Document:

Exhibit 10.15

 

EXECUTION VERSION

 

EMPLOYMENT AGREEMENT

(Farmer Bros. Co. / Modaro)

 

 

This
Employment Agreement (“Agreement”) is dated March 19, 2009 (the “Signing
Date”), and made effective as of March 1, 2009 (the “Commencement Date”),
between FARMER BROS. CO., a Delaware corporation (the “Company”), and HEIDI
MODARO (“Modaro”) who agree as follows:

 

1.                                       Employment:  The Company
hereby employs Modaro, and Modaro accepts employment from the Company, on the
terms and conditions herein stated.

 

2.                                       Term of Employment:  The
term of Modaro’s employment under this Agreement commenced on the Commencement
Date and shall end when terminated under Section 7 below.

 

3.                                       Duties:  Modaro
shall serve as Vice President Sales and Operations, Coffee &
Tea of the Company, reporting to the Chief Operating Officer (“COO”).  Her general responsibilities shall include
oversight responsibility for the Company’s direct store delivery sales and
operations.  In addition to her general
responsibilities, Modaro shall also perform such other duties as are consistent
with her position and as are directed by the Company’s COO, Chief Executive
Officer (“CEO”) or Board of Directors (“Board”).  Modaro shall devote to the Company’s business
substantially all of her working time. 
Service as a director or equivalent of other for-profit organizations
shall require approval of the Board.

 

4.                                       Base Salary: Modaro shall receive an annual base salary of
$250,000 payable in accordance with the Company’s normal payroll practice.  The annual base salary amount shall be
reviewed annually by the Company and can be adjusted upward or downward by the
Company from time to time but shall not be reduced below $250,000 per annum.

 

5.                                       Bonuses:

 

A.                                   On the next
regular payday after the Signing Date, the Company shall pay Modaro a signing
bonus of Fifty Thousand Dollars ($50,000).

 

B.                                     Modaro shall be
entitled to participate in the Company’s 2005 Incentive Compensation Plan or
any successor plan (“Plan”) each year commencing with fiscal 2009 so long as
the Plan remains in effect and one or more of the Company’s other executive
officers who are full-time Company employees (“Senior Executives”) also
participate.  Under the terms of the
Plan, the Compensation Committee will, in its discretion, and after
consultation with Modaro, determine the Performance Criteria and all other
variables by which Modaro’s bonus for such year will be measured.  The Target Award, as defined in the Plan, for
fiscal 2009 and subsequent years shall be an amount equal to forty percent
(40%) of Modaro’s base annual salary and such bonus as may be earned by Modaro
for fiscal 2009 shall be a full year’s bonus (i.e., not pro-rated).  Except as provided in the preceding sentence,
Modaro’s participation in the Plan is subject to all Plan terms and conditions.
Under the terms of the Plan, no bonus is earned until awarded by the
Compensation Committee after completion of the fiscal year, and the
Compensation Committee may, in its discretion, reduce, entirely eliminate or
increase the bonus indicated by the Performance Criteria and other Plan
factors.  Modaro acknowledges receipt of
a copy of the Plan.

 

C.                                     If Modaro is
employed by the Company on the second anniversary of the Commencement Date (the
“Vesting Date”), the Company shall pay Modaro on the next regular Company
payday the sum of Two Hundred Thousand Dollars ($200,000).  If Modaro’s employment is terminated before
the Vesting Date (i) by reason of Modaro’s death or Permanent Incapacity, (ii) by
the Company

 

 

without
Cause, or by Modaro for Good Reason, the Company shall pay to Modaro the sum of
Two Hundred Thousand Dollars ($200,000) upon termination and within ten (10) days
after the release required under Section 8C below has been received by the
Company and has become effective.

 

D.                                    For the
avoidance of doubt, if Modaro’s employment is terminated before the Vesting
Date by the Company for Cause or by Modaro without Good Reason, no retention
bonus is payable under Section 5C above.

