Exhibit 10.13
SECOND AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
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AGREEMENT made as of the 16th day of October, 1995 by and between
Xxxxxxx X. Xxxxxxxx ("Executive") and Xxxxxxxx, X.X., a Delaware limited
partnership (the "Partnership") and sometimes referred to herein as the Employer
(the "Employer").
Preliminary Statement
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NTGargiulo, Inc., a Florida corporation ("NTG") and the Partnership, among
others, entered into an Asset Contribution Agreement dated December 23, 1992
(the "Asset Contribution Agreement"), pursuant to which NTG contributed
substantially all of its assets to the Partnership and the Partnership has
assumed substantially all of the liabilities of NTG. Xxxxxxxx X.X., Inc.
(formerly "N.T. Xxxxxxxx X.X., Inc."), a Delaware corporation (the "Company"),
is the managing general partner of the Partnership. For a period of continuous
years until December 23, 1992, the Executive had been employed as an executive
officer of NTG, which together with its affiliates, were at various times
engaged in the operation of packing houses and farms, in the marketing of fresh
fruits and vegetables, and in the provision of management services to others in
connection with those activities.
In connection with the contribution of assets to the Partnership, the
parties entered into the Employment Agreement dated as of December 23, 1992
("Original Employment Agreement") pursuant to which the Executive continued to
render services as an executive employee of the Employer and covenanted not to
compete with the Employer. Executive, Employer, Tomato Investment Associates,
Inc. ("MCO"), Monsanto Company ("Monsanto") and certain
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other parties also entered into a Restructuring Agreement ("Restructuring
Agreement") and the parties hereto entered into an Amended and Restated
Employment Agreement dated as of July 29, 1994 as contemplated by such
Restructuring Agreement. Also, concurrently therewith, the parties to the
Agreement entered into the Option and Retained Interests Agreement (the "Option
Agreement") pursuant to which MCO was granted, among other things, an option to
purchase certain additional interests in the Partnership (the term "Option" is
used herein as defined in such Option and Retained Interests Agreement). It is
anticipated that (a) MCO will purchase all remaining Partnership interests it
does not currently hold (the "Additional Interest Acquisition"), (b) Monsanto
will contribute to a new corporation ("Holding Company") to be formed by
Monsanto and Calgene, Inc., a Delaware corporation ("Calgene"), all of the
capital stock of MCO in exchange for shares of Holding Company (the "Exchange"),
whereupon MCO will become a wholly owned subsidiary of Holding Company, (c)
simultaneously with the Exchange, a subsidiary of Holding Company will merge
with Calgene, whereupon Calgene will also become a wholly owned subsidiary of
Holding Company, and (d) immediately after the Exchange, the Company will
dissolve and liquidate and distribute all of its assets to MCO, as its sole
stockholder, whereupon the Partnership will be dissolved and all of its assets
and liabilities will be vested in MCO (the "Liquidation" and, collectively with
the Additional Interest Acquisition and the Exchange, the "Partnership
Reorganization Transactions"). However, this Agreement shall become effective
whether or not the Partnership Reorganization Transactions are consummated.
This Second Amended and Restated Employment Agreement amends, restates and
supersedes the Original Employment Agreement and the Amended and Restated
Employment Agreement in their entirety. The Effective Date of the Second
Amended and Restated Employment Agreement shall be July 1, 1995.
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NOW THEREFORE, in consideration of the mutual promises herein contained,
and for other good and valuable consideration, the receipt and adequacy of which
are conclusively acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. The Employer shall continue to employ the Executive as Chief Executive
Officer of the Partnership. It is understood and the Partnership agrees that
during the Employment Term (as hereinafter defined) the Executive shall also
serve, without additional compensation therefor, as the President and Chief
Executive Officer of the Company and, if and when elected, as an officer or
director of any subsidiary, division or other affiliates of the Employer,
provided that, as determined by the Company's Board of Directors, a portion of
the Executive's compensation under this Agreement may be allocated and charged
to the Company for services provided to it by the Executive. Notwithstanding
the foregoing, if the Partnership Reorganization Transactions are consummated,
then (a) Executive shall become the Chief Executive Officer of MCO, (b) MCO
shall assume all of the obligations of the Partnership hereunder, (c) MCO shall
thereafter be deemed the "Employer" hereunder, and (d) this Agreement shall
otherwise remain in full force and effect. Nothing in this provision shall
require the Executive, without his written consent, to assume significant
management duties with Holding Company or any Holding Company affiliate which is
unrelated to MCO and its subsidiaries. The Executive accepts such employment
and agrees to perform diligently, on a full-time basis, and to the best of his
ability during the Employment Term, all of the duties and functions attendant
upon such offices and such other executive duties and functions appropriate to
such offices as may be assigned to him by the Company's Board of Directors or,
upon consummation of the Partnership Reorganization Transactions, by MCO's Board
of Directors. The Executive shall be a member of and report solely to the Board
of Directors of the Company or, upon consummation of the
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Partnership Reorganization Transactions, to the Board of Directors of MCO. The
Employer shall provide, pay for, and maintain such facilities, equipment and
supplies as are reasonably necessary for the Executive's performance of his
duties under this Agreement. The Executive shall, unless prevented by
