EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of January 23, 1997 by and between John D.
Johnson whose residence is located at 51 Dellwood Cove, Dellwood, MN 55110
(hereafter "Johnson") and Harvest States Cooperatives located at 1667 North
Snelling Avenue, St. Paul, Minnesota 55108 (hereafter "Harvest States").
1. THE EMPLOYMENT CLAUSE
Harvest States hereby agrees to and does hereby employ Johnson as
President and CEO, and Johnson hereby agrees to continue in the employ
of Harvest States as President and CEO, for the period set forth in
Paragraph 2 below (the period of employment) upon the other terms and
conditions set forth in this Agreement.
2. PERIOD OF EMPLOYMENT; TERMINATION OF AGREEMENT
(a) The period of employment shall commence on the date of this
Agreement and, subject only to the provisions of Paragraphs
6(b) and 6(c) below, relating, respectively, to death and
disability, shall continue for a rolling three (3) year
period, provided that Johnson's employment may be terminated
by either party on at least thirty (30) days written notice,
subject to the rights and obligations of the parties set forth
herein.
(b) Either party may terminate this Agreement and all of the
rights and obligations of the parties hereunder, upon at least
three (3) years' prior written notice to the other party.
3. THE PERFORMANCE CLAUSE
Throughout the period of employment, Johnson agrees to devote his full
time and attention during normal business hours to the business of
Harvest States, except for earned vacations and except for illness or
incapacity.
4. THE COMPENSATION CLAUSE
(a) For all services to be rendered by Johnson in any capacity
during the period of employment, Johnson shall be paid as
annual compensation a base or fixed salary of at least
$500,000. The Board will annually review Johnson's annual
compensation and determine what is appropriate for a cost of
living and/or merit increase.
(b) Bonus or incentive compensation, if any, shall be paid to
Johnson in the discretion of the Board of Directors.
(c) During the term of his employment hereunder, Johnson shall be
entitled to those employee benefits separately made available
to him from time to time by the Board of Directors in its
discretion.
(d) Harvest States shall bear such ordinary and necessary business
expenses incurred by Johnson in performing his duties
hereunder as Harvest States determines from time to time,
provided that Johnson accounts promptly for such expenses to
Harvest States in the manner prescribed from time to time by
Harvest States.
5. TERMINATION WITH SEVERANCE ALLOWANCE
(a) Conditions for Severance Allowance and Amount. In the event of
termination of the employment of Johnson by Harvest States
during the period of employment for any reason other than for
cause, as defined in (b) below, death or disability, Harvest
States shall pay Johnson a severance allowance by continuing
Johnson's base or fixed salary for three (3) years, plus
continuing his family health insurance for at least one (1)
year. Said severance allowance shall be in lieu of all other
severance payable to Johnson under Harvest States severance
policies. Said severance shall be paid in semi-monthly
installments, subject to normal withholding taxes.
(b) Definition of "For Cause". For the purpose of this Agreement,
termination of Johnson's employment shall be deemed to have
been for cause (and in which case the Harvest States shall
have no obligation to Johnson whatsoever) only:
(i) if termination of Johnson's employment shall have
been the result of an act or acts of fraud, theft or
embezzlement on the part of Johnson which, if
convicted, would constitute a felony and which
results or which is intended to result directly or
indirectly in gain or personal enrichment of Johnson
at the expense of the Harvest States; or
(ii) if termination of Johnson's employment results from
Johnson's willful and material misconduct, including
willful and material failure to perform his duties,
and Johnson has been given written notice by the
Board of Directors with respect to such and Johnson
does not cure within a reasonable time; or
(iii) if there has been a breach by Johnson during the
period of employment of the provisions of Paragraph 3
above, relating to the time to be devoted to the
affairs of Harvest States, and with respect to any
alleged breach of Paragraph 3 hereof, Johnson shall
have substantially failed to remedy such alleged
breach within thirty days from Johnson's receipt of
notice from the Board of Directors.
(c) Non-Compete. In consideration of the severance payments,
during the period that Johnson accepts the severance allowance
provided herein, Johnson agrees: (i) not to recruit or solicit
any employee or customer of Harvest States or participate in
the solicitation of any employee or customer of Harvest
States; and (ii) not to directly or indirectly participate
anywhere in the continental United States in any activities
which are in competition or conflict with the activities of
Harvest States or any Harvest States subsidiary, including,
but not limited to, managing, consulting, operating,
controlling, owning or having an ownership interest in, being
employed by, or being connected with the management, operation
or control of, any business which is of the same or similar
type of business in which Harvest States or any Harvest States
subsidiary presently engage, or hereafter engage during the
term of this Agreement, or which competes with, or reasonably
could be expected to compete with, Harvest States or any
Harvest States subsidiary.
