SEPARATION AGREEMENT AND RELEASE
EXHIBIT 10.1
|
Swift & Company | |
| 0000 Xxxxxxxxxx Xxxxxx | ||
| Xxxxxxx, Xxxxxxxx 00000 |
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (“Agreement”) is made and entered into by and
between Swift & Company, a Delaware corporation (“Company”), and Xxxxxxxx Xxxxx
(“Executive”) and, solely for the purposes of Sections 3(c) and 4, Swift Foods Company, a
Delaware Corporation (“Swift”).
1. Termination. Executive’s employment with Company terminated due to his resignation
effective May 26, 2006 (the “Termination Date”), through which date Executive received his
regular salary. Executive will also receive payment for his accrued but unused twelve days of
vacation in the amount of $17,769.24 (less applicable withholding and other deductions). Executive
will also be paid for any reimbursable business expenses incurred through the Termination Date and,
by signing this Agreement, acknowledges that he has been so reimbursed. Executive will receive
notice of Executive’s right to elect continued medical, dental, and vision coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). Executive may also
choose to convert his group life and disability insurance coverages to individual policies, in
accordance with the terms of those group insurance programs. Executive understands and agrees that
he is not to sign this Agreement prior to the Termination Date.
2. Definitions.
(a) “Claims” means all theories of recovery of whatever nature, whether known or
unknown, and now recognized by the law or equity of any jurisdiction. This term includes causes of
action, charges, indebtedness, losses, claims, liabilities, and demands, whether arising in equity
or under the common law or under any contract or statute. This term includes any claims of
discrimination, harassment, retaliation, retaliatory discharge, or wrongful discharge, and any
other claim which is alleged or which could be alleged by Executive, or on Executive’s behalf, in
any lawsuit or other proceeding. This term includes any claims and rights arising under the Age
Discrimination in Employment Act of 1967, 29 U.S.C. §621, et seq.; Title VII of the Civil Rights
Act of 1964, 42 U.S.C. §2000e, et seq.; the Executive Retirement Income Security Act of 1974, 29
X.X.X. §0000, et seq.; and the Americans with Xxxxxxxxxxxx Xxx, 00 X.X.X. §00000, et seq.; the
Worker Adjustment and Retraining Xxxxxxxxxxxx Xxx, 00 X.X.X. §0000, et seq.; the Family and Medical
Leave Act, 29 U.S.C. §2601, et seq.; and any other federal, state or local law or regulation
regarding employment or the termination of employment. This term includes any and all rights,
benefits or claims Executive may have under any employment contract or arrangement or under any
severance, bonus, or incentive compensation plan, program or agreement.
(b) “Damages” means all elements of relief or recovery of whatever nature, whether
known or unknown, which are recognized by the law or equity of any jurisdiction which
is sought or which could be sought by Executive, or on Executive’s behalf, in any lawsuit or
other proceeding. This term includes actual, incidental, indirect, consequential, compensatory,
exemplary, liquidated and punitive damages; rescission; attorneys’ fees; interest; costs; equitable
relief; and expenses. This term also includes wages, benefits or other compensation owed, or
allegedly owed to Executive, by virtue of Executive’s employment or termination of employment with
Company, including severance, bonuses, or incentive compensation, payable pursuant to any plan,
program, or agreement.
(c) “Executive” means and includes Executive acting individually; in any corporate or
other representative capacity; and on behalf of Executive’s heirs, executors, administrators, legal
representatives, successors, beneficiaries, and assigns.
(d) “Released Parties” means and includes Company, and its past, present and future
owners, trustees, parents, subsidiaries, affiliates, and related entities, and all of the foregoing
entities’ and persons’ past, present and future directors, managers, officers, employees,
associates, agents, lenders, shareholders, partners, benefit plans (and each such plan’s
fiduciaries, administrators, trustees, sponsors and representatives), insurance carriers,
predecessors, shareholders, successors, assigns, executors, administrators, and representatives, in
both their representative and individual capacities. Each of the Released Parties is an intended
beneficiary of this Agreement.
