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EXHIBIT 10.24
EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") made between Xxxxxx X.
Xxxxxxxxx, (the "Executive") and Ralcorp Holdings, Inc., a corporation with
its principal place of business at 000 Xxxxxx Xxxxxx, Xx. Xxxxx, Xxxxxxxx,
and its subsidiaries and affiliates (the "Company"),
WITNESSETH THAT:
RECITALS
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WHEREAS, the Company was incorporated on October 23, 1996; and
WHEREAS, the Company was spun-off from its former parent company,
Ralcorp Holdings, Inc. ("Old Ralcorp") on January 31, 1997; and
WHEREAS, Executive is presently employed by the Company and has
substantial experience as an executive level manager for the Company; and
WHEREAS, the Company desires to secure Executive's employment for a
definite period of time; and
WHEREAS, Executive desires to be employed by the Company in the
executive capacity described in SECTION TWO of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
promises contained herein, the Company and Executive hereby agree as follows:
SECTION ONE
DEFINITIONS
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The following terms shall have the meanings set forth below:
A. "Involuntary Termination" shall be any termination of the
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Executive's employment with the Company, other than a Termination for Cause,
(a) to which the Executive objects orally or in writing or (b) which follows
any of the following:
(i) without the express written consent of the Executive, (a)
the assignment of the Executive to any duties materially
inconsistent with the Executive's positions, duties,
responsibilities and status on the effective date of this
Agreement or (b) a material change in the Executive's
titles, offices, or reporting responsibilities as in effect
on the effective date of this Agreement and with respect to
either (a) or (b) the situation is not remedied within
thirty (30) days after receipt by the Company of written
notice by the Executive; provided, however, (a) and (b)
herein shall not constitute an "Involuntary Termination" if
either situation is in connection with the Executive's
death or disability; or
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(ii) without the express written consent of the Executive, a
reduction in the Executive's annual salary or opportunity
for total annual compensation, in effect on the effective
date of this Agreement which is not remedied within thirty
(30) days after receipt by the Company of written notice by
the Executive; or
(iii) without the express written consent of the Executive, the
Executive is required to be based more than 100 miles from
Executive's office location on the effective date of this
Agreement, except for required travel on business to an
extent substantially consistent with the business travel
obligations of the Executive on the effective date of this
Agreement; or
(iv) without the express written consent of the Executive, (a)
failure by the Company to continue in effect benefit and
compensation plans which may include a stock ownership
plan, a stock purchase plan, a stock option plan, a defined
benefit pension plan, a defined contribution pension plan,
a life insurance plan, a health and accident plan, and/or a
disability plan which are, in the aggregate, substantially
equivalent in value to those in which the Executive is
participating or entitled to participate on the effective
date of this Agreement; or (b) the taking of any action by
the Company that would (1) adversely affect the
participation in or materially reduce the aggregate value
to the Executive of benefits under such plans either in
terms of the amount of benefits provided or the level of
the Executive's participation relative to other
participants; or (2) cause a failure to provide the number
of paid vacation days to which the Executive was then
entitled in accordance with the Company's normal vacation
policy in effect on the effective date of this Agreement,
which in either situation (a) or (b) is not remedied within
thirty (30) days after receipt by the Company of written
notice by the Executive; or
(v) the liquidation, dissolution, consolidation, or merger of
the Company or transfer of all or substantially all of its
assets, unless a successor or successors (by merger,
consolidation, or otherwise) to which all or a significant
portion of its assets have been transferred expressly
assumes in writing all duties and obligations of the
Company as here set forth.
The Executive's continued employment shall not constitute consent
to, or a waiver of rights with respect to any circumstances set
forth above.
B. "Termination for Cause" shall be a termination because of:
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(i) the continued failure by the Executive to devote reasonable
time and effort to the performance of the Executive's duties
(other than any such failure resulting from the Executive's
incapacity due to physical or mental illness) after written
demand therefor has been delivered to the Executive by the
Company that specifically identifies how the Executive has
not devoted reasonable time and effort to the performance of
the Executive's duties; or
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(ii) the willful engaging by the Executive in misconduct which is
materially injurious to the Company, monetarily or otherwise;
or
(iii) the Executive's conviction of a felony or a crime involving
moral turpitude;
in any case as determined by the Board of Directors of the Company
(the "Board") upon the good faith vote of not less than a majority
of the Directors then in office, after reasonable notice to the
Executive specifying in writing the basis or bases for the proposed
Termination for Cause and after the Executive has been provided an
opportunity to be heard before a meeting of the Board held upon
reasonable notice to all Directors; provided, however, that a
Termination for Cause shall not include a termination attributable
to:
(i) bad judgment or negligence on the part of the Executive other
than habitual negligence; or
(ii) an act or omission believed by the Executive in good faith to
have been in, or not opposed to, the best interests of the
Company and reasonably believed by the Executive to be lawful.
