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EXHIBIT 10.29
Execution Copy
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "AGREEMENT") is made and entered into as of the 4th
day of September, 1997, by and between SOUTHERN FOODS GROUP, L.P., a Delaware
limited partnership (the "EMPLOYER"), and XXXXXXX X. XXXX (the "EMPLOYEE").
Recitals
WHEREAS, Employee formerly was the President and Chief Executive
Officer of Xxxxxx/Meadow Gold Dairies Holdings, Inc., a Delaware corporation
("XXXXXX/MEADOW GOLD"); and
WHEREAS, Employer has recently entered into a series of transactions
resulting in Employer acquiring substantially all of the assets of Xxxxxx/Meadow
Gold relating to its dairy operations located in the Western United States which
sell dairy products primarily under the Meadow Gold and Viva trademarks; and
WHEREAS, the parties desire to enter into this Agreement to provide for
the employment of Employee by Employer and certain other matters as provided
herein;
NOW, THEREFORE, the parties hereto, in consideration of the mutual
covenants and promises hereinafter contained, do hereby agree as follows:
1. Employment. Employer hereby employs Employee and Employee
hereby accepts the employment, on the terms and conditions hereinafter set
forth.
2. Duties. Employee's principal duties and responsibilities shall
be during the employment term, to manage the Meadow Gold Dairies Division (as
hereinafter defined) of Employer and to render such services to Employer and its
affiliates of an executive and administrative character as the general partner
of Employer may from time to time reasonably direct. Employee will devote his
best efforts and substantially all of his business time and attention (except
for vacation periods and reasonable periods of illness or other incapacity) to
the business of Employer and its affiliates; provided, however, that Employee
may devote a reasonable amount of time (consistent with Employee's past
practices) to civic, charitable, political and passive investment endeavors.
3. Employment Term. The employment term shall begin on the date
hereof and continue until the first to occur of:
(a) The fifth anniversary of the date hereof; provided,
however, that the term shall be automatically extended for one or more
one (1) year periods unless Employer or Employee, not less than ninety
(90) days prior to the commencement of any such one (1) year period,
notifies the other party in writing that this Agreement shall expire
rather than be extended for additional one (1) year periods; or
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(b) The date on which the employment period is terminated
pursuant to Section 12 hereof.
4. Salary and Other Compensation. As compensation for the
services to be rendered by Employee to Employer pursuant to this Agreement and
as consideration for Employee's obligations under Sections 6 through 10 hereof,
Employee shall be paid the following compensation and other benefits:
(a) SALARY: Employer shall pay Employee an annual salary of
$336,000, or such higher compensation as may be established by Employer
from time to time (the "BASE SALARY").
(b) ANNUAL BONUS: Employer shall pay Employee an annual bonus
(each, an "ANNUAL BONUS") with respect to each Fiscal Year (as defined
in Section 5) fully completed during the term of Employee's employment
of an amount equal to 0.66% of the Meadow Gold Dairies Division's
EBITDA (as defined in Section 5) for such Fiscal Year; provided,
however, that the Annual Bonus shall not exceed the amount of
Employee's Base Salary for such Fiscal Year. The Annual Bonus shall be
prorated for any period that this Agreement is in effect which is less
than twelve (12) months, based on the number of months during such
Fiscal Year that this Agreement is in effect.
(c) DISABILITY: Should Employee become disabled, which for
purposes of this subsection 4(c) means Employee's inability because of
any physical or emotional illness to perform Employee's assigned duties
under this Agreement more than 30 hours per week, Employee's Base
Salary shall nevertheless be paid at its full rate prior to the
Employee's termination pursuant to Section 12(b); provided, however,
that if Employee receives any periodic payments representing lost
compensation under any health, disability, or accident insurance policy
or under any salary continuation insurance policy, the premiums for
which have been paid by Employer or paid for by Employee but reimbursed
by Employer, the amount of salary that Employee will be entitled to
receive from Employer during the disability shall be decreased by the
gross amount of such payments (before any withholding for taxes).
(d) EMPLOYEE BENEFIT PLANS: Employee shall be eligible to
participate, to the extent Employee may be eligible, in any profit
sharing, retirement, insurance, health coverage or other employee
benefit plan maintained by Employer.
(e) FRINGE BENEFITS: Except as provided otherwise in this
Agreement, Employee shall be entitled to the fringe benefits available
to the other employees of Employer, as such benefits may be revised
from time to time.
(f) VACATIONS AND LEAVE: Employee shall be entitled to the
same vacation and leave time as the other executive officers of
Employer.
5. Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below:
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(a) "TRADE SECRETS" means any scientific or technical
information, formula, design, process, procedure or improvement that is
valuable to Employer and not generally known to the competitors of
Employer. To the fullest extent consistent with the foregoing and
otherwise lawful, Trade Secrets shall include, without limitations, all
information and documentation pertaining to the invention, development,
nature, design and specifications of and the production, application
and processing techniques and procedures relating to Employer's present
and future products and processes.
(b) "CONFIDENTIAL INFORMATION" means any data or information
and documentation, other than Trade Secrets, that is valuable to
Employer and not generally known to the public. To the fullest extent
consistent with the foregoing and otherwise lawful, Confidential
Information shall include, without limitation, Employer's marketing
techniques, pricing information, business plans and opportunities, bids
in process or under consideration (regardless of whether Employer has
entered into any agreement, made any commitment, or issued any bid or
offer), financial statements and projections, specialized customer
information concerning unique or novel marketing habits, and the
special products and services Employer may offer or provide to its
customers from time to time.
(c) "CONFIDENTIAL CUSTOMER INFORMATION" means any technical or
accounting data or proprietary information or confidential business
information of any of Employer's customers.
(d) "AFFILIATE" with respect to any person or entity means any
person or entity that directly or indirectly controls, is controlled
by, or is under common control with such person or entity.
(e) "FISCAL YEAR" shall mean Employer's fiscal year for
accounting and tax purposes, and shall include any fiscal year that is
shorter or longer than twelve (12) months due to a change in the date
Employer's fiscal year ends.
(f) "MEADOW GOLD DAIRIES DIVISION" shall mean the dairy
operations of Xxxxxx, Inc. located in the Western United States that
manufacture and sell dairy products primarily under the Meadow Gold and
Viva trademarks which were acquired by Employer of even date herewith
from Mid-America Dairymen, Inc. ("Mid-Am") as a result of a
contribution to Employer of substantially all of the assets and
liabilities of such diary operations.
(g) "EBITDA" shall mean the net income, if any, of the Meadow
Gold Dairies Division of Employer for the Fiscal Year in question, as
adjusted to exclude the effects of (i) interest expense of the Meadow
Gold Dairies Division for such Fiscal Year, (ii) all Federal and state
taxes attributable to the operations of the Meadow Gold Dairies
Division, if any, with respect to such Fiscal Year on, or with respect
to, income or profits of the Meadow Gold Dairies Division, if any, and
(iii) all amounts attributable to depreciation and amortization for
such Fiscal Year. Such calculations shall be made in accordance with
generally accepted accounting principles of Employer consistently
applied.
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6. Employer Property. With respect to any and all Trade Secrets,
Confidential Information and other processes, formulae, inventions and works
made or conceived by Employee during his employment, whether (i) solely or
jointly with any other person, firm, organization or employee, (ii) during or
after his regular hours of employment, or (iii) with or without the use of
Employer's facilities, materials or personnel:
(a) Employee will disclose promptly to Employer all such Trade
Secrets, Confidential Information and other processes, formulae,
inventions and works.
(b) Employee will execute and promptly deliver to Employer
such written instruments, and, upon the request of Employer, do such
other acts, as may be required to patent, copyright or otherwise
protect such Trade Secrets, Confidential Information and other
processes, formulae, inventions and works, and any documentation or
other materials pertaining thereto, and to vest all rights, title and
interest therein in Employer. All such Trade Secrets, Confidential
Information and other processes, formulae, inventions and works,
together with any documentation or other materials pertaining thereto,
shall be considered work made for hire and prepared by Employee as an
employee within the scope of his employment by Employer.
(c) Employer shall have the perpetual and unlimited right,
without cost, to make, use and sell, in whole or in part, any of such
Trade Secrets, Confidential Information or other processes, formulae,
inventions or works, and to make, use and sell any and all products,
processes and services derived from any of such Trade Secrets,
Confidential Information or other processes, formulae, inventions or
works.
7. Confidentiality. Except as required by law, during the term of
employment by Employer and thereafter, Employee shall not, without the prior
written consent of Employer, directly or indirectly use, disclose or disseminate
to any other person, firm, organization or employee, or otherwise employ any
Trade Secrets, Confidential Information or Confidential Customer Information.
This obligation shall not apply to any Trade Secrets or Confidential Information
(i) that shall have become generally known to competitors of Employer (in the
case of Trade Secrets) or to the public (in the case of Confidential
Information) through no act or omission of Employee, or (ii) that shall have
been disclosed to Employee by a person or entity unaffiliated with Employer that
has legitimate possession thereof in its entirety, and possesses the
unrestricted right to make such disclosure. Employee acknowledges that Employer
may be bound by contract with Employer's customers not to disclose any
Confidential Customer Information. Accordingly, Employee agrees to indemnify and
hold Employer harmless from and against any claim for damages, including
attorneys' fees and court costs, brought by Employer's customers or any other
interested party, and against any other claim based on contract, tort or common
law indemnity arising out of his unauthorized disclosure of Confidential
Customer Information in violation of this Section 7.