3. Consideration. In consideration for Executive’s promises herein, Company shall:
(a) Pay Executive a severance benefit in the gross aggregate amount of $787,500 ($43,750 per
month for an 18-month period) (less applicable withholding and deductions), in substantially equal
and consecutive bi-weekly payments beginning within ten (10) days of Executive’s execution and
return of this Agreement; provided that the initial such payment shall be $133,269.18 and shall
cover the period from the Termination Date until August 25, 2006 (as defined in Section 21).
During the eighteen (18) month period covered by these payments and as further consideration for
these payments, Executive agrees to make himself available to, and cooperate with, the Company
regarding Company matters of which Executive has knowledge, as reasonably requested by Company.
Executive further agrees that, for purposes of determining Executive’s eligibility for unemployment
insurance benefits, these payments shall be considered pay in lieu of notice. No deductions will
be made from these payments for the purpose of making any contributions to Company’s 401(k) plan.
Upon the death or disability of Executive during the eighteen month period, the obligations of
Executive to make himself available to, and to cooperate with, the Company as set forth in this
Section shall terminate; provided, however that such a termination shall not affect the duties and
obligations set forth in the other sections of this Agreement or the obligation of the Company to
make the payments set forth in this Section to Executive, his legal representatives, heirs, or
successors, as applicable.
(b) Pay the employer’s portion of the monthly premium cost of continued medical, dental, and
vision insurance coverage for Executive and, if applicable, Executive’s dependents under Company’s
group medical, dental, and vision plan from the Termination Date through November 25, 2007 (or such
earlier time that Executive obtains alternate coverage) to the extent Executive elects to continue
this coverage in accordance with COBRA. Executive acknowledges that he is required to pay
Executive’s portion for such continued COBRA
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coverage. By “employer’s portion,” it is meant that portion of each monthly premium equal to
the amount of the monthly premium paid by Company at the time immediately preceding the Termination
Date. By “Executive’s portion,” it is meant the remaining portion necessary for continued COBRA
coverage, including any administrative charge. If Executive elects such COBRA coverage, the period
during which Company pays the employer’s portion of the premium costs will count towards the
maximum period of COBRA coverage.
(c) On the day following the Reaffirmation Date (assuming no revocation of this Agreement by
Executive), all of Executive’s stock options, consisting of options to purchase 1,000,000 shares of
Swift’s stock, issued under the option agreements and the plans pursuant to which such options were
issued that are not then vested shall be vested in full. Executive shall be permitted to exercise,
in accordance with the terms of the options, any and all such rights until the earlier of (i) the
date the option would otherwise expire in accordance with its terms, (ii) the 270th day after a
Qualifying Public Offering (as defined therein) or (iii) the 90th day after the completion of a
merger, combination, share exchange or similar transaction involving Swift pursuant to which the
securities for which the option is then exercisable are listed on a national securities exchange or
the Nasdaq National Market System or any successor thereto. Swift hereby waives any rights to
purchase any such stock options and any shares of common stock of Swift issued upon the exercise of
any such stock options, pursuant to the terms of any such stock options or the Stockholders
Agreement (as defined in Section 4).
The consideration set forth in this Section 3 is collectively referred to as “Consideration.”
4. Purchase of Stock. Pursuant to Section 4.5 of that certain Stockholders Agreement
dated as of September 19, 2002 among HMTF Rawhide, L.P., ConAgra Foods, Inc., Hicks, Muse, Xxxx &
Xxxxx Incorporated, Swift and the other individuals named therein, as amended (the
“Stockholders Agreement”), and in connection with Executive’s termination of employment,
Swift shall purchase from Executive, and Executive shall transfer and sell to Swift, free and clear
of all encumbrances, no later than the close of business on September 6, 2006, 247,433 shares of
common stock of Swift owned by Executive for cash consideration of $249,907.33. Executive shall,
in exchange for such consideration, deliver to Swift at the closing of such sale stock certificates
representing such shares, with such certificates being duly endorsed (or accompanied by duly
executed stock powers) and otherwise in good form for delivery. Upon the closing of such purchase
and sale, Executive shall have no further rights with respect to such shares. The terms of this
Section 4 shall constitute the notice of purchase required under the Stockholders Agreement.