 

6.                                       Benefits: The Company will provide to Modaro (i) all
benefits and perquisites provided by the Company from time to time to all
Senior Executives, subject to the eligibility requirements and the terms and
conditions of the benefit plans and perquisite policies (collectively “Executive
Benefits”) and (ii) an educational benefit described below (“Educational
Benefit”).  For the avoidance of doubt,
the Executive Benefits include use of a Company car in accordance with the
Company’s policy on Company cars, will receive four (4) weeks of vacation
per year in accordance with the terms of the Company’s policy, group health
insurance (PPO or HMO), life insurance, 
business travel insurance, qualified retirement plan, 401(k) plan,
employee stock ownership plan, cell phone, company credit card, expense
reimbursement and coaching.  Not all of
the foregoing Executive Benefits are 100% Company paid.  The Company reserves the right to alter or
discontinue any or all such Executive Benefits, provided they are so altered or
discontinued as to all Senior Executives.

 

The
Company will also provide to Modaro tuition benefits equivalent to those
provided by Sara Lee Corporation under its Executive MBA Program Policy — USA,
as last updated as of November 8, 2005 (the “Policy”) which is
incorporated herein by this reference, which benefits the Company will provide
on the terms and subject to the conditions contained in such Policy, other than
the “Scope” provision.

 

Modaro
shall be entitled to participate in the Company’s 2007 Omnibus Plan as
administered by the Company’s Compensation Committee.  On the first business day following the end
of the blackout period which covers the Signing Date, Modaro will be granted
7,000 stock options and 700 shares of restricted stock.  The strike price of the options will be the
closing price of the Company’s stock on such date.  The terms and conditions of the options and
restricted stock shall be the same as those applicable to the grants made to
the Company’s Senior Executives in 2008. 
Modaro will be entitled to such future grants under the 2007 Omnibus
Plan as are awarded to her by the Compensation Committee from time to time in
its discretion.

 

7.                                       Termination:

 

A.                                   Modaro’s
employment is terminable by the Company for Cause which shall consist only of (i) a
repeated refusal to follow reasonable directions from the COO or CEO or Board
after a warning; (ii) a material breach of any of Modaro’s fiduciary
duties to the Company (a breach involving dishonesty or personal gain shall be
deemed material regardless of the amount involved); (iii) conviction of a
felony; (iv) commission of a willful violation of any law, rule or
regulation involving moral turpitude; (v) commission of a willful or grossly
negligent act or omission which has a material adverse effect on the Company;
or (vi) commission of a material breach by Modaro of this Agreement which
breach, if curable, is not cured within a reasonable time after written notice
from the COO or CEO describing the nature of the breach in reasonable detail.

 

B.                                     Modaro’s
employment shall terminate upon Modaro’s resignation, with or without Good
Reason, death or “Permanent Incapacity,” as defined below.  “Permanent Incapacity” shall be deemed to
have occurred if Modaro has been unable to perform substantially all of her
employment duties under Section 3 on a substantially full time basis by
reason of a mental or physical condition for a

 

2

 

period
of ninety (90) consecutive days or for more than one hundred eighty days (180)
in any period of three hundred sixty-five (365) consecutive days.

 

Good
Reason shall consist only of (i) the Company’s material breach of this
Agreement, (ii) a material reduction in Modaro’s responsibilities, duties
or authority, or (iii) a material relocation of Modaro’s principal place
of employment more than fifty (50) miles from its present location; provided,
however, that any such condition shall not constitute Good Reason unless both (x) Modaro
provides written notice to the Company describing the condition claimed to
constitute Good Reason in reasonable detail within ninety (90) days of the
initial existence of such condition, and (y) the Company fails to remedy
such condition within thirty (30) days of receiving such written notice
thereof; and provided, further, that in all events the termination of Modaro’s
employment with the Company shall not be treated as a termination for Good
Reason unless such termination occurs not more than one (1) year following
the initial existence of the condition claimed to constitute Good Reason.

 

C.                                     Modaro’s
employment shall terminate at the election of the Company at any time without
Cause.