C. "Voluntary Termination" shall be any termination of the
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Executive's employment with the Company other than an Involuntary
Termination or a Termination for Cause.
SECTION TWO
EMPLOYMENT
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The Company hereby employs Executive as its Corporate Vice President
and Director of Product Supply. Executive's day-to-day reporting
responsibilities shall be to the Company's Chief Executive Officer. Subject
to SECTION EIGHT, the Company may modify or realign Executive's duties and
responsibilities as it deems necessary during the term of this Agreement.
SECTION THREE
BEST EFFORTS OF EXECUTIVE
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Executive agrees that the Executive will at all times faithfully and to
the best of the Executive's ability, experience and talent, perform all of
the duties that may be required of or from the Executive pursuant to the
express and implicit terms hereof. Executive acknowledges that the Executive
is obligated to manage the business of the Company in a sound and
businesslike manner and in material conformity with all laws and regulations
governing the conduct of the business of the Company.
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SECTION FOUR
TERM
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The term of this Agreement shall be three years beginning on February
1, 1997 and ending on January 31, 2000 (the "Term"). This Agreement may be
extended for additional periods upon the mutual written agreement of the
parties.
SECTION FIVE
COMPENSATION
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During the Term of this Agreement, Executive shall be entitled to the
following:
A. The Company shall pay Executive a minimum monthly base salary of
$12,500.00, payable on the last day of each month. The base salary may be
increased by the Company at any time during the Term of this Agreement;
provided, however, that until January 31, 2000, Executive's monthly base
salary shall not be less than the amount set forth above.
B. The Company shall pay Executive a minimum annual bonus of
$25,000.00, payable in October of each year. The annual bonus may be
increased by the Company at any time during the Term of this Agreement;
provided, however, that until January 31, 2000, Executive's annual bonus
shall not be less than the amount set forth above.
C. Executive shall be provided with an executive level benefit
program including stock options and/or stock grants as determined by the
Company. Any such stock options shall become immediately exercisable, and
such stock grants shall vest immediately, upon Executive's Involuntary
Termination during the Term of this Agreement.
D. Executive shall be eligible for coverage under such pension plan,
group health insurance plan, 401(k) plan, vacation, holiday and other
programs or policies in effect from time to time for salaried Executives of
the Company.
SECTION SIX
OLD RALCORP STOCK OPTIONS
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It is understood that Old Ralcorp previously granted Executive certain
Non-Qualified Stock Options. It is further understood and agreed that Old
Ralcorp paid Executive a lump sum payment that represents fair compensation
for these Non-Qualified Stock Options. Executive understands and agrees that
Executive received this lump sum payment in lieu of these options and that
Executive forfeits all Old Ralcorp Non-Qualified Stock Options, and rights
thereunder, which Executive had not exercised at the time Executive received
the lump sum payment.
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SECTION SEVEN
CHANGE OF CONTROL
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Contemporaneously with the execution of this Agreement, the Executive
and the Company will enter into a Management Continuity Agreement providing
benefits under certain circumstances in the event of a Change-in-Control of
the Company, as defined in such Management Continuity Agreement. Such
benefits will be in addition to those provided under this Agreement;
provided, however, that any benefits paid under said Management Continuity
Agreement shall be reduced by amounts paid hereunder in respect of periods
after Executive's termination of employment following a Change-in-Control.
Executive agrees that the previous Management Continuity Agreement entered
into by Executive with Old Ralcorp is null and void and Executive releases
any claims to benefits under the previous Management Continuity Agreement.