5. Release.
(a) Executive releases and discharges the Released Parties from, and hereby waives, all Claims
and Damages, including those related to, arising from or attributable to (i) Executive’s employment
with Company, (ii) the termination of that employment, (iii) the operations of the Company and its
subsidiaries, and (iv) all other acts or omissions related to any matter regarding, involving or
related to the Company or its subsidiaries at any time prior to and including the date of
Executive’s execution of this Agreement; except that this release will not affect Executive’s
entitlement to benefits (1) under this Agreement, (2) pursuant to the terms of Company’s benefit
plans (other than severance or separation pay plans) governed by the
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Executive Retirement Income Security Act of 1974 (“ERISA”), or (3) with respect to
Executive’s stock options.
(b) Executive understands and expressly agrees that the release in Section 5(a) extends to all
Claims of every nature and kind, known or unknown, suspected or unsuspected, past or present (but
not future), which Claims are arising from, attributable to, or related to Executive’s employment
with Company, the termination of Executive’s employment, or any alleged action or inaction of the
Released Parties, and that all such Claims are hereby expressly settled or waived. Executive
further understands and expressly agrees that the release in Section 5(a) includes the waiver of
any Claims and rights Executive may have against any of the Released Parties under the Age
Discrimination in Employment Act, the Older Workers Benefit Protection Act, or under any other law
prohibiting age discrimination, arising prior to and including the date of Executive’s execution of
this Agreement.
(c) Executive agrees not to bring or cause to be brought any Claims against any of the
Released Parties in any court or before any arbitral authority, or accept any Damages for any
Claims against any of the Released Parties, which Claims are related to, arising from or attributed
to Executive’s employment with Company, the termination of that employment, and any other matter
covered by the release in Section 5(a). Executive represents and warrants that Executive has not
brought or caused to be brought any such Claims, or accepted any such Damages for any such Claims,
against any of the Released Parties.
(d) Notwithstanding anything else contained herein to the contrary, the parties agree and
acknowledge that this Section 5, including the release contained in Section 5(a) shall not act as a
release or otherwise affect any Claim Executive may have against any of Executive’s employers prior
to the Company or Swift.
6. Confidential Information.
(a) Executive acknowledges that (i) Company has trade, business and financial secrets and
other confidential and proprietary information (collectively, the “Confidential
Information”), (ii) the Confidential Information has been developed or acquired by Company
through the expenditure of substantial time, effort and money and provides Company with an
advantage over competitors who do not know or use such Confidential Information, and (iii) during
Executive’s employment by Company, Executive has had access to and has become acquainted with
Confidential Information of Company. Confidential Information includes marketing plans, Company’s
commodity marketing position, grain trades and strategy, budgets, long-range plans, sales data,
technical information, processes and compilations of information, records, specifications and
information concerning customers or vendors, manuals relating to suppliers’ products, customer
lists, information regarding methods of doing business, the identity of suppliers, and personnel
information. Confidential Information also includes this Agreement and its terms. Confidential
Information does not include information, knowledge, and data that is publicly available or becomes
publicly available other than through an act or omission of Executive, or becomes available on a
non-confidential basis from a source other than Executive so long as such source is not known by
Executive to be bound by a confidentiality agreement with or other obligations of secrecy to the
other party.
