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Exhibit 10.74
EMPLOYMENT AGREEMENT
THIS AGREEMENT made and entered into as of the 6th day of August, 1999, by
and between ▇▇▇▇▇▇▇ FOODS, INC., a Minnesota corporation (the "Company") and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the "Executive").
WHEREAS, Executive has served as President of an operating company
subsidiary of ▇▇▇▇▇▇▇ Foods, Inc.; and
WHEREAS, Company and Executive have agreed to enter into this Agreement
effective as of January 1, 1999.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties agree that this Agreement is effective as of January 1,
1999 as follows:
1. EMPLOYMENT AND DUTIES. Company shall employ Executive to serve as
President of ▇.▇. ▇▇▇▇▇▇▇▇ Company and in such capacity Executive shall perform
such duties as the Bylaws provide and as the CEO of the Company may from time to
time determine.
2. TERM. This Agreement shall be effective as of January 1, 1999 and shall
continue through December 31, 2000, unless earlier terminated as provided herein
(the "Employment Period"). The Employment Period may be extended thereafter upon
the written agreement of the parties hereto.
3. ANNUAL BASE SALARY. For all services by Executive, the Company agrees to
pay to Executive an Annual Base Salary for each of the calendar years of this
Agreement from January 1, 1999 through December 31, 2000 of at least $230,000.
4. ADDITIONAL BENEFITS AND WORKING FACILITIES.
a. Annual Bonus. For each calendar year during the term of this
Agreement, Executive shall participate in the ▇▇▇▇▇▇▇ Foods, Inc. 1994
Executive Incentive Plan (and successor plans) (the "IP") and such other
bonus arrangements as may be approved by the Compensation Committee of the
Board of Directors (the "Compensation Committee") (the aggregate of all
payments made under such bonus arrangements being herein referred to as the
"Annual Bonus").
b. Other Benefits. Executive shall be entitled to participate in all
compensation, incentive, employee benefit, welfare and other plans,
practices, policies and programs and fringe benefits, including vacation
policy (collectively, "Employee Benefit Plans") on a basis no less
favorable than that provided to any other executive officer of the Company.
c. Expenses. The Company shall reimburse Executive for all reasonable
expenses incurred by Executive in connection with the Company's business,
including but not
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limited to, expenses of travel and entertainment, upon presentation of
itemized statements therefor.
5. TERMINATION OF EMPLOYMENT.
a. Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. If
the Company determines in good faith that the Disability of the Executive
has occurred during the Employment Period (pursuant to the definition of
Disability set forth below), it may give to the Executive written notice in
accordance with Section 11 of this Agreement of its intention to terminate
the Executive's employment. In such event, the Executive's employment with
the Company shall terminate effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), provided that,
within the 30 days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For purposes
of this Agreement, "Disability" shall mean a determination by the Company
in its sole discretion that Executive is unable to perform his job
responsibilities as a result of chronic illness, physical, mental or any
other disability for a period of six months or more.
b. With or Without Cause. The Company may terminate the Executive's
employment during the Employment Period with or without Cause. For purposes
of this Agreement, "Cause" shall mean:
(i) the continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity due
to physical or mental illness), after a written demand for substantial
performance is delivered to the Executive by the Board which
specifically identifies the manner in which the Board believes that
the Executive has not substantially performed the Executive's duties,
or
(ii) the willful engaging by the Executive in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the
Company, or
(iii) conviction of a felony or guilty or nolo contendere plea by
the Executive with respect thereto.
For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or omitted
to be done, by the Executive in bad faith or without reasonable belief
that the Executive's action or omission was in the best interests of
the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the instructions
of the Chief Executive Officer (while the Executive does not serve as such)
or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith
and in the best interests of the Company. The cessation of employment of
the Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly
adopted by the
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affirmative vote of not less than 75% of the entire membership of the Board
(excluding the Executive) at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard
before the Board) finding that, in the good faith opinion of the Board, the
Executive is guilty of the conduct described in subparagraph (i), (ii) or
(iii) above, and specifying the particulars thereof in detail.
c. Good Reason. The Executive's employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean in the absence of a written consent of the Executive:
(i) upon, or in anticipation of, a Change in Control, the
assignment to the Executive of any duties inconsistent with the
Executive's title and position (including status, offices and
reporting requirements), authority, duties or responsibilities as
contemplated by Section 1 of this Agreement, or any other action by
the Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which
is remedied by the Company promptly after receipt of notice thereof
given by the Executive; provided that after a Change in Control the
Company shall have the flexibility to appoint the Executive to a
reporting relationship different from that which existed prior to the
Change in Control, to make an immaterial change in Executive's duties,
or to change the Executive's title provided that Executive shall not
have a stature less than that of an operating company President; it is
understood that equivalent positions may have different titles;
(ii) any failure by the Company to comply with any of the
provisions of Section 3 of this Agreement or the failure by the
Company to increase such Base Salary each year after a Change in
Control by an amount which at least equals on a percentage basis, the
mean average percentage increase in base salary for all employees
similarly situated during the two full calendar years immediately
preceding a Change in Control, other than an isolated, insubstantial
and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given
by the Executive;
(iii) the failure of the Company upon a Change in Control to (A)
continue in effect any employee benefit plan, compensation plan,
welfare benefit plan or material fringe benefit plan in which
Executive is participating immediately prior to such Change in Control
or the taking of any action by the Company which would adversely
affect Executive's participation in or reduce Executive's benefits
under any such plan, unless Executive is permitted to participate in
other plans providing Executive with substantially equivalent
benefits, or (B) provide Executive with paid vacation in accordance
with the most favorable past practice of the Company as in effect for
Executive immediately prior to such Change in Control;
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(iv) after, or in anticipation of, a Change in Control, any
purported termination by the Company of the Executive's employment
otherwise than as expressly permitted by this Agreement for Cause,
death or Disability;
(v) any failure by the Company to comply with and satisfy Section
10(c) of this Agreement; or
(vi) after, or in anticipation of, a Change in Control, any
requirement that the Executive (A) be based anywhere more than 50
miles from the office where the Executive is currently located or (B)
travel on Company business to an extent substantially greater than the
Executive's current travel obligations.
