EXHIBIT 10.29
EXECUTION COPY
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of the 20th day of May by and between S&C Holdco, Inc. (to be
renamed Swift & Company), a Delaware corporation (together with its successors
and assigns permitted hereunder, the "Company"), and Xxxxxx Xxxxxx (the
"Executive").
WHEREAS, ConAgra Foods, Inc., a Delaware corporation ("CAGCO"), HMTF
Rawhide, L.P., a Delaware limited partnership ("Acquisition LP"), and the
Company have entered into an agreement of even date herewith (the "Acquisition
Agreement") pursuant to which the Company has agreed to acquire (the
"Acquisition") the fresh beef, pork, and lamb businesses owned by CAGCO and
certain related cattle feeding operations (the "Businesses");
WHEREAS, the Executive has been employed by CAGCO in connection with
the Businesses;
WHEREAS, the Company and the Executive desire that the Executive's
employment in connection with the Businesses continue after the consummation of
the Acquisition; and
WHEREAS, the parties hereto deem it desirable for the Company to employ
the Executive on the terms and conditions set forth herein.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EMPLOYMENT PERIOD. Subject to Section 3, the Company hereby agrees
to employ the Executive, and the Executive hereby agrees to be employed by the
Company, in accordance with the terms and provisions of this Agreement, for the
period commencing as of the date of consummation of the Acquisition and ending
on the fourth anniversary date of the consummation of the Acquisition (the
"Employment Period"); provided, however, that commencing on such anniversary
date of the consummation of the Acquisition, and on each anniversary of such
date occurring thereafter, the Employment Period shall automatically be extended
for one additional year unless at least six months prior to the ensuing
expiration date (but no more than 12 months prior to such expiration date), the
Company or the Executive shall have given written notice that it or he, as
applicable, does not wish to extend this Agreement (a "Non-Renewal Notice"). The
term "Employment Period," as utilized in this Agreement, shall refer to the
Employment Period as so automatically extended.
2. TERMS OF EMPLOYMENT.
(a) Position and Duties.
(i) During the term of the Executive's employment,
the Executive shall serve as the President of Swift Pork Company and, in so
doing, shall report to the Chief Executive Officer of the Company (the "CEO").
The Executive shall have supervision and control over, and responsibility for,
such management and operational functions of the Company currently assigned to
such positions, and shall have such other powers and duties (including holding
officer positions with the Company and one or more subsidiaries of the Company)
as may from time to time be prescribed by the CEO and agreed to by the
Executive, so long as such
powers and duties are reasonable and customary for the president of an
enterprise or division comparable to Swift Pork Company.
(ii) During the term of the Executive's employment,
and excluding any periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote substantially all of his business time
to the business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully, effectively and
efficiently such responsibilities. During the term of Executive's employment, it
shall not be a violation of this Agreement for the Executive to (1) serve on
corporate, civic or charitable boards or committees, (2) deliver lectures or
fulfill speaking engagements and (3) manage personal investments, so long as
such activities do not materially interfere with the performance of the
Executive's responsibilities as an employee of the Company in accordance with
this Agreement.
(b) Compensation.
(i) Base Salary. During the term of the Executive's
employment, the Executive shall receive an annual base salary ("Annual Base
Salary"), which shall be paid in accordance with the customary payroll practices
of the Company, at least equal to $400,000. Commencing on the first day (the
"First Date") of the month in the month beginning after the first anniversary
date of this Agreement, and on each subsequent anniversary date of the First
Date as long as the Executive remains an employee of the Company (the First Date
and each subsequent anniversary of the First Date being herein referred to as an
"Adjustment Date"), the Annual Base Salary of the Executive shall be increased
by an amount equal to five percent (5%) of the then current Annual Base Salary
or such greater amount as the Board of Directors of the Company (the "Board") in
its discretion may determine appropriate. The result of such increase to the
then current Annual Base Salary shall constitute the Executive's Annual Base
Salary commencing on the Adjustment Date then at hand and continuing until the
next Adjustment Date. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this Agreement. The
term Annual Base Salary as utilized in this Agreement shall refer to Annual Base
Salary as so increased.
(ii) Bonuses. The Executive shall be eligible to
receive an annual performance bonus (a "Bonus") in accordance with the
provisions of Exhibit A. For each fiscal year of the Company, the Board shall
approve a budget which shall include, among other things, a target for the items
set forth on Exhibit A hereto for that year. A portion of the Executive's Bonus
shall be based upon the Company's achievement of such targets in accordance with
the guidelines set forth on Exhibit A hereto. The Bonus shall be payable on the
first day of the first calendar month after the determination of the Company's
EBITDA (as defined in Exhibit A).