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(b) Executive shall hold in confidence and not directly or indirectly disclose or use or copy
or make lists of any Confidential Information, except to the extent authorized in writing by the
General Counsel of Company or compelled by legal process, and except that Executive may disclose
this Agreement to Executive’s spouse, attorneys, and financial advisors, upon their agreement not
to disclose this Agreement or its terms to any third party. Executive agrees to use reasonable
efforts to give Company notice of any and all attempts to compel disclosure of any Confidential
Information, in such a manner so as to provide Company’s General Counsel with written notice within
one (1) business day after Executive is informed that such disclosure will be compelled. Such
written notice shall include a description of the information to be disclosed, the court,
government agency, or other forum through which the disclosure is sought, and the date by which the
information is to be disclosed, and shall contain a copy of the subpoena, order or other process
used to compel disclosure.
(c) Executive agrees that, on or before the Termination Date, Executive shall have assembled
and delivered to Company each and every original and copy of any and all documents, compilations,
recordings, and any other form of written, printed, recorded, typed and every other matter, thing
or material of any kind which Executive has in Executive’s possession, custody or control that is
or was the property of Company or relates in any way to the business of Company.
7. Agreement Not to Compete or Solicit.
(a) In consideration of the benefits to be received by Executive hereunder, including the
Consideration, Executive agrees not to directly or indirectly, individually or as an officer,
director, employee, shareholder, consultant, contractor, partner, joint venturer, agent, equity
owner or in any capacity whatsoever, engage in the fresh meat (beef, pork and lamb) business (the
“Competing Business”), of any of Tyson Foods, Inc., Xxxxxxx Incorporated, National Beef Packing
Company, LLC or Smithfield Foods, Inc., or any of their respective subsidiaries, affiliates,
successors or assigns, during the period beginning on the Termination Date and ending on November
25, 2007. Notwithstanding the foregoing, the Company agrees that Executive may own less than two
percent of the outstanding voting securities of any of the foregoing entities so long as the
Executive does not otherwise participate in such Competing Business in any way prohibited by this
Section 7(a).
(b) In further exchange for the Consideration, Executive agrees that for a period of eighteen
(18) months following the Termination Date, Executive will not, directly or indirectly for
Executive or for others, in any geographic area or market where Company is conducting any business
as of the Termination Date or has during the previous twelve (12) months conducted any business:
recruit, solicit or induce or attempt to recruit, solicit or induce any employee of Company to
terminate his or her employment with Company, or hire or assist in the hiring of any such employee
by a person, association, or entity not affiliated with Company.
(c) Executive acknowledges and agrees that the covenants contained in this Section 7 are
reasonable and necessary to protect Company’s Confidential Information and the business and
goodwill of Company and that their enforcement would not cause Executive any undue hardship or
unreasonably interfere with Executive’s ability to earn a livelihood.
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8. Injunctive Relief.
(a) Executive acknowledges that violation of the covenants in Sections 6 or 7 will cause
irreparable damage to Company, entitling Company to an injunction in a court of competent
jurisdiction, in addition to whatever remedies Company may have at law or in equity, including
recovery of reasonable attorneys’ fees and costs incurred by Company in enforcing the terms of
Sections 6 or 7.
(b) Executive further acknowledges and agrees that if Executive violates the covenants
contained in Section 7 and Company brings legal action for injunctive or other equitable relief,
Executive agrees that Company shall not be deprived of the benefit of the full period of such
covenants, as a result of the time involved in obtaining such relief. Accordingly, Executive
agrees that the provisions in Section 7 shall have a duration determined pursuant to that
paragraph, computed from the date the relief is granted. Nothing herein is intended to limit the
relief available to Company for Executive’s violation of the covenants contained in Section 7.
(c) As used in Sections 6, 7 or 8, “Company” shall include any affiliates of the Company.
