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EXHIBIT 10.13
SALARY CONTINUATION AGREEMENT
This Agreement, dated the 4th day of June, 1996, between Xxxxxxx Xxxxx
Foods, Inc., a New York corporation (the "Employer"), with offices at 00 Xxxxxx
Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000, and Xxxxxx X. Xxxxxx (the "Employee"),
residing at 00 Xxxxxxxxxx, Xxxx, Xxxxxxxxx, Xxx Xxxx.
WHEREAS, the Employer employs the Employee, and the Employee shall
serve as the Employer's chief operating officer commencing effective May 27,
1996 and shall serve as the Employer's president and chief executive officer,
commencing effective January 2, 1997, and
WHEREAS, the Employer and Employee wish to provide for the continuation
of the Employee's salary in certain events of termination of employment,
NOW, THEREFORE, the parties agree as follows:
1. CONSIDERATION. The parties hereby acknowledge that this
Agreement is entered into for good and sufficient consideration, the receipt
of which is hereby acknowledged by each of the parties.
2. COMPENSATION AND BENEFITS.
(a) Salary. As compensation for services of the Employee, the
Employer shall pay to the Employee an annual salary determined from time to time
by the Board of Directors of the Employer, in accordance with its compensation
policies.
(b) Incentive Compensation. In addition, the Employee shall
participate in, and shall be entitled to, additional compensation under the
Employer's Management Incentive Plan and Deferred Profit Sharing Program at an
entitlement rate to be determined from time to time by the Board of Directors of
the Employer, in accordance with its compensation policies.
(c) Benefits. The Employee shall be entitled to receive health
insurance, disability insurance, and all other employee benefits consistent with
the Employer's employee benefit policies for executives as determined from time
to time by the Board of Directors of the Employer. Notwithstanding the
foregoing, the Employee expressly acknowledges that the salary continuation
benefits under this Agreement are provided in lieu of any other severance
arrangements normally provided by the Employer to its executive employees.
(d) For purposes of this Agreement, the Employee's "Salary"
shall mean the sum of (i) the Employee's annual salary, as then in place at the
time of such determination, and (ii) the average Management Incentive Program
and Deferred Profit Sharing Program awards received by the Employee for the two
(2) most recently completed fiscal years of the Employer.
3. TERMINATION.
(a) Death. If the Employee dies during employment with the
Employer, the Employer shall continue the Employee's salary, defined in Section
2(d), for a period of twenty-four (24) months. Such salary continuation payments
are in addition to all life insurance benefits the Employee is entitled to
receive under any life insurance policies provided to the Employee pursuant to
Section 2(c). The Employer may, in its sole discretion, acquire a life insurance
policy or policies to fund any obligation it may have under this Section 3(a).
Such salary continuation payments shall be paid to the Employee's estate.
(b) Disability. If the Employee becomes disabled due to a
physical or mental disability, the Employer shall continue the Employee's
salary, as defined in Section 2(d), for a period of twenty-four (24) months from
the date of the Employee's disability; provided, however, that such salary
continuation payments shall be offset by the amount, if any, which the Employee
shall receive under any short-term or long-term program of the Employer. The
Employer may, in its sole discretion, acquire a disability policy or policies to
fund any obligation it may have under this Section 3(b). For purposes of this
Section 3(b), the Employee shall be deemed disabled if the Board of Directors of
the Employer shall in good faith find, on the basis of medical evidence
submitted to it, that the Employee suffers from a mental or physical condition
or impairment which precludes the resumption of his usual and customary duties,
and if such impairment or condition is likely to last for a period of more than
six (6) months. In the event of a disability, the Employee's Salary shall be
determined as of the date of the onset of the Employee's disability and the
twenty-four (24) month salary continuation period shall be measured from the
date of the onset of the Employee's disability.
(c) Termination Without Cause. The Employer may terminate the
Employee without cause. For purposes of this Agreement, the term "cause" shall
have the meaning set forth in Section 3(d) hereof. In the event the Employer
terminates the Employee without cause, the Employer shall continue the
Employee's salary, as defined in Section 2(d), for a period of twenty-four (24)
months.
(d) Termination for Cause. The Employer may terminate the
Employee for cause. For purposes of this Agreement, the Employer shall have
cause to terminate the Employee in the event of (i) Employee's conviction of or
plea of guilty or nolo contendere to a felony, or (ii) the Employee's commission
of a fraudulent or deliberately dishonest act which has an adverse impact on the
business of the Employer, or (iii) the Employee's material breach of this
Agreement or the terms and conditions of his employment. In the event the
Employee is terminated for cause, the Employer shall have no further obligation
under this Agreement.
(e) Voluntary Termination By the Employee. The Employee may
terminate employment voluntarily upon reasonable notice to the Employer. If the
Employee terminates employment voluntarily, the Employer shall have no further
obligation under this Agreement.