(d) Request and Release. In order to obtain the severance
allowance provided for in this Agreement, Johnson must submit
a request for severance and must sign a complete release of
all claims. Harvest States shall have no obligation to pay any
severance allowance unless and until Johnson shall have
submitted the request for severance and signed a full and
complete release of all claims, to be drafted by Harvest
States Legal Department.
6. TERMINATION WITHOUT SEVERANCE ALLOWANCE
(a) Voluntary Termination by Johnson. In the event of voluntary
termination by Johnson, Harvest States shall not owe Johnson
any severance allowance and Johnson shall not, for a period of
three (3) years from the date of termination, directly or
indirectly participate anywhere in the continental United
States in any activities which are in competition or conflict
with the activities of Harvest States or any Harvest States
subsidiary, including, but not limited to, managing,
consulting, operating, controlling, owning or having an
ownership interest in, being employed by, or being connected
with the management, operation or control of, any business
which is of the same or similar type of business in which
Harvest States or any Harvest States subsidiary presently
engage, or hereafter engage during the term of this Agreement,
or which competes with, or reasonably could be expected to
compete with, Harvest States or any Harvest States subsidiary.
(b) Death. In the event of Johnson's death during the period of
employment, the legal representative of Johnson shall be
entitled to the base or fixed salary provided for in Paragraph
4(a) above for the month in which death shall have occurred,
at the rate being paid at the time of death, and the period of
employment shall be deemed to have ended as of the close of
business on the last day of the month in which death shall
have occurred but without prejudice to any benefits, such as
life insurance, otherwise due in respect of Johnson's death.
(c) Disability.
(i) In the event of the Johnson's disability during the
period of employment, Johnson shall be entitled to an
amount equal to the base or fixed salary provided for
in Paragraph 4(a) above, at the rate being paid at
the time of the commencement of disability, for the
period of such disability but not in excess of twelve
(12) months from the beginning of the period that
establishes such disability, as described in
Paragraph 6(c)(iii) below.
(ii) The amount of any payments due under Paragraph
6(c)(i) shall be reduced by any payments to which
Johnson may be entitled for the same period because
of disability under any disability or pension plan of
Harvest States or of any division, subsidiary, or
affiliate thereof, or as the result of workers'
compensation or nonoccupational disability payments
received from any government entity.
(iii) The term "Disability" as used in this Agreement,
shall mean an illness or accident occurring during
the period of employment which prevents Johnson from
performing the essential functions of his job under
this Agreement, with reasonable accommodations (as
defined by federal and Minnesota disability laws),
for a period of six consecutive months. The period of
employment shall be deemed to have ended as of the
close of business on the last day of such six-month
period but without prejudice to any payments due
Johnson from any disability policy or disability
insurance.
7. SUCCESSOR IN INTEREST
This Agreement and the rights and obligations hereunder shall be
binding upon and inure to the benefit of the parties hereto and their
respective legal representatives, and shall also bind and inure to the
benefit of any successor of Harvest States by merger or consolidation
or any purchaser or assignee of all or substantially all of its assets,
but, except to any such successor, purchaser, or assignee of Harvest
States, neither this Agreement nor any rights or benefits hereunder may
be assigned by either party hereto.
8. CONSTRUCTION
Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or the remaining
provisions of this Agreement.
9. GOVERNING LAWS
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Minnesota.
10. NOTICES
Any notice required or permitted to be given under this Agreement shall
be sufficient if in writing, sent by Certified Mail, Return Receipt
Requested:
If to Johnson: 51 Dellwood Cove
Dellwood, MN 55110
With a copy to: Legal Department
Harvest States Cooperatives
P.O. Box 64594
St. Paul, MN 55164
If to Harvest States: Chairman of the Board of Directors
(Home address)
With a copy to: Legal Department
Harvest States Cooperatives
P.O. Box 64594
St. Paul, MN 55164
11. ENTIRE AGREEMENT
This Agreement shall constitute the entire agreement between the
parties, superseding all prior agreements, and may not be modified or
amended and no waiver shall be effective unless by written document
signed by the Chairman of the Board and Johnson.
Executed as of the 23rd day of January, 1997.
HARVEST STATES COOPERATIVES
By: /s/ Steven Burnet
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Steven Burnet
Chairman of the Board
/s/ John D. Johnson
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John D. Johnson