Exhibit 6.11
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is dated as of the 1st of January, 1994,
by and between Centennial Foods, Inc., an Idaho corporation ("Company") and Xxx
X. Xxxxx, an individual ("Employee").
WHEREAS, the Company desires to have the benefit of Employee's knowledge and
experience as a full-time employee, and consider such employment a vital element
to protecting and enhancing the best interests of the Company; and
WHEREAS, the Company and Employee desire to enter into an agreement reflecting
the terms under which Employee will be employed by the Company for the five (5)
year period described in Section 1 hereof;
NOW, THEREFORE, in consideration of the mutual covenants set forth herein and
other good and valuable consideration, the parties agree as follows:
1 . Term.
The Company hereby agrees to employ Employee for a five-year period
commencing on the date of this Agreement and ending on the fifth
anniversary thereof, unless sooner terminated as provided in Sections 5
and 6.
2. Duties.
Employee shall serve as the President and Chief Executive Officer of
the Company, and shall exercise such authority and assume such
responsibilities as the Board of Directors of the Company may
prescribe. Employee agrees to devote his full time, attention, and best
efforts to the performance of his duties.
3. Compensation.
a. The Company shall pay to Employee for the services rendered
under this Agreement a base annual salary of $121,264 per
year, subject to review and increase from time to time by the
Board of Directors of the Company, in its sole discretion.
b. The Company will recognize a $500,000 Incentive Performance
Obligation (IPO) owed to the Employee for Management Services
provided from 1989 through 1993 (the preceding employment
Agreement period). Except for a $2,000 per year payment, due
to the Employee on May 1st of each year of this Agreement, the
outstanding obligation will be deferred until the Company is
financially able to pay (see Item 3e below)), or until the
Company is sold. If the Company is sold, the IPO balance due
to the Employee will be paid to the Employee from the proceeds
of the sale.
c. The Company will establish a Stock Option Plan for the
Employee which will allow the Employee the opportunity to earn
stock options upon performance against specific criteria
established by the Board of Directors and the Employee. The
amount of stock options to be offered will be determined
solely by the Board of Directors.
d. The Company will provide for an ongoing Incentive Performance
Bonus (I PB) of 100,000 per year for each year of service
provided by the Employee under the term of this Agreement. The
yearly IPB, except for $2,000 per year, to be paid to the
Employee on May 1st of each year, will be deferred until the
Company is financially able to pay (see Item 3e below), or
until the Company is sold. If the Company is sold, the
accumulated IPB balance due to the Employee (Item 3d) will be
paid to the Employee from the proceeds of the sale, provided
that the sale of the Company is $7,500,000 or more. If the
Company is sold for a value less than $7,500,000, then the
Employee will not be eligible for any incentive performance
bonus under this item.
e. For determination of the Company's financial ability to pay
employee in Item 3b and 3d above, the following will apply.
The Company will not be obligated to pay the Employee any accumulated
amounts under Paragraphs 3b and 3d, until such time as the Company has achieved
a positive net equity. Once a positive net equity is reached the Company will
become obligated to pay 25 percent of its yearly net income before income taxes
toward satisfying the accumulated Incentive Performance Obligations outlined in
Paragraphs 3b and 3d. Each year thereafter, so long as the net equity is
positive, the Company will pay 25 percent of its net income toward the
retirement of its Incentive Performance Obligations owed to the Employee until
such obligation is satisfied.
f. As an incentive to maximize the potential selling price of the
Company, the Employee will earn a selling price bonus of 5.45
percent of the total selling price of the Company, provided
that the selling price exceeds $7.5 million. The selling price
bonus will be paid from the proceeds of the sale at closing.
4. Employee Benefits.
The Employee also shall be entitled to the following fringe benefits:
a. Life and Health Insurance. The Company will provide to
Employee term life insurance in the face amount of $1,000,000.
The Company will also provide health insurance covering full
health and dental requirements of the Employee.
b. Vacation. Employee shall be entitled to fifteen (1 5) working
days of paid vacation each year. Employee may take his
vacation only at such times as are mutually acceptable to the
Company and Employee. In the event Employee is unable for any
reason to take the fifteen (1 5) days of paid vacation
authorized during any year, the Employee may accrue unused
vacation days.
c. Other. Employee shall receive the following additional
benefits, to be used only in the course and scope of his
employment; (i) use of a fullsize automobile, insured by the
Company; (ii) use of a gasoline credit card provided by the
company; (iii) use of a credit card provided by the Company
for travel and promotion purposes.
5. Other Obligations of the Company.
In addition to its other obligations hereunder, the Company shall
provide Employee with certain mutually acceptable facilities and
services commensurate with Employee's position and adequate for the
performance of his duties, for Employee's use in the course and scope of
his employment. Such facilities and services will include a private
office, secretarial support, office equipment and supplies, and the
like. The Company shall reimburse Employee for business expenses,
including reasonable travel, entertainment and promotional expenses,
subject to the approval of the Board of Directors, which approval shall
not be unreasonably withheld. The Company shall indemnify and hold
harmless Employee from all losses, liabilities, and damages (including
reasonable attorneys' fees and costs) resulting from or in connection
with the discharge of Employee's duties in the course and scope of his
employment.
