[HORIZON LETTERHEAD]
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
November 11, 1999
Xxxxxxx X. Xxxxx
00000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxx 00000
000-000-0000
Dear Xxxxx,
It is my extreme pleasure to confirm our offer of employment as President and
Chief Operating Officer for Horizon Organic Holding Corporation (HOH)
pursuant to this Amended and Restated Employment Agreement which shall
supercede and replace in its entirety the Employment Agreement, dated as of
November 4, 1999, between you and the Company. This is a full-time, exempt
position reporting to Xxxxxx Xxxxxxxx, Chief Executive Officer. The details
of our employment offer to you are confirmed below:
EMPLOYMENT TERMS AND CONDITIONS
TERMS:
1. EFFECTIVE DATE OF HIRE: November 29, 1999
2. BASE SALARY: $9,615.39 per pay-cycle with 26 pay cycles per year
($250,000.14 if annualized). You will have annual compensation reviews
that are performance/merit based, scheduled on the anniversary of your hire
date. The Compensation Committee of the Board will determine annual merit
increase compensation adjustments.
3. SUCCESSION: The position of President and Chief Operating Office is
identified as the successor to the Chief Executive Officer position. The
succession to President/CEO is scheduled concurrent with the May 21, 2000,
Shareholder's meeting.
At the time your position and responsibilities are elevated to President /
CEO, your base compensation will be increased from $9,615.39 per pay
cycle to $10,577.00 per pay cycle ($275,002.00 if annualized).
4. BOARD OF DIRECTORS: The positions of President / COO as well as President /
CEO are identified as members of the HOH Board of Directors.
5. BONUS: As President / COO, you will participate in the Horizon Organic
Dairy Bonus Compensation Plan at 45% of base salary at target performance,
with a maximum potential bonus of 90% of base salary for extraordinary
performance. Your bonus consideration for 1999 will be prorated from date
of hire to December 31, 1999.
At the time you are promoted to President / CEO, you will participate in
the BCP at 55% of base salary at target performance, with a maximum
potential bonus of 110% of base salary for extraordinary performance.
Bonus consideration is based on a combination of corporate and individual
performance factors, the details of which will be mutually determined by
you and the CEO during your service as President / COO and mutually
determined by you and the Board during your service as President / CEO.
6. PAID TIME OFF: You will accrue Paid Time Off (PTO) at the rate of 26 days
per employment year. You will have an additional 10 days of PTO in your PTO
on your date of hire.
7. STOCK OPTIONS: On your start date, you will be awarded, in accordance
with the Horizon qualified Equity Incentive Plan, a vesting stock option to
purchase 150,000 shares of HOH common stock at the strike price at the
close of business on the day of the signed Employment Agreement or the
strike price on your start date, whichever is the lower PLUS 50,000
restricted stock options of HOH common stock at 85% of the strike price at
the close of business on the day of the signed Employment Agreement or the
strike price on your start date, whichever is lower. At the time you are
promoted to President / CEO you will receive additional 50,000 options at
the fair market value at that time. All of the stock options described in
this paragraph 7 are referred to in this letter agreement as the "Stock
Options."
Except as provided otherwise in this paragraph 7, the Stock Options will
vest at 25% per year on the anniversary date of the award with a 5-year
exercise period. In the event of a Change of Control of HOH, the Stock
Options immediately shall become exercisable in full. A "Change in Control"
of HOH shall be deemed to have occurred if (i) any person (as such term is
used in Sections 13(d) and 14(d) (2) of the Securities and Exchange Act of
1934 (the "Exchange Act")), other than HOH, is or becomes the beneficial
owner (as defined in Rule 13D-3 under the Exchange Act), directly or
indirectly, of 50% or more of the combined voting
power of the outstanding shares of capital stock of HOH entitled to vote
generally in the election of directors (calculated as provided in Rule
13d-3(d) under the Exchange Act in the case of rights to acquire capital
stock), whether by means of a tender offer or exchange offer, Transaction
or otherwise; or (ii) the Board or stockholders of HOH approve a
Transaction. A "Transaction" is: a) any consolidation or merger of HOH
other than a merger solely to effect a reincorporation or a merger of HOH as
to which stockholder approval is not required pursuant to Sections 251(f)
or 253 of the Delaware General Corporation Law; or b) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of 50% or more of the assets of HOH.