incapacity, devote his whole working time, attention and ability to the
discharge of his duties hereunder and to the faithful and diligent performance
of such duties and the exercise of such powers. The Executive shall perform his
duties and responsibilities pursuant to reasonable guidelines for employee
conduct applicable to all employees of the Employer and adopted by the Company's
Board of Directors (or, upon consummation of the Partnership Reorganization
Transactions, by MCO's Board of Directors) from time to time pertaining to
internal control, business conduct, conflicts of interest, outside business
activities and other similar issues. The Executive agrees that, in addition to
complying with the provisions of Section 6 of this Agreement, he will not,
during the Employment Term, engage in any other gainful occupation or ventures,
except that the Executive may participate in such trade, community, charitable
and religious activities which do not interfere in a material respect with the
performance of his duties hereunder, and except that the Executive shall be
entitled to make and manage his personal investments, which include the
ownership of a vineyard in Napa Valley, California, provided that such
investments require only his incidental time, do not conflict with or compete
with his duties to the Employer hereunder (it being understood that the
Executive has ownership interests in lands which are leased to the Employer or
its affiliates, and such investments or the Executive's activities in respect
thereof shall not be deemed to constitute a conflict of interest with the
Executive's duties to the Employer hereunder), are not violative of the
provisions of Section 6 hereof, and are consistent with the guidelines for
employee conduct described previously in this Section 1. If the Partnership
Reorganization Transactions are consummated, then the Executive shall become a
member of the Board of Directors of Holding Company, and Holding
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Company shall provide the Executive with the same Director and Officer Liability
Insurance coverage it provides to the other members of the Board of Directors of
Holding Company and to the other directors and officers of the Employer. If the
Executive is elected or appointed as an officer of Holding Company, Holding
Company shall provide the Executive with the same Director and Officer Liability
Insurance Coverage it provides the other officers of Holding Company. If the
Partnership Reorganization Transactions are not consummated, Monsanto will make
any amendments necessary to the charter documents of MCO or any successor entity
so that the indemnification provisions shall be comparable to the
indemnification provisions of the charter documents of Monsanto and its
subsidiaries. The Executive acknowledges and agrees that, if the Partnership
Reorganization Transactions are consummated, then timely cooperation with
Holding Company shall be a material duty under this Agreement. In this regard,
the Executive agrees that he will use his best efforts so that he and the
Employer will provide timely financial reports, other communications and perform
other duties and obligations relating to the matters described in Schedule 1 as
may reasonably be required by Holding Company from time to time. The Executive
agrees that, contemporaneously with his execution of this Agreement, he will
execute a separate agreement relating to obligations of Xxxxxxxx management to
cooperate, communicate and inform, the form of which is attached hereto as
Schedule 1 (the "Cooperation Agreement").
2. (a) The initial term of the Executive's employment under this
Agreement shall be for a period commencing effective July 1, 1995 and ending on
December 31, 2001, unless sooner terminated pursuant to Section 2(b), Section 5,
Section 6 or Section 7 hereof. The term of the Executive's employment hereunder
shall be automatically renewed from year to year after December 31, 2001, for
additional one-year periods, unless sooner terminated pursuant to Section 2(b),
Section 5, Section 6 or Section 7 hereof or unless at least six (6) months prior
to the expiration of the initial or
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any renewal term, either party gives written notice to the other of his or its
intention not to renew the Executive's employment at the end of such term. The
initial term of the Executive's employment (as it may be sooner terminated
pursuant to Section 2(b), Section 5, Section 6 or Section 7 hereof) is referred
to herein as the "Initial Term" and such Initial Term, as it may be renewed from
time to time, is referred to herein as the "Employment Term."
(b) Notwithstanding anything in Section 2(a) above, if, after
completion of the Employer's financial statements for the calendar year ending
December 31, 1998, the independent certified public accountants of the Company
determine that Cumulative EBIT (as defined in Schedule 2, a copy of which is
attached hereto and incorporated by reference herein) through December 31, 1998
is less than 70% of the Cumulative Plan, the Board of Directors of the Company
(or, if the Partnership Reorganization Transactions are consummated, the Board
of Directors of MCO) shall give the Executive notice of its determination, and
the Employer shall have the right to renegotiate this Agreement. If the
renegotiation is not completed in a manner acceptable to the Board, in its sole
discretion, within sixty (60) days of the Board's notice to the Executive, the
Employer shall have the right to terminate this Agreement, in which case the
Executive's termination shall hereinafter sometimes be referred to as a "Section
2(b) Termination." If the Partnership Reorganization Transactions are
consummated and the Board of Directors of Holding Company disputes the
determination that Cumulative EBIT through December 31, 1998 is 70% or more of
the Cumulative Plan, the dispute shall be referred to Holding Company's
independent certified public accountants ("Certified Public Accountants") for
that firm to determine, using generally accepted accounting principles, if
Cumulative EBIT through December 31, 1998 equalled or exceeded 70% of the
Cumulative Plan, and the Certified Public Accountants' determination shall be
final and binding on all parties absent manifest error.