 

8.                                       Payments upon Termination:  In addition to any payment required by Section 5C
above, the following amounts are payable upon termination of Modaro’s
employment, as applicable:

 

A.                                   In the event of
a termination for any reason, base salary at the then existing rate, shall be
prorated and paid through the effective termination date, along with accrued
and untaken vacation (subject to the Company’s vacation policy).  If termination is due to Modaro’s death or
Permanent Incapacity, the Company shall also pay to Modaro upon termination an
additional lump sum severance amount equal to the Target Award under the
Company’s 2005 Incentive Compensation Plan which is applicable to Modaro for
the fiscal year in which termination is effective or, if termination takes
place before a Target Award for the then current fiscal year has been assigned
to Modaro, forty percent (40%) of Modaro’s then annual base salary, in either
case prorated for the partial fiscal year ending on the effective termination
date.

 

B.                                     If termination
occurs at the election of the Company without Cause or by Modaro’s resignation
with Good Reason:  Modaro will receive as
severance (i) an amount equal to her base salary at the rate in effect on
the date of termination for a period of one (1) year, (ii) partially
Company-paid COBRA coverage under the Company’s health care plan for herself
and her spouse for one (1) year after the effective termination date (the
Company will pay the same percentage of the coverage cost that it would have
paid had Modaro’s employment not terminated) and (iii) an amount equal to
Modaro’s bonus Target Award for the fiscal year in which the date of
termination occurs (or, if no Target Award has been assigned to Modaro as of
the date of termination, the average bonus paid by the Company to Modaro for
the last three (3) completed fiscal years or for the number of completed
fiscal years that Modaro has been in the employ of the Company if fewer than
three, prior to the termination date), such amount to be prorated for the
partial fiscal year in which the termination occurs.  Modaro is not obligated to seek other
employment as a condition to receipt of the payments called for by this Section 8B,
and Modaro’s earnings, income or profits from other employment or business
activities after termination of her employment shall not reduce the Company’s
payment obligations under this Section 8B. 
Subject to Section 8C and Section 12J(ii), the amount referred
to in clause (i) above shall be paid in installments in accordance with
the Company’s standard payroll practices commencing in the month following the
month in which Modaro’s Separation from Service occurs, and the amount referred
to in clause (iii) above shall be paid in a lump sum within thirty (30)
days after the end of the Company’s fiscal year in which Modaro’s Separation
from Service occurs.  As used herein, a “Separation
from Service” occurs when Modaro dies, retires, or otherwise has a termination
of employment with the

 

3

 

Company
that constitutes a “separation from service” within the meaning of Treasury
Regulation Section 1.409A-1(h)(1), without regard to the optional
alternative definitions available thereunder.

 

C.                                     As a condition
to receiving the payment called for by Section 5C and the severance
payments under Section 8B above, Modaro must execute and deliver to the
Company within twenty-one (21) days following the termination of her employment
(or such longer period as may be required under applicable law) a general
release of claims against the Company other than claims to the payments called
for by this Agreement, such release to be in form and content substantially as
attached hereto as Exhibit A, and said release shall have become
effective under applicable laws, including the Age Discrimination in Employment
Act of 1967, as amended.

 

D.                                    All benefits
other than payments and benefits payable under Sections 5B, 8A and 8B shall
terminate automatically upon termination of Modaro’s employment except to the
extent otherwise provided in the Company benefit plans or by law.

 

E.                                      Except as
provided in Section 5C and this Section 8 or by applicable Company
benefit plans or laws, Modaro shall not be entitled to any payments of any kind
in connection with the termination of her employment by the Company.

 

9.                                       Employee Handbook and Company Policies: So long as she is employed
by the Company, Modaro shall comply with, and shall be entitled to rights as
set forth in the Company’s Employee Handbook which may be revised from time to
time and other Company policies as in effect and communicated to Modaro from
time to time.  In the event that there is
a conflict or contradiction between the contents of the Employee Handbook or other
such Company policies and the provisions of this Agreement, then the provisions
of this Agreement will prevail.

 

10.                                 Confidential Information, Intellectual Property:

 

A.                                   Modaro acknowledges that
during the course of her employment with the Company, she will be given or will
have access to non-public and confidential business information of the Company
which will include information concerning pending or potential transactions,
financial information concerning the Company, information concerning the Company’s
product formulas and processes, information concerning the Company’s business
plans and strategies, information concerning Company personnel and vendors, and
other non-public proprietary information of the Company (all collectively
called “Confidential Information”).  All
of the Confidential Information constitutes “trade secrets” under the Uniform
Trade Secrets Act.  Modaro covenants and
agrees that during and after the term of her employment by the Company she will
not disclose such information or any part thereof to anyone outside the Company
or use such information for any purpose other than the furtherance of the
Company’s interests without the prior written consent of the CEO or Board.

