Exhibit 10.1
Employment Agreement
This Employment Agreement (the "Agreement") is made and entered into as
of September 1, 2003 by and between Xxxxxxx Company, a Delaware corporation (the
"Company"), and Xxxxx Xxxxxx ("Employee").
WHEREAS, the Company desires to provide certain benefits to Employee as
an incentive to remain with the Company into the future.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Title and Employment Duties. Employee shall be President and Chief Operating
Officer of the Company.
2. Relocation.
(a) If Employee's employment with the Company is terminated for any reason
(other than a termination by the Company for "Cause", as such term is
defined below) prior to December 31, 2008, the Company will pay to
Employee the relocation benefits described below provided (i) such
relocation occurs within 180 days of the termination date, and (ii)
another employer has not offered to, or does not otherwise, pay for
such relocation benefits. The relocation benefits are as follows:
i. Business class airfare for Employee and Employee's spouse and
children to Australia;
ii. Shipping expenses for Employee's personal and household effects
to Australia. Household goods and other personal effects will be
transported by ocean freight.. A limited amount of personal items
may be shipped by air transport;
iii. Normal and customary closing costs payable by sellers in
connection with selling one residence in the Battle
Creek/Kalamazoo metropolitan area (the "Residence"); and
iv. The "loss on sale" of the Residence, if any.
(b) A "loss on sale" shall be calculated by using the following formula:
the amount Employee paid for the Residence plus the cost of capital
improvements to the Residence minus the selling price of the
Residence. Employee shall provide the Company with documentation
requested by the Company (including receipts and invoices associated
with any capital improvements) to support the calculation.
3. Pension Credit. Employee will be granted a total of approximately 8.5 years
of pension service credit (i.e., approximately 2.5 years of actual service
plus 6 years of additional service) if he works through December 31, 2005.
For avoidance of doubt, for each additional full year of service performed
after December 31, 2005, Employee will be entitled to one year of pension
service credit. For example, (i) if Employee is employed by the Company
through December 31, 2006, Employee shall be entitled to a total of
approximately 9.5 years of pension service credit (i.e., approximately 3.5
years of actual service plus 6 years of additional service); and (ii) if
Employee is employed by the Company through December 31, 2004, Employee
shall be entitled to a total of approximately 1.5 years of pension service
credit (i.e., approximately 1.5 years of actual service, and no additional
service).
4. Termination.
a. If Employee's employment is terminated by reason of Employee's death
or disability, Employee's estate or Employee, as the case may be,
shall be entitled to receive benefits provided under the Company's
general policy for such events and the benefits specified in paragraph
2 hereof and, if such termination occurs after December 31, 2005, the
benefits specified in paragraph 3 hereof.
b. The Company may terminate Employee's employment under this Agreement
for "Cause." Termination for "Cause" means termination by the Company
because of (i) theft, embezzlement, or fraud by Employee pursuant to
which the Company has suffered a loss, or conspiracy by Employee to
commit any of the foregoing, (ii) incapacity on the job by reason of
Employee's abuse of alcohol or drugs, (iii) commission by Employee of
a crime involving moral turpitude, or an act of dishonesty by Employee
in connection with the performance of Employee's duties hereunder,
(iv) a willful and knowing violation by Employee of any law or
regulation respecting the business of the Company, (v) a breach of any
fiduciary duty owed by Employee to the Company in any material
respect, (vi) breach by Employee of any of the provisions of this
Agreement in any material respect, or (vii) failure of Employee to
perform his duties in any material respect as required under this
Agreement; provided, however, that in the case of clauses (vi) and
(vii) hereof, if such breach or failure is capable of being cured
within thirty (30) days, the Company must provide written notice of
such breach or failure within thirty (30) days of its discovery
thereof, and Employee must have thirty (30) days from such written
notice to cure such breach or failure. Upon termination of this
Agreement pursuant to this paragraph 5(b), Employee shall be entitled
to receive any salary earned and not paid up to the date of
termination, which shall be subject to set-off to the maximum extent
permitted by law if the Company has encountered a loss by reason of
the action permitting the Company to terminate Employee for Cause,
and, notwithstanding any other paragraph herein, Employee shall not be
entitled to any further compensation. For avoidance of doubt, if
Employee's employment is terminated pursuant to this paragraph 5(b),
Employee shall forfeit any benefits described in paragraphs 2 and 3 4
hereof.
c. The Company may at any time terminate Employee's employment without
Cause, provided that the Company shall provide Employee with (i)
severance benefits as provided by the Xxxxxxx Company Severance
Benefit Plan, as amended from time to time (the "Severance Plan"),
provided that Employee is eligible for receipt of such benefits as
provided for by the Severance Plan (e.g., Employee has delivered a
full release of the Company), and (ii) the benefits described in
paragraphs 2 and 3 hereof.
