Exhibit 10.15
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into this 19th day of August, 1998,
by and between Land O'Lakes, Inc., a Minnesota cooperative corporation with its
principal place of business at 0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx Xxxxx,
Xxxxxxxxx 00000 (hereinafter referred to as "Land O'Lakes"), and Xxxx X. Xxxxxx,
an individual residing at 000 Xxxxxx Xxxx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000
(hereinafter referred to as "Prince").
WHEREAS, Prince is experienced and possesses significant expertise in
the management and operation of a California dairy processing business and has
served for a number of years as President and Chief Executive Officer of
Dairyman's Cooperative Creamery Association ("DCCA") of Tulare, California; and
WHEREAS, Land O'Lakes desires to retain and employ the services of
Prince on the terms and conditions set forth in this Agreement, and Prince
desires to be retained and employed by Land O'Lakes to perform such services
under the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
covenants and commitments of Land O'Lakes and Prince set forth in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Land O'Lakes and Prince agree as
follows:
1. Employment. Land O'Lakes hereby employs Prince as Senior Vice President,
California Dairy Operations, and Prince hereby accepts such employment in
such capacity and agrees to perform services for Land O'Lakes upon the
terms and conditions set forth in this Agreement. In his capacity as Senior
Vice President, California Dairy Operations, Prince will be expected to
provide leadership in California dairy manufacturing operations and
California dairy industry representation, subject to the management and
direction of Land O'Lakes' Chief Executive Officer (hereinafter referred to
as the "CEO"). Throughout the term of this Agreement and in his capacity as
an officer of Land O'Lakes, Prince shall devote his full time, loyalty,
attention, skill, and energy to the business and affairs of Land O'Lakes
and shall perform to the best of his ability such other responsibilities
and duties as may be assigned to him from time to time by the CEO. In
performing such duties and responsibilities, Prince shall implement and
promote the Land O'Lakes values statement.
2. Term; Termination.
A. The term of this Agreement shall be five (5) years, commencing on July
1, 1998, and continuing through June 30, 2003. Upon expiration of the
term of this Agreement, Prince's status with Land O'Lakes shall be
deemed to be that of an at-will employee and, as such, Land O'Lakes
may, in its sole discretion, modify the terms and conditions of
Prince's employment with Land O'Lakes.
B. This Agreement shall terminate immediately upon the happening of
either (1) Prince's death, or (2) the disability or incapacitation of
Prince for a consecutive period of twelve (12) months or more, which
disability or incapacitation renders Prince unable to perform
substantially all of his normal employment responsibilities hereunder.
C. Land O'Lakes may terminate this Agreement at any time, without prior
notice to Prince, upon the occurrence of any of the following events:
(i) Prince willfully refuses to perform his duties under this
Agreement or willfully refuses to comply with or implement
reasonable policies established by the CEO or Land O'Lakes' Board
of Directors;
(ii) Prince misappropriates any Land O'Lakes assets or commits any
other act of dishonesty, misconduct, or violation of law which
materially compromises his ability to effectively perform his
responsibilities hereunder; or
(iii) Prince breaches this Agreement in any material respect, which
breach is not cured or is not capable of being cured by Prince
within thirty (30) days after written notice of such breach is
delivered to Prince by Land O'Lakes in accordance with paragraph
13 hereof.
X. Xxxxxx may terminate this Agreement upon sixty (60) days written
notice for any reason at any time after June 30, 1999. In the event of
such termination occurring during the second or third contract years
of this agreement, Prince shall be entitled to receive Base Pay as
provided in paragraph 3.A. for a period of two calendar years after
the effective termination date. In the event such termination occurs
during the fourth or fifth contract year, Prince shall be entitled to
receive Base Pay for one calendar year or the balance of the term of
this agreement, whichever period is shorter. During any period during
which Prince is paid pursuant to this paragraph after his effective
termination date, he shall continue to be eligible for health care
benefits on the same basis and subject to the same contribution rate
in effect as of his effective termination date. None of the other
employee benefits described in paragraph 4 will continue after
Prince's effective termination date. Further, Prince will not be
eligible for any variable pay, whether annual or long-term,
attributable to any period after his effective termination date.
