EXHIBIT 10(b)
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CHANGE IN CONTROL AGREEMENT
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This Agreement between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ("Executive") and ▇▇▇ ▇▇▇▇▇ Farms,
Inc., a Delaware corporation (the "Corporation") is effective May 1, 2002
("Effective Date") and supercedes any similar agreement between the Executive
and the Corporation.
1.00 PURPOSE
The Corporation believes that [1] a sound and stable management team is
essential to promoting the best interests of the Group and the Corporation's
stockholders, [2] as is the case with many publicly held corporations, a Change
in Control may materially alter the Group's structure and adversely affect
managers' employment security, [3] appropriate steps should be taken to enable
certain managers, including the Executive, to devote their full and continued
attention to the Group's business affairs during the crucial (and often
tumultuous) period preceding and immediately following a Change in Control and
[4] subject to the terms of this Agreement, these objectives can best be met by
providing the Executive with the severance payments described in this Agreement.
2.00 DEFINITIONS
When used in this Agreement, the following terms will have the meanings given to
them in this section unless another meaning is expressly provided elsewhere in
this Agreement. When applying these definitions, the form of any term or word
will include any of its other forms.
2.01 BOARD. The Corporation's board of directors.
2.02 CAUSE. The Executive's [1] willful and continued refusal to substantially
perform assigned duties (other than any refusal resulting from incapacity due to
physical or mental illness), [2] willful engagement in gross misconduct
materially and demonstrably injurious to any Group Member or [3] breach of any
term of this Agreement. However, [4] Cause will not arise [a] solely because the
Executive is absent from active employment during periods of vacation,
consistent with the Employer's applicable vacation policy, or other period of
absence initiated by the Executive and approved by the Employer or [b] due to
any event that constitutes Good Reason.
2.03 CHANGE IN CONTROL.
[1] Subject to the rules of application described in Section 2.03[2], the
date on which the earliest of the following events occurs:
[a] After the Effective Date, an event that would be required to be
reported as a change in control for purposes of the Exchange Act.
[b] During any 12-consecutive-calendar-month period ending after the
Effective Date, there is a change in a majority of the Incumbent
Directors for any reason other
than death or disability as reasonably established by the Corporation
on the basis of medical and other information known (or made available)
to it.
[c] After the Effective Date, any entity or "person," [including a
"group" as contemplated by Exchange Acts ss.ss.13(d)(3) and 14(d)(2)]
is or becomes the "beneficial ownEr" [as defined in Rule 13d-3 under
the Exchange Act], through a tender offer or otherwise, of Common
Shares representing 50 percent or more of the combined voting power of
the Corporation's then outstanding Common Shares.
[d] During any 12-consecutive-calendar-month period ending after the
Effective Date, any entity or "person," [including a "group" as
contemplated by Exchange Act ss.ss.13(d)(3) And 14(d)(2)] acquires,
either directly or as a "beneficial owner" [as defined in Rule 13d-3
under the Exchange Act], through a tender offer or otherwise, Common
Shares representing more than 20 percent of the combined voting power
of the Corporation's then outstanding Common Shares. However, this
element of this definition will be applied without regard to the effect
of any redemption of Common Shares by the Corporation or the
acquisition of Common Shares by any Group Member and after ignoring any
Common Shares acquired:
[i] Before the beginning of any 12-consecutive-calendar-month
measurement period;
[ii] By or through an employee benefit plan [whether or not
intended to comply with Code ss.401(a) and whether or not the
Executive participates in that plan] maintained by any Group
Member;
[iii] Directly, through an equity compensation plan maintained by
any Group Member;
[iv] Directly, through inheritance, gift, bequest or by operation
of law on the death of an individual; or
[v] By any entity or "person" [including a "group" as contemplated
by Exchange Act ss.ss.13(d)(3) and 14(d)(2)] with respect to which
that acquirer has filed SEC Schedule 13G indicating that the Common
Shares were not acquired and are not held for the purpose of or
with the effect of changing or influencing, directly or indirectly,
the Corporation's management or policies, unless and until that
entity or person indicates that its intent has changed by filing
SEC Schedule 13D.
[e] After the Effective Date, the Corporation's stockholders approve a
definitive agreement to merge or combine the Corporation with or into
another entity, a majority of the directors of which were not Incumbent
Directors immediately before the merger and in which the Corporation's
stockholders will hold less than 50
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percent of the voting power of the surviving entity. When applying this
element of this definition:
[i] Stockholders will be determined immediately before and
immediately after the merger or combination; and
[ii] The Common Shares owned before the transaction by the entity
with which the Corporation merges or combines will be disregarded
for all purposes.
