EMPLOYMENT AGREEMENT
THIS AGREEMENT is made between Farmland Industries, Inc. (“Farmland”), with its principal place of
business at 0000 Xxxxx Xxx Xxxxxxxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, and Xxxx X. Xxxxxxx, (“Executive”).
WHEREAS, Executive and Farmland desire and agree to govern their employment relationship by means of
this Employment Agreement.
NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, and for good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, it is mutually covenanted
and agreed by and between the parties as follows:
1. Position and Term. Farmland hereby employs Executive to serve as Executive Vice President and
Chief Financial Officer and in such other senior management positions as may be assigned from time to time. The
period of employment under this Agreement shall commence on September 1, 2000 and continue for a rolling two (2)
year period and shall be referred to as the “Employment Period.” In no event, will such Employment Period be
automatically extended beyond Executive’s 65th birthday. Executive’s employment may be earlier terminated by
either party subject to the rights and obligations of the parties set forth herein. While employed hereunder,
Executive will devote his best efforts to Farmland and shall perform the duties of the position outlined herein
and such other duties as may be reasonably assigned by Farmland. While it is understood and agreed that
Executive’s job capacities may change at Farmland’s discretion, Executive’s level of responsibility shall not be
substantially reduced at any time. Executive shall not, without the prior written consent of Farmland, render
services of a business, professional, or commercial nature to any other person or firm, whether for compensation
or otherwise during the Employment Period.
2. Employment at Will. The parties acknowledge this Employment Agreement does not create any
obligation on Executive’s part to work for Farmland nor on Farmland’s part to employ Executive for any fixed
period of time and that this Employment Agreement may be terminated at any time with or without cause, subject
only to the rights and obligations set forth herein.
3. Termination of Employment.
(a) Death. Executive’s employment shall terminate upon his death.
(b) Termination by the Company
(i) Without Cause. Farmland may terminate Executive’s employment, at any time and for any reason
whatsoever, without cause, effective upon delivery of written notice of termination to
Executive.
(ii) For Cause. Farmland may terminate Executive’s employment at any time for Cause, effective upon delivery
of written notice of termination to Executive. If such termination by Farmland is asserted to
be for Cause, such termination notice shall state the grounds constituting Cause. As used
herein, “Cause” shall mean: (a) willful misconduct by Executive which is damaging or
detrimental to the business and affairs of Farmland, monetarily or otherwise, as determined by
the Chief Executive Officer in the exercise of good faith business judgment; (b) a material
breach of this Employment Agreement by Executive which is not “cured” by Executive following at
least thirty (30) days’ written notice of such breach; (c)gross negligence in the execution of
his material assigned duties; (d) the commission by Executive of any act involving fraud,
dishonesty or moral turpitude; (e) the indictment for, being bound over for trial following
preliminary hearing, or the conviction of Executive of any felony in either a state or federal
court proceeding; or (f) failure to reasonably perform his duties and obligations or to
implement policies and directions promulgated by Farmland following at least thirty (30) days’
written notice of such failure.
(iii) Disability. Farmland may terminate Executive’s employment if Executive sustains a disability which is
serious enough that Executive is not able to perform the essential functions of his position,
with or without reasonable accommodations, as defined and if required by applicable state and
federal disability laws. Executive shall be presumed to have such a disability if he qualifies
to begin receiving disability income insurance payments under any applicable Long Term
Disability Income plan. Further, Executive shall be presumed to have such a disability if he
is substantially incapable of performing his duties for a period of more than twelve (12) weeks.
(c) Termination by Executive
(i) Voluntary Resignation. Executive may terminate his employment at any time and for any reason
whatsoever, effective upon delivery of written notice of termination to Farmland.
(ii) “Good Reason” Resignation. Executive may terminate this contract and his employment for “Good Reason”
following at least thirty (30) days’ written notice of the asserted “Good Reason” to Farmland,
if such “Good Reason” is not then “cured” by Farmland. If such termination by Executive is
asserted to be for “Good Reason”, such termination shall state the grounds that Executive
claims constitutes Good Reason. As used herein, “Good Reason” shall mean a material breach of
this Employment Agreement by Farmland, or a demotion such that Executive does not serve in
substantially the capacity described herein or a position of comparable responsibility.
