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Exhibit 10.5
EXECUTIVE OFFICER AGREEMENT
AGREEMENT ("Agreement") made this 22nd day of June, 1998,
between Tropicana Products, Inc. (the "Company") and Xxxx X. Xxxxxx (the
"Executive").
Executive is the President Tropicana North America and
Executive Vice President of the Company and has important management
responsibilities and talents which benefit the Company. The Company believes
that its best interests will be served if Executive is encouraged to remain with
the Company. The Company has determined that Executive's ability to perform
Executive's responsibilities and utilize Executive's talents for the benefit of
the Company, and the Company's ability to retain Executive as an employee, will
be significantly enhanced if Executive is provided with an employment agreement
and with fair and reasonable protection from the risks of termination under
certain circumstances. Accordingly, the Company and Executive agree as follows:
1. Defined Terms.
Unless otherwise indicated, capitalized terms used in this
Agreement shall have the meanings set forth in Schedule A.
2. Effective Date; Term of Agreement.
This Agreement shall be effective as of the date first set
forth above (the "Effective Date") and shall remain in effect for three years.
3. Compensation and Benefits of Executive.
Subject to any increases authorized by the Board, Executive
shall be entitled to the following during the Term of this Agreement:
(a) A Base Salary of $400,000, which may be increased at
the discretion of the Board;
(b) An Annual Target Bonus opportunity of sixty five
percent (65%) of Base Salary; and
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(c) Participation in all other plans generally available
to executives of the Company (including, but not
limited to, retirement plans, welfare benefit plans,
stock incentive plans, deferred compensation plans,
Benefit Equalization Plan, vacation, annual
transportation allowance and other perquisites) on a
basis no less favorable than is generally afforded to
other executives.
4. Severance Benefits.
If Executive's employment with the Company is terminated at
any time during the Term by the Company without Cause or by Executive due to
Good Reason (the effective date of either such termination hereafter referred to
as the "Termination Date"), and provided that the Executive is and remains in
full compliance with his obligations in Section 9 hereof, then Executive shall
be entitled to the benefits provided in this Section 4.
(a) Salary and Bonus. A cash payment equal to two times
the sum of:
(i) Executive's Base Salary; and
(ii) Executive's Annual Target Bonus.
payable monthly over 24 months, beginning with the calendar month following the
Termination Date.
(b) Pro-Rata Annual Target Bonus. Within a reasonable time
after the Termination Date, the Company shall pay Executive a lump sum amount,
in cash, equal to Executive's Annual Target Bonus, multiplied by a fraction, the
numerator of which shall equal the number of days Executive was employed by the
Company in the calendar year in which the Termination Date occurs and the
denominator of which shall equal 365.
(c) Deferred Compensation Plan Payment. The Company shall pay
Executive all amounts previously deferred under the Company's deferred
compensation plan (or any successor plan(s)) but not yet paid, in such form as
elected by Executive under such plan(s).
(d) Continued Welfare Benefits. For two years following the
Termination Date, the Company shall provide Executive with medical, dental, and
life insurance benefits at the level provided to its executives from time to
time ("Welfare Benefits"); provided, however, that if Executive becomes employed
by a new employer, Executive's coverage under the applicable Company plans shall
continue, but Executive's coverage thereunder shall be secondary to (i.e.,
reduced by) any benefits provided under like plans of such new
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employer; and, provided, further, that Executive shall continue to make all
employee premiums or contributions required to be made under the applicable
Company plans.
(e) Pension Plan. Upon Termination, Executive will be deemed
100% vested in Executive's then accrued benefit in any Company defined benefit
pension plans, other than the Benefits Equalization Plan or any successor or
replacement plan thereto.
(f) Outplacement Counseling. For the one year period following
the Termination Date, the Company shall reimburse all reasonable expenses
incurred by Executive for professional outplacement services by qualified
consultants selected by Executive, up to 35% of Executive's Base Salary.
(g) Payment of Accrued But Unpaid Amounts. After the
Termination Date, the Company shall pay Executive earned but unpaid
compensation, not described above, including, without limitation, any unpaid
portion of Executive's annual Bonus accrued with respect to the full fiscal year
ended prior to the Termination Date, at the same time as it otherwise would have
been paid.
(h) The foregoing amounts in this Section 4 shall be reduced
by any amounts paid under the Company's Severance Pay Plan or any replacement
plan.
5. Mitigation.
Executive shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, and compensation earned from such employment or
otherwise shall not reduce the amounts otherwise payable under this Agreement.
