EXHIBIT 10.(iii)F
THIS AGREEMENT is made effective as of August 1, 2000 by and between Xxxxxx X. Xxxxx (hereafter
"Executive") and Farmland Industries, Inc., a Kansas cooperative corporation (together with all affiliates, the
"Company").
WHEREAS,
Executive has been designated as the Company’s President and Chief
Executive Officer, effective September 1, 2000;
NOW, THEREFORE, it is hereby agreed as follows:
1. Employment. The Company hereby agrees to employ Executive as its Chief Executive Officer
effective September 1, 2000, and Executive hereby agrees to accept employment with the Company in such position
upon the terms and conditions set forth in this Agreement.
2.
Period of Employment; Termination of
Agreement. The period of employment as Chief Executive
Officer shall commence on September 1, 2000 and continue for a rolling three (3)
year period until written notice on non-extension is provided by either party.
In no event, will such term 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.
3. Position, Duties, Responsibilities. Executive shall be employed as the Chief Executive
Officer. Executive shall exercise such authority and perform such duties and services, consistent with such
position, as may be assigned to him from time to time by the Board of Directors (the "Board").
4. Devotion of Time and Best
Efforts. Except for vacations and absences due to
temporary illness, Executive shall devote his full time, best efforts and
undivided attention and energies during his employment to the performance of his
duties and to advance the Company’s interests, as determined by the Board.
During his employment, Executive shall not, without the prior approval of the
Board, be engaged in any other business activity which conflicts with the duties
of Executive hereunder, whether or not such business activity is pursued for
gain, profit or other pecuniary advantage. Executive may continue his current
civic and charitable activities and his current service on various boards.
5. Compensation and Benefits.
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(a) Base Salary. The Company shall pay Executive an initial "Base Salary" at the rate of
Five Hundred Eighty One Thousand, Two Hundred and Twenty-Four Dollars ($581,224) per year. The Board
shall annually review the amount of Base Salary. Such review and any increase shall occur on the current
customary schedule. Any such upward adjustment shall not require a written amendment to this
Agreement.
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(b)
Other Compensation and Employee Benefits.
During the term of this employment hereunder 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 in this Agreement
shall preclude the company from terminating or amending any such plan or program
in its sole discretion.
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(c)
Business Expenses. The Company shall bear
such ordinary and necessary business expenses incurred by executive in
performing his duties hereunder as the Company determined from time to time,
provided that Executive accounts promptly for such expenses to the Company in
the manner prescribed from time to time by the Company.
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6. Early Termination. This Agreement may be terminated prior to its scheduled expiration as
follows:
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(a) Death. Executive's employment shall terminate upon Executive's death.
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(b) Termination by the Company.
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(1) Request for Resignation. The Company, by action of the Board, may request Executive's resignation at
any time and for any reason whatsoever, without cause, effective in accordance with the
delivery of a written request for resignation to Executive. Executive agrees to immediately
tender his resignation upon receipt of any such request.
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(2) For Cause. The Company, by action of the Board, may terminate the Executive's employment at any time
for Cause, effective upon delivery of written notice of termination to Executive. If such
termination by the Company is asserted to be for Cause, such termination notice shall state the
grounds that the Board claims constitute Cause. As used herein, "Cause" shall mean (a) willful
misconduct by Executive which is damaging or detrimental to the business and affairs of the
Company, monetarily or otherwise, as determined by the Board in the exercise of its good faith
business judgment; (b) a material breach of this Agreement by Executive, (c) chronic alcoholism
or any other form of substance addiction on the part of Executive, (d) the commission by
Executive of any act involving fraud or dishonesty or moral turpitude, (e) the indictment for,
being bound over for trial following a preliminary hearing, or the conviction of Executive of,
any criminal act in either a state or federal court proceeding, or (f) willful refusal to
implement policies promulgated by the Board.