[f] Within any 12-consecutive-calendar-month period ending after the
Effective Date, any entity or "person" [including a "group" as
contemplated by Exchange Act ss.ss.13(d)(3) and 14(d)(2) and Code
ss.280G] acquires, either directly or as a "beneficial owner" [as
defined in Rule 13d-3 under the Exchange Act] of another entity or
person, Group assets having a total gross fair market value equal to or
greater than 50 percent of the book value of the Group's assets. For
purposes of this definition, "book value" will be established on the
basis of the latest consolidated financial statement the Corporation
filed with the Securities and Exchange Commission before the date any
12-consecutive calendar month measurement period began. However, except
as otherwise provided in this section, this element of this definition
will be applied after ignoring:
[i] Any transfer of assets to a stockholder of the Corporation
(determined immediately before the asset transfer), but only to the
extent exchanged for or with respect to the Corporation's stock;
[ii] Any transfer of assets to an entity, 50 percent or more of the
total value or voting power of which is owned by one or more Group
Members;
[iii] Any transfer of assets to any entity or "person" [including a
"group" as contemplated by Exchange Act ss.ss.13(d)(3) and
14(d)(2)] that, immediately before The transfer, owns, directly or
as a "beneficial owner" [as defined in Rule 13d-3 under the
Exchange Act], 50 percent or more of the total value or voting
power of the Corporation's outstanding securities; or
[iv] Any transfer of assets to an entity, at least 50 percent or
more of the total value or voting power of which, immediately
before the transfer, is owned, directly or indirectly, by a person
described in Section 2.03[1][c] of this definition.
[2] The following rules of application will be applied to this definition:
[a] For purposes of applying all parts of this definition, [i] Common
Shares owned or acquired by the Executive or by any other entity or
"person" [including a "group" as contemplated by Exchange Act
ss.ss.13(d)(3) and 14(d)(2)] acting in
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concert with the ExecutiVe will be disregarded, [ii] any transfer of
assets to the Executive or to any other entity or "person" [including a
"group" as contemplated by Exchange Act ss.ss.13(d)(3) and 14(d)(2)]
acting in concert with the Executive will be disregarded and [iii] the
constructive ownership rules of Code ss.318(a) will be applied to
determine stock ownership;
[b] For purposes of applying Section 2.03[1][f], an entity's or a
person's status (unless specifically indicated otherwise) will be
determined immediately after the transfer of assets; and
[c] Any transfer of assets disregarded under Section 2.03[1][f][i] will
not be ignored when applying that subsection if that transaction is
part of a larger transaction or series of transactions that also
involve the transfer of assets for cash or consideration other than
Common Shares.
2.04 CODE. The Internal Revenue Code of 1986, as amended, or any successor
statute.
2.05 COMMON SHARES. The Corporation's shares of Common Stock or any security
issued in substitution, exchange or in place of the Corporation's Common Stock.
2.06 CONFIDENTIAL INFORMATION. Any and all information (other than information
in the public domain) related to the Group's business or that of any Group
Member, including all processes, inventions, trade secrets, computer programs,
engineering or technical data, drawings or designs, manufacturing techniques,
information concerning pricing and pricing policies, marketing techniques, plans
and forecasts, new product information, information concerning suppliers,
methods and manner of operations, and information relating to the identity and
location of all past, present and prospective customers.
2.07 DATE OF TERMINATION. Except as otherwise provided in Section 4.00:
[1] If the Executive is Terminated because of Retirement or for Cause, the
date specified in the Notice of Termination;
[2] If the Executive is Terminated because of Disability, the date
determined under Section 4.04[1];
[3] If the Executive dies, the date of death;
[4] If the Executive is Terminated for Good Reason, the date specified in
the Notice of Termination;
[5] If the Executive is Terminated for any reason other than Retirement,
Cause, Disability, death or Good Reason, the date on which a Notice of
Termination is given; or
[6] If the Employer Terminates the Executive without giving a Notice of
Termination, the date on which that Termination is effective.
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However, if either Party utilizes the procedures described in Section 7.03 to
dispute the basis on which the Executive's employment is being terminated, the
Date of Termination will be no later than the last day of the Executive's active
employment as a common law employee of all Group Members.
2.08 DISABILITY. An incapacity due to physical or mental illness that has
prevented the Executive from discharging assigned duties on a full-time basis
for at least the lesser of [1] 26 consecutive weeks or [2] the period between
the date the incapacity arose and the last day but one of the Effective Period.
2.09 EFFECTIVE PERIOD. The 36 consecutive calendar months beginning after a
Change in Control occurring during the Term, even if that period extends beyond
the Term.
