x employment shall be deemed to have been for cause only:

(i)

if termination of Xxxxxxx’x employment shall have been the result of an act or acts of fraud, theft or embezzlement on the part of Xxxxxxx which, if convicted, would constitute a felony and which results or which is intended to result directly or indirectly in gain or personal enrichment of Xxxxxxx at the expense of the Company; or

(ii)

if termination of Xxxxxxx’x employment results from Xxxxxxx’x willful and material misconduct, including willful and material failure to perform his duties, and Xxxxxxx has been given written notice by the Board of Directors with respect to such and Xxxxxxx does not cure within a reasonable time; or

(iii)

if there has been a breach by Xxxxxxx during the period of employment of the provisions of Paragraph 3 above, relating to the time to be devoted to the affairs of the Company, and with respect to any alleged breach of Paragraph 3 hereof, Xxxxxxx shall have substantially failed to remedy such alleged breach within thirty days from Xxxxxxx’x receipt of notice from the Board of Directors.

(b)

Nonrenewal of Agreement. The Company may elect not to renew this Agreement, and thereby to terminate Xxxxxxx’x employment hereunder without any severance obligations, upon at least three (3) years’ prior written notice to Xxxxxxx.

(c)

Termination by Xxxxxxx. Xxxxxxx shall have the right to terminate his employment in his sole discretion, with or without cause, by providing thirty (30)

days notice of his intent to resign. Xxxxxxx shall in that event receive no further compensation or severance allowance.

(d)

Death. In the event of Xxxxxxx’x death during the period of employment, the legal representative of Xxxxxxx shall be entitled to the base or fixed salary provided for in Paragraph 4(a) above for the month in which death shall have occurred, at the rate being paid at the time of death, and the period of employment shall be deemed to have ended as of the close of business on the last day of the month in which death shall have occurred but without prejudice to any benefits, such as life insurance, otherwise due in respect of Xxxxxxx’x death.

(e)

Disability

(i)

In the event of Xxxxxxx’x disability during the period of employment, Xxxxxxx shall be entitled to an amount equal to the base or fixed salary provided for in Paragraph 4(a) above, at the rate being paid at the time of the commencement of disability, for the period of such disability but not in excess of twelve (12) months from the beginning of the period that establishes such disability, as described in Paragraph 6(e)(iii) below.

(ii)

The amount of any payments due under Paragraph 6(e)(i) shall be reduced by any payments to which Xxxxxxx may be entitled for the same period because of disability under any disability or pension plan of the Company or of any division, subsidiary, or affiliate thereof, or as the result of workers’ compensation or nonoccupational disability payments received from any government entity.

(iii)

The term “Disability” as used in this Agreement, shall mean an illness or accident occurring during the period of employment which prevents Xxxxxxx from performing the essential functions of his job under this Agreement, with reasonable accommodations (as defined by federal and Minnesota disability laws), for a period of six consecutive months. The period of employment shall be deemed to have ended as of the close of business on the last day of such six-month period but without prejudice to any payments due Xxxxxxx from any disability policy or disability insurance.

7. Noncompetition

Xxxxxxx agrees that during the term of his employment and thereafter for a period of two (2) years, he will not directly or indirectly engage in or carry on a business that is in direct competition with any significant business unit of the Company as conclusively determined by the Board of Directors. Further, Xxxxxxx agrees that during this same period of time he will not act as an agent, representative, consultant, officer, director, independent contractor or employee of any entity or enterprise that is in direct competition with any significant business unit of the Company as conclusively determined by the Board of Directors.

8. Nondisclosure of Confidential Information

Xxxxxxx, except in connection with his employment hereunder, will not disclose to any person or entity, either during the Period of Employment or at any time thereafter, any confidential information acquired by Xxxxxxx while employed by the Company. This protected confidential information includes the Company’s trade secrets, technical information, contracts, systems, procedures, business plans, internal reports, and personnel files and information. Xxxxxxx agrees and acknowledges that all of such information, in any form, is and will remain the sole and exclusive property of the Company.

9. Successor in Interest

This Agreement and the rights and obligations hereunder shall be binding upon and inure to the benefit of the parties hereto and their respective legal representatives, and shall also bind and inure to the benefit of any successor of the Company by merger or consolidation or any purchaser or assignee of all or substantially all of its assets, but, except to any such successor, purchaser, or assignee of the Company, neither this Agreement nor any rights or benefits hereunder may be assigned by either party hereto.

10. Construction

Whenever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement.

11. Governing Laws

This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Minnesota.

12. Notices

Any notice required or permitted to be given under this Agreement shall be sufficient if in writing, sent by Certified Mail, Return Receipt Requested:


		If to Xxxxxxx:		Xxxx X. Xxxxxxx
				00 Xxxx Xxxx Xxxx.
				Xxxxxxxxx, XX 00000

		If to the Company:		Chairman of the Board
				CHS, Inc.
				0000 XXXXX Xxxxx
				Xxxxx Xxxxx Xxxxxxx, XX 00000


		With a copy to:		General Counsel
				CHS, Inc.
				0000 XXXXX Xxxxx
				Xxxxx Xxxxx Xxxxxxx, XX 00000

13. Entire Agreement

This Agreement shall constitute the entire agreement between the parties, superseding the parties’ Agreement of September 1, 2000 and any prior agreements. This Agreement may not be modified or amended, and no waiver shall be effective, unless by written document signed by the Chairman of the Board and Xxxxxxx.

IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date set forth above.


		CHS, Inc.

		By:

Xxxx X. Xxxxxxx

		Its:

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EMPLOYMENT AGREEMENT

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