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(3) Disability. The Company, by action of the Board, may terminate the Executive's employment if Executive
sustains a disability which is serious enough that Executive is not able to perform the
essential functions of Executive's job, 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 for purpose of this Agreement if Executive qualifies, because of
illness or incapacity, to begin receiving disability income insurance payments under the
long-term disability income insurance policy that the Company maintains for the benefit of
Executive. If there is no such policy in effect at the date of Executive's potential
disability, or if Executive does not qualify for such payments, Executive shall nevertheless be
presumed to have such a disability if Executive is substantially incapable of performing
Executive's duties for a period of more than twelve (12) weeks.
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(c) Termination by Executive.
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(1) Voluntary Resignation. Executive may terminate the Employment Period and Executive's employment at any
time and for any reason whatsoever, effective upon delivery of written notice of resignation to
the Company.
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(2) Good Reason Resignation. Executive may terminate the Employment Period and resign his employment at any
time for Good Reason, effective upon delivery of written notice of resignation to the Company.
If such resignation by Executive is asserted to be for "Good Reason," such resignation and
notice shall state the grounds that Executive claims constitute Good Reason. As used herein
"Good Reason" shall mean a material breach of this Agreement by the Company, which breach is not
cured within thirty (30) days of the Company's receipt of notice of such breach, or a demotion
such that Executive does not serve as the Chief Executive Officer of the Company.
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7. Post-Termination Payments by the Company.
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(a) Resignation Requested by Company or Resignation for Good Reason. In the event that
Executive's employment is terminated prior to expiration of the term by the Company through a Request
for Resignation or by Executive for Good Reason, and the Executive:
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(1)
signs (and does not rescind, as allowed by law) a Release of Claims in a form
satisfactory to the Company which assures, among other things, that Executive
will not commence any type of litigation or other claims as a result of his
employment or termination of employment; and
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(2) honors all of Executive's other obligations as required by this Agreement;
the Company will provide Executive severance benefits ("Severance Benefits") as follows:
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(i) a severance payment equal to Executive's then existing Base Salary through the unexpired portion of the
term of this Agreement;
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(ii)
additional severance in the form of pro-rata payouts under any variable
compensation plan, long-term incentive program or other bonus arrangements then
in effect; |
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(iii)
vested benefits under the Company-sponsored pension plan, 401(k) plan, SERP, and
deferred compensation plan, in accordance with the terms and conditions of such
plans; |
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(iv)
if such termination occurs prior to Executive attaining the age of sixty-two
(62), the Company shall pay Executive the difference between the retirement
benefit he would have received under the Company-sponsored retirement plan had
he retired at age sixty-two (62) and the retirement benefit he would receive
under such plan based on his date of termination of employment; |
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(v)
if such termination occurs prior to August 31, 2005, the Company shall also
provide Executive the following continued employment benefits (or their
equivalent) through August 31, 2005 on the same terms generally available to
other senior officers: life insurance, health and dental insurance, and other
non-pension, non-retirement benefits then generally provided to senior officers
of the Company; |
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(vi)
Executive may continue to have family coverage under the Company-sponsored
medical plan until he reaches age 65, becomes eligible for Medicare or becomes
eligible for coverage by another group plan, but Executive shall be responsible
for paying the retiree premium rate for such coverage. |
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(b) Termination by Reason of Death or Disability, Termination by the Company for Cause or
Termination by Executive Through Voluntary Resignation. If Executive's employment is terminated prior
to expiration of the term by reason of the Executive's death or disability, by the Company for Cause, or
by Executive as a Voluntary Resignation, Executive shall be entitled only to his rights (a) to receive
the unpaid portion of this 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 his variable or
incentive compensation for each full or partial year (on a pro rata basis) during which he was employed,
to the extent earned and accrued, pursuant to the terms and conditions of the applicable compensation
plan(s), (e) to receive vested benefits under the Company's pension plan, 401(k) plan, SERP, deferred
compensation or other benefit plans in which the Executive has participated, all to the extent and in
accordance with the terms of such plans, and (f) to continue certain health insurance at his expense
pursuant to COBRA. |
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(c) Sole Source of Payments. The post-termination payments provided herein shall be in
lieu of all other compensation, or other payments or consideration of any kind under any contract, plan
program or practice related to Executive's employment. |
8. Nonrenewal of Agreement. The Company may elect not to renew this Agreement, and thereby to
terminate Executive's employment hereunder without any severance obligations, upon at lest three (3) year's prior
written notice of non-extension to Executive.
