Exhibit 10.12
EMPLOYEE SEVERANCE AGREEMENT
This Employee Severance Agreement (this "Agreement"), dated as of November
17, 2003 (the "Effective Date"), is between Premium Standard Farms, Inc.
("PSF"), a Delaware corporation whose principal executive offices are located in
Kansas City, Missouri, and Xxxxxxx Xxxxxx ("Xxxxxx").
1. Employment. PSF will employ Xxxxxx as the Vice-President of Sales and
Marketing. He is employed as an at-will employee. The parties anticipate the
employment to last for at least until November 17, 2008, at which time Xxxxxx
will be eligible for the severance payment recited herein.
2. Salary and Benefits. Xxxxxx will commence his employment at an annual
salary of $200,000, and will receive the standard benefits as in effect from
time to time afforded to PSF officers.
3. Prior Agreements. This agreement supersedes and replaces any prior
representations or employment agreements entered into by and between PSF and
Xxxxxx, and is not intended as a contract of employment for a fixed duration.
4. Resignation. If Xxxxxx resigns his employment or leaves employment by
reason of his death or disability at any time prior to November 17, 2008, he
will forfeit the severance payment.
5. Termination of Employment. If Xxxxxx' employment is terminated by PSF
for specified reasons, he will not be paid the severance payment. The specified
reasons are (A) any fraud, theft or intentional misappropriation perpetrated by
Xxxxxx against PSF; (B) Xxxxxx' conviction for or admission of a felony offense
or his indictment for a criminal offense involving or relating to the business
of PSF; (C) Xxxxxx' failure to abide by PSF policies and procedures; (D) Xxxxxx'
breach of his obligations under Sections 8 or 9 of this Agreement; or (E)
Xxxxxx' failure to perform his obligations as an officer of PSF, after
counseling.
6. Severance Payment. If PSF terminates Xxxxxx' employment at any time for
reasons other than specified herein, Xxxxxx will receive all earned Base Salary
and benefits under Section 2 only through the last day of Xxxxxx' employment
with PSF (as well as reimbursement of expenses incurred through the last day of
Xxxxxx' employment). In exchange for providing PSF with an enforceable waiver
and release agreement in a form utilized by PSF for PSF officers, for the period
of time immediately following Xxxxxx' last day of employment with PSF through
November 17, 2008, PSF will continue to pay to Xxxxxx, as Xxxxxx' xxxxxxxxx pay,
Xxxxxx' Base Salary then in effect on Xxxxxx' last day of employment. Also, PSF
will pay the COBRA premium for continuing Xxxxxx' health insurance, in effect at
the time of Xxxxxx' termination, under COBRA for a period of 18 months. In the
event of Xxxxxx' death prior to November 17, 2008, PSF's obligation to continue
to pay Xxxxxx' severance pay and the COBRA premium shall cease as of the last
day of the month in which Xxxxxx' death occurs or November 17, 2008, whichever
occurs first.
7. Severance Pay. If Xxxxxx' employment with PSF continues after November
17, 2008, Xxxxxx shall revert to coverage under PSF's Vice President Severance
Pay Plan ("VP Plan"), and such VP Plan will be the sole source of Xxxxxx'
entitlement to severance pay after that date. At such time as Xxxxxx becomes
eligible for severance pay pursuant to this Agreement, he shall have the right
to waive the severance benefits pursuant to Section 6 and elect to claim
whatever entitlement he may have pursuant to the then current VP Plan.
8. Restrictive Covenants:
a. During the period that Xxxxxx is employed by PSF, except for
fulfilling his duties as an officer of PSF, and for a period of twelve
(12) months after his employment terminates for any reason:
(i) Xxxxxx will not directly or indirectly solicit any PSF
customers, or their consultants and/or representatives, on
behalf of any person, organization or entity that compete with
or is in competition with PSF;
(ii) Xxxxxx will not directly or indirectly solicit any PSF employee
(including any person employed by PSF on the date of Xxxxxx'
termination of employment who subsequently leaves PSF
employment) to leave PSF's employ or to become employed by any
other person, organization or entity; and
(iii) Xxxxxx will not directly or indirectly solicit or encourage any
PSF supplier, representative, vendor or consultant to change its
relationship with PSF.
b. In the event that Xxxxxx takes any actions contrary to the
restrictions in subsection (a) above, Xxxxxx will not be entitled to
receive any further payment of severance pay or COBRA premiums and,
upon written request by PSF, Xxxxxx must immediately return to PSF any
and all severance pay and the cost of COBRA premiums previously paid
to him or on his behalf. This is in addition to any and all remedies
available to PSF, including injunctive relief and an action for
damages. A court of competent jurisdiction may modify the restrictions
in Section 8 to the extent it finds any of them to be overbroad or
unenforceable.
9. Confidential Information, Trade Secrets. Xxxxxx acknowledges that
information, observations, and data obtained by Xxxxxx concerning PSF's
business, both prior to the Effective Date while Xxxxxx was employed by PSF (or
any predecessor whose stock or assets have been acquired by PSF, if applicable),
and after the Effective Date, concerning the business or affairs of PSF (or any
such predecessor, as the case may be) constitute confidential information, are
trade secrets, are the property of PSF, and are essential and confidential
components of PSF's business. Xxxxxx will not directly or indirectly disclose to
any person, organization or entity or use any of such information, observations
or data, except in the course of Xxxxxx' employment with PSF. Upon termination
of employment, Xxxxxx agrees to return to PSF all confidential information and
trade secrets, including all copies and excerpts thereof.
10. Survival of Obligations Upon Xxxxxx' Termination. The obligations of
Xxxxxx in Sections 8 and 9 will survive the termination of Xxxxxx' employment
with PSF.
2
11. General Matters.
a. This Agreement will be governed by the internal laws of the State of
Missouri, without regard to its conflict of law rules. Any dispute
regarding this Agreement shall be adjudicated by a court of competent
jurisdiction in the State of Missouri.
b. This Agreement may be amended only with the written consent of Xxxxxx
and a duly authorized officer of PSF.
c. This Agreement may not be assigned by Xxxxxx and shall be binding upon
PSF's successors and assigns.
ACCEPTED AND AGREED: ACCEPTED AND AGREED:
PREMIUM STANDARD FARMS, INC.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxxxx Xxxxxx
--------------------------------- ---------------------------------
Name: Xxxxxx X. Xxxxx XXXXXXX XXXXXX
--------------------------------
Title:President: President
---------------------
3
