EXHIBIT 10.39
EMPLOYMENT AGREEMENT
This Employment Agreement is made effective as of January 14, 2000
between Cenex Harvest States Cooperatives, a Minnesota cooperative corporation
(together with all affiliates, the "Company") and Noel Estenson, who is
presently the Chief Executive Officer of the Company ("Executive").
WHEREAS;
A. Executive is the principal officer of the Company and an
integral part of its management.
B. This Employment Agreement is intended to provide Executive a
severance benefit and to put his total compensation package in
a competitive range for 1998 through 2000, as described
herein.
NOW THEREFORE, it is hereby agreed by and between the parties as
follows:
1. Employment. The Company hereby employs Executive and Executive
hereby accepts employment with the Company, subject to the
terms and conditions hereinafter provided.
2. Term. The employment of Executive hereunder will be for the
period commencing on the effective date of this Agreement and
ending on December 31, 2000, provided, however, that the
Executive may terminate the employment relationship prior to
the expiration date as hereinafter provided. Executive hereby
agrees to tender his written resignation effective December
31, 2000.
3. Position, Duties, Responsibilities. Executive shall be
employed as the Chief Executive Officer. Executive shall
exercise such authority and perform such duties and services,
consistent with such position, as may be assigned to him from
time to time by the Board of Directors (the "Board").
4. Devotion of Time and Best Efforts. Except for vacations and
absences due to temporary illness, Executive shall devote his
best efforts during his employment to the performance of his
duties and to advance the Company's interests, as determined
by the Board. During his employment, Executive shall not,
without the prior approval of the Board be engaged in any
other business activity which conflicts with the duties of
Executive hereunder, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage.
5. Early Termination.
a. Death. Executive's employment shall terminate upon
Executive's death. In the event of Executive's death,
any unpaid payments under paragraphs 6(c) and/or 8
shall be paid to his estate at the time they are
otherwise payable.
-1-
b. Termination by the Company. The Company shall be
entitled to terminate Executive's employment prior to
December 31, 2000. In the event of any such
termination, however, the Company shall make the
payments required under paragraphs 6(a) and 6(b)
through December 31, 2000, and shall make the
payments required under paragraphs 6(c) and 8 at the
time they are otherwise payable.
c. Termination by Executive. Executive may terminate his
employment at any time and for any reason whatsoever,
effective upon delivery of written notice of
termination to the Company. In that event, Executive
will not be entitled to receive any further payments
pursuant to paragraph 6(a) herein, but will be
entitled to receive any unpaid payments pursuant to
paragraphs 6(c) and/or 8 herein at the times
specified below. In that event, Executive shall also
be entitled (a) to receive the unpaid portion of his
Base Salary, prorated to the date of termination, (b)
to receive reimbursement for any ordinary and
reasonable business expenses for which he had not yet
been reimbursed, (c) to receive payment for accrued
and unused vacation days, (d) to receive his
incentive compensation for each full or partial (on a
pro rata basis) year during which he was employed, to
the extent earned and accrued, pursuant to the terms
and conditions of the applicable incentive
compensation plan(s), (e) to receive payments under
the Company's pension, profit sharing, deferred
compensation or other benefit plans in which the
Executive has participated, all to the extent and in
accordance with the terms of such plans, and (f) to
continue certain health insurance at his expense
pursuant to COBRA.
6. Compensation.
a. Base Salary. During his employment, the Company shall
pay Executive a "Base Salary" at the rate of Five
Hundred Forty Thousand Eight Hundred Dollars
($540,800) per year, commencing on the effective date
of this Agreement, payable in accordance with the
Company's regular payroll practices and policies
which are in effect from time to time.
b. Annual Variable and Long-Term Incentive Compensation.
During his employment, Executive shall be entitled to
receive compensation under the annual Variable
Compensation Plan and the Management Long-Term
Incentive Plan, payable within the current customary
time frame, which is at least equal to amounts
payable pursuant to the terms of the Executive
Compensation Plan that was in effect for Cenex on
January 1, 1998. In calculating the amount of
incentive compensation under the Executive
Compensation Plan, it shall be assumed that Cenex had
met the projected earnings in the Cenex Long Range
Business Plan in effect on January 1, 1998. In the
event that either of these plans is discontinued or
amended effective during his employment, and the
amount of variable compensation
-2-
due Executive under the replacement or amended plans
is less than Executive would have received under the
current plans, the Executive shall be entitled to
receive the amount of variable compensation that
would have been payable under the current plans.
c. One-Time Adjustment to Total Cash Compensation. The
Company shall make payment to Executive in the amount
of Six Hundred Sixty Thousand Dollars ($660,000),
payable at the earlier of (i) August 1, 2000 or (ii)
thirty (30) days prior to the effective date of any
consolidation of the Company's business with the
business of any other entity ("Consolidation").