8. Return of Material to Employer. Employee will deliver to
Employer, upon termination of Employee's employment with Employer and at any
other time upon Employer's request, all memoranda, notes, records, drawings or
other documentation, whether made or
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compiled by him alone or with others or made available to him while employed by
Employer, pertaining to Confidential Customer Information, Trade Secrets,
Confidential Information or other inventions and works of Employer, and all
Confidential Customer Information, Trade Secrets, Confidential Information and
other inventions and works of Employer in his possession.
9. Noncompetition. During Employee's employment by Employer and
for a period of two (2) years after Employee's termination of employment with
Employer, Employee shall not, directly or indirectly, either individually or
jointly or on behalf of or in concert with any other person or entity, as a
proprietor, partner, shareholder, member, director, officer, employee, agent,
consultant or through any other kind of ownership (other than ownership of less
than five percent (5%) of any class of outstanding securities of any company
listed on any national securities exchange or traded in the over-the-counter
market) or in any other representative or individual capacity (a) engage in any
business or render any services to any business that is in competition with the
business of Employer in any of the states of the United States located west of
the Mississippi River (the "RESTRICTIVE AREA") so long as Employer continues to
conduct business in the Restrictive Area during such two (2) year period, (b)
engage in any business which calls upon, solicits, diverts, or takes away any
customer or customers of Employer in the Restrictive Area for the purpose of
selling or attempting to sell to any of such customers any products similar to
any products theretofore sold or provided to any of such customers by Employer
so long as Employer continues to conduct business in the Restrictive Area during
such two (2) period, (c) solicit any present or future employee of Employer, or
discuss with any such employee termination or resignation from employment with
Employer, so that such employee may accept employment with, or engagement as a
partner, investor, shareholder or consultant with, Employee, directly or
indirectly as specified above, or (d) otherwise interfere with, disrupt or
attempt to disrupt relationships, contractual or otherwise, between Employer and
any of its lenders, customers, employees or suppliers.
10. Notice of Employment. So long as Employee is subject to the
noncompetition provisions of Section 9, Employee shall notify Employer in
writing, within five (5) days after accepting employment with any other person,
firm or organization of the name and address of such employer and his employment
capacity with such employer.
11. Injunctive Relief. The parties recognize that irreparable
damage will result to Employer from any violation of this Agreement by Employee.
The parties expressly agree that, in addition to any and all other remedies
available to Employer for any such violation, Employer shall have the remedies
of restraining order and injunction, and any such other equitable relief as may
be declared or issued by a court to enforce the provisions of Sections 6 through
10 above, without posting any bond that might be required, and Employee agrees
not to claim in any such equitable proceedings that a remedy at law is available
to Employer. The existence of any claim or cause of action by Employee against
Employer, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Employer of any provision hereof.
Notwithstanding anything contained herein to the contrary, and if and only if a
provision of this type contained in this Section is enforceable in the
jurisdiction in question, if any one or more of the provisions contained in
Sections 6 through 10 shall for any reason be held to be excessively broad as to
duration, geographical scope, activity or subject, such provisions shall be
construed by limiting and reducing it so as to be enforceable to the extent
compatible with the applicable law
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in such jurisdiction as it shall then appear. Employee agrees to reimburse
Employer for any and all expenses incurred, including attorneys' fees, expenses,
court costs and settlement costs, in connection with the enforcement of its
rights and Employee's obligations under this Agreement.
12. Termination. Employment of Employee under this Agreement may
be terminated:
(a) By Employee's voluntary resignation after giving at least
60 days' written notice.
(b) By Employer With Cause. For purposes of this Agreement
"WITH CAUSE" shall mean:
(i) Employee's becoming Totally Disabled. For the
purposes of this Agreement, Employee will be "TOTALLY
DISABLED" if he is "totally disabled" as defined in and for
the period necessary to qualify for benefits under any
long-term disability income insurance policy then in effect
that is applicable to executive employees of Employer;
(ii) the dissolution and liquidation of Employer,
other than as part of a reorganization, merger, consolidation
or sale of all or substantially all of the assets of Employer
whereby Employer's business is continued;
(iii) a conviction of or a plea of guilty or nolo
contendere by Employee to a felony involving fraud,
embezzlement, theft, or dishonesty or other criminal conduct;
(iv) habitual neglect of Employee's duties or failure
by Employee to perform or observe any substantial obligation
of such employment that is not remedied within thirty (30)
days after written notice thereof from Employer; or
(v) any material breach by Employee of this Agreement
which is not cured within thirty (30) days after written
notice thereof from Employer.