(iii) Incentive, Savings and Retirement Plans. During
the term of the Executive's employment, the Executive shall be entitled to
participate in all incentive, savings and retirement plans, practices, policies
and programs applicable generally to other executives of the Company
("Investment Plans").
(iv) Welfare Benefit Plans. During the term of the
Executive's employment, the Executive and/or the Executive's family, as the case
may be, shall be eligible
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for participation in and shall receive all benefits under welfare benefit plans,
practices, policies and programs ("Welfare Plans") provided by the Company
(including, without limitation, medical, prescription, dental, disability,
salary continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to
other executives of the Company.
(v) Perquisites. During the term of the Executive's
employment, the Executive shall be entitled to receive (in addition to the
benefits described above) such perquisites and fringe benefits appertaining to
his position in accordance with any practice established by the Board. Executive
shall be furnished with all such facilities and services suitable to his
position and adequate for the performance of his duties.
(vi) Expenses. During the term of the Executive's
employment, the Executive shall be entitled to receive prompt reimbursement for
all reasonable employment expenses incurred by the Executive in accordance with
the policies, practices and procedures of the Company.
(vii) Vacation and Holidays. During the term of the
Executive's employment, the Executive shall be entitled to four weeks of paid
vacation time each year in addition to those days designated as paid holidays in
accordance with the plans, policies, programs and practices of the Company for
its executive officers. Unused vacation time shall carry over to the next year.
Any unused vacation time shall be paid in a cash lump sum payment promptly after
the Date of Termination, pursuant to Section 4(a)(i).
(viii) Stock Options. In addition to any benefits the
Executive may receive pursuant to paragraph 2(b)(iii), as may be determined
appropriate by the Board, the Company may, from time to time, grant Executive
stock options (the "Executive Options") exercisable for shares of capital stock
of the Company and, subject to the terms of this Agreement, such Executive
Options shall have such terms and provisions as may be determined appropriate by
the Board. Upon the closing of the Acquisition, the Company will grant Executive
Options in accordance with the terms of Exhibit B hereto and under a stock
option plan to be adopted upon such closing.
3. TERMINATION OF EMPLOYMENT.
(a) Death or Disability. The Executive's employment shall
terminate automatically upon the Executive's death during the Employment Period.
If the Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), the Company may give
to the Executive written notice in accordance with Section 11(b) of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, the Executive
shall not have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the Executive's inability to
perform his duties and obligations hereunder for a period of 180 consecutive
days due to mental or physical incapacity as determined by a physician selected
by the Company or its
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insurers and acceptable to the Executive or the Executive's legal representative
(such agreement as to acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause or without Cause. For purposes
of this Agreement, "Cause" shall mean (i) a breach by the Executive of the
Executive's obligations under Section 2(a) (other than as a result of physical
or mental incapacity) which constitutes a continued material nonperformance by
the Executive of his obligations and duties thereunder, as reasonably determined
by the Board, and which is not remedied within 30 days after receipt of the
written notice from the Board provided for in the next sentence specifying such
breach, (ii) commission by the Executive of an act of fraud upon, or willful
misconduct toward, the Company, as reasonably determined by a majority of the
disinterested members of the Board (neither the Executive nor members of his
family being deemed disinterested for this purpose), (iii) a material breach by
the Executive of Section 6 or Section 9, (iv) the conviction of the Executive of
any felony (or a plea of nolo contendere thereto); or (v) the failure of the
Executive to carry out, or comply with, in any material respect any directive of
the Board consistent with the terms of this Agreement, which is not remedied
within 30 days after receipt of the written notice from the Board provided for
in the next sentence. Notwithstanding the foregoing, no act or omission shall
constitute "Cause" for purposes of this Agreement unless the Board provides
Executive (x) written notice clearly and fully describing the particular acts or
omissions which the Board reasonably believes in good faith constitutes "Cause;"
(y) an opportunity, within 30 days following his receipt of such notice, to meet
in person with the Board to explain or defend the alleged acts or omissions
relied upon by the Board and, to the extent practicable, to cure such acts or
omissions; and (z) a copy of a resolution duly adopted by a majority of the
Board (excluding Executive) finding that in the good faith opinion of the Board,
Executive committed the alleged acts or omissions and that they constitute
grounds for Cause hereunder. The Executive shall have the right to contest a
determination of Cause by the Company by requesting arbitration in accordance
with the terms of Section 11(j) hereof.