8. BENEFITS: You will be eligible to participate in all company benefits
including:
- Wellness and insurance (life, short- and long-term disability,
medical, dental and vision), from first day of employment providing you
complete the required enrollment forms within the first 30 days of
employment.
- 401-K program with eligibility for participation to commence after one
year of regular full-time employment. Enrollment windows are available
at the beginning of each quarter following one year of employment.
The 401-K plan is currently being restructured for a January 2000
implementation. Among other changes, we are evaluating the acceleration
of participation eligibility.
- Employee stock purchase plan after a 90 days of regular full-time
employment with enrollment periods of July 1st and January 1st of each
year.
9. MOVING ALLOWANCE: HOH will reimburse you (or pay on your behalf) all
costs related to your relocation to Colorado up to $100,000.00 for related
relocation expenses, such as realtor fees/closing costs on the
sale/purchase of your home, house-hunting trips to Colorado, temporary
housing, living expenses, etc.
10. SEVERANCE: HOH agrees to pay, as severance, contingent upon the execution
of a release and non-compete agreement, 18 months of base salary at the
base salary rate in effect at the time of termination in the form of
salary continuation (39 pay cycles) with the exception of termination for
cause or voluntary termination (such severance payment referred to herein
as the "Severance"). The release agreement will be full and final; the
duration of the non-compete will be equal to the duration of the
severance/salary continuation, i.e., 18 months and will be limited in
scope to the organic products industry.
CONDITIONS:
TERMINATION WITHOUT CAUSE: HOH will have the right to terminate employment
at any time without 'cause'. In such event, contingent upon the execution of
a release and non-compete agreement, HOH agrees to pay the Severance and the
pro rata portion of your bonus from January 1st of the year in which the
termination occurred to the termination date based upon year end plan
achievement, paid out at the same time as other bonus plan participants.
VOLUNTARY TERMINATION: You may voluntarily terminate employment at any time,
after which no further compensation shall be paid, nor will there be any
entitlement to Severance. However, HOH agrees to pay, at the same time as
other bonus plan participants, your bonus on a prorated basis based upon
year-end plan achievement. Should you decide to voluntarily terminate
employment with HOH, you agree to give at least 30 days notice of resignation.
In the event of a Change of Control of HOH or significant change in
responsibilities, you will have the right to receive the Severance upon your
voluntary termination.
TERMINATION FOR CAUSE: HOH will have the right to terminate for 'cause' if a
written notification has been given and curative solution has not been
reached within 15 days of notification. For these purposes, 'cause' shall be
found to exist if you have been convicted of a felony, committed an act
involving the misappropriation of funds of HOH or any other act which in the
reasonable judgement of HOH is deliberately intended to bring harm or injury
to the business or property of HOH. In the event of termination for cause,
there will be no further compensation, bonus, or severance compensation. You
will be entitled to all compensation, benefits and unreimbursed expenses
accrued through the date of termination.
COMPANY POLICIES: Throughout your employment, you will be expected to abide
by all of the company's policies, procedures and code of conduct.
This offer is contingent upon your ability to provide Horizon Organic Dairy
the necessary I-9 information documenting your right to work in the U.S.A.
Xxxxx, we are very excited about your joining our team and are looking
forward to working with you. We are confident that you will make a
significant contribution to our business. Welcome to Horizon Organic Dairy!
Please indicate your acceptance of this Amended and Restated Employment
Agreement by signing below and returning one original to Human Resources.
Sincerely,
/s/ Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
Vice President, Human Resources
Accepted: /s/ Xxxxxxx X. Xxxxx
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Declined:
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