9. Cooperation in Litigation. Executive agrees that Executive shall cooperate with, and
assist, Company in defense of any claim, litigation or administrative proceeding brought against
Company or any other Released Party, as reasonably requested by Company. Such cooperation and
assistance shall include (i) interviews of Executive by legal counsel for Company or other Released
Party as reasonably requested by Company’s counsel, (ii) Executive providing documents (or copies
thereof) and executing affidavits as reasonably requested by Company’s counsel, (iii) Executive
appearing for depositions, trials, and other proceedings as reasonably requested by Company’s
counsel, and (iv) Executive communicating with any party adverse to Company, or with a
representative, agent or legal counsel for any such party, concerning any pending or future claims
or litigation or administrative proceeding solely through legal counsel for Company. Nothing in
this Section 9 is intended to cause Executive to testify other than truthfully in any proceeding or
affidavit. The Company shall reimburse Executive for reasonable out-of-pocket expenses that he
incurs in connection with cooperation and assistance he provides under the terms of this Section.
10. Promise Not to Seek Employment. In further exchange for the Consideration, Executive
agrees never to seek employment (as an employee, temporary employee or contractor) with the Company
or its subsidiaries and affiliates.
11. Non-Disparagement. Executive agrees to refrain from engaging in any conduct, or from
making any comments or statements, which have the purpose or effect of harming the reputation or
good will of Company or any of the Released Parties.
12. Warranties. Executive agrees, represents and warrants that:
(a) the Consideration is not something to which Executive is otherwise indisputably entitled,
is good and sufficient consideration for Executive’s execution and
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nonrevocation of this Agreement, and is paid by or on behalf of the Released Parties in full
satisfaction and settlement of any Claims and Damages;
(b) Executive is legally and mentally competent to sign this Agreement;
(c) Executive is the sole owner of any Claims that have been or could have been asserted,
Executive has the requisite capacity and authority to make this Agreement, and no portion of any
existing or potential Claims has been sold, assigned, pledged or hypothecated by Executive to any
third party; and
(d) Executive presently possesses the exclusive right to receive all of the Consideration paid
in consideration for this Agreement.
13. Choice of Law. This Agreement shall be interpreted and construed in accordance with
and shall be governed by the laws of the State of Colorado, without reference to principles of
conflict of law of Colorado or any other jurisdiction, and, when applicable, the laws of the United
States.
14. Entire Agreement. This Agreement constitutes the entire agreement of the parties
relating to the subject matter hereof. Any previous agreements with respect to Executive’s
employment, other than the agreements and plans governing the stock options previously granted to
the Executive, are superseded by this Agreement and hereby terminated, except that Executive’s
obligations under any confidentiality, non-disclosure, intellectual property or noncompetition
agreement which Executive entered into with Company shall remain in full force and effect. No
term, provision or condition of this Agreement may be modified in any respect except by a writing
executed by both Executive and Company. No person has any authority to make any representation or
promise on behalf of any of the parties not set forth in this Agreement. This Agreement has not
been executed in reliance upon any representation or promise except those contained herein.
15. Acknowledgment of Terms. Executive acknowledges that Executive has carefully read this
Agreement; that Executive has had the opportunity for review of it by Executive’s attorney; that
Executive fully understands its final and binding effect; that Company admits to no wrongdoing in
connection with Executive’s employment, the termination of Executive’s employment, or any other
matter covered by the release in Section 5(a); that this Agreement is intended as a compromise of
all Claims which Executive has alleged or may allege against any of the Released Parties; that the
only promises or representations made to Executive to sign this Agreement are those stated herein;
and that Executive is signing this Agreement voluntarily.
16. Waiver. The failure of Company to enforce or to require timely compliance with any
term or provision of this Agreement shall not be deemed to be a waiver or relinquishment of rights
or obligations arising hereunder, nor shall this failure preclude the enforcement of any term or
provision or avoid the liability for any breach of this Agreement.
17. Severability. Each part, term or provision of this Agreement is severable from the
others. Notwithstanding any possible future finding by a duly constituted authority that a
particular part, term or provision is invalid, void or unenforceable, this Agreement has been made
with the clear intention that the validity and enforceability of the remaining parts, terms
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and provisions shall not be affected thereby; provided that if the release is invalidated,
Executive shall execute a valid release or this entire Agreement shall be voidable, at the option
of Company, thereby requiring Executive to return the Consideration, to the extent permitted under
applicable law.