2.10 EMPLOYER. The Group Member by which the Executive is directly employed on
the date of any event, act or occurrence described in this Agreement, including
execution of this Agreement. If, without incurring a Termination, the Executive
becomes a common law employee of a Group Member other than the Employer, that
Group Member will automatically become the Executive's "Employer" under this
Agreement and will be fully liable, as the Executive's Employer, for all
obligations arising under this Agreement during the period of that employment
relationship, including the payment of any amount described in Section 5.00 that
becomes due during the course of that employment relationship.
2.11 EXCHANGE ACT. The Securities Exchange Act of 1934, as amended, or any
successor statute.
2.12 GOOD REASON. For purposes of Section 4.06, any of the following to which
the Executive has not consented in writing:
[1] At any time after a Change in Control, any breach of this Agreement of
any nature whatsoever by or in behalf of the Group or any Group Member;
[2] At any time after a Change in Control, a reduction in the Executive's
title, duties, responsibilities or status, as compared to either [a] the
Executive's title, duties, responsibilities or status immediately before a
Change in Control or [b] any enhanced or increased title, duties,
responsibilities or status to which the Executive accedes after the Change
in Control;
[3] At any time after a Change in Control, the assignment to the Executive
of duties that are inconsistent with [a] the Executive's office immediately
before the date of a Change in Control or [b] any more senior office to
which the Executive is promoted after a Change in Control;
[4] During any calendar year ending after a Change in Control, a 10 percent
(or larger) reduction (other than a reduction attributable to any
Termination for death, Disability or Cause or for any period the Executive
is temporarily absent from active employment) in the highest of [a] the
Executive's total cash compensation for the
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preceding calendar year or, if higher, [b] the Executive's total cash
compensation for the last calendar year ending before the Change in Control
but [c] in both cases, determined without regard to any amounts described
in this Agreement;
[5] At any time after a Change in Control, a requirement that the Executive
relocate to a principal office or worksite (or accept indefinite
assignment) to a location more than 50 miles distant from [a] the principal
office or worksite to which the Executive was assigned immediately before a
Change in Control or [b] any location to which the Executive agreed to be
assigned after a Change in Control;
[6] At any time after a Change in Control, the imposition on the Executive
of business travel obligations substantially greater than the Executive's
business travel obligations during the 12-consecutive-calendar-month period
ending before the Change in Control but determined without regard to any
special business travel obligations associated with activities relating to
the Change in Control;
[7] At any time after a Change in Control, the Employer's [a] failure to
continue in effect any material fringe benefit or compensation plan,
retirement or deferred compensation plan, life insurance plan, health and
accident plan or disability plan in which the Executive is participating at
the time of a Change in Control, [b] modification of any of the plans or
programs just described that adversely affects the value of the Executive's
benefits under those plans, or [c] failure to provide the Executive, after
a Change in Control, with the same number of paid vacation days to which
the Executive is or becomes entitled at or anytime on or after a Change in
Control under the terms of the Employer's vacation policy or program.
However, Good Reason will not arise under this subsection solely because
[d] the Corporation or the Employer terminates or modifies any program
after a Change in Control solely to comply with applicable law but only to
the extent of the change required or [e] a plan or benefit program expires
under self-executing terms contained in that plan or benefit program before
the Change in Control; or
[8] The Employer fails to deliver a Notice of Termination to the Executive
within 30 days after the Executive becomes Disabled.
2.13 GROUP. The Employer, the Corporation and any other entity to which either
is related through common ownership as defined in Codess.1504.
2.14 GROUP MEMBER. Each entity that is a member of the Group.
2.15 INCUMBENT DIRECTOR. Each person who was a member of the Board on the
Effective Date and, after the Effective Date, each director whose election or
nomination for election by the Company's stockholders was approved by a vote of
at least a majority of the then Incumbent Directors.
2.16 NOTICE OF PAYMENT. The written notice by which the Corporation apprises the
Executive of [1] the amount of any payment due under this Agreement, [2] the
reason that amount is payable and [3] the basis on which that payment was
calculated.
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2.17 NOTICE OF TERMINATION. A written notice that describes in reasonable detail
the facts and circumstances claimed to provide a basis for Termination.
2.18 PARTIES. The Corporation and the Executive.
2.19 RETIREMENT. The Executive's Termination in accordance with [1] the
Employer's normal retirement policy in effect on the date of a Change in Control
and which is generally applicable to its salaried employees or [2] in accordance
with any individual retirement arrangement agreed upon by the Parties.
2.20 RETIREMENT AGE. The normal or mandatory retirement age specified in any of
the policies or arrangements described in Section 2.19.