For purposes of this Agreement, "without Cause" shall mean a termination by the
Company of the Executive's employment during the Employment Period for any
reason other than a termination based upon Cause, death or Disability, including
pursuant to a Board Determination (as defined in Section 4(b)).
(c) Good Reason. The Executive's employment may be terminated
during the Employment Period by the Executive for Good Reason or without Good
Reason; provided, however, that the Executive agrees not to terminate his
employment for Good Reason unless (i) the Executive has given the Company at
least 30 days' prior written notice of his intent to terminate his employment
for Good Reason, which notice shall specify the facts and circumstances
constituting Good Reason, and (ii) the Company has not remedied such facts and
circumstances constituting Good Reason within such 30-day period. For purposes
of this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position (including status,
offices, titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 2(a) or any other action by the
Company which results in a material diminution in such position, authority,
duties or
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responsibilities, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive (without
limiting the foregoing, the Company and the Executive agree that the delegation
of the authority, duties or responsibilities of the Executive to another person
or persons, including any committee, shall be deemed to be an action by the
Company which results in a material diminution in the Executive's position,
authority, duties, or responsibilities as contemplated by Section 2(a)),
provided, however, that Good Reason may not be asserted by the Executive under
this clause (i) of Section 3(c) after a Non-Renewal Notice has been given by
either the Company or the Executive;
(ii) any termination or material reduction of a
material benefit under any Investment Plan or Welfare Plan in which the
Executive participates unless (1) there is substituted a comparable benefit that
is economically substantially equivalent to the terminated or reduced benefit
prior to such termination or reduction or (2) benefits under such Investment
Plan or Welfare Plan are terminated or reduced with respect to all then existing
senior executives of the Company previously granted benefits thereunder;
(iii) any failure by the Company to comply with any
of the provisions of Section 2(b), other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the Executive;
(iv) any failure by the Company to comply with and
satisfy Section 8(c), provided that such successor has received at least ten
days prior written notice from the Company or the Executive of the requirements
of Section 8(c);
(v) the relocation or transfer of the Executive's
principal office to a location more than 20 miles from the Company's current
executive offices as such are maintained on the date hereof in the city of
Greeley, Colorado; or
(vi) without limiting the generality of the
foregoing, any material breach by the Company or any of its subsidiaries or
other affiliates (as defined below) of (1) this Agreement or (2) any other
agreement between the Executive and the Company or any such subsidiary or other
affiliate, which material breach is not remedied by the Company promptly after
receipt of notice thereof given by the Executive.
As used in this Agreement, "affiliate" means, with respect to a person,
any other person controlling, controlled by or under common control with the
first person; the term "control," and correlative terms, means the power,
whether by contract, equity ownership or otherwise, to direct the policies or
management of a person; and "person" means an individual, partnership,
corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
(d) Notice of Termination. Any termination by the Company for
Cause or without Cause, or by the Executive for Good Reason or without Good
Reason, shall be communicated by Notice of Termination to the other party hereto
given in accordance with Section 11(b). For purposes of this Agreement, a
"Notice of Termination" means a written
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notice which (i) indicates the specific termination provision in this Agreement
relied upon, (ii) to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii) if the Date of
Termination (as defined below) is other than the date of receipt of such notice,
specifies the termination date (which date shall not be more than 15 days after
the giving of such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes to
a showing of Good Reason or Cause shall not waive any right of the Executive or
the Company hereunder or preclude the Executive or the Company from asserting
such fact or circumstance in enforcing the Executive's or the Company's rights
hereunder.
(e) Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason or without Good Reason, the date of receipt of the
Notice of Termination or any later date specified therein pursuant to Section
3(d), as the case may be, (ii) if the Executive's employment is terminated by
the Company other than for Cause, the date on which the Company notifies the
Executive of such termination or any later date specified therein pursuant to
Section 3(d), as the case may be, (iii) if the Executive's employment is
terminated by reason of death or Disability, the date of death of the Executive
or the Disability Effective Date, as the case may be, and (iv) if the
Executive's employment terminates due to the giving of a Non-Renewal Notice, the
last day of the Employment Period.
4. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) Good Reason; Other Than for Cause, Death or Disability.