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3. In consideration of the services rendered by the Executive pursuant to
this Agreement, the Employer agrees to provide the Executive compensation as
follows:
(a) Commencing on January 1, 1996 and continuing through December 31,
1996, the Employer shall pay the Executive an annual salary ("Salary") of Three
Hundred Fifty Thousand Dollars ($350,000), payable in substantially equal
monthly installments. Commencing January 1, 1997 and annually thereafter during
the Initial Term, Executive's Salary shall be increased by an amount equal to
four percent (4%) of the Salary paid to the Executive during the immediately
preceding calendar year.
(b) In addition, during the Initial Term, the Executive shall be
eligible for Annual and Long-Term Incentive Awards as defined on Schedule 2.
The Long-Term Incentive Award shall be based on the performance of the Company
during calendar years 1996-2001. No Long-Term Incentive Award shall be paid to
the Executive unless all of the goals and targets set forth on Schedules 2 and
2-A have been met as of the end of calendar year 2001. The Executive
acknowledges and agrees that the financial targets, calculations and projections
on which the Long-Term Incentive Award is based were prepared using financial
information, data and projections prepared by the Company under the direction of
the Executive and furnished by the Company to Monsanto. It is understood that
the Executive is not providing any assurance that the targets and goals set
forth on Schedules 2 and 2-A will in fact be met.
If the Partnership Reorganization Transactions are consummated and the Board of
Directors of Holding Company disputes whether the respective financial goals set
forth on Schedule 2 have been met, the dispute shall be referred to the
Certified Public Accountants for that firm to determine, using generally
accepted accounting principles, if the financial goals were, in fact, met. The
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Certified Public Accountants' determination shall be final and binding on all
parties absent manifest error.
(c) The Additional Compensation, as defined in the First Amended and
Restated Employment Agreement, for periods under prior agreements through June
30, 1995 shall be paid in accordance with the terms of the First Amended and
Restated Employment Agreement.
(d) The compensation (Salary and Annual and Long-Term Incentive
Awards) for any portion of the Employment Term after the Initial Term shall be
as mutually agreed by the Executive and the Board of Directors of the Company.
(e) Payments of any Annual or Long-Term Incentive Awards and any
incentive compensation payable pursuant to Section 3(d) for any fiscal year or
period shall be made no later than two and one-half months following the close
of the applicable calendar year.
(f) The Executive shall be accorded the right to participate, on a
basis comparable to the basis on which other executive officers of the Employer
participate (including the payment of any applicable employee contributions and
premiums), in any and all stock option plans, pension plans (provided his
participation in the pension plan will not adversely affect the tax qualified
status of the plan), group insurance, accident, sickness, disability and
hospitalization insurance plans and all other similar employee benefit plans
(but not including any nonqualified profit-sharing, bonus or other incentive
compensation plan (except for a stock option plan)) for the benefit of the
Employer's executive officers which may be in effect during the period of the
Executive's employment hereunder. During the Employment Term and for a period
of twelve months after any termination thereof, the Employer shall at its own
expense maintain term life insurance on the Executive's life providing coverage
of at least $2,000,000 (provided that any cost thereof in excess of that
attributable to
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normal rates shall be borne by the Executive), naming such beneficiaries as the
Executive may designate from time to time. The Executive shall be entitled to
the same types of additional fringe benefits as the Executive was entitled to
receive in his capacity as Chief Executive Officer of the Partnership during the
year preceding the Effective Date of this Agreement to the extent such are
disclosed in Schedule 3 attached to this Agreement. Any other fringe benefits
shall be as approved by the Board of Directors of the Company (or, if the
Partnership Reorganization Transactions are consummated, by the Board of
Directors of MCO).
4. The Executive is authorized to incur reasonable expenses, including
without limitation reasonable travel and entertainment expenses, incident to the
business of the Partnership and the Company (and, if the Partnership
Reorganization Transactions are consummated, to the business of MCO) and the
performance of his duties under this Agreement. The Employer will reimburse the
Executive for all such expenses upon presentation by the Executive, from time to
time, of an itemized account of such expenses as well as supporting evidence
thereof.
