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EXHIBIT 10.7
CONSULTING AND ADVISORY AGREEMENT
THIS AGREEMENT (the "Agreement"), is made effective as of August 25,
2000, by and between The ▇▇▇▇▇ Packing Company, a North Carolina corporation
(together with its subsidiaries and affiliates, the "Company") and ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ (the "Consultant").
WHEREAS, pursuant to the terms of that certain Acquisition Agreement by
and among the Company, Premium Standard Farms, Inc. and PSF Acquisition Corp.,
dated as of July 12, 2000 (the "Acquisition Agreement"), it was agreed that the
Company and the Consultant would enter into this Agreement; and
WHEREAS, the Company desires to retain the services of the Consultant
and the Consultant desires to perform certain services for the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties hereto agree as follows:
1. Services. The Consultant agrees to provide various consulting and
advisory services to the Company as determined by the Company from time to time,
including but not limited to:
a. Working with the Company to develop and implement policies
and procedures with respect to the business and operations of the
Company;
b. Attending meetings and participating in conference calls or
other forms of communication to share the Consultant's ideas,
experience and expertise with the Company;
c. Assisting in the development, maintenance and enhancement
of positive relations between the Company and both the governmental
authorities and the broader communities in which the Company operates;
d. Promoting the interests of the Company in connection with
public relations efforts; and
e. Providing any other services the Company believes will be
beneficial in furthering its goals.
Such services will be provided at times reasonably agreed to by the
Company and the Consultant.
2. Compensation.
2.1 Consulting Fee. The Consultant shall be compensated in
accordance with the compensation structure set forth on Schedule 1 attached
hereto.
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2.2 Reimbursement of Expenses. The Company shall reimburse the
Consultant for all reasonable and necessary expenses properly incurred or paid
by the Consultant in connection with, or related to, the performance of services
under this Agreement, including but not limited to travel, lodging and
reasonable entertainment expenses. However, the Consultant shall not incur
expenses in excess of $1000 during any one month period without the prior
written consent of the Company. The Consultant shall submit to the Company
itemized statements on a monthly basis together with receipts, in a form
satisfactory to the Company, of all such expenses incurred. The Company shall
pay to the Consultant amounts shown on each such statement within thirty (30)
days of receiving Consultant's itemized statement.
2.3 Benefits. The Consultant shall not be entitled to any
benefits, coverage or privileges, including, without limitation, social
security, unemployment, medical or pension payments, made available to employees
of the Company; provided, however, that, the Company shall provide medical
insurance coverage to Consultant during the term of this Agreement except as
otherwise provided herein on terms substantially equivalent to those offered by
the Company to its employees. The Company agrees that the Consultant's right to
continuation of health care coverage under "COBRA" will commence upon the
termination of coverage hereunder.
2.4 Taxes. No income tax or payroll tax of any kind shall be
withheld or paid by the Company on behalf of the Consultant for any payment
under this Agreement. The Consultant agrees to be responsible for all taxes and
similar payments arising out of any of her activities contemplated by this
Agreement, including, without limitation, federal, state and local income tax,
social security tax (FICA), self-employment taxes, unemployment insurance taxes
and all other taxes, fees and withholding. The Company shall not be obligated to
pay to the Consultant any amounts hereunder until the Consultant shall provide
to the Company the Consultant's federal tax identification number and any other
necessary information required by the Company to comply with applicable tax and
other laws.
3. Term and Termination.
3.1 Term. The term of this Agreement shall be three years,
commencing on the date of this Agreement and ending on August 25, 2003;
provided, however, that, this Agreement may be earlier terminated as set forth
in Section 3.2 below.
3.2 Termination.
(a) Termination For Cause. This Agreement may be
terminated by the Company prior to the expiration of the term for "Cause" as
defined below, or by the Consultant by resignation. For purposes of this Section
3.2(a), "Cause" shall mean (i) any public disparagement of the Company, (ii)
Consultant's conviction of a felony or any crime involving moral turpitude;
(iii) the willful engaging by Consultant in conduct injurious to the Company,
monetarily or otherwise; (iv) the willful failure by Consultant to perform the
services referenced in Section 1 hereof; or (v) a material breach of this
Agreement, including any breach of the confidentiality and non-competition
obligations contained in Sections 5 and 6. In the event of termination for Cause
or resignation by the Consultant, the Consultant shall be entitled to retain all
amounts previously paid hereunder and shall be entitled to (i) the portion of
the consulting fee set forth on Schedule 1 attached hereto earned but not yet
paid prior to the effective date of such
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early termination; (ii) expenses properly incurred but not yet paid prior
to the effective date of such early termination; and (iii) the medical insurance
coverage set forth in Section 2.3 above up to and including the effective date
of such early termination. Such payments shall constitute full settlement of any
and all claims of the Consultant of every description against the Company and
Company shall have no obligation or liability to make additional payments to
Consultant hereunder.