 

B.  Modaro further covenants that for a period of
one (1) year after her employment by the Company terminates, she will not,
directly or indirectly, overtly or tacitly, induce, attempt to induce, solicit
or encourage, or assist anyone in soliciting or encouraging (i) any
customer of the Company to cease doing business with, or not to do business
with, the Company or (ii) any employee of the Company to leave the
Company.

 

C.  The Company and Modaro agree that the
covenants set forth in this Section 10 are reasonably necessary for the
protection of the Company’s Confidential Information and that a breach of the
foregoing covenants will cause the Company irreparable damage not compensable
by monetary damages, and that in the event of such breach or threatened breach,
at the Company’s election, an action may be brought in a court of competent
jurisdiction seeking a temporary restraining order and a

 

4

 

preliminary
injunction against such breach or threatened breach notwithstanding the
arbitration provision of Section 12F below.  Upon the court’s decision on the application
for a preliminary injunction, the court action shall be stayed and the
remainder of the dispute submitted to arbitration under Section 12F.  The prevailing party in such legal action
shall be entitled to recover its costs of suit including reasonable attorneys’
fees.

 

D.                                    The Company
shall own all rights in and to the results, proceeds and products of Modaro’s
services hereunder, including without limitation, all ideas and intellectual
property created or developed by Modaro and which is related to Modaro’s
employment.

 

11.                                 Integration
with Change in Control Severance Agreement:  If Modaro becomes eligible for benefits under
Section 3 of the Change in Control Severance Agreement executed
concurrently herewith, the benefits provided by Section 4 of that
Agreement shall be in lieu of, and not in addition to, the benefits provided by
Section 8B of this Agreement, but the payment called for by Section 5C
above shall not be affected.

 

12.                                 Miscellaneous:

 

A.                                   This Agreement
and the Change in Control Severance Agreement and Indemnification Agreement
entered into concurrently herewith contain the entire agreement of the parties
on the subject of Modaro’s employment by the Company, all prior and
contemporaneous agreements, promises or understandings being merged herein.
This Agreement can be modified only by a writing signed by both parties hereto.

 

B.                                     Modaro cannot
assign this Agreement or delegate her duties hereunder. Subject to the
preceding sentence, this Agreement shall bind and inure to the benefit of the
parties hereto, their heirs, personal representatives, successors and assigns.

 

C.            No waiver of any provision or
consent to any exception to the terms of this Agreement shall be effective
unless in writing and signed by the party to be bound and then only to the
specific purpose, extent and instance so provided.  This Agreement may be executed in
counterparts (and by facsimile signature), each of which shall be deemed an
original but all of which together shall constitute one and the same agreement.

 

D.                                    Each party
shall execute and deliver such further instruments and take such other action
as may be necessary or appropriate to consummate the transactions herein
contemplated and to carry out the intent of the parties hereto.

 

E.                                      This Agreement
shall be construed in a fair and reasonable manner and not pursuant to any
principle requiring that ambiguities be strictly construed against the party
who caused same to exist.

 

F.                                      (i)                                     All disputes
arising under or in connection with this Agreement, shall be submitted to a
mutually agreeable arbitrator, or if the parties are unable to agree on an
arbitrator within fifteen (15) days after a written demand for arbitration is
made by either party, to JAMS/Endispute (“JAMS”) or successor organization, for
binding arbitration in Los Angeles County by a single arbitrator who shall be a
former California Superior Court judge. 
Except as may be otherwise provided herein, the arbitration shall be conducted
under the California Arbitration Act, Code of Civil Procedure 1280 et seq.  The parties shall have the discovery rights
provided in Code of Civil Procedure 1283.05 and 1283.1.  The arbitration hearing shall be commenced
within ninety (90) days after the selection of an arbitrator by mutual
agreement or, absent such mutual agreement, the filing of the application with
JAMS by either

 

5

 

party
hereto, and a decision shall be rendered by the arbitrator within thirty (30)
days after the conclusion of the hearing. The arbitrator shall have complete
authority to render any and all relief, legal and equitable, appropriate under
California law, including the award of punitive damages where legally available
and warranted. The arbitrator shall award costs of the proceeding, including
reasonable attorneys’ fees and the arbitrator’s fee and costs, to the party
determined to have substantially prevailed. 
Judgment on the award can be entered in a court of competent
jurisdiction.