5. (a) The Executive shall be entitled to five (5) weeks of vacation
during each calendar year of the Employer, and to reasonable absences by reasons
of incapacity. For purposes of this Agreement, "incapacity" shall mean
disability to perform the duties and functions assigned to the Executive
pursuant to Section 1 of this Agreement by reason of the Executive's then
physical or mental condition. There shall be no reduction in the Executive's
Salary or in his entitlement to Annual or Long-Term Incentive Awards or
compensation pursuant to Section 3(d) for the first six (6) months of any
continuous period of incapacity. In the event that the Executive's incapacity
continues for a period exceeding six (6) consecutive months, and without
abrogating the Employer's right not to renew the Employment Term pursuant to and
in accordance with the provisions of Section 2 of this Agreement, thereafter the
Executive
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shall be entitled to receive two-thirds (2/3) of the Salary, and no Annual
Incentive Award, for so long as such incapacity continues, for a maximum period
of eighteen (18) months after such initial six (6) month period; provided,
however, that the Employer may terminate this Agreement at any time during the
last twelve (12) months of such eighteen (18) month period if the Executive
shall be certified at such time to be "incapacitated" (within the meaning of
"incapacity" set forth herein) by at least two out of three licensed physicians
(one selected by the Employer, one selected by the Executive and one selected by
the other two physicians). In the event that the Executive's incapacity
continues for a period exceeding twenty-four (24) consecutive months, the
Employer may terminate this Agreement upon notice, without need for any
certification of incapacity by licensed physicians. In the event that this
Agreement is terminated pursuant to the provisions of this Section 5, the
Employer shall have no further obligations hereunder other than (i) the
Employer's obligation to pay to the Executive all amounts of Salary and Annual
Incentive Award, and compensation pursuant to Section 3(d) as set forth in this
Section 5 accrued to date of termination, (ii) its obligation to continue
coverage of the Executive under the Employer's life, health and medical plans in
which he was then a participant, (iii) such further obligations to the Executive
as the Employer deems appropriate, and (iv) the payment of any Long-Term
Incentive Award pursuant to Section 5(b) below. For purposes of this Section 5,
the Employer's obligation to pay the Salary shall be offset by any payments made
to the Executive during any such period of incapacity pursuant to any short-term
sickness and accident policy or long-term disability policy, the premiums for
which are paid by the Employer, and by the amount of any workers' compensation
if those benefits are not taken into account by the disability policy.
(b) In the event that this Agreement is terminated by the Employer
because of the Executive's incapacity, the Executive shall be eligible to
receive a prorated share of his Long-Term
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Incentive Award. Any such award shall be paid to him by the Employer after the
close of the calendar year ending December 31, 2001. The prorated award shall
be the amount of the award otherwise payable to the Executive except for the
incapacity divided by a fraction, the numerator of which is the number of whole
months during the term of this Agreement until the date which is six (6) months
from the date the Executive last worked because of incapacity and the
denominator is 72. No interest will accrue on the Long-Term Incentive Award
from the date of the Executive's termination due to incapacity until it is paid
him.
6. (a) During the Employment Term, and, except in the case of a
termination of the Employment Term because of a Section 2(b) Termination, for a
period of two (2) years from the date of termination of the Employment Term:
(i) The Executive shall not, in the United States of America, the
Commonwealth of Puerto Rico and any other country or territory in which the
Employer or any of its affiliates or, if the Partnership Reorganization
Transactions are consummated, Holding Company or any of its affiliates
(including, without limitation, Calgene), conduct, either at, or at any
time during the two-year period preceding the date of termination of the
Employment Term, significant (which shall, without limitation of the
generality of the foregoing, be deemed to include any country or territory
in which the Partnership or its affiliates or Holding Company, or any of
its affiliates (including, without limitation, Calgene) has or had $1.0
million or more in annual sales)) business (including, for these purposes,
but without limitation, the sale or marketing of any product)
(collectively, the "Covered Jurisdictions"), be engaged, directly or
indirectly, either for his own account or as agent, consultant,
representative, employee, partner, officer, director, stockholder or
otherwise of any person, firm, corporation or enterprise engaged in
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either (A) any aspect of the business of growing, packing or marketing
tomatoes or other products grown, packed or marketed by the Employer; (B)
any other business conducted by the Employer or its affiliates either at,
or at any time during the two-year period preceding the date of termination
of the Employment Term ("Other Business Activities of the Employer"); or
(C) if the Partnership Reorganization Transactions are consummated, any
aspect of the cotton, oils or other businesses conducted by Holding
Company, or any of its affiliates (including, without limitation, Calgene),
at any time during the two-year period preceding the date of termination of
the Employment Term (collectively, the "Covered Businesses");
(ii) the Executive shall not render financial or other assistance
to any person, firm, corporation or enterprise engaged in the Covered
Businesses in the Covered Jurisdictions;
(iii) the Executive shall not, directly or indirectly, buy from
or sell to, solicit the business of or broker to or sell for, or perform
any services within the Covered Businesses for, any person or entity who
was a customer of the Employer or any of its affiliates or, if the
Partnership Reorganization Transactions are consummated, Holding Company or
any of its affiliates (including, without limitation, Calgene), or who
became such a customer within two years after termination of the
Executive's employment;
(iv) the Executive shall not solicit for employment, hire, or
induce to leave the service of the Employer or any of its affiliates, any
employee, salesman, agent or representative of the Employer or any of its
affiliates who was engaged in any activities within the Covered Businesses
and who was such either at or at any time during the one-year
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period preceding the date of termination of the Employment Term; and
(v) the Executive shall not use or permit the Executive's name
to be used in connection with any business or enterprise engaged in any
activities within the Covered Businesses.