(b) Termination Without Cause. This Agreement may be
terminated by the Company prior to the expiration of the term without Cause. In
the event of termination without Cause or upon the death or disability of the
Consultant, the Consultant shall be entitled to (i) full immediate payment of
all earned but not yet paid, and all unearned consulting fee as set forth on
Schedule 1 attached hereto, for the full term of this Agreement; and (ii) the
medical insurance coverage set forth in Section 2.3 above, for the full term of
this Agreement. Such payments shall constitute full settlement of any and all
claims of the Consultant of every description against the Company and Company
shall have no other obligation or liability to Consultant hereunder.
4. Cooperation.
The Consultant shall use her best efforts in the performance of her
obligations under this Agreement. The Company shall provide such access to its
information and property as may be reasonably required to permit the Consultant
to perform her obligations under this Agreement. The Consultant shall cooperate
with the Company's personnel, shall not interfere with the conduct of the
Company's business and shall observe all rules, regulations and security
requirements of the Company concerning the safety of persons and property.
5. Proprietary Information.
5.1 For purposes of this Agreement, "Proprietary Information"
shall include all information (whether or not patentable and whether or not
copyrightable) owned, possessed or used by the Company, including, without
limitation, any data, formula, vendor information, customer information,
apparatus, equipment, trade secret, process, research, report, technical data,
know-how, software, software documentation, hardware design, technology,
marketing or business plan, forecast, unpublished financial statement, budget,
license, price, cost and employee list that is communicated to, learned of,
developed or otherwise acquired by the Consultant in the course of her service
as a consultant to the Company.
5.2 The Consultant acknowledges that her relationship with the
Company is one of high trust and confidence and that in the course of providing
service to the Company she will have access to and contact with Proprietary
Information. The Consultant agrees that she will not, during the term of this
Agreement or at any time thereafter, disclose to others, or use for her benefit
or the benefit of others, any Proprietary Information.
5.3 The Consultant's obligations under this Section 5 shall
not apply to any information that (i) is or becomes known to the general public
under circumstances involving no breach by the Consultant of this Section 5,
(ii) is disclosed to Consultant by a third party
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unaffiliated with the Company who is not subject to an obligation of
confidentiality to the Company, or (iii) is approved for release by written
authorization of the Company.
5.4 Upon termination of this Agreement or at any other time
upon request by the Company, the Consultant shall promptly deliver to the
Company all records, files, memoranda, notes, designs, data, reports, price
lists, customer lists, drawings, plans, computer programs, software, software
documentation, sketches, laboratory and research notebooks and other documents
(and all copies or reproductions of such materials) containing or based upon
Proprietary Information.
6. Restrictive Covenant. As a material part of this Agreement, and in
consideration of the agreements contained in the Acquisition Agreement, the
Consultant agrees she shall not at any time during the term of this Agreement:
6.1 work for, consult for, be an independent contractor for,
be employed by or be an officer, director, shareholder or partner of, or
otherwise own any interest in, any entity competing with the Company, including
the hog production or processing businesses, within the states of North
Carolina, Florida and New York;
6.2 solicit, directly or indirectly, any of the Company's
existing or prospective customers for any business or entity competing with the
Company; and
6.3 solicit, induce, or attempt to induce any current employee
of the Company to leave the Company's employ or hire any such employee.
If any restriction set forth in this Section 6 is found by any court of
competent jurisdiction to be unenforceable because it extends for too long a
period of time, or over too great a range of activities, or in too broad a
geographic area, it shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which it may be
enforceable.