2.21 TERM. Initially, the period beginning on the Effective Date and ending
midnight, April 30, 2003 ("Termination Date"). Subject to Section 6.00, the Term
will automatically be extended for successive one-year periods beginning on the
Termination Date and anniversaries of each Termination Date.
2.22 TERMINATION. Termination of the common law employee-employer relationship
between the Executive and all Group Members for any reason, whether or not the
Executive subsequently becomes a consultant or adviser to any Group Member or
serves as a member of the board of directors of any Group Member. However, a
Termination will not be deemed to have occurred [1] solely because the
Executive's Employer ceases to be a Group Member and the Executive continues to
be employed by that former Group Member or [2] subject to Section 4.06, if the
Executive's common law employment relationship is transferred between Group
Members without interruption.
3.00 EXECUTIVE'S OBLIGATIONS
3.01 SERVICES DURING CERTAIN EVENTS. If any "person" (as used in Section
2.03[1][c]) initiates a tender or exchange offer, distributes proxy materials to
the Corporation's stockholders or takes other steps to effect, or that may
result in, a Change in Control, the Executive agrees not to Terminate
voluntarily during the pendency of that activity other than by reason of
Retirement and to continue to serve as a full-time employee of the Employer
until those efforts are abandoned, that activity is terminated or until a Change
in Control has occurred.
3.02 CONFIDENTIAL INFORMATION. Except as otherwise required by applicable law,
Executive expressly agrees to keep and maintain Confidential Information
confidential and not, at any time during or subsequent to the Executive's
employment with any Group Member, to use any Confidential Information for
Executive's own benefit or to divulge, disclose or communicate any Confidential
Information to any person or entity in any manner except [1] to employees or
agents of the Employer or of the Corporation that need the Confidential
Information to perform their duties on behalf of any Group Member or [2] in the
performance of Executive's duties to the Employer. Executive also agrees to
notify the Corporation promptly of any circumstance Executive believes may
legally compel the disclosure of Confidential Information and to give this
notice before disclosing any Confidential Information.
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3.03 EFFECT OF BREACH OF OBLIGATIONS. If the Executive breaches any obligation
described in this Agreement:
[1] If that breach occurs before a Change in Control, this Agreement will
terminate as of the date of the breach, even if the fact of the breach
becomes apparent at a later date;
[2] If that breach occurs after a Change in Control but before the
Executive has Terminated, this Agreement will terminate as of the date of
the breach, even if the fact of the breach becomes apparent at a later date
and no amounts will be due under this Agreement; or
[3] If that breach occurs after a Change in Control and after the Executive
Terminates, the Executive will repay any amounts paid under this Agreement
plus interest calculated at the prime interest rate quoted in the Wall
Street Journal, over the period beginning on the date of the payment to the
Executive (or any beneficiary under this Agreement and ending on the date
of repayment.
4.00 COMPENSATION PAID IF EXECUTIVE TERMINATES AFTER A CHANGE IN CONTROL
4.01 TERMINATION FOR CAUSE.
[1] The Employer may Terminate the Executive for Cause at any time by
delivering to the Executive a Notice of Termination specifying the
effective date of the Termination (which may not be earlier than the date
the Notice of Termination is given) and the basis upon which the Employer
believes that it has Cause to Terminate the Executive.
[2] As of the Date of Termination specified in the Notice of Termination,
[a] the Executive's employment will end, [b] this Agreement will terminate
and [c] no amounts will be paid or due under this Agreement at any time.
4.02 TERMINATION BECAUSE OF DEATH. Subject to Section 8.03, if the Executive
dies, this Agreement will terminate as of the date the Executive dies and no
amounts will be paid or due under this Agreement at any time.
4.03 TERMINATION AFTER RETIREMENT AGE. If the Executive Terminates after
Retirement Age for any reason, this Agreement will terminate as of the date
specified in the Notice of Termination (which may not be earlier than the
Executive's Retirement Age) and no amounts will be paid or due under this
Agreement at any time.
4.04 TERMINATION BECAUSE OF DISABILITY.
[1] The Employer may Terminate the Executive at any time after the
Executive has become Disabled but only if it delivers to the Executive a
Notice of Termination specifying the effective Date of Termination, which
may be [a] no earlier than 30 days after this Notice of Termination is
delivered or [b] no later than the last day but one of the Effective Period
during which the Disability began.