6. Termination by the Company.
Employee's employment hereunder may be terminated by the Company without
any breach of this Agreement under the following circumstances:
a. Death or Disability. Employee's employment shall terminate
upon his death. In addition, if as a result of his incapacity
resulting from physical or mental illness, Employee shall have
been unable to perform his duties hereunder for a period of
more than one hundred and eighty (1 80) days (whether or not
consecutive) during any twelve-month period, the Company may
terminate his employment hereunder.
b. Cause. The Company may terminate Employee's employment
hereunder for "Cause," which for purposes of this Agreement
shall be defined to mean (i) the willful commission by
Employee of acts that are dishonest or demonstrably and
materially injurious to the Company, monetarily or otherwise,
(ii) the commission by Employee of a felonious act.
The termination of Employee's employment for any reasons other than
those specified above shall be deemed to be a termination without
cause.
7. Termination by Employee.
Employee shall be entitled to terminate his employment for "Good
Reasons," which for purposes of this Agreement shall be defined to mean
his resignation caused by, and within ninety (90) days of, the
following:
a. Without the express written consent of Employee, he is
assigned any duties materially inconsistent with his
positions, duties, or status with the Company as contemplated
by this Agreement, except in connection with the termination
of his employment for Cause or as a result of his disability
or death;
b. Any action by the Company which results in a material
diminishment in the position, duties, or status of Employee
with the Company as contemplated by this Agreement:
c. The base salary of Employee, as the same may hereafter be
increased from time to time, is reduced;
d. The Company fails to comply with any of its material
obligations hereunder; or
e. Without the express written consent of Employee, he is
required to be permanently based anywhere other than the
Facilities; provided, however, Company has the right to make
temporary assignments for a reasonable period of time at other
locations where the Company has a special need for Employee's
services.
Termination of Employee of his employment with the Company pursuant to
this Section 6 shall be deemed to be termination of Employee's
employment by the Company without Cause.
8. Severance Payment.
a. If at any time during the term of this Agreement Employee is
terminated without Cause, or Employee resigns for Good Reason,
as defined in Sections 5 and 6 hereof, then Employee shall be
entitled to a severance payment equal to the greater of (i)
the net salary due Employee for the balance of the term of
this Agreement, or (ii) two (2) years' net salary. For
purposes of calculating these amounts, it will be assumed that
Employee would have continued to be paid the salary being paid
at the time of termination.
b. If at any time during the term hereof Employee is terminated
for Cause or Employee resigns for other than Good Reason as
defined herein, then Employee shall receive no severance
payment whatsoever.
c. If at the expiration of the term of this Agreement the Company
does not offer to renew this Agreement on substantially the
same terms and conditions for a period of at least two (2)
years, Employee shall be entitled to a severance payment equal
to two (2) years' net salary, calculated as set forth in
Subsection 8(a) above.
d. The Company stock issued to the Employee shall remain the
property of the Employee.
e. Any severance payment payable to Employee hereunder shall be
paid within thirty (30) days after the termination of
Employee's employment.
9. Arbitration.
Any dispute or controversy arising under, or in connection with this
Agreement shall be settled exclusively by arbitration in Ada County,
Idaho, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's
award in any court having jurisdiction. Each party shall bear his or its
own costs of arbitration, but the prevailing party in such arbitration
shall be entitled to recover as part of any award entered his or its
expenses for attorneys' fees and disbursements.
10. Notices.
All notices, requests, demands, and other communication called for or
contemplated hereunder shall be in writing and shall be deemed to have
been duly given when delivered personally or when mailed by United
States certified or registered mail, postage prepaid, addressed to the
parties, their successors in interest or assignees at the following
addresses or such other addresses as the parties may designate by notice
in the manner aforesaid:
If to the Company:
Xx. Xxxx Xxxxxxx
Secretary, CFI
0000 Xxxxxxxx Xxxxx
Xxxxx x'Xxxxx, XX 00000
If to Employee:
Xxx X. Xxxxx
000 X. Xxxxxxxxxx
Xxxxxx, Xxxxxxx 00000
11. Law Governing.
This Agreement shall be governed by and construed in accordance with
the laws of the Sate of Idaho, exclusive of choice law provisions which
may direct application of the laws of a different jurisdiction.
12. Validity.
The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement, which shall remain in full force and
effect.
13. Entire Agreement.
This Agreement constitutes the entire understanding between the parities
with respect to the subject matter hereof, superseding all prior oral or
written agreements or negotiations. This Agreement may not be amended
except in a writing executed by the parties hereto.
14. Effect on Successors in Interest.
This Agreement shall inure to the benefit of and be binding upon the
heirs, administrators, executors, successors, and assigns of each of the
parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
FOR CENTENNIAL FOODS, INC.: EMPLOYEE:
/s/Xxxxxxx Xxxxxxx /s/Xxx Xxxxx 4/15/94
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Xxxxxxx Xxxxxxx Xxx Xxxxx
Chairman of the Board
/s/Xxxxx Xxxxxxx 4/18/94
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Xxxxx Xxxxxxx
Compensation Committee
/s/Xxxxxxx Xxxxx 4/15/94
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Xxxxxxx Xxxxx
Compensation Committee