7. Independent Contractor Status.
The Consultant and the Company understand and intend that the
Consultant shall perform all services under this Agreement as an independent
contractor and not as an employee of the Company. The manner of and means by
which the Consultant executes and performs her obligations hereunder are to be
determined by the Consultant in her reasonable discretion. The Consultant is not
authorized to assume or create any obligation or responsibility, express or
implied, on behalf of, or in the name of, the Company or to bind the Company in
any manner, unless, in each instance, the Consultant shall receive the prior
written approval of the Company to so assume, obligate or bind the Company.
8. Existing Agreements.
The Company and the Consultant agree that this Agreement shall in all
respects replace any existing agreements related to employment between the
Consultant and the Company. The Consultant hereby releases, acquits, and forever
discharges the Company of and from any and all liability, claims, demands,
obligations, actions, causes of action and damages of any kind or
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nature whatsoever, whether known or unknown, anticipated or unanticipated,
suspected or unsuspected, past, present, or future, arising out of or relating
in any way to such prior agreements related to employment.
9. Wrongful Use of Company's Name.
After termination of the Consultant's services hereunder, the
Consultant shall not indicate on any stationery, business card, advertising, or
other business materials that she is, or was, formerly a consultant for the
Company or of any division or subsidiary of the Company, except in the bona fide
submission of resumes and the filling out of applications in the course of
seeking employment.
10. Injunction. In view of the Consultant's access to Proprietary
Information granted hereunder, and in consideration of the compensation set
forth in Section 1 hereof and in consideration of the value of such property to
the Company, the Consultant acknowledges that the non-disclosure covenants and
the restrictive covenants set forth in Sections 5 and 6, are reasonable and
necessary to protect and maintain the proprietary and other legitimate business
interests of the Company, and that the enforcement thereof would not prevent the
Consultant from earning a livelihood. In the event of a breach or threatened
breach by the Consultant of any such covenant, the Consultant acknowledges that
the Company would be irreparably harmed and that the full extent of injury
resulting therefrom would be impossible to calculate and Company therefore would
not have an adequate remedy at law. Accordingly, the Consultant acknowledges
that temporary and permanent injunctive relief would be appropriate remedies
against such breach or threatened breach, without bond or security; provided,
that nothing herein shall be construed as limiting any other legal or equitable
remedies the Company might have.
11. Notices.
All notices, requests and consents hereunder shall be in writing.
Notices, requests and consents to the parties shall be effectively given and
delivered if personally delivered, facsimiled (if confirmation of such
transmission is received) or sent to the parties at their respective addresses
indicated herein by registered or certified mail, postage prepaid, or by
reputable overnight mail courier service:
If to the Company: The ▇▇▇▇▇ Packing Company
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇
If to Consultant: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Either party by notice to the other may from time to time change the
proper address for any such notice, request or consent.
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12. Entire Agreement.
This Agreement constitutes the entire agreement between the parties and
supersedes all prior agreements and understandings, whether written or oral,
relating to the subject matter of this Agreement, including without limitation
any existing employment agreements between the Company and the Consultant, which
are terminated hereby.
13. Amendment.
This Agreement may be amended or modified only by a written instrument
executed by both the Company and the Consultant.
14. Governing Law.
This Agreement shall be construed, interpreted and enforced in
accordance with the laws of the State of North Carolina.
15. Assignment.
This Agreement is personal to the Consultant and may not be assigned by
the Consultant. This Agreement may be assigned by the Company to any party with
the consent of the Consultant, which consent shall not be unreasonably withheld,
and the assignee shall be entitled to enforce against the Consultant the
non-compete and non-disclosure covenants of the Consultant herein contained. The
Consultant further agrees to execute, for the benefit of any proposed assignee,
a document acknowledging the agreement of the Consultant to: (a) be bound by the
non-compete and non-disclosure covenants set forth herein subsequent to any
proposed assignment; and (b) consent to the enforcement of such covenants by
such assignee against the Consultant.
16. Waiver.
No delay or omission by the Company in exercising any right under this
Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by the Company on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.
17. Severability.
In the event that any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year set forth above.
CONSULTANT
/s/ ▇▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
THE ▇▇▇▇▇ PACKING COMPANY
By: /s/ J ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: CEO
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Schedule 1
COMPENSATION
For the first year of this Agreement, the Consultant shall receive an
annual fee of $200,000 payable in accordance with the compensation policies of
the Company. Compensation for the remaining term of the Agreement shall consist
of one lump sum payment of $250,000, payable on the first anniversary of the
date of this Agreement.