7. Benefit Plans.
a. General. During the Employment Period, Executive
shall be eligible to participate in all executive
compensation and employee benefit plans or programs
generally applicable to senior management employees
of the Company pursuant to the terms and conditions
of such plans and programs. Nothing contained in this
Agreement shall preclude the Company from terminating
or amending any such plan or program.
b. Qualified Plans. Executive shall be entitled to
Company contributions and benefits with respect to
Base Salary under the Company's qualified pension
plans determined in the same manner as for other
participants in those plans, subject to any
contribution or benefit limitations. However, if such
plans as in effect on the date of execution of this
Agreement are modified in a manner which will reduce
future benefits under those plans for Executive,
then, as a means to make up for those reductions, the
Company shall establish a new nonqualified plan or
amend an existing nonqualified plan which shall
provide for any lost benefits under the Company's
pension plan.
c. Nonqualified Plans.
(1) Share Option Plan. Executive shall continue
to be eligible to participate in the Share
Option Plan. If this plan should be amended
or terminated prior to the end of the
Employment Period, the terms of the plan
will be maintained with respect to
Executive, unless Executive agrees to accept
the modified provisions of a revised plan or
a new plan intended to replace the plan.
(2) Supplemental Executive Retirement Plan.
Executive will be entitled to benefits under
this plan on terms no less favorable than
those set forth in the restatement of the
plan effective January 1, 1997; however, if
this plan should be amended or terminated
prior to the completion of payments under it
to Executive, the terms of the plan will be
maintained with respect to Executive, unless
Executive
-3-
agrees to accept the modified provisions of a revised
plan or a new plan intended to replace that
restatement.
8. Severance Payment by the Company. The Company shall make a
severance payment to Executive in the amount of Six Hundred
Thousand Dollars ($600,000), payable at the earlier of (a)
August 1, 2000 or (b) thirty (30) days prior to the effective
date of any Consolidation. This severance payment shall not be
considered as income or compensation in determining
Executive's benefits under any non-qualified benefit plan,
including the Supplemental Executive Retirement Plan.
9. Other Executive Obligations. Executive agrees that the
following provisions will apply throughout Executive's period
of active or inactive employment, and will continue to apply
even if Executive's employment is terminated under Paragraph
5, regardless of the reason for termination:
a. Nondisclosure of Confidential Information. Except to
the extent required in furtherance of the Company's
business in connection with matters as to which
Executive is involved as an employee, Executive will
not, during the term of his employment and for an
unlimited period thereafter, directly or indirectly:
(1) disclose or furnish to, or discuss with, any
other person or entity any confidential information
concerning the Company or its business or employees,
acquired during the period of his employment by the
Company; (2) individually or in conjunction with any
other person or entity, employ or cause to be
employed, any such confidential information in any
way whatsoever or (3) without the written consent of
the Company, publish or deliver any copies, abstracts
or summaries of any papers, documents, lists, plans,
specifications or drawings containing any such
confidential information.
b. Non-Interference. Executive will not, during the term
of his employment and for an unlimited period
thereafter, directly or indirectly attempt to
encourage, induce or otherwise solicit any employee
or other person or entity to breach any agreement
with the Company or otherwise interfere with the
advantageous business relationship of the Company
with any person or entity. Executive specifically
agrees not to solicit, on Executive's own behalf or
on behalf of another, any of the Company's employees
to resign from their employment with the Company in
order to go to work elsewhere. Executive further
specifically agrees not to make any disparaging
remarks of any sort or otherwise communicate any
disparaging remarks about the Company or any of its
members, equity holders, directors, officers or
employees, directly or indirectly, to any of the
Company's employees, members, equity holders,
directors, customers, vendors, competitors, or other
people or entities with whom the Company has a
business or employment relationship.
-4-
c. Non-Competition. Executive agrees that during the
term of his employment and thereafter for a period of
two (2) years, Executive will not directly or
indirectly engage in or carry on a business that is
in direct competition with any significant business
unit of the Company as conclusively determined by the
Board of Directors. Further, Executive agrees that
during this same period of time he will not act as an
agent, representative, consultant, officer, director,
independent contractor or employee of any entity or
enterprise that is in direct competition with any
significant business unit of the Company as
conclusively determined by the Board of Directors.
d. Consulting. Executive agrees to make himself
generally available to the Company as needed for
consulting, on terms to be separately agreed upon
between the parties, through December 31, 2001.