For purposes of this Section, any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
d. Notice of Termination. Any termination by the Company or by the
Executive shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 11(b) of this Agreement. For
purposes of this Agreement, a "Notice of Termination" means a written
notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) to the extent applicable, sets forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provisions so
indicated and (iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination date
(which date shall be not more than 30 days after the giving of such
notice). The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive
or the Company, respectively, hereunder or preclude the Executive or the
Company, respectively, from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
e. Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company other than for
Disability, the date of receipt of the Notice of Termination or any later
date specified therein within 30 days of such notice, (ii) if the
Executive's employment is terminated by reason of death or Disability, the
Date of Termination shall be the date of death of the Executive or the
Disability Effective Date, as the case may be, and (iii) if the Executive's
employment is terminated by the Executive, the Date of Termination shall be
30 days after the giving of such notice by the Executive provided that the
Company may elect to place the Executive on paid leave for all or any part
of such 30-day period.
f. Change in Control. "Change in Control" means the occurrence of any
one of the following events:
(i) individuals who, on the date hereof, constitute the Board
(the "Incumbent Directors") cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a
director subsequent to the date
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hereof, whose election or nomination for election was approved by a
vote of at least two-thirds of the Incumbent Directors then on the
Board (either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as a nominee for
director, without written objection to such nomination) shall be an
Incumbent Director; provided, however, that no individual initially
elected or nominated as a director of the Company as a result of an
actual or threatened election contest (as described in Rule 14a-11
under the Securities Exchange Act of 1934 (the "Act")) ("Election
Contest") or other actual or threatened solicitation of proxies or
consents by or on behalf of any "person" (as such term if defined in
Section 3(a)(9) of the Act and as used in Sections 13(d)(3) and
14(d)(2) of the Act) other than the Board ("Proxy Contest"), including
by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest, shall be deemed an Incumbent Director;
(ii) any person is or becomes a "beneficial owner" (as defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of
the Company representing 20% or more of the combined voting power of
the Company's then outstanding securities eligible to vote for the
election of the Board (the "Company Voting Securities"); provided,
however, that the event described in paragraph (ii) shall not be
deemed to be a Change in Control of the Company by virtue of any of
the following acquisitions: (A) by the Company or any subsidiary, (B)
by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any subsidiary, (C) by any underwriter
temporarily holding securities pursuant to an offering of such
securities, (D) pursuant to a Non-Qualifying Transaction (as defined
in paragraph (iii)), or (E) pursuant to any acquisition by the
Executive or any group of persons including the Executive (or any
entity controlled by the Executive or any group of persons including
the Executive);
(iii) the consummation of a merger, consolidation, statutory
share exchange or similar form of corporate transaction involving the
Company or any of its subsidiaries that requires the approval of the
Company's stockholders, whether for such transaction or the issuance
of securities in the transaction (a "Reorganization"), or sale or
other disposition of all or substantially all of the Company's assets
to an entity that is not an affiliate of the Company (a "Sale"),
unless immediately following such Reorganization or Sale: (A) more
than 60% of the total voting power of (x) the corporation resulting
from such Reorganization or the corporation which has acquired all or
substantially all of the assets of the Company (in either case, the
"Surviving Corporation"), or (y) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial ownership of
100% of the voting securities eligible to elect directors of the
Surviving Corporation (the "Parent Corporation"), is represented by
Company Voting Securities that were outstanding immediately prior to
such Reorganization or Sale (or, if applicable, is represented by
shares into which such Company Voting Securities were converted
pursuant to such Reorganization or Sale), and such voting power among
the holders thereof is in substantially the same proportion as
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the voting power of such Company Voting Securities among the holders
thereof immediately prior to the Reorganization or Sale, (B) no person
(other than any employee benefit plan (or related trust) sponsored or
maintained by the Surviving Corporation or the Parent Corporation), is
or becomes the beneficial owner, directly or indirectly, of 20% or
more of the total voting power of the outstanding voting securities
eligible to elect directors of the Parent Corporation (or, if there is
no Parent Corporation, the Surviving Corporation) and (C) at least a
majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Reorganization or Sale
were Incumbent Directors at the time of the Board's approval of the
execution of the initial agreement providing for such Reorganization
or Sale (any Reorganization or Sale which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed to be a
"Non-Qualifying Transaction"); or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company.