 

(ii)                                  The foregoing
notwithstanding, if the amount in controversy exceeds $200,000, exclusive of
attorneys’ fees and costs, the matter shall be litigated in the Los Angeles
County Superior Court as a regular non-jury civil action except that a former
California Superior Court Judge selected by the parties or by JAMS, as
hereinabove provided, shall be appointed as referee to try all issues of fact
and law, without a jury, pursuant to California Code of Civil Procedure §638 et
seq.  The parties hereto expressly waive
a trial by jury. Judgment entered on the decision of the referee shall be
appealable as a judgment of the Superior Court. 
The prevailing party shall be entitled to receive its reasonable
attorneys’ fees and costs from the other party.

 

G.                                     Payments to
Modaro are subject to payroll deductions and withholdings if and to the extent
required by law.  Salary payments will be
reduced on a dollar-for-dollar basis by payments received by Modaro for
disability under governmental or Company-paid disability insurance programs.

 

H.                                    All provisions
of this Agreement which must survive the termination of this Agreement to give
them their intended effect shall so survive.

 

I.                                         If any
provision of this Agreement is determined to be unenforceable as illegal or
contrary to public policy, it shall be deemed automatically amended to the
extent necessary to render it enforceable provided the intent of the parties as
expressed herein will not thereby be frustrated.  Otherwise the unenforceable provision shall be
severed from the remaining provisions which shall remain in effect.

 

J.                                        (i)                                     It is intended
that any amounts payable under this Agreement shall either be exempt from or
comply with Section 409A of the Code (including the Treasury regulations
and other published guidance relating thereto) (“Code Section 409A”)
so as not to subject Modaro to payment of any additional tax, penalty or
interest imposed under Code Section 409A. 
The provisions of this Agreement shall be construed and interpreted to
avoid the imputation of any such additional tax, penalty or interest under Code
Section 409A yet preserve (to the nearest extent reasonably possible) the
intended benefit payable to Modaro.

 

(ii)                                  Notwithstanding
any provision of this Agreement to the contrary, if Modaro is a “specified
employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as
of the date of Modaro’s Separation from Service, Modaro shall not be entitled
to any payment or benefit pursuant to Section 8B until the earlier of (i) the
date which is six (6) months after Modaro’s Separation from Service for
any reason other than death, or (ii) the date of Modaro’s death.  Any amounts otherwise payable to Modaro upon
or in the six (6) month period following Modaro’s Separation from Service
that are not so paid by reason of this Section 12K(ii) shall be paid
(without interest) as soon as practicable (and in all events within thirty (30)
days) after the date that is six (6) months after Modaro’s Separation from
Service (or, if earlier, as soon as practicable, and in all events within thirty
(30) days, after the date of Modaro’s death). 
The provisions of this Section 12J(ii) shall only apply if,
and to the extent, required to avoid the imputation of any tax, penalty or
interest pursuant to Code Section 409A.

 

(iii)                               To the extent
that any benefits pursuant to Section 8B(ii) or reimbursements
pursuant to Section 6 are taxable to Modaro, any reimbursement payment due
to Modaro

 

6

 

pursuant
to such provision shall be paid to Modaro on or before the last day of Modaro’s
taxable year following the taxable year in which the related expense was
incurred.  The benefits and
reimbursements pursuant to such provisions are not subject to liquidation or
exchange for another benefit and the amount of such benefits and reimbursements
that Modaro receives in one taxable year shall not affect the amount of such
benefits or reimbursements that Modaro receives in any other taxable year.

 

[SIGNATURE PAGE FOLLOWS]

 

7

 

IN WITNESS WHEREOF, the parties have executed
this Agreement as of the date first above written.