e. Cooperation in Claims. During the term of his
employment and for an unlimited period thereafter, at
the request of the Company, Executive will cooperate
with the Company with respect to any claims or
lawsuits by or against the Company where Executive
has knowledge of the facts involved in such claims or
lawsuits. Executive shall be entitled to reasonable
compensation for Executive's time and expense in
rendering such cooperation. Further, Executive will
decline to voluntarily aid, assist or cooperate with
any party who has claims or lawsuits against the
Company, or with their attorneys or agents. The
Company and Executive both acknowledge, however, that
nothing in this paragraph shall prevent Executive
from honestly testifying at an administrative
hearing, arbitration, deposition or in court, in
response to a lawful and properly served subpoena in
a proceeding involving the Company.
f. Remedies. The parties recognize and agree that,
because any breach by Executive of the provisions of
this Paragraph 9 would result in damages difficult to
ascertain, the Company shall be entitled to
injunctive and other equitable relief to prevent a
breach or threatened breach of the provisions of this
Paragraph 9. Accordingly, the parties specifically
agree that the Company shall be entitled to temporary
and permanent injunctive relief to enforce the
provisions of this Paragraph 9, that such relief may
be granted without the necessity of proving actual
damages. The parties further agree that the right to
such relief shall be in lieu of any right to recover
money damages for any such breach.
g. Enforceability. Executive agrees that considering
Executive's relationship with the Company, and given
the terms of this Agreement, the restrictions and
remedies set forth in Paragraph 9 are reasonable.
Notwithstanding the foregoing, if any of the
covenants set forth above shall be held to be invalid
or unenforceable, the remaining parts thereof shall
nevertheless continue to be valid and enforceable as
though the invalid or unenforceable parts have
-5-
not been included therein. In the event the
provisions relating to time periods and/or areas of
restriction shall be declared by a court of competent
jurisdiction to exceed the maximum time periods or
areas of restriction permitted by law, then such time
periods and areas of restriction shall be amended to
become and shall thereafter be the maximum periods
and/or areas of restriction which said court deems
reasonable and enforceable. Executive also agrees
that the Company's action in not enforcing a
particular breach of any part of Paragraph 9 will not
prevent the Company from enforcing any other breaches
that the Company discovers, and shall not operate as
a waiver by the Company against any future
enforcement of a breach.
10. Notices. Notices hereunder shall be in writing and shall be
delivered personally or sent return receipt requested and
postage prepaid, addressed as follows:
If to Executive:
Noel Estenson
Cenex Harvest States Cooperatives
5500 CENEX Drive
Inver Grove Heights, MN 55077
If to the Company:
Chairman of the Board
Cenex Harvest States Cooperatives
5500 CENEX Drive
Inver Grove Heights, MN 55077
With a Copy to:
General Counsel
Cenex Harvest States Cooperatives
5500 CENEX Drive
Inver Grove Heights, MN 55077
11. Assignment. This Agreement is personal in its nature and the
parties hereto shall not, without the consent of the other,
assign or transfer this Agreement or any rights or obligations
hereunder; provided, however, that the provisions hereof shall
inure to the benefit of, and be binding upon each successor in
a change of control of the Company, whether by merger,
consolidation, transfer of all or substantially all assets,
sale or otherwise (and such successor shall thereafter be
deemed the "Company" for purposes of this Agreement).
-6-
12. Binding Agreement. The provisions of this Agreement shall be
binding upon, and shall inure to the benefit of, the
respective heirs, legal representatives and successors of the
parties hereto.
13. Minnesota Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Minnesota, unless otherwise preempted by federal law.
14. Captions and Section Headings. Captions and paragraph headings
used herein are for convenience only and are not a part of
this Agreement and shall not be used in construing it.
15. Invalid Provisions. If any provision of this Agreement shall
be unlawful, void, or for any reason unenforceable, it shall
be deemed severable from, and shall in no way affect the
validity or enforceability of, the remaining provisions of
this Agreement.
16. Waiver of Breach. The failure to enforce at any time any of
the provisions of this Agreement, or to require at any time
performance by the other party of any of the provisions
hereof, shall in no way be construed to be a waiver of such
provisions or to affect either the validity of this Agreement
or any part hereof or the right of either party thereafter to
enforce each and every provision in accordance with the terms
of this Agreement.
17. Entire Agreement. Except as provided in paragraph 9(d), this
Agreement contains the entire agreement between the parties
with respect to the subject matter hereof and supersedes all
prior and contemporaneous agreements, representations and
understandings of the parties with respect thereto. No
modification or amendment of any of the provisions of this
Agreement shall be effective unless in writing specifically
referring hereto and signed by Executive and a member of the
Board upon authorization of the Board to do so.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date set forth above.
EXECUTIVE CENEX HARVEST STATES
COOPERATIVES
By: /s/ Noel K. Estenson By: /s/ Steven Burnet
---------------------------- --------------------------------
Noel Estenson Chairman of the Board
7