If, during the Employment Period, the Company shall terminate the Executive's
employment other than for either Cause or Disability or the Executive shall
terminate his employment for Good Reason, and the termination of the Executive's
employment in any case is not due to his death or Disability:
(i) The Company shall pay to the Executive in a lump
sum in cash within ten days after the Date of Termination the aggregate of the
following amounts: (1) the sum of the Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid and any compensation
previously deferred by the Executive (together with any accrued interest or
earnings thereon) and any accrued vacation pay ("Accrued Obligations"); (2) an
amount equal to two times the Executive's then current Annual Base Salary; (3)
an amount equal to the greater of either fifty percent (50%) of (a) the maximum
annual Bonus (excluding any "stretch" amounts as described on Exhibit A) that
the Executive could have earned over the remainder of the Employment Period
(assuming that a Non-Renewal Notice would be timely given by the Company prior
to the next ensuing expiration date of the Employment Period) or (b) the highest
Bonus paid hereunder to the Executive prior to the Date of Termination
multiplied by the number of complete, and prorated for any partial, fiscal years
remaining in the Employment Period (assuming that a Non-Renewal Notice would be
timely given by the Company prior to the next ensuing expiration date of the
Employment Period); and (4) any amount arising from Executive's participation
in, or benefits under, any Investment Plans ("Accrued Investments"), which
amounts shall be payable in accordance with the terms and conditions of such
Investment Plans. Notwithstanding anything to the contrary contained herein, for
purposes of clauses 3(a) and (b) of the preceding sentence, if the Date of
Termination occurs (x) during the first year of
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the Employment Period, the Employment Period shall be deemed to end two years
from the end of the year in which the Date of Termination occurs, (y) during the
second year of the Employment Period, the Employment Period shall be deemed to
end one year from the end of the year in which the Date of Termination occurs,
and (z) during the third or any subsequent year, the Employment Period shall be
deemed to end at the end of the year in which the Date of Termination occurs.
(ii) Except as otherwise provided in Section 4(d),
the Executive (and members of his family) shall be entitled to continue their
participation in the Company's Welfare Plans for a period of 12 months from the
Date of Termination. This period shall be credited against any period for which
the Executive and/or members of his family are entitled to continuation coverage
under Section 4980B of the Internal Revenue Code of 1986, as amended, and
Sections 601-609 of the Employee Retirement Income Security Act of 1974, as
amended.
(iii) Notwithstanding the terms or conditions of any
Executive Option, stock appreciation right or similar agreements between the
Company and the Executive, the Executive shall vest, as of the Date of
Termination, in all rights under such agreements (i.e., Executive Options that
would otherwise vest after the Date of Termination) and thereafter shall be
permitted to exercise, in accordance with the terms of the Executive Options,
any and all such rights until the earlier of (w) the date the Option would
otherwise expire in accordance with its terms, (x) if the Date of Termination is
prior to a Qualifying Public Offering (as defined in that certain Stock Option
Agreement of even date herewith between the Company and Executive), the 270th
day after a Qualifying Public Offering, (y) if the Date of Termination is after
a Qualifying Public Offering, the 90th day after the Date of Termination, or (z)
the 90th day after the completion of a merger, combination, share exchange or
similar transaction involving the Company pursuant to which the securities for
which this Option is then exercisable are listed on a national securities
exchange or the Nasdaq National Market System or any successor thereto;
provided, however, the provisions of this clause (iii) of this Section 4(a)
shall not apply to a termination of the Executive's employment during the
Employment Period that is made by the Company pursuant to a Board Determination.
(b) Board Determination. If the Executive's employment is
terminated by the Company pursuant to a Board Determination during the
Employment Period, the Executive shall be entitled to receive the benefits
specified in Sections 4(a)(i) and 4(a)(ii) of this Agreement. Further,
notwithstanding the terms or conditions of any Executive Option, stock
appreciation rights or similar agreement between the Executive and the Company,
all unvested Executive Options and unvested stock appreciation rights or similar
agreements shall be forfeited and the Executive shall not vest, as of the Date
of Termination or otherwise, in any rights under such unvested Executive
Options, stock appreciation rights or similar agreements that are unvested
immediately prior to the Date of Termination and thereafter shall be permitted
to exercise, in accordance with the terms of the Executive Options, only those
rights that were otherwise vested immediately prior to the Date of Termination
until the earlier of (w) the date the Option would otherwise expire in
accordance with its terms, (x) if the Date of Termination is prior to a
Qualifying Public Offering, the 270th day after a Qualifying Public Offering,
(y) if the Date of Termination is after a Qualifying Public Offering, the 90th
day after the Date of Termination, or (z) the 90th day after the completion of a
merger, combination, share exchange or similar transaction involving the Company
pursuant to which the securities for which this Option is then
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exercisable are listed on a national securities exchange or the Nasdaq National
Market System or any successor thereto. For purposes of this Agreement, a "Board
Determination" shall mean a determination by the Board (which is evidenced by
one or more written resolutions to such effect) (i) to terminate the Executive's
employment during the Employment Period based upon the Board's dissatisfaction
with the manner in which the Executive has performed his obligations and duties
under Section 2(a) and (ii) that Cause does not exist as a basis for such
termination. Notwithstanding the foregoing, no act or omission shall constitute
or be the basis for a termination based upon a Board Determination unless the
Board provides the Executive (a) written notice of its intention to terminate
Executive's employment pursuant to a Board Determination, and (b) an
opportunity, within 30 days following the Executive's receipt of such notice, to
meet in person with the Board to explain or defend his performance to the Board.