E. Notwithstanding any contrary provisions contained elsewhere in this
Agreement, this Agreement and the respective rights and obligations of
Land O'Lakes and Prince hereunder (except for those rights and
obligations of the parties under paragraphs 6 and 8) cease upon
termination.
3. Compensation.
A. As compensation for services performed hereunder during the first year
of the term of this Agreement, Land O'Lakes shall pay Prince a base
salary at an annual rate of Three Hundred Thousand Dollars
($300,000.00) per year (hereinafter referred to as the "Base Salary").
The Base Salary payable to Prince during each subsequent year of the
term of this Agreement shall be established by Land O'Lakes' CEO not
later than June 30 of each year during the term of this Agreement,
unless the parties mutually agree otherwise. In no event shall the
CEO's annual review of Prince's Base Salary result in an increase in
Prince's Base Salary which is less than Land O'Lakes' budgeted average
percentage salary increase for exempt management personnel for that
year.
X. Xxxxxx shall also be entitled to participate in the Executive Annual
Variable Compensation Plan established by Land O'Lakes for its
officers, at the rate applicable to group vice presidents; provided,
however, that the maximum payment under such Plan for each year of the
term of this Agreement shall not exceed sixty percent (60%) of
Prince's current Base Salary in such year. The parties acknowledge
that this plan operates on a calendar year basis, and to the extent
the term of this Agreement includes any partial plan year, payment
under the plan for such partial plan year will be on a pro rata basis.
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X. Xxxxxx shall further be entitled to participate in the Executive
Long-Term Variable Compensation Plan established by Land O'Lakes for
its officers, at the rate applicable to group vice presidents;
provided, however, that the maximum payment under such Plan for each
year of the term of this Agreement shall not exceed forty percent
(40%) of Prince's current Base Salary in such year. Prince shall
commence eligibility for accrual of benefits under this Plan as of the
beginning of the term of this Agreement. The parties acknowledge that
this plan operates on a three-calendar-year cycle, and to the extent
the term of this Agreement includes any partial cycle, payment under
the plan for such cycle will be on a pro rata basis. The parties
specifically agree that for the following cycles, Prince will receive
the specified portion of the amount he would have received according
to the terms of the plan if he had been employed throughout the entire
cycle, provided he is actively employed through December 31 of the
final year of such cycle: 96-98, 1/3; 97-99, 2/3; 98-00, full payment.
D. All compensation to be paid to Prince in accordance with the terms of
this Agreement shall be subject to all applicable withholding taxes,
payroll deductions, and other deductions required by law and shall be
payable to Prince in accordance with Land O'Lakes' normal payroll
procedures.
4. Employee Benefit Programs.
A. In addition to the compensation described in paragraph 3, Prince shall
be eligible to participate in the welfare and pension benefit plans
maintained by Land O'Lakes, such participation to be in accordance
with the terms of the plans as they may exist during the term of this
Agreement. In addition, Land O'Lakes shall provide Prince with the
following specific benefits throughout the term of this Agreement:
(i) Use of his current automobile or an equivalent automobile in
accordance with established guidelines for the Land O'Lakes
executive automobile plan;
(ii) Participation in the Land O'Lakes, Inc. Employee Retirement Plan,
the Land O'Lakes Employee Savings and Supplemental Retirement
Plan, and the Land O'Lakes Non-Qualified Excess Benefits Plan
(IRS Limits);
(iii) Equivalent of benefit accrual under Land O'Lakes, Inc. Employee
Retirement Plan from date of hire with DCCA provided through
combination of supplemental individual non-qualified arrangement
and plan benefits;
(iv) Continue special deferred annuity payment plan provided by DCCA;
(v) Insurance policy with personal liability coverage of Two Million
Dollars ($2,000,000.00);
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(vi) The opportunity to participate in the elective deferred
compensation plan offered to officers of Land O'Lakes;
(vii) Establish beginning balance in personal flex-time program which
is the sum of thirty (30) days and accrued, unused vacation time
from DCCA, the total of which shall not exceed forty-five (45)
days; commence accrual at rate of two (2) days per month;
(viii) Full relocation benefits according to the terms of the Land
O'Lakes program currently in existence in the event Prince is
requested to relocate during the term of this Agreement; and
(ix) Participation in such other welfare benefit plans as Land O'Lakes
generally makes available to its executive employees.