 

	
  COMPANY:

  	
  FARMER
  BROS. CO.,

  
	
   

  	
  a
  Delaware corporation

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Roger M. Laverty III

  
	
   

  	
   

  	
  Roger
  M. Laverty III,

  
	
   

  	
   

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  MODARO:

  	
  /s/
  Heidi Modaro

  
	
   

  	
  Heidi
  Modaro

  

 

[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT

(FARMER BROS. CO. / HEIDI MODARO)]

 

 

EXHIBIT A

RELEASE AGREEMENT

 

 

I
understand that my position with Farmer Bros. Co. (the “Company”) terminated
effective                       ,
20     (the “Separation Date”).  The Company has agreed that if I choose to
sign this Agreement, the Company will pay me severance benefits (minus the
standard withholdings and deductions) pursuant to the terms of the Employment
Agreement entered into as of                          ,
2009 between myself and the Company.  I
understand that I am not entitled to this severance payment unless I sign this
Agreement.  I understand that in addition
to this severance, the Company will pay me all of my accrued salary and
vacation, to which I am entitled by law regardless of whether I sign this
release.

 

In
consideration for the severance payment I am receiving under this Agreement, I
acknowledge and agree that I am bound by the provisions of Sections 10A and 10B
of my Employment Agreement and hereby release the Company and its current and
former officers, directors, agents, attorneys, employees, shareholders, and
affiliates from any and all claims, liabilities, demands, causes of action,
attorneys’ fees, damages, or obligations of every kind and nature, whether they
are known or unknown, arising at any time prior to the date I sign this
Agreement.  This general release
includes, but is not limited to: all federal and state statutory and common law
claims, claims related to my employment or the termination of my employment or
related to breach of contract, tort, wrongful termination, discrimination,
wages or benefits, or claims for any form of compensation.  This release is not intended to release any
claims I have or may have against any of the released parties for (a) indemnification
as a director, officer, agent or employee under applicable law, charter
document or agreement, (b) severance and other termination benefits
specifically provided for in my Employment Agreement which constitutes a part
of the consideration for this release, (c) health or other insurance
benefits based on claims already submitted or which are covered claims properly
submitted in the future, (d) vested rights under pension, retirement or
other benefit plans, or (e) in respect of events, acts or omissions
occurring after the date of this Release Agreement.  In releasing claims unknown to me at present,
I am waiving all rights and benefits under Section 1542 of the California
Civil Code, and any law or legal principle of similar effect in any
jurisdiction:  “A general release does
not extend to claims which the creditor does not know or suspect to exist in
her favor at the time of executing the release, which if known by him must have
materially affected her settlement with the debtor.”

 

I
acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under the federal Age Discrimination in Employment Act of
1967, as amended (“ADEA”).  I also
acknowledge that the consideration given for the waiver in the above paragraph
is in addition to anything of value to which I was already entitled.  I have been advised by this writing, as
required by the ADEA that: (a) my waiver and release do not apply to any
claims that may arise after my signing of this Agreement; (b) I should
consult with an attorney prior to executing this release; (c) I have
twenty-one (21) days within which to consider this release (although I may
choose to voluntarily execute this release earlier); (d) I have seven (7) days
following the execution of this release to revoke the Agreement; and (e) this
Agreement will not be effective until the eighth day after this Agreement has
been signed both by me and by the Company.

 

I
accept and agree to the terms and conditions stated above:

 

 

	
   

  	
  /s/
  Heidi Modaro

  
	
   

  	
  Heidi
  ModaroExhibit 10.16

 

CONSULTING AGREEMENT

 

 

THIS
CONSULTING AGREEMENT (the “Agreement”) is made by and between FARMER
BROS. CO., a Delaware corporation (the “Company”), and MICHAEL J. KING,
an individual (“Consultant”), with reference to the following facts:

 

RECITALS

 

A.            Consultant will resign his
employment with the Company effective March       , 2009 (“Effective Date”).

 

B.            The Company desires to hire Consultant
to consult with it on matters within Consultant’s expertise, strictly on an
independent contractor basis.

 

C.            The Company and Consultant
desire to memorialize the terms of their relationship in this Agreement.

 

NOW,
THEREFORE, in consideration of the mutual covenants and conditions contained
herein, the parties hereby agree as follows:

 

1.             Retention.  The Company hereby agrees to retain
Consultant, and Consultant agrees to perform services for the Company, on the
terms and conditions set forth herein.