Except as expressly set forth in Section 4(d) and 4(g) hereof, no amounts
payable under this Agreement shall be subject to reduction or offset in respect
of any claims which the Company (or any other person or entity) may have against
Executive.
6. Parachute Limitation.
Notwithstanding anything herein to the contrary, if any amount
or distribution by the Company to or for the benefit of Executive (whether or
not paid or distributed pursuant to the terms of this Agreement or otherwise)
would subject Executive to an excise tax under Section 4999 of the Code (such
excise tax, together with any interest and penalties thereon, hereinafter
referred to as the "Excise Tax") on "excess parachute payments," as defined in
Section 280G of the Code, the amounts payable under Section 4 (and any other
necessary amounts) shall be reduced by the smallest amount necessary to avoid
the imposition of the Excise Tax.
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7. Termination for Cause.
Nothing in this Agreement shall be construed to prevent the
Company from terminating Executive's employment for Cause. If Executive is
terminated for Cause, the Company shall have no obligation to make any payments
under this Agreement, except for payments that are otherwise required to be paid
under then-existing employee benefit plans, programs and arrangements of the
Company.
8. Indemnification.
Executive shall, after the Termination Date, retain all rights
to indemnification under applicable law or under the Company's certificate of
incorporation or by-laws, as they may be amended or restated from time to time,
as are available to other officers of the Company.
9. Executive's Covenants.
(a) Confidential Information. During and after the period of
the Executive's employment with the Company, Executive will regard and preserve
as confidential all Proprietary Information (as hereinafter defined) pertaining
to the business and affairs of the Company or any current or future affiliate
thereof that will be obtained by Executive in the course of his employment,
whether he has such information in his memory or in writing or in any other
physical form, except (x) while employed by the Company in the business of and
for the benefit of the Company, or (y) when required to do so by a court of
competent jurisdiction, by any governmental agency having supervisory authority
over the business of the Company, or by any administrative body or legislative
body (including a committee thereof) with authority to order Executive to
divulge, disclose or make accessible such Proprietary Information. Executive
shall not without the prior written consent of the Company otherwise divulge,
disclose or make accessible to any other person, firm, partnership or
corporation or other entity, or use for his benefit or purposes, any Proprietary
Information concerning the business or affairs of the Company. This obligation
of confidentiality shall not extend, however, to information which:
(i) was known by Executive on a nonconfidential basis
prior to its receipt by Executive from the Company;
(ii) is now, or hereafter becomes, generally
available to the public through no fault of Executive; or
(iii) is rightfully provided to Executive without
restriction from a third party, which third party possessed
such information without restriction.
(b) For purposes of this Agreement, Proprietary Information
shall include any information relating to the business or the affairs of the
Company that has not previously
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been publicly released by duly authorized representatives of the Company and
shall include but not be limited to "insider" information about the Company that
might be important to a reasonable investor who is deciding whether to buy, sell
or hold securities, information encompassed in all drawings, designs, computer
programs, strategic business plans, raw materials standards and specifications,
product development materials, research, proposals, marketing or sales plans,
manufacturing processes, storage and distribution processes, customer buying
habits and histories, financial information, profit margins, costs, pricing
information, business contact information, customer information, employee
information, such as employee lists, organization charts, personnel material,
talent material, salary and bonus information, and any confidential work product
developed by Executive or at his direction during the course of Executive's
employment with the Company.
(c) Noncompetition. During the period of Executive's
employment with the Company and for two years thereafter, Executive agrees that,
without the prior written consent of the Company, Executive shall not, directly
or indirectly, serve, or enter into a relationship with, a Competing Business,
either as principal, manager, agent, consultant, officer, stockholder, partner,
investor, lender or employee or in any other capacity, or act in any manner
adversely to the interests of the Company. Nothing in this Section 9(c) shall be
construed so as to preclude Executive from investing in any publicly or
privately held company, provided Executive's beneficial ownership of any class
of such company's securities does not exceed 1% of the outstanding securities of
such class.
(d) Nonsolicitation. During the period of Executive's
employment by the Company and for two years thereafter, Executive shall not,
directly or indirectly, himself or through others, solicit, entice away,
canvass, employ or hire or cause to be solicited, enticed away, canvassed,
employed or hired any employee of the Company or any person employed by the
Company during the preceding two years (the "Protected Employees"), nor shall
Executive directly or indirectly, himself or through others, solicit, entice or
induce any Protected Employee to terminate Executive's employment by, or
contractual relationship with, the Company or authorize, approve or assist in
the taking of any such actions by any other person.