(c) Death or Disability. If the Executive's employment is
terminated by reason of the Executive's death or Disability during the
Employment Period, the Company shall pay to his legal representatives (i) in a
lump sum in cash within ten days after the Date of Termination the aggregate of
the following amounts: (A) an amount equal to the Executive's then current
Annual Base Salary or Four Hundred Thousand Dollars ($400,000), whichever is
greater; and (B) the Accrued Obligations; and (ii) the Accrued Investments which
shall be payable in accordance with the terms and conditions of the Investment
Plans. In addition, the members of the Executive's family shall be entitled to
continue their participation in the Company's Welfare Plans for a period of 12
months after the Date of Termination. Further, notwithstanding the terms or
conditions of any Executive Option, stock appreciation right or similar
agreements between the Company and the Executive, the Executive shall vest, as
of the Date of Termination, in all rights under such agreements (i.e., Executive
Options that would otherwise vest after the Date of Termination) and thereafter
his legal representative shall be permitted to exercise, in accordance with the
terms of the Executive Options, any and all such rights until the earlier of (w)
the date the Option would otherwise expire in accordance with its terms, (x) if
the Date of Termination is prior to a Qualifying Public Offering, the 270th day
after a Qualifying Public Offering, (y) if the Date of Termination is after a
Qualifying Public Offering, the 90th day after the Date of Termination, or (z)
the 90th day after the completion of a merger, combination, share exchange or
similar transaction involving the Company pursuant to which the securities for
which this Option is then exercisable are listed on a national securities
exchange or the Nasdaq National Market System or any successor thereto. The
Company shall have no further payment obligations to the Executive or his legal
representatives under this Agreement.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated by the Company for Cause or by the Executive
without Good Reason during the Employment Period, the Company shall have no
further payment obligations to the Executive other than for payment of Accrued
Obligations, Accrued Investments (which shall be payable in accordance with the
terms and conditions of the Investment Plans), and the continuance of benefits
under the Welfare Plans to the Date of Termination (or later to the extent
required by law). Further, notwithstanding the terms or conditions of any
Executive Option, stock appreciation rights or similar agreement between the
Executive and the Company, all unvested Executive Options and unvested stock
appreciation rights or similar agreements shall be forfeited and the Executive
shall not vest, as of the Date of Termination or otherwise, in any rights under
such Executive Options, stock appreciation rights or similar agreements that are
unvested immediately prior to the Date of Termination and thereafter shall be
permitted to exercise, in
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accordance with the terms of the Executive Options, only those rights that were
otherwise vested immediately prior to the Date of Termination until the earlier
of (w) the date the Option would otherwise expire in accordance with its terms,
(x) if the Date of Termination is prior to a Qualifying Public Offering, the
270th day after a Qualifying Public Offering, (y) if the Date of Termination is
after a Qualifying Public Offering, the 90th day after the Date of Termination,
or (z) the 90th day after the completion of a merger, combination, share
exchange or similar transaction involving the Company pursuant to which the
securities for which this Option is then exercisable are listed on a national
securities exchange or the Nasdaq National Market System or any successor
thereto.
(e) If pursuant to the terms and provisions of the Company's
Welfare Plans the Executive (or members of his family) are not eligible to
participate in the Company's Welfare Plans because the Executive is no longer an
employee of the Company, then the Company may fulfill its obligations under
Section 4(a)(ii), Section 4(b) or Section 4(c), as applicable, by either
providing to the Executive (or his legal representatives), or reimbursing the
Executive (or his legal representatives) for the costs of, benefits
substantially similar to the benefits provided by the Company to its senior
management under its Welfare Plans as such may from time to time exist after the
Date of Termination.
5. FULL SETTLEMENT, MITIGATION. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement and such amounts shall not be reduced whether or not the Executive
obtains other employment. Neither the Executive nor the Company shall be liable
to the other party for any damages in addition to the amounts payable under
Section 4 arising out of the termination of the Executive's employment prior to
the end of the Employment Period; provided, however, that the Company shall be
entitled to seek damages for any breach of Sections 6, 7 or 9 or criminal
misconduct.
6. CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges that the Company and their
affiliates have trade, business and financial secrets and other confidential and
proprietary information (collectively, the "Confidential Information"). As
defined herein, Confidential Information shall not include information (i) that
becomes generally available to the public other than as a result of a disclosure
by Executive, (ii) that is rightfully available to Executive on a
non-confidential basis from a source other than the Company (provided such
source was not bound by a confidentiality agreement with the Company or
otherwise prohibited from transmitting the information to Executive by a
contractual, legal, or fiduciary obligation), or (iii) that is required to be
disclosed by the Executive pursuant to a subpoena or court order, or pursuant to
a requirement of a governmental agency or law of the United States of America or
a state thereof or any governmental or political subdivision thereof; provided,
however, that the Executive shall take all reasonable steps to prohibit
disclosure pursuant to subsection (iii) above.
(b) The Executive agrees (i) to hold such Confidential
Information in confidence and (ii) not to release such information to any person
(other than Company employees and other persons to whom the Company has
authorized the Executive to disclose
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such information and then only to the extent that such Company employees and
other persons authorized by the Company have a need for such knowledge).
(c) The Executive further agrees not to use any Confidential
Information for the benefit of any person or entity other than the Company.
(d) As used in this Section 6, "Company" shall include the
Company and any of its direct or indirect subsidiaries or affiliates.
7. SURRENDER OF MATERIALS UPON TERMINATION. Upon any termination of the
Executive's employment, the Executive shall immediately return to the Company
all copies, in whatever form, of any and all Confidential Information and other
properties of the Company and their affiliates which are in the Executive's
possession, custody or control.
8. SUCCESSORS.
(a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns. The Executive agrees
that, on or after the closing of the Acquisition, the Company may assign this
Agreement to any directly or indirectly owned subsidiary of the Company, in
which event "Company" as used in this Agreement shall thereafter also mean such
subsidiary (except where reference is made to stock options or other benefit
plans that are not maintained by such subsidiary), and in connection with such
assignment, such subsidiary shall expressly assume this Agreement.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
9. NON-COMPETITION.
(a) The term of Non-Competition (herein so called) shall be
for a term beginning on the date hereof and continuing until the second
anniversary of the Date of Termination.
(b) During the term of Non-Competition, the Executive will not
(other than for the benefit of the Company pursuant to this Agreement), directly
or indirectly, individually or as an officer, director, employee, shareholder,
consultant, contractor, partner, joint venturer, agent, equity owner or in any
capacity whatsoever, engage in any fresh meat or meat processing business (a
"Competing Business"), located in the United States or Australia (the
"Geographic
10
Area"), (ii) hire, attempt to hire, or contact or solicit with respect to hiring
any employee of the Company, or (iii) divert or take away any customers of the
Company in the Geographic Area. Notwithstanding the foregoing, the Company
agrees that after the Date of Termination the Executive may be employed by, or
perform services for, a person (as such term is defined in Subsection 3(c)
above) whose business operations include a Competing Business provided that
revenues from such Competing Business comprise less than fifty percent (50%) of
the total revenues of such person at the time the Executive is initially
employed or begins to perform services for such person, so long as Executive
does not personally render advice to, perform any services for, or otherwise
participate in, such Competing Business operations of such person.
Notwithstanding the foregoing, the Company agrees that the Executive may own
less than five percent of the outstanding voting securities of any publicly
traded company that is a Competing Business so long as the Executive does not
otherwise participate in such competing business in any way prohibited by the
preceding sentence.
(c) During the term of Non-Competition, the Executive will not
use the Executive's access to, knowledge of, or application of Confidential
Information to perform any duty for any Competing Business; it being understood
and agreed to that this Section 9(c) shall be in addition to and not be
construed as a limitation upon the covenants in Section 9(b) hereof.
(d) The Executive acknowledges that the geographic boundaries,
scope of prohibited activities, and time duration of the preceding paragraphs
are reasonable in nature and are no broader than are necessary to maintain the
confidentiality and the goodwill of the Company's proprietary information, plans
and services and to protect the other legitimate business interests of the
Company.
(e) As used in this Section 9, "Company" shall include the
Company and any of its direct or indirect subsidiaries or affiliates.
10. EFFECT OF AGREEMENT ON OTHER BENEFITS. The existence of this
Agreement shall not prohibit or restrict the Executive's entitlement to full
participation in the executive compensation, employee benefit and other plans or
programs in which executives of the Company are eligible to participate.
11. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. Whenever the terms
"hereof", "hereby", "herein", or words of similar import are used in this
Agreement they shall be construed as referring to this Agreement in its entirety
rather than to a particular section or provision, unless the context
specifically indicates to the contrary. Any reference to a particular "Section"
or "paragraph" shall be construed as referring to the indicated section or
paragraph of this Agreement unless the context indicates to the contrary. The
use of the term "including" herein shall be construed as meaning "including
without limitation." This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or their respective
successors and legal representatives.
11
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive: Xxxxxx Xxxxxx
0000 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
With a copy to: Xxxxxxx X. Xxxxx, Esq.
Xxxxx Partnership, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
If to the Company: Swift & Company
c/o HMTF Rawhide, L.P.
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxxxxx
With a copy to: Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) If any provision of this Agreement is held to be illegal,
invalid or unenforceable under present or future laws effective during the term
of this Agreement, such provision shall be fully severable; this Agreement shall
be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a portion of this Agreement; and the remaining provisions of
this Agreement shall remain in full force and effect and shall not be affected
by the illegal, invalid or unenforceable provision or by its severance from this
Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
(d) The Company shall use all commercially reasonably efforts
to obtain and maintain a director's and officer's liability insurance policy
during the term of the Executive's employment covering the Executive on
commercially reasonable terms, and the amount of coverage shall be reasonable in
relation to the Executive's position and responsibilities hereunder; provided,
however, that such coverage may be reduced or eliminated to the extent that the
Company reduces or eliminates coverage for its directors and executives
generally.
12
(e) The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(f) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement, or the failure to assert
any right the Executive or the Company may have hereunder, shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.
(g) The Executive acknowledges that money damages would be
both incalculable and an insufficient remedy for a breach of Section 6 or 9 by
the Executive and that any such breach would cause the Company irreparable harm.
Accordingly, the Company, in addition to any other remedies at law or in equity
it may have, shall be entitled, without the requirement of posting of bond or
other security, to equitable relief, including injunctive relief and specific
performance, in connection with a breach of Section 6 or 9 by the Executive.
(h) The provisions of this Agreement constitute the complete
understanding and agreement between the parties with respect to the subject
matter hereof and the Executive acknowledges that, except as set forth on
Exhibit C, the Company has no obligations with respect to any retention bonuses,
stay bonuses or severance payments that the Executive may be entitled to as a
result of the Acquisition or the consummation of the transactions contemplated
by the Acquisition Agreement.
(i) This Agreement may be executed in two or more
counterparts.
(j) In the event any dispute or controversy arises under this
Agreement and is not resolved by mutual written agreement between the Executive
and the Company within 30 days after notice of the dispute is first given, then,
upon the written request of the Executive or the Company, such dispute or
controversy shall be submitted to arbitration to be conducted in accordance with
the rules of the American Arbitration Association. Judgment may be entered
thereon and the results of the arbitration will be binding and conclusive on the
parties hereto. Any arbitrator's award or finding or any judgment or verdict
thereon will be final and unappealable. All parties agree that venue for
arbitration will be in Denver, Colorado, and that any arbitration commenced in
any other venue will be transferred to Denver, Colorado, upon the written
request of any party to this Agreement. All arbitrations will have three
individuals acting as arbitrators: one arbitrator will be selected by the
Executive, one arbitrator will be selected by the Company, and the two
arbitrators so selected will select a third arbitrator. Any arbitrator selected
by a party will not be affiliated, associated or related to the party selecting
that arbitrator in any matter whatsoever. The decision of the majority of the
arbitrators will be binding on all parties. The Company shall be responsible for
paying its own and the Executive's attorneys fees, costs and other expenses
pertaining to any such arbitration and enforcement regardless of whether an
arbitrator's award or finding or any judgment or verdict thereon is entered
against the Executive. The Company shall promptly (and in no event after ten
days following its receipt from the Executive of each written request therefor)
reimburse the Executive for his reasonable attorneys fees, costs and other
expenses pertaining to any such arbitration and the enforcement thereof.
13
(k) Sections 4, 5, 6, 7, 8, 9 and 11 of this Agreement shall
survive the termination of the Executive's employment.
(l) This Agreement shall automatically terminate on the
termination of the Acquisition Agreement prior to the consummation of the
Acquisition and may not be amended prior to the consummation of the Acquisition
without the consent of Acquisition LP, which shall be deemed to be a third party
beneficiary of this Agreement prior to the consummation of the Acquisition.