 

2.             Term
of Agreement.  The term of this Agreement shall commence on
the Effective Date and shall continue for a term of three (3) years unless terminated
earlier under Section 6.

 

3.             Duties.

 

(a)           Consultant shall consult
with the Company concerning its sales, marketing and product development
activities at the request of the Company from time to time and shall perform
such incidental tasks relating to such consultation services as the Company may
reasonably request, it being understood that Consultant shall be called upon
only occasionally and, without Consultant’s consent, shall not be required to
perform the services on the Company’s premises or at any other designated
location.

 

(b)           It is expressly agreed that Consultant
shall be and is an independent Consultant in performing his duties under this
Agreement and shall not be considered or deemed an agent, partner or joint
venturer of the Company nor shall Consultant be considered or deemed to be an
employee of the Company for any purpose, including without limitation, for
purposes of any pension, bonus, equity participation or other benefit plan
which the Company makes available to its employees; provided that nothing
herein shall affect Consultant’s rights with respect to pension and other
benefits made available to Company retirees. 
The compensation paid hereunder shall be gross compensation.  Consultant assumes full responsibility and
liability to the taxing bodies of the federal and state governments for paying
all income, self-employment and other taxes due with respect to the Company’s
payments for Consultant’s services under this Agreement.

 

(c)           Consultant acknowledges that
no equipment or materials are provided by Company.  If, with Consultant’s consent, Consultant
performs services on Company premises,

 

1

 

Company
will provide use of such on-site facilities, equipment and clerical services as
the Company determines are reasonably necessary for the performance of
Consultant’s services.  No reimbursements
will be made by Company for any expenses Consultant incurs unless approved in
advance by the Company.  No specific
hours are required so long as Consultant’s services under this agreement are
properly performed.  Consultant remains
free to provide services to others so long as Consultant’s services under this
Agreement are properly performed, subject to Section 5.

 

4.             Fee.  Consultant shall receive, as compensation for
his services under this Agreement, an annual fee payable quarterly in arrears, prorated
for any partial quarter in which this Agreement terminates, as follows:

 

	
  First year

  	
   

  	
  $

  	
  120,000

  	
   

  
	
  Second year

  	
   

  	
  $

  	
  75,000

  	
   

  
	
  Third year

  	
   

  	
  $

  	
  75,000

  	
   

  

 

Payments
are due whether or not Company calls upon Consultant to perform consulting
services.

 

5.             Confidential
Information; Non-competition; Intellectual Property.  In providing his services hereunder, Consultant
will have access to “Confidential Information,” as defined below.  Consultant agrees that during the term of this
Agreement and thereafter, he shall keep the Confidential Information in the
strictest of confidence and shall not use or disclose the same in any manner or
for any purpose except as required for his performance under this Agreement or
except to the extent that disclosure is required by law.  Before making any disclosure required bylaw,
Consultant shall give the Company reasonable prior notice of the pending
disclosure.  The term “Confidential
Information” is to be broadly defined. 
Confidential Information includes all information that has or could have
commercial value or other utility in the business in which Company is engaged
or in which it contemplates engaging. 
Confidential Information also includes all information the unauthorized
disclosure of which could be detrimental to the interests of Company, whether
or not such information is identified as Confidential Information by
Company.  For example and without
limitation, Confidential Information includes any and all information
concerning Company, or its subsidiaries’ techniques, processes, formulas, trade
secrets, inventions, discoveries, improvements, research or development and
test results, specifications, data, know-how, marketing plans, business plans,
strategies, forecasts, unpublished financial information, budgets, projections,
and customer and supplier identities, characteristics, and agreements.  Upon termination or expiration hereof, Consultant
shall forthwith return or provide to Company satisfactory evidence of the
destruction of all written, printed and electronic records containing Confidential
Information.  To help protect the
confidentiality of the Confidential Information, Consultant agrees that during
the term of this Agreement and for a period of two (2) years thereafter, he
will not, directly or indirectly, (i) solicit, induce or encourage any customer
of the Company to discontinue or reduce its trade with Company or (ii) solicit,
induce, or encourage any employee of Company to terminate employment by the
Company.  During the term of this
Agreement, Consultant agrees not to provide services to any person or entity
whose business is, in the reasonable judgment of Company, competitive with the
business of the Company or any of its subsidiaries.  Consultant agrees that Company shall be
entitled to an injunction to prevent any threatened or continuing breach of
this Section 5.  All discoveries,
developments, designs, ideas, improvements, inventions, formulas, processes,
techniques, know-how, and data (whether or not patentable or registerable under
copyright or similar statutes) made, conceived, reduced to practice or learned
by Consultant, whether alone or in conjunction with others (i) which are
related to the business of Company or its subsidiaries or to Company or
subsidiary research and development or (ii) which result from tasks assigned to
Consultant or from the use of