In Clause B of Section 6(a)(i) and in Sections 6(a)(iii) and 6(a)(iv), the term
"affiliate" shall be limited to subsidiaries of the Employer or, in the case of
other affiliates, to business activities of the affiliate of the type described
in Clause A of this Section 6(a)(i), Other Business Activities of the Employer
and to other business activities of the affiliate to which the Executive has
devoted direct supervision or substantial activity. If the Partnership
Reorganization Transactions are consummated, the term "affiliate" in Clause C of
Section 6(a)(i) and in Sections 6(a)(iii) and 6(a)(iv) shall be limited to
Holding Company and its other subsidiaries (including, without limitation,
Calgene).
Notwithstanding the foregoing, the Executive may participate in any manner in
the business activities of Chile Financial Investments Associates, Inc. and
Xxxxxxxx Landco, Inc. (provided that, for the period during which the Executive
is subject to the restrictions of this Section 6(a), the Executive shall not
propose or consent to such entities entering into any new business not conducted
by such entities on December 23, 1992, the effective date of the Original
Employment Agreement, that competes with any of the Covered Businesses in any of
the Covered Jurisdictions), and the operation of a vineyard in Napa Valley,
California, and such activities of the Executive (and the Executive's ownership
interests in lands which are leased to the Employer or its affiliates) shall not
be deemed a breach of the foregoing provisions of this Section 6(a) or to
constitute a conflict of interest with the Executive's duties to the Employer
under Section 1 of this Agreement.
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(b) The Executive agrees that a violation on the part of the
Executive of the covenants contained in Section 6(a) will cause irreparable
damage to the Employer, and that it is and will be impossible to estimate or
determine the damage that will be suffered by the Employer in the event of a
breach by the Executive of such covenants. Therefore, the Executive further
agrees that the Employer shall be entitled to an injunction from any court of
competent jurisdiction restraining any further violation of such covenants by
the Executive, his employer, employees, partners, agents or other associates, or
any of them, such right to an injunction to be in addition to whatever other
remedies the Employer may have. In addition, the Employer may, as provided in
Section 7 of this Agreement, terminate this Agreement for breach of the
provisions set forth in Section 6(a).
(c) The invalidity of any one or more of the words, phrases,
sentences or clauses contained in this Section 6 shall not affect the
enforceability of the remaining portions of this Section. If one or more of the
words, phrases, sentences or clauses contained in this Section shall be invalid,
this Section shall be construed as if such invalid word or words, phrase or
phrases, sentence or sentences or clause or clauses had not been inserted, and
if such invalidity should be caused by the length of any period of time, the
size of any area, or the service or product limitations set forth in this
Section, such period of time or such area or such service or product
limitations, or all of them, shall, without need of further action by any party
hereto, be deemed to be reduced to a period, area, service or product that will
cure such invalidity.
(d) In the case where this Agreement terminates because of a Section
2(b) Termination, all of the terms, conditions and provisions of Section 6(a)-
(c) above shall also apply, except that restrictions shall extend only for a
period of one year from the effective date of the termination of this Agreement.
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7. (a) In the event of the death of the Executive, this Agreement shall
terminate, without notice, on the date of the happening of such event, and the
Employer shall have no further obligations hereunder other than (i) for payment
of Salary and compensation pursuant to Section 3(d) to which the Executive is
entitled, accrued through the date of death, (ii) for continued regular payments
of Salary for a period of six (6) months after the date of death, to the
Executive's wife if she then be living and, if not, to the Executive's estate,
(iii) payment of an Annual Incentive Award (prorated during the calendar year in
which the Executive dies) no later than two and one-half months following the
close of the calendar year during which the Executive died, and (iv) those with
respect to any employee benefit plan in which the Executive shall have
participated that arise because of or survive his death. The Executive's
designated beneficiary also shall be eligible to receive a prorated share of his
Long-Term Incentive Award to be paid after the close of the calendar year ending
December 31, 2001. The prorated award shall be the amount of the award
otherwise payable to the Executive had he lived, divided by a fraction, the
numerator of which is the number of whole months during the term of this
Agreement until the Executive's death and the denominator is 72. No interest
will accrue or be paid on the Long-Term Incentive Award from the date of the
Executive's death until it is paid to his designated beneficiary.