4. Compensation.
(a) Base Salary. During his employment, Farmland shall pay Executive an initial“Base Salary” at the rate
of Four Hundred Twelve Thousand Eighty Dollars ($412,080) per year, commencing on the effective date of this Employment Agreement,
payable in accordance with Farmland’s regular payroll practices and policies. Farmland shall annually
review the amount of Base Salary. Any upward adjustment shall not require a written amendment to this
Employment Agreement.
(b) Other Compensation and Employee Benefits. During the Employment Period, Executive shall be eligible to
participate in the Company’s variable pay and long-term incentive compensation programs. Executive
shall be entitled to participate in any additional executive compensation programs and employee benefit
plans generally applicable to senior management employees of the Company pursuant to the terms and
conditions of such programs and plans. Nothing contained herein shall preclude Farmland from
terminating or amending any such plan or program in its sole discretion.
5. Post-Termination Payments by Farmland.
(a) Terminations without Cause or Resignation for Good Reason. In the event that Executive’s employment is
terminated by Farmland without Cause or by Executive for Good Reason, and Executive signs (and does not
rescind, as allowed by law) a Release of Claims in a form satisfactory to Farmland which assures, among
other things, that Executive will not commence any litigation or other claims as a result of his
employment or termination, and agrees to honor all of Executive’s other obligations as required by this
Agreement, Farmland will provide Executive a severance payment equal to two years Base Salary and
Executive will be entitled to a pro-rata payment under any then existing annual or long-term variable
pay or incentive plans or other bonus arrangements then in effect, if applicable objectives are achieved.
(b) Termination for Cause, or Voluntary Resignation. If Executive’s employment is terminated by Farmland
for Cause or by Executive as a Voluntary Resignation, Executive shall be entitled only to his rights (a)
to receive the unpaid portion of his Base Salary, prorated to the date of termination, (b) to receive
reimbursement for any ordinary and reasonable business expenses for which he had not yet been
reimbursed, (c) to receive payment for accrued and unused vacation days, (d) to receive payments under
Farmland’s pension, deferred compensation or other benefit plans in accordance with the terms of such
plans, and (e) to continue certain health insurance at his expense pursuant to COBRA.
6. Other Executive Obligations. Executive agrees that the following provisions will apply throughout
Executive’s Employment Period and for the specified post-employment period, regardless of the reason for
termination or resignation;
(a) Nondisclosure of Confidential Information. Except to the extent required in
furtherance of Farmland’s business in connection with matters as to which Executive is involved as an
employee, Executive will not, during the term of his employment and for an unlimited period thereafter,
directly or indirectly: (1) disclose or furnish to, or discuss with, any other person or entity any
confidential information concerning Farmland or its business or employees, acquired during the period of
his employment by Farmland; (2) individually or in conjunction with any other person or entity, employ
or cause to be employed, any such confidential information in any way whatsoever or (3) without the
written consent of Farmland, publish or deliver any copies, abstracts or summaries of any papers,
documents, lists, plans, specifications or drawings containing any such confidential information.
(b) Non-Interference. Executive will not, during the Employment Period and for an
unlimited period thereafter, directly or indirectly attempt to encourage, induce or otherwise solicit
any employee or other person or entity to breach any agreement with the Company or otherwise interfere
with the advantageous business relationship of the Company with any person or entity. Executive
specifically agrees not to solicit, on Executive’s own behalf or on behalf of another, any of the
Company’s employees to resign from their employment with the Company in order to go to work elsewhere.
Executive further specifically agrees not to make any disparaging remarks of any sort or otherwise
communicate any disparaging remarks about the Company or any of its members, equity holders, directors,
officers or employees, directly or indirectly, to any of the Company’s employees, members, equity
holders, directors, customers, vendors, competitors, or other people or entities with whom the Company
has a business or employment relationship.
(c) Non-Competition. Executive agrees that during the term of his employment and
thereafter for a period of one (1) year, Executive will not directly or indirectly engage in or carry on
a business that is in direct competition with any significant business unit of Farmland as conclusively
determined by the President and Chief Executive Officer. Further, Executive agrees that during this
same period of time he will not act as an agent, representative, consultant, officer, director,
independent contractor or employee of any entity or enterprise that is in direct competition with any
significant business unit of Farmland as conclusively determined by the President and Chief Executive
Officer.
(d) Cooperation in Claims. For an unlimited period following his period of employment, at
the request of Farmland, Executive will cooperate with Farmland with respect to any claims or lawsuits
by or against Farmland where Executive has knowledge of the facts involved in such claims or lawsuits.