 

2

 

Company
facilities, equipment or Confidential Information are the property of Company,
constitute a work made for hire to the extent legally possible and are hereby
assigned to Company by Consultant.

 

6.             Termination
of Agreement.  This Agreement can be terminated upon written
notice if a party hereto is in breach of this Agreement and such breach, if
curable, remains uncured for a period of ten (10) days after written notice
describing the breach has been given by the non-breaching party.  In the event that during the term of this
Agreement Consultant dies or is rendered unable to perform the services
required by this Agreement by reason of a physical or mental disability, the
Company shall continue to make the payments required by this Agreement to
Consultant if living and not judicially declared to be incompetent, otherwise
to his spouse, if any, and otherwise to such person as is legally entitled
thereto upon receipt of proof satisfactory to the Company of such entitlement.

 

No
termination shall relieve a party of any obligation or liability accrued at, or
in connection with, the termination.  Section
5 shall survive termination of this Agreement as shall any other provision for
which survival is necessary to give it its intended effect.

 

Consultant’s
fee shall be prorated and paid to the termination date, and no other
compensation or payment of any kind shall be due Consultant under this
Agreement.

 

7.             General
Provisions.

 

(a)           Notices.  All notices under this Agreement shall be in
writing and deemed given as of the date personally delivered (including
delivery by a commercial delivery service) or placed and postmarked in the
United States mail, first class, postage prepaid, and addressed if to Company
at Company’s principal offices and if to Consultant at Consultant’s last
residence address appearing in the records of Company.  Notices delivered personally or by delivery
service shall be deemed received as of the date of actual receipt.  Mailed notices shall be deemed received five (5)
days after deposit in the United States mail.

 

(b)           Arbitration.  Except for actions for injunctive relief
under Section 5, any dispute concerning this Agreement or the performance of
the parties hereunder shall be submitted to binding arbitration in Torrance,
California before the American Arbitration Association under its Commercial
Rules.  Judgment on the award can be
entered in a court of competent jurisdiction.

 

(c)           Attorneys’ Fees.  Should any legal action be taken to enforce
the terms of this Agreement or an arbitration commenced under subparagraph (b),
the prevailing party shall be entitled to receive its costs and expenses,
including attorney’s fees incurred in that regard.

 

(d)           No Assignment or Transfer. The rights and
obligations under this Agreement may not be assigned or delegated by Consultant.  The Company, however, is free to assign its
interest under this Agreement to any successor to all or substantially all of
the Company’s business by asset sale, stock sale, merger or other method.

 

(e)           Successors and Assigns.  Subject to the provisions of this Agreement,
the provisions of this Agreement shall be binding upon and inure to the parties
their successors, heirs, assigns, and permitted transferees.

 

(f)            Governing Law.  The provisions of this Agreement shall be
governed by and construed in accordance with the laws of the State of
California.

 

3

 

(g)           Integration. This Agreement
contains the entire agreement of the parties on the subject of Consultant’s
services to the Company as such and supersedes all prior agreements, written or
oral, between the parties with reference to the subject matter of this
Agreement.  No other agreements, oral or
written, prior or contemporaneous, exist between the parties as to such subject
matter.

 

IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first written above.

 

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  FARMER
  BROS. CO.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Roger M. Laverty III

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Roger
  M. Laverty III

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CONSULTANT:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/
  Michael J. King

  
	
   

  	
  MICHAEL
  J. KING

  

 

4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00163-of-00352.parquet"}]]