(b) For purposes of this Agreement, "Cause" shall mean (i) a willful
violation on the part of the Executive of the covenants contained in Section 1,
Section 6(a), or Section 9, (ii) the willful misconduct or gross negligence on
the part of the Executive which is materially and demonstrably injurious to the
Employer or is otherwise a material breach of fiduciary duties owed to the
Employer, or (iii) an act or acts by the Executive constituting a violation of
applicable laws which is materially and demonstrably injurious to the Employer
and which the Executive knew or reasonably should have known constituted a
violation of law. The
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Employer may terminate the Executive's employment under subsection (i) or (ii)
of this Section 7(b) only if the Executive is given prior written notice
specifying the nature of the alleged Cause and the Executive has been given a
reasonable opportunity (which shall be not less than sixty days) to take
remedial action but failed or refused to do so.
(c) In the event that the Executive voluntarily terminates his
employment with the Employer, the Employer shall pay to the Executive as final
remuneration all amounts of Salary and compensation pursuant to Section 3(d)
accrued, due and payable under this Agreement to the effective date of
termination, to the extent not previously paid to the Executive, and the
Employer shall have no further obligation to the Executive. The Executive
shall not be eligible for any Annual Incentive Award for the calendar year in
which the Executive voluntarily terminated employment, and the Executive shall
not be entitled to any Long-Term Incentive Award. Moreover, the Executive's
"Voluntary Termination" (as hereinafter defined) of employment shall be deemed
to be a breach of this Agreement. For purposes of the preceding sentence,
"Voluntary Termination" shall mean the Executive voluntarily and without being
induced or caused to do so by the Employer, resigning his position with the
Employer in writing. Without limiting the foregoing, Voluntary Termination
shall not include, and the Executive shall not be subject to a claim for breach
of contract under this Section, due to (i) the Employer terminating the
Executive without Cause, including, without limitation, due to the Executive's
failure to meet any performance goals or targets, (ii) Termination by the
Executive for Good Reason, (iii) a failure of the parties to agree upon a
renegotiated employment agreement pursuant to Section 2(b) hereof upon a failure
to reach 70% of the Cumulative Plan by December 31, 1998 and the Executive
resigning as a result thereof, (iv) the death or disability of the Executive,
(v) any nonrenewal of the Employment Term, or (vi) any Termination of the
Executive For Cause. The provision described above limiting
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the Employer's right to a claim for breach of contract under circumstances not
constituting a Voluntary Termination is not meant to limit the Employer's right
to other types of claims under any other provision of this Agreement under such
circumstances.
(d) The Executive may, at his option, exercisable by notice to the
Employer given within ninety (90) days after the Executive first becomes aware
of the occurrence of such event, terminate this Agreement, effective as of a
date specified in such notice, upon the occurrence of any one or more of the
following (each a "Termination by Executive for Good Reason"):
(i) the reassignment of the Executive by the Employer, without
the Executive's express written consent, to a position with the Employer
other than that of Chief Executive Officer, or to a position with the
Company other than that of Chief Executive Officer, or a material adverse
change in the nature or scope of the Executive's authorities, powers,
functions, duties or responsibilities in those positions; provided,
however, that the consummation of the Partnership Reorganization
Transactions shall not be deemed a violation of this provision;
(ii) The Employer's failure to perform its obligations under this
Agreement in any material respect, including without limitation the failure
by the Employer to pay compensation in accordance with this Agreement or
the failure of the Employer to provide the Executive with fringe benefits
substantially the same as those previously provided under this Agreement;
(iii) The Employer's requiring the Executive, without the
Executive's express written consent, to change his place of permanent
residency or to spend more than one-half of the time in which he performs
his duties for the Employer in a
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place outside of Xxxxxxx County, Florida, provided that any time that he
spends outside of Xxxxxxx County engaging in any activity for Monsanto,
Holding Company or Calgene (if the Partnership Reorganization Transactions
are consummated) shall not be counted;
(iv) unless the Executive gives prior written consent: (A) the
Employer's failure to continue the use of the name "Xxxxxxxx" in its
business name; (B) the sale, exchange or other disposition of a material
portion of the Employer's assets (other than assets which may be
contributed to the Employer by Calgene, Holding Company or Monsanto if the
Partnership Reorganization Transactions are consummated) to a third party
unrelated to the Employer, Holding Company, Calgene or Monsanto, such that
the value of the remaining assets of the Employer and its subsidiaries
which are consolidated with the Employer are materially diminished; (C) the
transfer of a material portion of the Employer's assets (other than assets
which may be contributed to the Employer by Calgene, Holding Company or
Monsanto if the Partnership Reorganization Transactions are consummated) to
Holding Company, Calgene or Monsanto or any of their affiliates if (1) the
transfer materially diminishes the Employer's abilities to conduct its
business as previously conducted prior to the transfer and thereby causes
it not to be reasonably possible for it to achieve the Earnings Targets, or