(e) Injunctive Relief. Executive and the Company agree that
the covenants in this Section 9 are reasonable under the circumstances, and
further agree that if any court of competent jurisdiction finds that any of such
covenants are not legally enforceable, such court shall excise or modify the
offending provision or provisions of such covenants to the least degree required
by law or equity and shall thereafter enforce such covenants as so excised or
modified. Executive agrees that any breach of the covenants contained in this
Section 9 would irreparably injure the Company. Accordingly, Executive agrees
that the Company may, in addition to pursuing any other remedies it may have in
law or in equity, cease making any payments otherwise required by this Agreement
and obtain an injunction against Executive from any court having jurisdiction
over the matter restraining any further violation of this Agreement by
Executive.
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(f) Executive will inform any subsequent employer of his
obligations under this Section 9 of the Agreement.
10. Disputes.
Except with respect to any disputes or controversies arising
under Section 9 of this Agreement which shall be settled exclusively in a court
of competent jurisdiction, any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
the state of the Company's headquarters, in accordance with the Rules of the
American Arbitration Association then in effect. Judgment may be entered on an
arbitrator's award relating to this Agreement in any court having jurisdiction.
11. Assignment.
Except as otherwise provided herein, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the Company and
Executive and their respective heirs, legal representatives, successors and
assigns. If the Company shall be merged into or consolidated with another
entity, the provisions of this Agreement shall be binding upon and inure to the
benefit of the entity surviving such merger or resulting from such
consolidation. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
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. The provisions of this Section 11 shall continue to apply to each
subsequent employer of Executive hereunder in the event of any subsequent
merger, consolidation or transfer of assets of such subsequent employer.
12. Withholding.
The Company may, to the extent required by law, withhold
applicable federal, state and local income and other taxes from any payments due
to Executive hereunder.
13. Applicable Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida applicable to contracts made
and to be performed therein, without giving effect to the principles of choice
of law thereof.
14. Entire Agreement.
This Agreement constitutes the entire agreement between the
parties and, except as expressly provided herein, supersedes all other prior
agreements concerning subject
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matter hereof between the Company and Executive. This Agreement may be changed
only by a written agreement executed by the Company and Executive.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
TROPICANA PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Accepted:
/s/ Xxxx X. Xxxxxx
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Executive
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SCHEDULE A
DEFINITIONS
As used in this Agreement, and unless the context requires a
different meaning, the following terms, when capitalized, have the meaning
indicated:
"Agreement" shall have the meaning ascribed to such term in
Section 2 of this Agreement.
"Annual Target Bonus" means an amount equal to the percentage
of Base Salary set forth in Section 3(b) hereof.
"Base Salary" means Executive's annual rate of base salary
(disregarding any reduction in such rate that constitutes Good Reason) in effect
on the Effective Date, as it may be increased from time to time.
"Board" means the Board of Directors of the Company.
"Bonus" means all amounts payable to Executive under the
Company's annual incentive plan (and any successor plans(s)) for the calendar
year in which a Termination Date occurs.
"Cause" means the following:
(1) Executive's refusal to follow written, lawful
directions or Executive's material failure to perform
Executive's duties, which refusal or failure has not
been cured by Executive within ten business days
following written notice thereof from the Company;
(2) Executive's material failure to comply with the
Policies and Procedures for Worldwide Business
Conduct; or
(3) Executive's engaging in conduct which is unlawful to
the detriment of the Company or any of its
affiliates.
"Code" means the Internal Revenue Code of 1986, as amended.
"Competing Business" means any of the following:
(1) any business relating to the manufacture,
distribution or sale of juice and/or juice beverage
products, worldwide; or
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(2) any business which is the same as or similar to any
other business in which the Company is engaged on the
date of a termination of employment, within the same
geographic area in which the Company is engaged in
such other business.
"Effective Date" shall have the meaning ascribed to such term
in Section 2 of this Agreement.
"Executive" shall have the meaning ascribed to such term in
the recitals of this Agreement.
"Good Reason" means the occurrence of any of the following:
(1) A reduction in any of Executive's Base Salary or
Target Bonus, from such salary or bonus existing
immediately prior to the Effective Date, which
reduction has not been cured by the Company within
ten business days following written notice thereof;
or
(2) A relocation, during the first two years of the Term
of this Agreement, of Executive's primary place of
business in excess of 50 miles from such place's
current location (but excluding travel required by
Executive's position); or
(3) A material breach of this Agreement by the Company.
"Term" means the period during which this Agreement is
effective pursuant to Section 2 of this Agreement.
"Termination Date" shall have the meaning ascribed to such
term in Section 4 of this Agreement.
"Welfare Benefits" shall have the meaning ascribed to such
term in Section 4 of this Agreement.