9. Consulting. If Executive
qualifies for Severance Benefits under Paragraph 7(a), Executive agrees to make
himself available to the Company as needed to consult for a period of one year
following termination of employment. Executive shall be available to consult up
to an average of forty (40) hours per month. Executive shall be entitled to
reasonable compensation for his time in providing such consulting services and
to reimbursement of his out of pocket expenses.
10. Other Executive Obligations. Executive agrees that the following provisions will apply
throughout Executive's period of employment and for the specified post-employment period, regardless of the
reason for termination or resignation;
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(a) Nondisclosure of Confidential Information. Except to the extent required in
furtherance of the Company'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 the Company or its business or employees, acquired during the period
of his employment by the Company; (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 the Company, publish or deliver any copies, abstracts or summaries of any papers,
documents, lists, plans, specifications or drawings containing any such confidential information.
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(b) Non-Interference. Executive will not, during the term of his employment 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. |
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(c) Non-Competition. Executive agrees that during the term of his employment and
thereafter for a period of two (2) years, Executive will not directly or indirectly engage in or carry
on a business that is in direct competition with any significant business unit of the Company as
conclusively determined by the Board of Directors. 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 the Company as conclusively determined by the Board of Directors. |
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(d) Cooperation in Claims. For an unlimited period following his period of employment, at
the request of the Company, Executive will cooperate with the Company with respect to any claims or
lawsuits by or against the Company 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 the Company, or with their attorneys or agents. The
Company 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 the Company. |
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(e) Remedies. The parties recognize and agree that, because any breach by Executive of
the provisions of this Paragraph 10 would result in damages difficult to ascertain, the Company shall be
entitled to injunctive and other equitable relief to prevent a breach or threatened breach of the
provisions of this Paragraph 10. Accordingly, the parties specifically agree that the Company shall be
entitled to temporary and permanent injunctive relief to enforce the provisions of this Paragraph 10 and
that such relief may be granted without the necessity of proving actual damages or irreparable harm. |
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(f) Enforceability. Executive agrees that considering Executive's relationship with the
Company, and given the terms of this Agreement, the restrictions and remedies set forth in Paragraph 10
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 the Company's action in not enforcing a particular breach of any part of
Paragraph 10 will not prevent the Company from enforcing any other breaches that the Company discovers,
and shall not operate as a waiver by the Company against any future enforcement of a breach. |
11. Notices. Notices hereunder shall be in writing and shall be delivered personally or sent
return receipt requested and postage prepaid, addressed as follows:
c/o Farmland Industries, Inc.
0000 Xxxxx Xxx Xxxxxxxxxx
Xxxxxx Xxxx, XX 00000
If to the Company: Chairman of the Board
c/o Corporate Secretary
Farmland Industries, Inc.
0000 Xxxxx Xxx Xxxxxxxxxx
Xxxxxx Xxxx, XX 00000
with a copy to: Vice President and General Counsel
Farmland Industries, Inc.
0000 Xxxxx Xxx Xxxxxxxxxx
Xxxxxx Xxxx, XX 00000
12. 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.
13. 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.
14. 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.
15. 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.
16.
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.
17.
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 a member of the Board
upon authorization of the Board to do so.
IN WITNESS
WHEREOF, the parties have executed this Agreement effective as of the date set
forth above.
EXECUTIVE FARMLAND INDUSTRIES, INC.
_/s/XXXXXX X. HONSE___ By: __/S/XXXXXX SHIVELY____________
Xxxxxx X. Xxxxx Xxxxxx Xxxxxxx, Chairman of the
Board of Directors
By: _/S/XXXX BEZNER________________
Xxxx Xxxxxx, Vice-Chairman of the
Board of Directors