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[2] If the Executive does not return to full-time active employment before
the Date of Termination specified in the Notice of Termination and if the
specified Date of Termination is within an Effective Period (whether or not
the Executive's absence began before or after the Effective Period began)
or if the Executive Terminates for Good Reason (as defined in Section
2.12[8]), [a] the Executive's employment will Terminate as of the Date of
Termination specified in the Notice of Termination, [b] this Agreement will
terminate and [c] the Executive will receive an amount equal to:
[i] The amount described in Section 5.00, calculated on the basis of
the compensation paid to the Executive before the absence began or, if
higher, the amount the Executive was receiving during the period of
absence; minus
[ii] The value of:
[A] One half of the disability benefit payable under the Social
Security Act;
[B] The amount by which the Executive's employer-funded benefit
under any retirement or deferred compensation plan [whether or not
intended to comply with Code ss.401(a)] is enhanced by the
Disability; and
[C] The value of any employer-funded disability income or other
benefits the Executive is entitled to receive from any disability
plan or program.
The value of these reductions:
[D] Will be calculated by applying the factors described in
Section 5.02[5]; and
[E] Will be applied before application of Section 5.02[1] or [2].
4.05 TERMINATION WITHOUT CAUSE.
[1] The Employer may Terminate the Executive without Cause for any reason
by delivering to the Executive a Notice of Termination that specifies the
Date of Termination, which may not be earlier than the date the Notice of
Termination is given.
[2] If [a] the Date of Termination specified in the Notice of Termination
is within the period beginning six months before the beginning of an
Effective Period and ending on the last day of the same Effective Period
and [b] the Executive's employment is not being Terminated due to death,
Disability or Cause, [c] the Corporation will pay (or cause the Employer to
pay) to the Executive the amount described in Section 5.00. After those
amounts have been paid, this Agreement will terminate and no further
amounts will be paid or due under this Agreement.
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4.06 TERMINATION FOR GOOD REASON.
[1] The Executive may Terminate for Good Reason after a Change in Control
by delivering to the Corporation a Notice of Termination for Good Reason
(other than Good Reason as defined in Section 2.12[8]) specifying the Date
of Termination (which may not be earlier than the date the Notice of
Termination is given) and the basis upon which the Executive believes that
Good Reason has arisen.
[2] If [a] the Date of Termination specified in the Notice of Termination
is within the period beginning six months before the beginning of an
Effective Period and ending on the last day of the same Effective Period
and [b] within 30 days after the Date of Termination, the Employer does not
cure the Good Reason event described in the Notice of Termination, [c] the
Corporation will pay (or cause the Employer to pay) to the Executive the
amount described in Section 5.00. After those amounts have been paid, this
Agreement will terminate and no further amounts will be paid or due under
this Agreement.
5.00 CHANGE IN CONTROL PAYMENTS
5.01 CALCULATION OF CHANGE IN CONTROL PAYMENTS. Subject to the terms of this
Agreement, if the Executive is Terminated under Section 4.04, 4.05 or 4.06, the
Corporation (or the Employer) will:
[1] Continue to pay the Executive's compensation and other benefits through
the Date of Termination and also will pay the Executive the value of any
unused vacation and compensation days determined under the Employer's
personnel policy. These amounts will be paid no later than 30 days after
the Executive's Date of Termination and will be based on the rate of
compensation and value of benefits in effect before the Notice of
Termination was delivered.
[2] Pay the Executive a lump sum equal to the amount described in this
subsection. This payment will be accompanied by a Notice of Payment and,
subject to Section 5.02, made no more than 30 days after the Executive's
Date of Termination. The amount payable under this subsection will be the
sum of:
[a] 299 percent of the Executive's "base amount" as defined under Code
ss.280G [whether or not the Change in Control generating benefits under
this Agreement is a "change in control" as defined under Code ss.280G];
plus
[b] An additional amount equal to:
[i] The cash bonus paid to the Executive by all Group Members
averaged over the three full fiscal years ending before the Date of
Termination (or, if shorter, over the full period of the
Executive's employment by all Group Members); multiplied by
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[ii] The number of days between the Executive's Date of Termination
and the last day of the Corporation's last complete fiscal year
ending before that Date of Termination; and divided by
[iii] 365 days.
[c] Any other change in control benefit to which the Executive is
entitled under any other plan, program or agreement with any Group
Member.
[3] For 36 months after the Executive's Date of Termination, the
Corporation also will maintain (or cause the Employer to maintain) in full
force and effect, for the Executive's continued benefit (and that of all
family members and other dependents who were enrolled in the programs on
the Executive's Date of Termination) all life, medical and dental insurance
programs in which the Executive (or members of the Executive's family or
other dependents) was participating or was covered immediately before the
Executive's Date of Termination. If the terms of any of the programs just
described do not allow the continued participation described in the
preceding sentence, the Corporation (or the Employer) will [a] provide
benefits that are substantially similar (including eligibility conditions,
conditions on benefits, the value of benefits and the scope of coverage) to
those provided by the life, medical and dental insurance programs in which
the Executive, members of the Executive's family and dependents were
participating immediately before the Executive's Date of Termination and
[b] ensure that any eligibility or other conditions on benefits under these
programs, including deductibles and copayments, will be administered by
applying the Executive's experience under any predecessor program in which
the Executive (or members of the Executive's family and dependents) were
participating before Termination.
