Exhibit 10.24
FIRST AMENDMENT TO THE
MANAGEMENT CONTINUITY AGREEMENT
AND TAX INDEMNIFICATION AGREEMENT
This First Amendment to the Management Continuity Agreement and Tax
Indemnification Agreement ("First Amendment") between Agribrands International,
Inc. and ________________________ ("Executive"), WITNESSETH:
WHEREAS, Agribrands has entered into an Agreement and Plan of
Reorganization, dated as of August 7, 2000, with Ralcorp Holding, Inc.
("Ralcorp");
WHEREAS, certain shareholders have objected to the proposed merger of
equals between Agribrands and Ralcorp ("the Merger");
WHEREAS, there is the possibility that the Merger will not be
completed;
WHEREAS, the Board of Directors desires to allay the concerns of
certain key executives of Agribrands regarding the uncertain future of the
Company in the event that the Merger is not completed;
WHEREAS, to secure the continuing services of certain key executives
without regard for their personal or professional futures;
NOW, THEREFORE, for and in consideration of the premises and other good
and valuable consideration, Agribrands and Executive agree as follows:
1. AMENDMENT OF MANAGEMENT CONTINUITY AGREEMENT
A. Article 1 Payment Period
The definition of the "Payment Period" set forth in the Management
Continuity Agreement is amended by deleting the existing text and
replacing it with the following:
The "Payment Period" shall be the following period commencing
with the first day of the month following that in which a
Qualifying Termination occurs:
i. if the Qualifying Termination is an Involuntary
Termination that occurs at any time during the first
year following the Change in Control - thirty-six
(36) months;
ii. if the Qualifying Termination is an Involuntary
Termination that occurs at any time during the second
year following the Change of Control - twenty-four
(24) months
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iii. if the Qualifying Termination is an Involuntary
termination that occurs at any time during the third
year following the Change in Control - twelve (12)
months; or
iv. if the Qualifying Termination is a Voluntary
Termination that occurs at anytime during the three
year following the Change of Control - twelve (12)
months,
but in no event shall the Payment Period extend beyond the
Executive's Normal Retirement Date.
B. Article 3 Severance Benefits
Article 3 of the Management Continuity Agreement is amended by deleting
the first full paragraph (regarding the ability of the Executive to
elect to reduce the Severance Benefits payable under the Agreement)
following Section C thereof.
C. Article 7 Taxes, Set-Off
Article 7 of the Management Continuity Agreement is amended by adding a
sentence thereto as follows:
Notwithstanding the preceding, all payments to be paid to the Executive
under this Agreement shall be grossed up by the Company in an amount
sufficient to pay (i) any Taxes incurred by the Executive pursuant to
Section 4999 of the Code with respect to a Parachute Payment (as
defined in Section 280G of the Code) received by Executive as a
consequence of a Qualifying Termination and (ii) any Taxes attributable
to amounts paid to or on behalf of the Executive pursuant to this
Article 7.
2. INDEMNIFICATION OF EXECUTIVE
A. In the event of a Qualifying Termination following a Change
in Control, other than the Merger, the Executive shall be entitled to
certain compensation from the Company, including but not limited to the
amounts due under this Agreement, under certain other benefit plans of
the Company and as a result of the acceleration and exercise of certain
incentive stock options granted by the Company to the Executive.
B. In addition to the amounts to be received by the Executive due
to a Qualifying Termination following a Change of Control, the Company
shall be liable for and shall hold the Executive harmless against and
shall make payment of:
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i. any Tax under Section 4999 of the Code which is
attributable to (a) a Parachute Payment received by
the Executive as a consequence of a Qualifying
Termination and (b) any amounts paid pursuant to this
Article 2 of the First Amendment;
ii. the cost to the Executive of preparing and filing any
Tax Return with respect to the period or periods in
which such amounts are received by the Executive; and
iii. any Tax attributable to amounts paid to or on behalf
of the Executive pursuant to Sections B(i) and (iii)
of this Article 2 of the First Amendment.
The Company's obligation to indemnify the Executive for Taxes hereunder
shall be limited to the payment of Taxes incurred pursuant to Section
4999 of the Code and Taxes incurred with respect to the amounts paid to
or on behalf of Executive pursuant to Sections B(i) and (iii) of this
Article 2 of the First Amendment. The Company shall not otherwise
indemnify Executive for Taxes incurred with respect to Severance
Benefits.
C. The term "Tax", as used in this First Amendment, shall mean
all taxes however denominated, including any interest, penalties or
other additions that may become payable in respect thereof, that are
imposed by any governmental entity, whether foreign or domestic,
federal, territorial, state or local, or any agency or political
subdivision of any such governmental entity, including but not limited
to all income or profit taxes, payroll and employee withholding taxes,
unemployment insurance, social security taxes, excise taxes (including,
without limitation, taxes under Sections 280G and 4999 of the Code) and
other or similar charges of the same or similar nature which the
Executive is required to pay, or the Company is required to withhold or
collect in connection with a Qualifying Termination.
D. The term "Tax Return" shall mean any return, filing,
questionnaire, information report or other document required to be
filed, including amended returns that may be filed, for any Tax period
with any Tax authority in connection with any Tax (whether or not
payment is required to be made with respect to such filings).
E. Failure to make any payment required under this Agreement
will result in the accrual of interest on such amount due, calculated
from the date of the Qualifying Termination to the date of payment at
the applicable Federal rate provided for in Section 7872(F)(2) of the
Code.
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3. REIMBURSEMENT OF FEES AND EXPENSES
The Company shall reimburse the Executive for all of the Executive's
reasonable fees and expenses in preparing any Tax Returns, or bringing and
pursuing any claim or action to enforce any rights or to collect any money as a
result of a Qualifying Termination, including the fees and expenses of legal,
tax and financial advisors incurred by Executive in connection herewith.
4. EFFECT OF AMENDMENT
Except to the extent amended above, the Management Continuity
Agreement, as amended, and supplemented by this agreement, shall continue in
full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment and Tax Indemnification Agreement as of the 15th day of November,
2000.
AGRIBRANDS INTERNATIONAL, INC.
___________________________________ By:___________________________
Executive Michael J. Costello
Secretary
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