SECTION EIGHT
TERMINATION
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A. The Company reserves the right to terminate the employment of
Executive at any time with or without cause. However, in the event of
Executive's Involuntary Termination prior to January 31, 2000, Executive
shall be entitled to the following:
(i) payment within sixty (60) days after Executive's
Involuntary Termination of Executive's minimum base salary
under this Agreement for the remainder of the three-year
term, in cash in a lump sum without discount or pro-ration;
and
(ii) payment within sixty (60) days after Executive's
Involuntary Termination of the minimum annual bonuses which
Executive would have been entitled to receive under this
Agreement during the remainder of the three-year term, in
cash in a lump sum without discount or pro-ration; and
(iii) continuation for the remainder of the three-year term of
the Executive's participation in each life, health,
accident and disability plan in which the Executive was
entitled to participate immediately prior to the
Executive's termination, upon the same terms and
conditions, including those with respect to spouses and
dependents, applicable at such time; provided, however,
that if the terms of any such benefit plan do not permit
continued participation by the Executive, then the Company
will arrange, at the Company's sole cost and expense, to
provide the Executive a benefit substantially similar to,
and no less favorable than, on an after-tax basis, the
benefit the Executive was entitled to receive under such
plan immediately prior the Executive's termination;
provided further, however, that the benefit to be provided
or payments to be made hereunder may be reduced by the
benefits provided or payments made (in either case on an
after-tax basis) by a subsequent employer for the same
occurrence or event; and
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(iv) payment in cash in a lump sum, within sixty (60) days after
the Executive's termination, of the difference between the
present values as of the date of the termination of (a) the
benefits under the Company's Retirement Plan and
Supplemental Retirement Plan which the Executive and the
Executive's beneficiary, if applicable, would have been
entitled to receive had the Executive remained employed by
the Company at a compensation level equal to that provided
in this Agreement for the entirety of the three-year term,
and (b) the actual benefit, if any, to which the Executive
and the Executive's beneficiary are entitled under the
Retirement Plan and the Supplemental Retirement Plan. For
purposes of this subparagraph, present value shall be
calculated in accordance with Section 417(e)(3) of the
Internal Revenue Code of 1986, as amended (the "Code"); no
reduction factors for early retirement shall be applied in
the calculation of benefits; and
(v) payment, on a current basis, of any actual costs and
expenses of litigation incurred by the Executive, including
costs of investigation and reasonable attorney's fees, in
the event the Executive is a party to any legal action to
enforce or to recover damages for breach of this Agreement,
or to recover or recoup from the Executive or the
Executive's legal representative or beneficiary any amounts
paid under or pursuant to this Agreement, regardless of the
outcome of such litigation, plus interest at the applicable
federal rate provided for in Section 7872(f)(2) of the
Code.
B. The Executive may file with the Secretary or any Assistant
Secretary of the Company a written designation of a beneficiary or contingent
beneficiaries to receive the payments described above in the event of the
Executive's death following the Executive's Involuntary Termination but prior
to payment by the Company. The Executive may from time to time revoke or
change any such designation of beneficiary and any designation of beneficiary
pursuant to this Agreement shall be controlling over any other disposition,
testamentary or otherwise; provided, however, that if the Company shall be in
doubt as to the right of any such beneficiary to receive such payments, it
may determine to pay such amounts to the legal representative of the
Executive, in which case the Company shall not be under any further liability
to anyone. In the event that such designated beneficiary or legal
representative becomes a party to a legal action to enforce or to recover
damages for breach of this Agreement, or to recover or recoup from the
Executive or the Executive's estate, legal representative or beneficiary any
amounts paid under or pursuant to this Agreement, regardless of the outcome
of such litigation, the Company shall pay their actual costs and expenses of
such litigation, including costs of investigation and reasonable attorneys'
fees, plus interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code; provided, however, that the Company shall not be
required to pay such costs and expenses in connection with litigation to
determine the proper payee, among two or more claimants, of the payments
pursuant to this Agreement.
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C. In the event of Executive's Voluntary Termination or Termination
for Cause, Executive shall not be entitled to receive any of the pay or
benefits that would have been provided pursuant to this Agreement except for
pay already earned and benefits already vested at the time of such
termination.
D. In the event that Executive's employment is terminated for any
reason during the Term of this Agreement, Executive shall not be eligible to
participate in any other severance pay plan established by the Company for
its Executives unless such severance pay plan provides benefits of greater
value in the aggregate than those available under this Agreement, in which
case Executive shall be entitled to benefits under such severance pay plan
but not under this Agreement.