18. Costs and Attorneys’ Fees. If any action is initiated to enforce this Agreement, the
prevailing party shall be entitled to recover from the other party its reasonable costs and
attorneys’ fees.
19. Technology Equipment. Executive shall be entitled to retain the cellular
telephone and blackberry device previously issued to him by the Company; provided that all charges
with respect to such equipment (e.g., monthly service charges) shall be the sole responsibility of
Executive after the Termination Date.
20. Construction. This Agreement shall be deemed drafted equally by all the parties. Its
language shall be construed as a whole and according to its fair meaning. Any presumption or
principle that the language is to be construed against any party shall not apply. The headings in
this Agreement are only for convenience and are not intended to affect construction or
interpretation. This Agreement represents a compromise of disputed Claims and is not to be
construed as an admission, direct or indirect, against any interest of the parties. Any references
to paragraphs, subparagraphs, or sections are to those parts of this Agreement, unless the context
clearly indicates to the contrary. Also unless the context clearly indicates to the contrary, (a)
the plural includes the singular and the singular includes the plural; (b) “and” and “or” are each
used both conjunctively and disjunctively; (c) “any,” “all,” “each,” or “every” means “any and all,
and each and every”; (d) “includes” and “including” are each “without limitation;” and (e)
“herein,” “hereof,” “hereunder” and other similar compounds of the word “here” refer to the entire
Agreement and not to any particular paragraph, subparagraph, section or subsection.
21. Timing. Executive acknowledges (a) Executive has 21 days to consider this Agreement
before executing it, although Executive may execute this Agreement before the 21 days expires, but
not before the Termination Date, (b) Executive may revoke this Agreement within 7 days after
Executive executes it, (c) such revocation must be in writing and received by Company’s Vice
President of Human Resources, Xxxx Xxxxxxxx, within this 7-day period, (d) the release set forth in
Section 4 shall not become effective or enforceable, the consideration set forth in Section 3 shall
not be paid, and the vesting of options pursuant to Section 3(c) hereof shall not occur, until
after the expiration of this 7-day period without revocation by Executive (the last day of such
7-day period being referred to herein as the “Reaffirmation Date”), and Executive returns
this Agreement to Company’s Vice President of Human Resources, Xxxx Xxxxxxxx, (e) Company may
require, as a prerequisite for payment of the Consideration, Executive to acknowledge in a signed
and dated writing that Executive did not revoke this Agreement during the 7-day period, and (f)
Executive’s acceptance of any of the Consideration after expiration of the 7-day period shall
constitute Executive’s acknowledgment that Executive did not revoke this Agreement during the 7-day
period.
22. Advice to Consult Counsel. Company hereby advises Executive to consult with an
attorney prior to executing this Agreement.
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23. Successors. This Agreement is personal to the Executive and without the prior
written consent of the Company shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive’s legal representatives, heirs, and successors and shall be binding
upon and enforceable against the Company and its successors and assigns.
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In witness whereof, the undersigned have executed this Agreement as of September 5, 2006, to
be effective as of the Termination Date, and intending to be legally bound as provided herein.
DO NOT SIGN BEFORE YOUR LAST DAY OF EMPLOYMENT
WITH SWIFT & COMPANY
WITH SWIFT & COMPANY
| EXECUTIVE | ||||
| /s/ Xxxxxxxx Xxxxx | ||||
| SWIFT & COMPANY | ||||
| /s/ Xxxx X. Xxxxxxxx | ||||
Vice President, Human Resources |
||||
| Solely for the purposes of Section 3(c) and Section 4: |
||||
| SWIFT FOODS COMPANY | ||||
| /s/ Xxxx X. Xxxxxxxx | ||||
Vice President, Human Resources |
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