5. Expenses. Land O'Lakes agrees to reimburse Prince for all reasonable and
necessary out-of-pocket expenses incurred by him in performing his duties
under this Agreement, such reimbursement to be made in accordance with
established policies and procedures.
6. Confidential Information.
A. Prince shall carefully guard and keep secret all trade secrets and
confidential information concerning the business and affairs of Land
O'Lakes, including, but not limited to Land O'Lakes customer lists,
personnel information, secret processes, or other secret or
confidential information, knowledge, or data (the "Confidential
Information"), whether or not such Confidential Information is
obtained, acquired, or developed by Prince during the period of his
employment with Land O'Lakes. Prince shall not, at any time, whether
in the performance of this Agreement or at a later time, directly or
indirectly disclose any such Confidential Information to any person,
firm, or corporation or other third party or use the same in any way
other than in connection with the business affairs of Land O'Lakes,
unless he first secures the prior written consent of Land O'Lakes'
CEO. Further, Prince shall refrain from any acts or omissions which
would reduce the value of the Confidential Information to Land
O'Lakes.
B. The existence of this Agreement, the terms and conditions of this
Agreement, and the content of all negotiations surrounding this
Agreement shall be considered Confidential Information.
C. In the event Prince becomes legally compelled to disclose any
Confidential Information of Land O'Lakes, Prince shall provide Land
O'Lakes with immediate notice so that Land O'Lakes may seek a
protective order or other appropriate remedy. If a protective order or
other remedy is not obtained by Land O'Lakes, Prince shall only
furnish that portion of Land O'Lakes' Confidential Information which
is legally required and shall exercise his best efforts to obtain a
protective order or other reliable assurance that Land O'Lakes'
Confidential Information shall be accorded confidential treatment. The
foregoing obligations of this paragraph 6 shall survive the term of
this Agreement.
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7. Return of Land O'Lakes' Property. Upon termination of his employment,
regardless of how termination is effected, Prince shall promptly
deliver to Land O'Lakes all records, reports, files, or other documents
which are the property of Land O'Lakes or which relate in any way to
the customers, business, practices, or techniques of Land O'Lakes,
along with any and all other property and Confidential Information of
Land O'Lakes which, in any of these cases, are in Prince's possession
or under his control. It is agreed that such records, reports, and
other documents or property, including any and all copies thereof and
all information contained therein, are and at all times shall be deemed
to be the property of Land O'Lakes.
8. Noncompetition.
A. During the six-year period commencing on July 1, 1998, Prince shall
not, without the prior written consent of the CEO, directly or
indirectly own, manage, operate, control, participate in, or be
connected in any manner with the ownership, management, operation, or
control of any business, a significant portion of which involves fluid
milk, ice cream, or any other product or product group which comprises
a significant portion of the business of Land O'Lakes at the time of
the termination of this Agreement, in any territory in which Land
O'Lakes conducts such business. Furthermore, Prince shall not induce
or attempt to persuade any agent, employee, or customer of Land
O'Lakes to terminate an existing employment, agency, or business
relationship with Land O'Lakes in order to enter into any such
relationship in competition with Land O'Lakes. The foregoing
obligations of this paragraph 8 shall survive the term of this
Agreement.