d. Employee may at any time terminate Employee's employment for "Good
Reason." Termination for "Good Reason" means termination by Employee
because of (i) a reduction in Employee's base salary, as in effect
from time to time, (ii) the Company's failure to provide any fringe
benefit plan or substantially similar benefit or compensation plan
which has been made generally available to other management employees
of the Company; provided, however, that nothing in this clause shall
be construed to constrain the Company from amending or eliminating any
benefit or compensation plan; (iii) a breach by the Company of its
obligations to Employee under this Agreement in any material respect,
or (iv) a material reduction in Employee's responsibilities or duties
as in effect immediately prior to such change, provided however, that
in the case of each of clauses (i) through (iv) hereof, Employee must
provide written notice of any such alleged action of the Company
within thirty (30) days of the date Employee knew of such action and
the Company shall have thirty (30) days from such written notice to
cure such action. If Employee terminates his employment for Good
Reason prior to December 31, 2005, he shall be entitled to (i)
severance benefits as provided by the Severance Plan, provided that
Employee is eligible for receipt of such benefits as provided for by
the Severance Plan (e.g., Employee has delivered a full release of the
Company), and (ii) the benefits described in paragraphs 2 and 3.
e. Employee may at any time terminate his employment without Good Reason,
in which case he shall be entitled to receive (i) such benefits as the
Company makes generally available to employees who have voluntarily
terminated their employment and (ii) if such termination occurs after
December 31, 2005, the benefits the benefits described in paragraph 3
hereof.
f. Notwithstanding any other provision in this Agreement, if (i)
Employee's employment is terminated prior to December 31, 2005 and
(ii) at the time of such termination, Employee qualifies for benefits
under Section 5 of the Employment Agreement between Employee and the
Company dated July 26, 2000 (the "Change of Control Agreement"), then
(i) Employee shall be entitled to the benefits described in paragraph
2, (ii) Employee shall vest in the benefits described in paragraph 3
on December 31, 2005, (iii) this Agreement shall otherwise be deemed
null, void and of no further force or effect, and (iv) Employee shall
be entitled to receive the benefits set forth under the Change of
Control Agreement; provided, however, the lump sum payment in Section
5(1)(C) of the Change of Control Agreement shall be reduced as set
forth below. The time period used to calculate the lump sum payment
shall be changed from (i) "three years after the Date of Termination,"
to (ii) "three years after the Date of Termination minus the time
period between the Date of Termination and December 31, 2005." For
example, if Employee's employment is terminated on December 31, 2004,
and Employee is entitled to benefits under Section 5 of the Change of
Control Agreement, (i) Employee would be credited with 6 additional
years of pension service on December 31, 2005, and (ii) under Section
5(1)(C) of the Change of Control Agreement, Employee would receive a
lump sum amount equal to the actuarial equivalent of the benefit that
he would have received for 2 years (as opposed to three years) of
additional participation under the Company's relevant retirement
plans.
5. Covenants and Release.
a. Non-compete. (i) For a period of two years beginning with the date
Employee's employment with the Company ends (the "Restricted Period"),
Employee shall not:
A. directly or indirectly, accept any employment, consult for or
with, or otherwise provide or perform any services of any nature
to, for or on behalf of any person, firm, partnership,
corporation or other business or entity that manufactures,
produces, distributes, sells or markets any of the Products (as
hereinafter defined) in the Geographic Area (as hereinafter
defined), including, but not limited to, General Xxxxx
(including, but not limited to, Pillsbury), Kraft (including, but
not limited to, Post and Nabisco), PepsiCo (including, but not
limited to, Quaker and Frito Lay), Malto Meal, Ralcorp, Nestle,
Parmalat, Xxxxxxxx'x, Danone and/or any other company that
operates a cereal, cookie or cracker business.
B. directly or indirectly, permit any business, entity or
organization which Employee, individually or jointly with others,
owns, manages, operates, or controls, to engage in the
manufacture, production, distribution, sale or marketing of any
of the Products in the Geographic Area.
(ii) For purposes of this Paragraph 5(a)
A. the term "Products" shall mean ready-to-eat cereal
products, toaster pastries, cereal bars, granola bars,
frozen waffles, crispy marshmallow squares, cookies,
crackers, ice cream cones, fruit snacks, meat
substitutes or any other grain-based convenience food;
B. the term "Geographic Area" shall mean any country in
the world where the Company manufactures, produces,
distributes, sells or markets any of the Products at
any time during the applicable Restricted Period; and
b. Non-solicitation. Employee agrees that during his employment and
thereafter for a period of two years beginning with the date his
employment with the Company ends, Employee shall not, without the
prior written consent of the General Counsel of the Company, directly
or indirectly employ, or solicit the employment of (whether as an
employee, officer, director, agent, consultant or independent
contractor) any person who is or was at any time during the previous
year an officer, director, representative, agent or employee of the
Company.