(2) after the transfer, it is not reasonably possible to measure the
financial return on the transferred assets and thereby causes it not to be
reasonably possible to measure the return to the Employer, including the
transferred assets; (D) if the Partnership Reorganization Transactions are
consummated, a material breach by Monsanto or Holding Company or any of
their successors of the Xxxxxxxx Credit Facility Agreement between Monsanto
and Holding Company; (E) if the Partnership Reorganization Transactions are
not consummated,
18
the failure by Monsanto to enter into a Xxxxxxxx Credit Facility Agreement
that is comparable to the Xxxxxxxx Credit Facility Agreement between
Monsanto and Holding Company, and once the Monsanto Xxxxxxxx Credit
Facility Agreement is executed, a material breach of that Agreement by
Monsanto; (F) the removal from the Employer by dividend or distribution to
the owners of the Employer, capital or assets such that the achievement of
the Earnings Targets described in Schedule 2 hereof are not reasonably
possible; or (G) the taking of any other actions by Monsanto or, if the
Partnership Reorganization Transactions are consummated, by Holding Company
or Calgene, which materially diminishes the Employer's abilities to conduct
its business and thereby causes it not to be reasonably possible to achieve
the Earnings Targets;
provided, in each case, that the event was suffered or incurred involuntarily
by, or without the express written consent of, the Executive and is not cured by
the Employer within thirty (30) days after the Employer receives written notice
from the Executive specifying the event that the Executive asserts constitutes a
basis for Termination by Executive for Good Reason. Notwithstanding anything in
this Section 7(d)(iv) to the contrary, the Partnership Reorganization
Transactions and any Restructuring Event, as defined in Section 8 below, shall
not be the basis for a Termination by Executive for Good Reason.
(e) (i) Upon any termination of this Agreement because of a
Section 2(b) Termination, the Employer shall pay to the Executive, in
addition to all sums then accrued, due and payable under this Agreement, an
additional amount equal to the Executive's Salary paid or payable to the
Executive for the calendar year ending December 31, 1998. The amount shall
be payable in a single sum within thirty days after the effective date of
the termination of this Agreement because of the Section 2(b) Termination.
In addition, the Employer shall
19
maintain or provide, at no cost to the Executive, group medical and other
insurance coverages on the Executive and his family, to the extent
previously received by the Executive under this Agreement for one year
following the effective date of the termination of this Agreement because
of the Section 2(b) Termination.
(ii) Upon any termination of this Agreement by the Employer
without Cause, or any timely nonrenewal by the Employer of the Employment
Term pursuant to Section 2(a) of this Agreement, or any Termination by
Executive for Good Reason, the Employer shall pay to the Executive, in
addition to all sums then accrued, due and payable under this Agreement, an
additional amount equal to twice the Executive's Salary paid or payable to
the Executive for the calendar year in which the effective date of the
termination of this Agreement occurs, which amount shall be payable in a
lump sum within thirty (30) days after the effective date of termination of
this Agreement. The Employer also shall maintain or provide, at no cost to
the Executive, group medical and other insurance coverages on the Executive
and his family, to the extent previously received by the Executive under
this Agreement, for at least two years after any such termination of this
Agreement. In addition, upon the termination of this Agreement by the
Employer without Cause, any timely nonrenewal by the Employer of the
Employment Term pursuant to Section 2(a) of the Agreement or any
Termination by Executive for Good Reason, the Employer shall pay to the
Executive, if the termination occurs on or before December 31, 1998, an
amount equal to one times the Annual Incentive Award, or if the termination
occurs on or after January 1, 1999, an amount equal to two times the Annual
Incentive Award, in each case paid the Executive for the calendar year in
which the termination took place or for the prior calendar year, whichever
Annual Incentive Award is greater. The payment of
20
this amount shall be paid to the Executive no later than two and one-half
months after the end of the calendar year in which the termination took
place.
(iii) In the event of a Section 2(b) Termination, the termination
of this Agreement by the Employer without Cause or by reason of nonrenewal
of the Employment Term, or Termination by Executive for Good Reason, the
Executive shall have no duty to seek other employment or otherwise mitigate
the amount of compensation payable to him under the terms of this
Agreement, and the amounts payable to the Executive hereunder shall not be
reduced because of any new Employment the Executive may obtain after
termination.
(iv) In addition, upon termination of this Agreement by the
Employer without Cause or any Termination by Executive for Good Reason
(hereinafter sometimes collectively referred to as "Termination"), the
Executive shall be eligible to receive a prorated share of the Annual
Incentive Award for the year in which the Termination occurs and shall also
be eligible to receive a prorated share of his Long-Term Incentive Award to
be paid to him within two and one-half months after the close of the
calendar year ending December 31, 2001. The prorated Long-Term Incentive
Award shall be the amount of the Award otherwise payable to the Executive
(except for the Termination) divided by a fraction, the numerator of which
is the number of whole or partial months during the term of this Agreement
until the effective date of the Executive's termination and the denominator
is 72. No interest shall accrue or be paid on the Long-Term Incentive
Award from the date of the Executive's Termination until it is paid to him.