Executive shall be entitled to reasonable compensation for Executive’s time and expense in rendering
such cooperation. Further, Executive will decline to voluntarily aid, assist or cooperate with any
party who has claims or lawsuits against Farmland, or with their attorneys or agents. Farmland and
Executive both acknowledge, however, that nothing in this paragraph shall prevent Executive from
honestly testifying at an administrative hearing, arbitration, deposition or in court, in response to a
lawful and properly served subpoena in a proceeding involving Farmland.
(e) Remedies. The parties recognize and agree that, because any breach by Executive of
the provisions of this Paragraph 6 would result in damages difficult to ascertain, Farmland shall be
entitled to injunctive and other equitable relief to prevent a breach or threatened breach of the
provisions of this Paragraph 6. Accordingly, the parties specifically agree that Farmland shall be
entitled to temporary and permanent injunctive relief to enforce the provisions of this Paragraph 6 and
that such relief may be granted without the necessity of proving actual damages or irreparable harm.
(f) Enforceability. Executive agrees that considering Executive’s relationship with
Farmland, and given the terms of this Agreement, the restrictions and remedies set forth in Paragraph 6
are reasonable. Notwithstanding the foregoing, if any of the covenants set forth above shall be held to
be invalid or unenforceable, the remaining parts thereof shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable parts have not been included therein. In the event
the provisions relating to time periods and/or areas of restriction shall be declared by a court of
competent jurisdiction to exceed the maximum time periods or areas of restriction permitted by law, then
such time periods and areas of restriction shall be amended to become and shall thereafter be the
maximum periods and/or areas of restriction which said court deems reasonable and enforceable.
Executive also agrees that Farmland’s action in not enforcing a particular breach of any part of
Paragraph 6 will not prevent Farmland from enforcing any other breaches that Farmland discovers, and
shall not operate as a waiver by Farmland against any future enforcement of a breach.
7. Notices. Notices hereunder shall be in writing and shall be delivered personally or sent
return receipt requested and postage prepaid, addressed as follows:
If to Executive: Xxxx X. Xxxxxxx
c/o Farmland Industries, Inc.
0000 Xxxxx Xxx Xxxxxxxxxx
Xxxxxx Xxxx, XX 00000
If to Farmland: Xxxxxx X. Xxxxx
President and Chief Executive Officer
Farmland Industries, Inc.
0000 Xxxxx Xxx Xxxxxxxxxx
Xxxxxx Xxxx, XX 00000
with a copy to: Executive Vice President
Administrative Group and General Counsel
Farmland Industries, Inc.
0000 Xxxxx Xxx Xxxxxxxxxx
Xxxxxx Xxxx, XX 00000
8. Binding Agreement. The provisions of this Agreement shall be binding upon, and shall inure to
the benefit of, the respective heirs, legal representatives and successors of the parties hereto.
9. Missouri Law. This Agreement shall be governed by and construed in accordance with the laws of
the State of Missouri, unless otherwise pre-empted by federal law.
10. Captions and Section Headings. Captions and paragraph headings used herein are for convenience
only and are not a part of this Agreement and shall not be used in construing it.
11. Invalid Provisions. If any provision of this Agreement shall be unlawful, void, or for any
reason unenforceable, it shall be deemed severable from, and shall in no way affect the validity or
enforceability of, the remaining provisions of this Agreement.
12. Waiver of Breach. The failure to enforce at any time any of the provisions of this Agreement,
or to require at any time performance by the other party of any of the provisions hereof, shall in no way be
construed to be a waiver of such provisions or to affect either the validity of this Agreement or any part hereof
or the right of either party thereafter to enforce each and every provision in accordance with the terms of this
Agreement.
13. Entire Agreement. This Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, representations and
understandings of the parties with respect thereto. No modification or amendment of any of the provisions of
this Agreement shall be effective unless in writing specifically referring hereto and signed by Executive and the
Chief Executive Officer.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date set forth above.
EXECUTIVE FARMLAND INDUSTRIES, INC.
By: XXXX X. XXXXXXX By: XXXXXX X. XXXXX
--------------------------------- -------------------------------------------
Xxxx X. Xxxxxxx Xxxxxx X. Xxxxx
Executive Vice President and President and Chief Executive Officer
Chief Financial Officer