5.02 EFFECT OF CODE SS.280G. If the sum of the amounts described in Section 5.01
and those promised under any other plan, program or agreement between the
Executive and any Group Member constitute "excess parachute payments" as defined
in Code ss.280G(b)(1), the Corporation (or the Employer) will either:
[1] Reimburse the Executive for the amount of any excise tax due under Code
ss.4999, if this procedure provides the Executive with an after-tax amount
that is larger than the after-tax amount produced under Section 5.02[2]; or
[2] Reduce the Executive's payments under this Agreement so that the
Executive's total "parachute payment" as defined in Code ss.280G(b)(2)(A)
under this and any all other agreements will be $1.00 less than the amount
that would be an "excess parachute payment" if this procedure provides the
Executive with an after-tax amount that is larger than the after-tax amount
produced under Section 5.02[1].
[3] If Section 5.02[2] is to be applied, the Executive may designate the
payments or type of payments that will be reduced (and the order in which
that reduction will be applied) to ensure that the total amounts paid will
not be an "excess parachute payment." This information must be returned, in
writing, within 30 days of the date of the Notice of
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Payment. If the Corporation does not receive written instructions within
that 30-day period, all payments will be reduced prorata. All payments
under this Agreement that are subject to Section 5.02[2] will be deferred
for [a] 30 days after the Executive notifies the Corporation of the
payments or types of payments to be reduced or [b] 30 days after the
expiration of the period during which the Executive may notify the
Corporation of the payments or types of payments to be reduced.
[4] If the Internal Revenue Service or any court of competent jurisdiction
subsequently and conclusively decides that the Corporation has
miscalculated the amount of any "excess parachute payment" and if that
decision, had it been made initially:
[a] Would have resulted in a larger payment than initially calculated,
the Corporation will reapply Section 5.02 based on the revised
calculation to identify the Executive's revised parachute payment and
immediately pay that additional amount to the Executive; but
[b] If, after that reapplication, the Executive is entitled to a
smaller amount under this Agreement than initially calculated, the
Executive will repay the amount of any overpayment to the Corporation
within 30 days of the date of that decision, together with interest on
that amount at the prime rate of interest quoted in the Wall Street
Journal, as of the date of that final decision, calculated over the
period beginning on the date the excess amount was paid and ending on
the date the excess amount is repaid.
[5] The value of all amounts due under this Agreement will be established
by the Corporation's independent auditors applying principles, assumptions
and procedures consistent with Code ss.280G. These principles, assumptions
and procedures will be explained to the Executive in the Notice of Payment.
5.03 CONDITIONS AFFECTING PAYMENTS.
[1] Except as expressly provided in this Agreement, the Executive's right
to receive the payments described in this Agreement will not decrease the
amount of, or otherwise adversely affect, any other benefits payable to the
Executive under any plan, agreement or arrangement between the Executive
and any Group Member.
[2] The Executive is not required to mitigate the amount of any payment
described in this Agreement by seeking other employment or otherwise, nor
will the amount of any payment or benefit provided for in this Agreement be
reduced by any compensation the Executive earns in any capacity after
Termination or, except as provided in Section 4.04, by reason of the
Executive's receipt of or right to receive any retirement or other benefits
on or after Termination.
[3] The amount of any payment made under this Agreement will be reduced by
amounts the Employer is required to withhold in payment (or in anticipation
of payment) of any income, wage or employment taxes imposed on the payment.
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5.04 LIMIT ON NUMBER OF CHANGES IN CONTROL. Regardless of any provision of this
Agreement, if more than one Change in Control (whether or not related) occurs
during the Term, the total amount payable under this Agreement will be the
largest amount (after application of Section 5.02[1] or [2]) calculated with
respect to any single change in control occurring during the Effective Period.
6.00 AMENDMENT AND TERMINATION
6.01 AMENDMENT. This Agreement may be amended at any time by written agreement
between the Executive and the Corporation.