X. Xxxxxx further acknowledges that the noncompetition provisions of this
paragraph 8 constitute a material inducement to Land O'Lakes to enter
into this Employment Agreement and to provide the benefits and
compensation payments to Prince hereunder, and Land O'Lakes will be
relying on the enforceability of the noncompetition provisions of this
paragraph 8 in performing its obligations under this Agreement.
9. Enforcement. Prince acknowledges that a breach of paragraph 6 or paragraph
8 may result in irreparable damage to Land O'Lakes. Accordingly, in the
event of any breach or threatened breach by Prince of paragraphs 6 or 8 of
this Agreement, Land O'Lakes may bring an action in any court of competent
jurisdiction to obtain a temporary and/or permanent injunction to enforce
the provisions of this agreement, or to pursue any other legal remedies
which may be available. If Land O'Lakes prevails in an action to enforce
the terms of this Agreement, Prince agrees to reimburse Land O'Lakes for
its costs and expenses, including reasonable attorneys' fees.
10. Assignment. This Agreement and the rights and obligations of Prince
hereunder are not assignable, in whole or in part, by Prince, and any
attempted assignment by him shall be null and void and without force and
effect.
11. Severability. The provisions of this Agreement shall be severable, and the
invalidity of any provision, or portion thereof, shall not affect the
enforceability of the remaining provisions of this Agreement.
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12. Waiver. The failure of either party under this Agreement to exercise any
right, power, or option given to that party under this Agreement or under
any applicable law, or the failure of either party to insist upon strict
compliance with the terms of this Agreement on one occasion shall not
constitute a waiver by such party with respect to any subsequent breach
thereof, nor shall it constitute a waiver by that party of its rights at
any time thereafter to require strict compliance with the terms of this
Agreement.
13. Notices. Any notices required hereunder shall be deemed to have been
properly given if a written notice has been delivered to the party to whom
notice is required to be given (the "Addressee") by either (a)
hand-delivering such notice to Addressee; or (b) enclosing such notice in a
sealed envelope and sending it by certified mail, return receipt requested,
postage prepaid, to Addressee at Addressee's address shown below, or at
such other address as Addressee may hereafter designate in writing to the
other party:
Xxxx Xxxxxx Land O'Lakes, Inc.
000 Xxxxxx Xxxx Xxxxx Attention: Xxxx X. Xxxxxx
Exeter, California 93221 President and Chief
Executive Officer
X.X. Xxx 00000
Xx. Xxxx, XX 00000-0000
With a copy to: Xxxx X. Xxxxx
Senior Counsel
Land O'Lakes, Inc.
X.X. Xxx 00000
Xx. Xxxx, XX 00000-0000
14. Headings. Titles and headings in this Agreement are for the convenience of
reference only and do not form a part of this Agreement and shall in no way
affect the interpretation hereof.
15. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Minnesota, without giving effect to any
choice or conflict of law provision or rule that would cause the
application of the laws of any jurisdiction other than the State of
Minnesota.
16. Advice of Counsel. No party, representative, or counsel for either party
has acted as counsel for the other party with respect hereto. Each party
represents that such party has sought and obtained any legal advice deemed
necessary prior to entering into this Agreement. Each party hereto has had
the opportunity to fully negotiate the terms hereof and to modify the
draftsmanship of this Agreement. Therefore, the terms of this Agreement
shall be construed and interpreted without any presumption, inference, or
rule requiring construction or interpretation against the party causing
this Agreement to be drafted. No party or representative for such party
shall act or be deemed to act as legal counsel or representative for the
other party.
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17. Entire Agreement. This writing evidences the entire agreement and
understanding of the parties with respect to the employment of Prince and
other matters discussed herein and supersedes any and all other agreements
and understandings, whether written or oral, with respect thereto. No
modification, alteration, or change in the terms of this Agreement shall be
effective unless made in a writing signed by both Land O'Lakes and Prince.
IN WITNESS WHEREOF, each of the parties have executed this Agreement effective
as of the date first above written.
LAND O'LAKES, INC.
By
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XXXX XXXXXX
Its
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