Exhibit 10.22
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") made between Xxxxx X. Xxxxxx
(the "Executive") and Agribrands International, Inc., a corporation with its
principal place of business at 0000 Xxxxx Xxxxx Xxxxx, Xx. Xxxxx, Xxxxxxxx,
00000 and its subsidiaries and affiliates (the "Company").
WITNESSETH THAT:
RECITALS
WHEREAS, the Company and Ralcorp Holdings, Inc. (hereinafter "Rome, Inc.")
contemplate entering into an Agreement and Plan of Reorganization pursuant to
which (i) Athens and Rome will form a holding company (the "Holding Company"),
(ii) Athens and Rome will each merge with separate wholly owned subsidiaries of
Holding Company so as to become subsidiaries of Holding Company (the
"Reorganization"), and (iii) the date on which such Reorganization is
consummated shall be referred to as the "Closing"; and
WHEREAS, the Executive is currently a party to a Management Continuity
Agreement dated April 1, 1998 by and between the Executive and
Company("Pre-Reorganization Management Continuity Agreement"); and
WHEREAS, the Executive currently possesses grants of options to acquire
pursuant to the terms of each grant common stock of the Company under that
certain 1998 Incentive Stock Plan maintained by the Company; and
WHEREAS, the parties deem it advisable to set forth in this Agreement the
terms and conditions of a new employment agreement and to separately agree that
the Executive will receive a new management continuity agreement on
substantially the same terms as the Pre-Reorganization Management Continuity
Agreement ("Management Continuity Agreement") in the event that the
Reorganization occurs; and
WHEREAS, the Executive waives any right to benefits under the
Pre-Reorganization Management Continuity Agreement and such agreement shall be
immediately terminated and have no further force and effect and the Executive
agrees to be bound and subject to the terms of the Agreement and the Management
Continuity Agreement; and
WHEREAS, in the event that the Reorganization does not occur, the parties
hereto hereby affirm and acknowledge their continuing obligations under the
Pre-Reorganization Management Continuity Agreement and acknowledge that this
Agreement and the new Management Continuity Agreement shall be null and void;
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the Company and Executive hereby agree as follows:
SECTION ONE
DEFINITIONS
The following terms shall have the meanings set forth below:
A. "Involuntary Termination" shall be any termination of the
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
(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 an automobile allowance, a stock option 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
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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:
(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
(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
Executive's employment with the Company other than an Involuntary Termination or
a Termination for Cause.
SECTION TWO
EMPLOYMENT
The Company hereby employs Executive as its Chief Financial Officer and to
become Chief Financial Officer of the Holding Company. Executive's reporting
responsibilities shall be to the Chief Executive Officer of the Company and upon
formation of the Holding Company to the Chief Executive Officer of the Holding
Company Subject to SECTION EIGHT, the Company may modify or realign Executive's
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duties and responsibilities as it deems necessary during the term of this
Agreement.
SECTION THREE
BEST EFFORTS OF EXECUTIVE
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.
SECTION FOUR
TERM
The term of this Agreement shall be three (3) years beginning on August 7,
2000 and ending on the date which immediately precedes the third (3rd)
anniversary of the Closing (the "Term"). This Agreement may be extended for
additional periods upon the mutual written agreement of the parties.
Notwithstanding any provision herein to the contrary, in the event the
Reorganization does not close pursuant to the terms of the Plan of
Reorganization, this Agreement shall be null and void and the terms of the
Pre-Reorganization Management Continuity Agreement between the Executive and
Athens in effect on the date immediately preceding the Term shall govern the
Executive's employment relationship with Athens as if this Agreement had not
been executed.
SECTION FIVE
COMPENSATION
During the Term of this Agreement, Executive shall be entitled to the
following:
A. The Company shall pay Executive a minimum monthly base salary in
an amount equal to the greater of the Executive's monthly base salary as of the
Closing or $15,125.00 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 expiration of the Term, 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 in an
amount equal to the greater of the Executive's minimum annual bonus as of the
Closing or $82,500 payable in November 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 expiration of the Term, Executive's annual bonus
shall not be less than the amount set forth above.
C. Executive shall be provided with a benefit program including stock
options and/or stock grants as determined by the Company. Any such stock options
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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 COMPANY STOCK OPTIONS
It is understood that the Company previously granted Executive certain
Non-qualified Stock Options. It is further understood and agreed that the
Executive (i) waives the right to accelerate such Stock Options by virtue of the
Reorganization and (ii) shall, as of the Closing, exchange such options for
options to purchase shares of Holding Company Common Stock having the same terms
and conditions as are in effect immediately prior to the Closing (including such
terms and conditions as may be incorporated by reference into the agreements
evidencing the Stock Options pursuant to the plans or arrangement pursuant to
which such Stock were granted and taking into account the provisions of Section
6(i) hereof) except that the exercise price and number of shares issuable upon
exercise shall be divided and multiplied, respectively, by the Company Exchange
Ratio as defined in the Agreement and Plan of Reorganization By and Between
Company and Rome, Inc., Dated as of August 7, 2000.
SECTION SEVEN
CHANGE OF CONTROL
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
Pre-Reorganization Management Continuity Agreement entered into by Executive
with the Company is null and void and Executive releases any claims to benefits
under the previous Management Continuity Agreement; provided however, that in
the event the Reorganization is not consummated, the Management Continuity
Agreement shall be null and void and the terms of the Pre-Reorganization
Management Continuity Agreement shall be given full force and effect as if this
Agreement and the Management Continuity Agreement had not been executed.
SECTION EIGHT
TERMINATION
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 expiration of the Term, Executive
shall be entitled to the following:
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(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 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 Term, in
cash in a lump sum without discount or pro-ration; and
(iii) after the Executive's Involuntary Termination continuation
for the remainder of the 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
(iv) payment in cash a lump sum, within sixty (60) days after the
Executive's Involuntary termination, equal to the present values as of the date
of termination of any other executive benefit, such as a car allowance, annual
medical examination, or other benefit, to which Executive may have been entitled
as an officer or employee of the Company; 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
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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.
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 Involuntarily
Terminated or Terminated for Cause 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
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
ARBITRATION
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
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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 ELEVEN
MISCELLANEOUS PROVISIONS
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 an authorized 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 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.
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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 7th day
of August, 2000.
Xxxxx X. Xxxxxx AGRIBRANDS INTERNATIONAL, INC.
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Executive