6.02 TERMINATION. This Agreement will terminate on the earliest of the following
to occur:
[1] The Executive's employment with all Group Members is Terminated before
a Change in Control;
[2] Before a Change in Control, the Executive is reassigned to a more
junior position, unless the Corporation decides that the new position is
sufficiently senior to justify continuation of this Agreement;
[3] The Corporation and the Executive mutually agree, in writing, to
terminate this Agreement, whether or not it is replaced with a similar
agreement;
[4] The Corporation notifies the Executive, in writing, that the Agreement
is to terminate at the end of its then current Term. To be effective,
however, this written notice [a] must be given no later than midnight of
the February 28 preceding the end of the then current Term but [b] may
never be effective [i] during an Effective Period or [ii] at any time after
the Corporation learns that activities have begun that, if completed, would
cause a Change in Control, although the notice may be given if those
activities end without generating a Change in Control;
[5] All payments due under this Agreement have been fully paid; or
[6] As provided in Section 4.00.
7.00 EQUITABLE RELIEF/DISPUTE RESOLUTION
7.01 UNIQUENESS OF OBLIGATIONS. The Executive's obligations described in this
Agreement are of a special and unique character which gives them a peculiar
value to the Group and the Group cannot be reasonably or adequately compensated
in damages in an action at law if Executive breaches those obligations.
Executive therefore expressly agrees that, in addition to any other rights or
remedies that the Corporation, the Employer or the Group may have, the
Corporation, the Employer and the Group will be entitled to injunctive and other
equitable relief in the form of preliminary and permanent injunctions without
bond or other security if the Executive actually breaches (or threatens to
breach) any obligation under this Agreement.
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7.02 INITIAL RESOLUTION OF DISPUTES AFFECTING PAYMENT AMOUNT.
[1] The Executive may request the Corporation to recalculate the amount of
payments due under this Agreement. That request must [a] be filed in
writing no later than 30 days after the Executive receives the Notice of
Payment and [b] specify the basis upon which the Executive believes that an
additional amount is due. Any request for recalculation that does not
comply with both requirements will be ineffective.
[2] Within 30 days of receiving a request that complies with Section
7.02[1], the Corporation will notify the Executive of any changes to its
calculations and the effect of any changes on the amount payable to the
Executive. If the Corporation does not deliver this information to the
Executive within this 30-day period, the Executive may regard the request
as having been denied.
[3] The Executive expressly waives any right to proceed under Section 7.03
to dispute the calculation of the amount payable under this Agreement
unless and until the administrative remedies described in this Section 7.02
are fully exhausted.
7.03 ARBITRATION Any [a] disagreement concerning the calculation of any payment
due under this Agreement that is not resolved after utilizing the procedures
described in Section 7.02, [b] breach of any term of this Agreement or [c] other
dispute or controversy arising out of or relating to this Agreement, including
the basis on which the Executive is Terminated, will be resolved by arbitration
in accordance with the rules of the American Arbitration Association. The award
of the arbitrator will be final, conclusive and nonappealable and judgment upon
the award rendered by the arbitrator may be entered in any court having
competent jurisdiction. The arbitrator must be an arbitrator qualified to serve
in accordance with the rules of the American Arbitration Association and one who
is approved by the Corporation and the Executive. If the Executive and the
Corporation fail to agree on an arbitrator, each must designate a person
qualified to serve as an arbitrator in accordance with the rules of the American
Arbitration Association and these persons will select the arbitrator from among
those persons qualified to serve in accordance with the rules of the American
Arbitration Association. Any arbitration relating to this Agreement will be held
in the city in which the Executive's last principal place of employment with a
Group Member before the Executive's Date of Termination is or was located or
another place the Parties mutually select immediately before the arbitration.
7.04 COSTS. The Corporation will bear all reasonable costs associated with any
dispute arising under this Agreement, including reasonable accounting and legal
fees incurred by the Executive through any proceeding described in Section 7.02
or 7.03. However, no amounts will be paid under this subsection to the extent
that those payments are "excess parachute payments."
7.05 PAYMENT DURING DISPUTE RESOLUTION PERIOD. If otherwise due, the Corporation
may not defer (or cause the Employer to defer) payment of any amount that is not
being contested under Section 7.02 or 7.03.
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7.06 PAYMENT OF ADDITIONAL AMOUNTS. If the arbitrators decide, at the conclusion
of the arbitration proceedings described in Section 7.03, that the Corporation
has understated the amount due under this Agreement, the Corporation will pay
the additional amount to the Executive within 30 days after the date of the
award along with interest calculated at the prime rate quoted in the Wall Street
Journal, for the period beginning on the Executive's Date of Termination and
ending on the date of payment. However, no amounts will be paid under this
subsection to the extent that those payments are "excess parachute payments."