Notwithstanding the foregoing, a Change in Control of the Company shall not
be deemed to occur solely because any person acquires beneficial ownership
of more than 20% of the Company Voting Securities as a result of the
acquisition of Company Voting Securities by the Company which reduces the
number of Company Voting Securities outstanding; provided, that if after
such acquisition by the Company such person becomes the beneficial owners
of additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control of the Company shall then occur.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
a. Death or Disability. If, during the Employment Period the
Executive's employment shall terminate on account of death or Disability:
(i) the Company shall pay to the Executive or his estate in a
lump sum in cash within 30 days after the Date of Termination the sum
of (x) the Executive's Annual Base Salary through the Date of
Termination to the extent not theretofore paid, and (y) the product of
(1) the Target Bonus and (2) a fraction, the numerator of which is the
number of whole and partial months in the fiscal year in which the
Date of Termination occurs through the Date of Termination and the
denominator of which is 12, to the extent not theretofore paid (the
sum of the amounts described in clauses (x) and (y) shall be
hereinafter referred to as the "Accrued Obligations");
(ii) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Executive or his estate or
beneficiaries any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan,
program, policy or practice or contract or
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agreement of the Company and its affiliated companies through the Date
of Termination (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits");
(iii) the Company shall pay to the Executive or his estate in a
lump sum in cash within 30 days after the Date of Termination an
amount equal to the Executive's current Annual Base Salary, and
(iv) all stock options shall vest and remain exercisable for the
remainder of their term and all restricted stock awards and other
awards shall vest and become immediately payable.
b. By the Company for Cause; By the Executive Other than for Good
Reason. If the Executive's employment is terminated for Cause or the
Executive terminates his employment without Good Reason during the
Employment Period, this Agreement shall terminate without further
obligations to the Executive other than the obligation to pay to the
Executive (i) his Annual Base Salary through the Date of Termination to the
extent theretofore unpaid and (ii) the Other Benefits.
c. By the Company Other than for Cause, Death or Disability. If,
during the Employment Period but prior to a Change in Control, the
Executive's employment is terminated by the Company other than for Cause,
Death or Disability:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the sum of:
(A) the amount of Executive's Annual Base Salary through the
Date of Termination to the extent not theretofore paid; and
(B) an amount equal to the Executive's current Annual Base
Salary.
(ii) the Company shall provide the Executive with the Other
Benefits.
(iii) all stock options shall vest and remain exercisable for the
remainder of their term and all restricted stock awards shall vest and
become immediately payable.
d. After, or in Anticipation of a Change in Control By the Company
Other than for Cause or By the Executive for Good Reason. If the
Executive's employment shall be terminated by the Company other than for
Cause or the Executive terminates his employment for Good Reason in
anticipation of or within two years following a Change in Control:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the sum of:
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(A) the Accrued Obligations;
(B) an amount equal to the product of (x) two (2) and (y)
the sum of (1) the Executive's current Annual Base Salary; and
(C) any compensation previously deferred by Executive other
than pursuant to a tax-qualified plan (together with any earnings
and interest thereon).
(ii) the Company shall provide the Executive with the Other
Benefits.
(iii) all stock options shall vest and remain exercisable for the
remainder of their term and all restricted stock awards and other
awards shall vest and become immediately payable.
7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent or
limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
and for which the Executive may qualify, nor shall anything herein limit or
otherwise affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliated companies. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan, policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan, policy, practice or
program or contract or agreement except as explicitly modified by this
Agreement; provided that the Executive shall not be eligible for severance
benefits under any other program or policy of the Company.
8. FULL SETTLEMENT. The Company's obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action which the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement, and such amounts shall
not be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law, all
legal fees and expenses which the Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) pursued or defended against in
good faith by the Executive regarding the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus in each case interest on any
delayed payment at the applicable Federal rate provided for in Section
7872(f)(2)(A) of the Code.
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9. SUCCESSORS.
a. 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.
b. This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
c. The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company to assume expressly and
agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had
taken place. As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or assets as
aforesaid.
10. MISCELLANEOUS.
a. This Agreement shall be governed by and construed in accordance
with the laws of the State of Minnesota, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by
the parties hereto or their respective successors and legal
representatives.
b. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Company:
▇▇▇▇▇▇▇ Foods, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
c. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
d. The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation.
e. The Executive's or the Company's failure to insist upon strict
compliance with any provision of this Agreement or the failure to assert
any right the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate employment for
Good Reason pursuant to Section 5(c) of this Agreement, shall not be deemed
to be a waiver of such provision or right or any other provision or right
of this Agreement.
f. From and after the Effective Date this Agreement shall supersede
any other employment agreement between the parties with respect to the
subject matter hereof.
g. Subject to the provisions of 5(d), there shall be no limitation on
the ability of the Company to terminate the Executive at any time with or
without Cause.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ FOODS, INC.
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: President/CEO
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