(c) By Employer Without Cause. For purposes of this Agreement,
"WITHOUT CAUSE" shall mean Employee's termination by Employer for any
reason other than (i) those set forth in subsections 12(a) and 12(b),
or (ii) the termination of this Agreement due to the expiration of the
term set forth in Section 3(a).
(d) By Employee due to any material breach by Employer of this
Agreement which is not cured within thirty (30) days after written
notice thereof from Employee.
In the event of termination of this Agreement other than for death, Employee
shall resign from all positions held in Employer, including without limitation
any position as a director, officer, agent, trustee or consultant of Employer or
any affiliate of Employer. Except as provided in Section 9, termination of the
employment of Employee shall not terminate or otherwise affect the party's
respective obligations under Sections 6 through 14 of this Agreement.
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13. Severance Benefits.
(a) VOLUNTARY RESIGNATION: In the event this Agreement is
terminated due to Employee's voluntary resignation, Employee shall not
be entitled to any severance benefits whatsoever.
(b) TERMINATION WITH CAUSE: In the event this Agreement is
terminated With Cause, Employee shall be entitled to (i) his full Base
Salary through his date of termination (ii) any benefits or awards
which pursuant to the terms of any compensation or benefit plan have
been earned or become payable as of Employee's date of termination, but
which have not yet been paid to Employee, and (iii) the amount due to
Employee for any expenses for which Employee shall not yet have been
reimbursed by Employer as of Employee's date of termination. Except as
otherwise provided for in the immediately preceding sentence, Employee
shall not be entitled to further compensation as of the date of
termination of this Agreement With Cause (specifically including, but
not limited to, any unearned bonuses). Any termination of this
Agreement With Cause shall be without prejudice to any right or remedy
to which Employee may be entitled either at law, in equity or under
this Agreement.
(c) TERMINATION WITHOUT CAUSE: In the event this Agreement is
terminated Without Cause or by Employee pursuant to Section 12(d),
Employee shall be entitled to receive as the full amount due Employee
from Employer hereunder a severance benefit in an amount equal to (i)
the Base Salary for the then remaining term of Employee's employment
determined in accordance with Section 3(a), payable in equal monthly
installments until the each of such term, plus (ii) the Annual Bonus,
if any, which would have otherwise been paid to Employee during each
year of the remaining term of Employee's employment.
14. Waiver. A party's failure to insist on compliance or
enforcement of any provision of this Agreement shall not affect the validity or
enforceability or constitute a waiver of future enforcement of that provision or
of any other provision of this Agreement by that party or any other party.
15. CHOICE OF LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED UNDER THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF
THE STATE OF TEXAS.
16. Severability. The invalidity or unenforceability of any
provision in the Agreement shall not in any way affect the validity or
enforceability of any other provision and this Agreement shall be construed in
all respects as if such invalid or unenforceable provision had never been in the
Agreement.
17. Notice. Any and all notices required or permitted herein shall
be deemed delivered if delivered personally or if mailed by registered or
certified mail to such party at the address hereinafter set forth following such
party's signature, or at such other address or addresses as either party may
hereafter designate in writing to the other.
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18. Assignment. This Agreement, together with any amendments
hereto, shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors, assigns, heirs and personal
representatives, except that the rights, benefits and obligations of Employee
under this Agreement are personal in nature and may not be assigned without the
prior written consent of Employer.
19. Amendments. This Agreement may be amended at any time by
mutual consent of the parties hereto, with any such amendment to be invalid
unless in writing, signed by the parties.
20. Entire Agreement. This Agreement contains the entire agreement
and understanding by and between the parties to the employment of Employee, and
no representations, promises, agreements, or understandings, written or oral,
relating to the employment of Employee by Employer not contained herein shall be
of any force or effect.
21. References and Headings. In construing this Agreement,
feminine or number pronouns shall be substituted for those masculine in form and
vice versa, and plural terms shall be substituted for singular and singular for
plural in any place in which the context so requires. The various headings in
this Agreement are inserted for convenience only and are not part of the
Agreement.
THIS PAGE INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, Employer and Employee have duly executed this
Agreement as of the day and year first above written.
SOUTHERN FOODS GROUP, L.P.
By: SFG Management Limited Liability
Company, sole general partner
By:/s/ XXXXXXX X. XXXX
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Xxxxxxx X. Xxxx, Assistant Secretary
Address for Notice Purposes:
c/o Xxxx Xxxxxxxx
0000 Xxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
EMPLOYEE:
/s/ XXXX XXXX
--------------------------------------------------
Xxxxxxx X. Xxxx
Address for Notice Purposes:
0000 Xxxx 0000
Xxxxx Xxxxxxx, Xxxx 00000
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