SECTION NINE
CONFIDENTIALITY
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Executive agrees that, in addition to any other limitations contained
in this Agreement, regardless of the circumstances of Executive's termination
of employment, Executive will not take, or communicate or disclose to any
person, firm, corporation or other entity, any information relating to the
Company's customer lists, prices, trade secrets, methods, systems,
advertising, or any other confidential knowledge or secrets that Executive
might from time to time acquire with respect to the business of the Company
or any of its affiliates or subsidiaries, unless Executive obtains written
consent of the Company. Executive also specifically acknowledges the
continued validity and effect of any Agreement as to Confidentiality and
Inventions previously signed by Executive and that the terms of any such
agreement are incorporated into this Agreement by this reference.
SECTION TEN
NON-COMPETITION
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In the event Executive's employment terminates pursuant to SECTION
EIGHT, Executive will not, for the duration of this Agreement, on Executive's
own behalf, or on behalf of any other person, firm, partnership or
corporation, engage in the private label cereal business as either a
proprietor, officer, director, partner, employee or consultant.
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SECTION ELEVEN
ARBITRATION
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As additional consideration for this Agreement, Executive agrees that
any differences, claims, or matters in dispute arising between the Company
and Executive out of or in connection with the Executive's employment or the
termination of the Executive's employment by the Company including, but not
limited to the terms and conditions of this Agreement, allegations of
wrongful termination, allegations of employment discrimination or allegations
of discriminatory or retaliatory discharge under any federal, state or local
discrimination law shall be submitted by them to arbitration by the American
Arbitration Association, or its successor, and the determination of the
American Arbitration Association, or its successor, shall be final and
absolute. The arbitrator shall be governed by the duly promulgated rules and
regulations of the American Arbitration Association, or its successor, and
the pertinent provisions of the laws of the State of Missouri relating to
arbitration. The decision of the arbitrator may be entered as a judgment in
any court of the State of Missouri or elsewhere.
SECTION TWELVE
MISCELLANEOUS PROVISIONS
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A. The Company shall be entitled to withhold from any payments made
pursuant to this Agreement, including SECTION EIGHT hereof, any federal,
state or local taxes required to be withheld by law or regulation.
B. This Agreement represents the entire agreement between the
parties and any prior understandings or representations of any kind preceding
the effective date of this Agreement shall not be binding on either party
except to the extent incorporated into this Agreement. This Agreement shall
not be altered, amended or modified except in writing signed by the Chief
Executive Officer of the Company and by the Executive.
C. This Agreement shall be binding upon and shall inure to the
benefit of the assigns, heirs, legatees or personal representatives of
Executive and the successors or assigns of the Company.
D. This Agreement shall inure to the benefit of and be binding upon
the Company and its successors. 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. The Company may not assign this Agreement
other than to a successor to all or substantially all of the business and/or
assets of the Company. Neither this Agreement nor any right or
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interest hereunder shall be assignable or transferable by Executive, the
Executive's beneficiaries or Executive's legal representatives without the
Company's prior written consent; provided, however, that nothing in this
Section shall preclude (i) Executive from designating a beneficiary to
receive any benefit payable hereunder upon the Executive's death, or (ii) the
executors, administrators, or other legal representatives of the Executive's
estate from assigning or transferring any rights hereunder to the person or
persons entitled thereunto.
E. The headings of sections are included solely for convenience of
reference and shall not control the meaning or interpretation of any of the
provisions of this Agreement.
F. This Agreement shall be construed according to the laws of the
State of Missouri without giving effect to the conflict of laws provisions
thereof.
G. No term or condition of this Agreement shall be deemed to have
been waived, nor shall there be any estoppel against the enforcement of any
provision of this Agreement, except by written instrument of the party
charged with such waiver or estoppel. No such written waiver shall be deemed
a continuing waiver unless specifically stated therein, and each such waiver
shall operate only as to the specific term or condition waived and shall not
constitute a wavier of such term or condition for the future or of any act
other than that specifically waived.
H. If, for any reason, any provision of this Agreement is held
invalid, such invalidity shall not affect any other provision of the
Agreement not held so invalid, and each such other provision shall to the
full extent consistent with law continue in full force and effect.
The parties have entered into this Agreement based solely upon the
terms and conditions set forth herein. THIS AGREEMENT CONTAINS A BINDING
ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
13th day of May, 1997.
RALCORP HOLDINGS, INC.
/s/ X. X. Xxxxxxxxx By: /s/ J. R. Xxxxxxxxxx
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Executive J. R. Xxxxxxxxxx
Chief Executive Officer
and President
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