c. Non-Disparagement. Employee agrees not to engage in any form of
conduct or make any statements or representations that disparage,
portray in a negative light, or otherwise impair the reputation,
goodwill or commercial interests of the Company, or its past, present
and future subsidiaries, divisions, affiliates, successors, or their
officers, directors, attorneys, agents and employees. Certain Company
Executives (as defined herein) agree not to engage in any form of
conduct or make any statements or representations that disparage,
portray in a negative light, or otherwise impair the reputation of
Employee. For purposes of this Paragraph, "Certain Company Executives"
means Xxxxxx Xxxxxxxxx, Xxxx Xxxxxx, Xxxx Xxxxxxx, Xxxx Xxxxxx,
Xxxxxxx Xxxxx, King Pouw, and Xxxxx Xxxxx for that period of time such
individuals are employees of the Company.
d. Preservation of Company Confidential Information. Employee agrees that
he shall not (without first obtaining the prior written consent in
each instance from the Company) during the term of this Agreement or
thereafter, disclose, make commercial or other use of, give or sell to
any person, firm or corporation, any information received directly or
indirectly from the Company or acquired or developed in the course of
Employee's employment, including, by way of example only, ideas,
inventions, methods, designs, formulas, systems, improvements, prices,
discounts, business affairs, products, product specifications,
manufacturing processes, data and know-how and technical information
of any kind whatsoever unless such information has been publicly
disclosed by authorized officials of the Company.
e. Release. In consideration of the compensation and benefits provided
pursuant to this Agreement, the sufficiency of which is hereby
acknowledged, Employee, for Employee and for any person who may claim
by or through Employee, irrevocably and unconditionally releases,
waives and forever discharges the Company and its past, present and
future subsidiaries, divisions, affiliates, successors, and their
respective officers, directors, attorneys, agents and employees, from
any and all claims or causes of action that Employee had, has or may
have, known or unknown, relating to Employee's employment with the
Company up until the date of this Agreement, including but not limited
to, any claims arising under Title VII of the Civil Rights Act of
1964, as amended, Section 1981 of the Civil Rights Act of 1866, as
amended, the Civil Rights Act of 1991, as amended, the Family and
Medical Leave Act, the Age Discrimination in Employment Act, as
amended by the Older Workers Benefit Protection Act of 1990, the
Americans with Disabilities Act, the Employee Retirement Income
Security Act; claims under any other federal, state or local statute,
regulation or ordinance; claims for discrimination or harassment of
any kind, breach of contract or public policy, wrongful or retaliatory
discharge, defamation or other personal or business injury of any
kind; and any and all other claims to any form of legal or equitable
relief, damages, compensation or benefits (except rights Employee may
have under the Employee Retirement Income Security Act of 1974 to
recover any vested benefits), or for attorneys fees or costs. Employee
additionally waives and releases any right Employee may have to
recover in any lawsuit or proceeding against the Company brought by
Employee, an administrative agency, or any other person on Employee's
behalf or which includes Employee in any class.
6. Miscellaneous.
a. Severability. If any provision of this Agreement is found by a court
of competent jurisdiction to be unenforceable, in whole or in part,
then that provision will be eliminated, modified or restricted in
whatever manner is necessary to make the remaining provisions
enforceable to the maximum extent allowable by law.
b. Controlling Law and Venue. Employee agrees that the laws of the State
of Michigan shall govern this Agreement. Employee also agrees that any
controversy, claim or dispute between the parties, directly or
indirectly, concerning this Agreement or the breach of thereof shall
only be resolved in the Circuit Court of Xxxxxxx County, or the United
States District Court for the Western District of Michigan, whichever
court has jurisdiction over the subject matter thereof, and the
parties hereby submit to the jurisdiction of said courts.
c. Entire Agreement; Amendment. Employee agrees that this Agreement and
the Change of Control Agreement, constitute the entire agreement
between Employee and the Company, and that this Agreement and the
Change of Control Agreement supersede any and all prior and/or
contemporaneous written and/or oral agreements relating to Employee's
employment with the Company and termination therefrom. For avoidance
of doubt, this Agreement replaces and supercedes the International
Repatriation Agreement dated July 28, 2000 between Employee and the
Company (the "Repatriation Agreement"), and consequently, the
Repatriation Agreement is null, void and of no further legal force or
effect. Employee acknowledges that this Agreement may not be modified
except by written document, signed by Employee and the General Counsel
the Company.
d. Employment Relationship. Employee acknowledges and agrees that his
employment with the Company described in this letter is an at-will
employment relationship, and that only the General Counsel of the
Company may modify this provision, and any modification must be in
writing signed by both parties.
e. Taxes. Usual and customary withholding for tax purposes will be
withheld from any payments made to Employee pursuant to this
Agreement, to the extent required by law. All tax liability with
respect to any and all payments or services received by Employee under
this Agreement (other than employer withholding and employer payroll
taxes) will be Employee's responsibility.
f. Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have executed and agreed to this Employment
Agreement on the dates provided below.
EMPLOYEE XXXXXXX COMPANY
/s/ Xxxxx Xxxxxx /s/ Xxxxxx X. Xxxxxxxxx
__________________________ By: ___________________________
Date: 8/26/03 Date: 8/26/03