Prior to the consummation of the Acquisition, Acquisition LP, on behalf of the
Company, shall be entitled to terminate this Agreement without obligation on the
part of the Company in the event of the Executive's death or if the Executive
becomes unable to perform his duties and obligations hereunder due to physical
or mental incapacity as determined by a physician selected by Acquisition LP, on
behalf of the Company, or by the Company's insurers and such physician
reasonably believes such incapacity will continue for a period of 180 days
following the commencement thereof.
(m) Except for the obligations of the Company set forth in
Exhibit C hereto and as otherwise set forth in this Agreement, the Executive
waives any and all rights to any retention bonus, stay bonus, or severance
payments that he is otherwise legally entitled to receive from CAGCO or the
Company or any of their respective affiliates.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
14
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from the Board, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
EXECUTIVE
/s/ XXXXXX XXXXXX
------------------------------------------
Xxxxxx Xxxxxx
S&C HOLDCO, INC. (to be renamed SWIFT &
COMPANY)
/s/ XXXXXX X. XXXXXX
------------------------------------------
By: Xxxxxx X. Xxxxxx
Title: President
EXHIBIT A
BONUS TERMS
The Bonus that the Executive is eligible to receive each year under
Section 2(b)(ii) of this Agreement shall be comprised 80% of an "EBITDA Target
Bonus" and 20% of an "MBO Bonus." The total annual bonus potential of Executive
shall be no less than 70% of the Executive's Annual Base Salary.
1. EBITDA Target Bonus
For the first fiscal year of the Company during the Employment Period
the Executive's EBITDA Target Bonus shall be calculated as follows:
EBITDA TARGET EBITDA TARGET
EBITDA TARGET(a)(b) BONUS %(b) BONUS AMOUNT
------------------- ------------- -------------
$275,000,000 100% $224,000
$245,000,000 90% $201,600
$235,000,000 80% $179,200
$220,000,000 70% $156,800
Less than $220 Million 0 0
----------
(a) For each fiscal year of the Company after the expiration of the
first fiscal year of the Company during the Employment Period, the Board of
Directors of the Company shall make an annual determination of the Company's
EBITDA Target. Such determination shall be made in good faith with a reasonable
basis and shall be consistent with the methodology used to establish the EBITDA
Target in the Company's annual budget. In no event shall the EBITDA Target
exceed the prior year's EBITDA Target by more than 10%.
"EBITDA" shall be defined as the Company's earnings before interest,
taxes, depreciation, and amortization. EBITDA amounts shall be reduced by the
applicable performance bonus amounts payable to the Executive and other members
of the Company's management team.
The EBITDA Target shall be subject to proration if the first fiscal
year of the Company is less than 12 months from the commencement of the
Employment Period or for any subsequent partial fiscal years. In addition, the
EBITDA Target shall be appropriately adjusted by the Board of Directors of the
Company to reflect any divestitures of any divisions or material assets during
any fiscal year.
For each fiscal year (a "Subject Year") of the Company after the
expiration of the first fiscal year of the Company during the Employment Period,
the percentage of the EBITDA Target Bonus payable to the Executive ("EBITDA
Target Bonus Percentage") shall be equal to the percentage of the EBITDA Target
achieved by the Company during such Subject Year; provided, however, that no
EBITDA Target Bonus shall be payable if the actual EBITDA for such Subject Year
is less than 70% of the EBITDA Target. The determination of whether the Company
achieved the EBITDA Target shall be made in accordance with generally accepted
accounting principles consistently applied by the independent certified public
accountants of the Company, whose determination shall be final and binding.
(b) The Executive and the Board of Directors of the Company shall
negotiate in good faith appropriate "stretch" Bonus amounts payable upon
achievement of EBITDA amounts in excess of 100% of the EBITDA Target.
2. MBO Bonus
The Executive's maximum MBO Bonus shall be based upon achievement of
objective criteria established in good faith by the Board of Directors.
EXHIBIT B
STOCK OPTIONS
Upon the closing of the Acquisition, Executive will be granted options
to purchase Two Million Two Hundred Fifty Thousand (2,250,000) shares of common
stock of the Company, pursuant to the Non-Qualified Stock Option Agreement (the
"Stock Option Agreement") which is attached hereto as portion of Exhibit B to
the Agreement.
EXHIBIT C
NON-WAIVED RETENTION BONUSES, STAY BONUSES AND SEVERANCE PAYMENTS
Executive is entitled to receive a Four Hundred Eighty-Seven Thousand
Five Hundred Dollar ($487,500) "stay bonus" to be paid by the Company to the
Executive within 15 days of the closing of the Acquisition.