4. CHANGE OF CONTROL.
(a) Notwithstanding the provisions of Section 3, in the event
of a Termination, as defined below, of the Employee within two (2) years after a
Change of Control, as defined below, the Employer shall continue the Employee's
Salary as defined in Section 2(d), for a period of twenty-four (24) months.
(b) Termination. For purposes of this Section 4, "Termination"
shall mean (i) termination by the Employer of the employment of the Employee for
any reason other than on account of the Employee's death, disability, or for
cause, as defined in Section 3(d), or (ii) resignation of the Employee for Good
Reason, as defined below.
(c) Change of Control. For purposes of this Section 4, a
Change of Control shall be deemed to have occurred if (i) anyone other than
Pro-Fac Cooperative, Inc. or any of its affiliates, including a "group" (as
defined in Section 13(d)(3) of the Securities and Exchange Act of 1934 (the
"1934 Act")) becomes the "beneficial owner" (within the meaning of Section 13d-3
under the 0000 Xxx) of a majority of the common stock of the Employer; or (ii)
the Employer is a party to a merger, consolidation, or other business
combination in which it is not the surviving corporation, or sells or transfers
all or a major portion of its assets to any other person (any of the foregoing
constituting a "Business Combination"); or (iii) as a result of, or in
connection with, any cash tender or exchange offer, purchase of stock, Business
Combination, or contested election, or any combination of the foregoing
transactions (a "Transaction"), the persons who were directors of the Employer
before the Transaction shall cease to constitute a majority of the Board of
Directors of the Employer or any Successor Corporation. "Successor Corporation"
means the surviving, resulting or transferee corporation in a Business
Combination, or if such corporation is a direct or indirect subsidiary of
another corporation, the parent corporation of such surviving, resulting or
transferee corporation.
(d) Good Reason. For purposes of this Section 4, "Good Reason"
shall mean the occurrence of one of the following events: (i) the assignment of
the Employee to any duties materially inconsistent with the Employee's
positions, duties, responsibilities and status with the Employer immediately
prior to the occurrence of a Change of Control; or (ii) a reduction in the
Employee's annual salary; or (iii) the Employer requires the Employee to be
based anywhere other than his office location immediately preceding the
occurrence of the Change in Control or one of the principal executive offices of
the Employer; or (iv) the liquidation, dissolution, consolidation or merger of
the Employer or transfer of all or a significant portion of its assets, unless a
successor or successors (by merger, consolidation, or otherwise) to which all or
a significant portion of the Employer's assets have been transferred assumes all
duties and obligations of the Employer under this Agreement. The Employee's
right to terminate employment for Good Reason shall not be affected by the
Employee's incapacity due to physical or mental illness. The Employee's
continued employment shall not constitute a consent to or waiver of rights with
respect to any circumstances constituting Good Reason herein.
5. BENEFITS. In the event the Employee is entitled to salary
continuation payments under the provisions of subsection (a), (b), or (c) of
Section 3 or under the provisions of Section 4, the Employer shall continue to
provide to the Employee during the period of such salary continuation payments
all welfare benefits on the same terms and conditions as the Employer is
providing such benefits to its executive employees under its employee benefit
policies for executives. For purposes of this Section 5, welfare benefits shall
include, by way of example and not limitation, health insurance benefits, life
insurance benefits, disability insurance benefits, and the like, and shall
exclude, by way of example, and not limitation, participation in any defined
benefit plan, defined contribution plan, ss.401(k) plan, or non-qualified
deferred compensation plan.
6. MISCELLANEOUS.
(a) Unfunded Plan. This Agreement shall not require the
Employer to segregate any assets with respect to the benefits which may be paid
under it. Neither the Employer nor the Board of Directors shall be deemed to be
a trustee of any amounts to be paid under this Agreement. Any liability of the
Employer shall be based solely upon the contractual obligations created by this
Agreement and no such obligations shall be deemed to be secured by any pledge or
an encumbrance on any property of the Employer.
(b) Termination and Amendment. This Agreement shall remain in
effect until December 31, 1998 and shall thereupon terminate; provided, however,
that the termination of the Agreement shall not impair or abridge the
obligations of the Employer accrued prior to the date of such action. Prior to
December 31, 1998, this Agreement shall be amended, abandoned, or terminated
only with the written consent of the Employee prior to the effective date of
such amendment, abandonment, or termination.
(c) Governing Law. This Agreement shall be governed by
the laws of the State of New York.
IN WITNESS WHEREOF, this Agreement has been executed on the date first
above written.
XXXXXXX XXXXX FOODS, INC.
By: /s/ Xxxxxx X. Call, Jr.
Title: Chairman of the Board
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