8.00 MISCELLANEOUS
8.01 SECURITY. At any time during the Term, the Corporation may provide (or
cause the Employer to provide) security for payment of the amounts and benefits
described in Section 5.00. This security may include one or more of [1] a
stand-by letter of credit issued by a reputable financial institution, [2] an
irrevocable grantor trust (the "Trust") established on terms the Corporation
believes to be appropriate, including a ruling from the Internal Revenue
Service, (or opinion of counsel satisfactory to the Corporation), to the effect
that any funds held by the Trust will be includible in the Executive's gross
income only for the taxable year or years paid to the Executive under the terms
of the Trust's related trust agreement or [3] any other form of security the
Corporation believes is appropriate.
8.02 NONASSIGNMENT. The right of an Executive or any other person to receive any
amount under this Agreement may not be assigned, transferred, pledged or
encumbered except by will or by applicable laws of descent and distribution. Any
attempt to assign, transfer, pledge or encumber any amount that is or may be
receivable under this Agreement will be null and void and of no legal effect.
8.03 SUCCESSORS TO THE EXECUTIVE. Subject to Section 8.02, this Agreement inures
to the benefit of and may be enforced by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.
8.04 TRANSFERS.
[1] If, either before or after a Change in Control, the Executive's common
law employment relationship shifts within the Group and there has been no
intervening Termination, this Agreement will remain in full force and
effect and for all purposes of this Agreement, the Executive's new Employer
will be substituted for the Executive's prior Employer.
[2] If the Employer is no longer a Group Member, whether or not as part of
a transaction that constitutes a Change in Control, this Agreement will
remain in full force and effect as described in Section 8.02. However, the
Executive will not be entitled to any amount under this Agreement on
account of a Change in Control that [a] solely affects the Group after that
transfer and [b] is not part of the same transaction through which the
Employer left the Group.
15
8.05 NOTICES. All notices and other communications provided for in this
Agreement must be written and will be deemed to have been given when deposited
with a reputable delivery service or in United States registered mail, return
receipt requested, postage prepaid. Also,:
[1] All notices must be directed to the address shown on the last page of
this Agreement;
[2] Notices and other communications to the Corporation and the Employer
will not be deemed to have been given unless they are directed to the
attention of the Corporation's Chief Executive Officer and copies are sent
to the Corporation's Secretary.
[3] Neither Party will be required to use any address other than that shown
on the last page of this Agreement unless notified of a change in the other
Party's address. Any change in either Party's address must be given in
writing to the other Party and will be effective only upon receipt.
8.06 COMPLETE AGREEMENT. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter of this Agreement have
been made by either Party that are not set forth expressly in this Agreement.
8.07 APPLICABLE LAW. The validity, interpretation, construction and performance
of this Agreement will be governed by the laws (but not the law of conflicts of
laws) of the State of Ohio.
8.08 VALIDITY. The invalidity or unenforceability of any provisions of this
Agreement will not affect the validity or enforceability of any other provisions
of this Agreement, which will remain in full force and effect.
16
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement to be
effective as of the date and year first above written.
▇▇▇ ▇▇▇▇▇ FARMS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
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Title: CEO
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ADDRESS:
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EXECUTIVE'S NAME
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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ADDRESS:
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17
SCHEDULE A
TO
EXHIBIT 10(b)
Agreements between ▇▇▇ ▇▇▇▇▇ Farms, Inc. and certain of the executive
officers of ▇▇▇ ▇▇▇▇▇ Farms, Inc. substantially identical to Agreement,
effective May 1, 2002, between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇ ▇▇▇▇▇ Farms, Inc.
Effective May 1, 2002, ▇▇▇ ▇▇▇▇▇ Farms, Inc. (the "Registrant") entered
into Agreements with the executive officers of the Registrant identified below,
which Agreements are substantially identical to the Agreement, effective May 1,
2002, between the Registrant and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Chief Financial Officer,
Treasurer and Secretary of the Registrant, a copy of which is being included as
Exhibit 10(b) to the Registrant's Annual Report on Form 10-K for the fiscal year
ended April 26, 2002 (the "2002 Form 10-K").
In accordance with Rule 12b-31 promulgated under the Securities
Exchange Act of 1934 and Item 601(b)(10)(iii) of Regulation S-K, the following
table identifies those executive officers of the Registrant with whom the
Registrant has entered into Agreements similar to that included as Exhibit 10(b)
to the 2002 Form 10-K:
NAME CURRENT OFFICES HELD WITH THE REGISTRANT
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Executive Vice President - Restaurant Division
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▇▇▇▇ ▇. ▇▇▇▇▇▇ Senior Vice President - Investor Relations and
Corporate Communications
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▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Vice President Finance and Assistant Secretary
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Executive Vice President - Food Products Division
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