Exhibit 10.13
SALARY CONTINUATION AGREEMENT
This Agreement, dated the 18th day of August, 1999, between Agrilink
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 Xxxxx Xxxxx Xxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
WHEREAS, the Employer employs the Employee, and the Employee shall
serve as the Employer's president and chief executive officer, and
WHEREAS, the Employer and Employee wish to provide for the retention of
the Employee, and 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 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) Retention Bonus. In addition, if the Employee continues providing
services to the Employer through August 31, 2001 in accordance to
the reasonable terms and conditions of his employment, the Employee
shall be entitled to, and shall receive a retention bonus in an
amount equal to $500,000. The Employee may elect to defer some or
all of the retention bonus
Exhibit 10.13
by making such an election within 30 days of the effective date of
this Agreement. In the event the Employee dies, becomes disabled as
defined in Section 3(b), or is Terminated without Cause as defined
in Section 3(c) prior to August 31, 2001, the Employer shall pay to
the Employee a pro-rata amount of his retention bonus, in accordance
with the provisions of subsection (a), (b), or (c) of Section 3
within 10 days of the such an event. In the event the Employee is
Terminated for Cause as defined in Section 3(d), or should
voluntarily terminate his employment as described in Section 3(e)
prior to August 31, 2001, the Employee shall not be entitled to, and
no portion shall be paid of, the retention bonus.
(d) 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.
(e) 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 award 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(e), 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(d). In
addition, the Employer shall pay to the employee a pro-rated
retention bonus, such pro-rated amount to be determined by
multiplying the retention bonus amount by the following: (a) the
number of the Employee's full or partial months of employment during
the period of August 31,
Exhibit 10.13
1998 through his date of death; divided by (b) 36 months. 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 and pro-rated
retention bonus shall be paid to the Employee's estate. In the event
of death, the Employee's Salary shall be determined as of the date
of death.
(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(e), for a period of twenty-four
(24) months, 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. In addition, the Employer shall pay to the employee a
pro-rated retention bonus, such pro-rated amount to be determined
by multiplying the retention bonus amount by the following: (a) the
number of the Employee's full or partial months of employment during
the period of August 31, 1998 through his date of disability,
divided by (b) 36 months. 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 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.
(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(e), for a period of twenty-four (24) months. In addition, the
Employer shall pay to the employee a pro-rated retention bonus, such
pro-rated amount to be determined by multiplying the retention bonus
amount by the following: (a) the
Exhibit 10.13
number of the Employee's full or partial months of employment during
the period of August 31, 1998 through his date of termination,
divided by (b) 36 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
reasonable 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(e), for a
period of twenty-four (24) months. In addition, should such
Termination occur prior to September 1, 2001, the Employer shall
also pay to the Employee the entire amount of his retention bonus,
as if he had continued his employment through August 31, 2001. The
payments provided in the Section 4(a) shall be in lieu of, and not
in addition to, the payments defined in Section 3(c).
(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,
Exhibit 10.13
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 13(d)(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 of 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
annual incentive opportunity; or (iii) the Employer requires the
Employee to be based anywhere other than his office location
immediately preceding the occurrence of the Change of 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
Exhibit 10.13
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 or, in the case
of death, to the Employee's surviving spouse or estate, 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 has been approved by the
Agrilink Foods, Inc. Board of Directors on August 18, 1999 as
evidenced by the execution of this Agreement. This Agreement shall
remain in effect until August 31, 2001: provided, however, that in
the event of a Change of Control, as defined in Section 4, before
the Agreement otherwise ceases to be effective, this Agreement shall
remain in existence for two (2) years after the date of such Change
of Control. The Termination of this Agreement shall not impair or
abridge the obligations of the Employer accrued prior to the date of
such action. The Employer may extend the term of this Agreement by
approval of the Board of Directors. It is the intention of the
Exhibit 10.13
Board of Directors to review this Agreement annually to consider
extending the expiration date. Prior to August 31, 2001, the
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. By signature below, the
Employee hereby consents to the termination of the existing Salary
Continuation Agreement dated August 19, 1998.
(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.
AGRILINK FOODS, INC.
By: /s/ Xxxxxx Call
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Xxxxxx Call
Title: Chairman, Agrilink Foods, Inc.
Date:
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Agreed: /s/ Xxxxxx Xxxxxx
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Xxxxxx X. Xxxxxx
Title: President and CEO, Agrilink Foods, Inc.
Date:
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