(f) Upon the Termination of this Agreement by the Employer for Cause,
the Employer shall pay to the Executive all
21
Salary then accrued, due and payable under this Agreement. The Employer shall
be under no obligation to pay the Executive any Annual Incentive Award for the
calendar year in which the termination of this Agreement by the Employer for
Cause occurred, nor shall the Executive be eligible for any Long-Term Incentive
Award.
(g) In all cases where the Executive or his estate or heirs has a
right to receive a pro rata share of his Long-Term Incentive Award following his
termination, death or disability, the Employer shall provide to the Executive or
his personal representative two and one-half months after the close of its
fiscal year copies of its audited financial statements as well as a calculation
of the EBIT for the Employer for the calendar year then ended; provided,
however, if the Partnership Reorganization Transactions are consummated, the
financial statements provided by the Employer are not required to be audited.
(h) Notwithstanding any other provision of this Agreement, the
Employer's obligations to continue any benefits under any employee benefit plan
after the termination of this Agreement shall be subject to the timely making,
by the Executive or his beneficiary, of any elections required by the terms of
such plan and the payment, if required, of any premiums therefor.
(i) The Executive agrees that any payments required under this
Section 7 that constitute continuation of the Executive's Salary beyond
termination of the Employment Term shall be reduced by any and all severance
payments which the Executive receives under any severance plan or program of the
Employer. Except as specifically otherwise provided in this Agreement, the
Executive acknowledges and agrees that he will not be entitled to accrue or be
eligible for any vacation pay, Annual or Long-Term Incentive Awards or other
benefits during periods following his termination with respect to which he is
paid or entitled to be paid
22
any amounts, or provided any benefits pursuant to this Section 7. However, the
preceding sentence shall not be deemed to release the Employer from its
obligation to pay the Executive any other compensation or benefits to which the
Executive is specifically entitled during periods following his termination
pursuant to this Agreement. The Executive and the Employer agree that, in the
event that any health, disability or life insurance benefits required to be
provided under this Section 7 cannot be provided under the terms of the plans
maintained by the Employer for any reason, the Employer shall satisfy the
requirement to provide such health, disability or life insurance benefits by
purchasing other comparable benefits and making them available to the Executive
at the same after-tax cost, provided, in the case of disability insurance, that
the same is obtainable, using reasonable efforts, on commercially reasonable
terms.
8. In the event that there occurs a Restructuring Event prior to June 30,
2001, to-wit:
(a) the sale of more than fifty percent of the stock or other equity
interest of the Employer to a person, corporation or entity other than to
Holding Company, a Holding Company affiliate, Calgene, a Calgene affiliate (in
the Partnership Reorganization Transactions or otherwise), Monsanto or a
Monsanto affiliate;
(b) the sale of all or substantially all of the assets of the
Employer to a person, corporation or entity other than to Holding Company, a
Holding Company affiliate, Calgene, a Calgene affiliate (in the Partnership
Reorganization Transactions or otherwise), Monsanto or a Monsanto affiliate; or
(c) there occurs a registered public offering of more than twenty-
five percent of the stock of the Employer;
23
and the net amount realized by the Employer or the shareholders of the Employer
exceeds the net cumulative capital invested (i.e., cumulative capital invested
reduced by cumulative capital returned in the form of dividends or other
distributions) by Monsanto and its affiliates and Holding Company and its
affiliates in the Employer plus a 14% cost of capital factor (compounded
annually), then the Executive shall be entitled to receive an amount equal to
five percent (5%) of the excess ("Restructuring Event Award"), but in no event
shall the amount payable to the Executive as a Restructuring Event Award exceed
the maximum Long-Term Incentive Award payable to the Executive under this
Agreement, and provided further, that the amount of the Restructuring Event
Award shall be reduced by the amount of any Long-Term Incentive Award paid to
the Executive hereunder. The Restructuring Event Award shall be fully earned
upon the occurrence of the Restructuring Event and shall not be forfeited or
reduced in the event that no amount of Long-Term Incentive Award is payable to
the Executive hereunder. The Restructuring Event Award shall be payable no
later than two and one-half months after the close of the calendar year ending
December 31, 2001. No interest shall accrue or be paid on the Restructuring
Event Award from the date of the Restructuring Event until it is paid. In the
event that there is a dispute over the net amount realized or the amount of the
investment and cost of capital factor, or any other financial issue, the dispute
shall be referred to Monsanto's independent certified public accountants or, if
the Partnership Reorganization Transactions are consummated, to the Certified
Public Accountants for them to resolve, using generally accepted accounting
principles. The determination of Monsanto's certified public accountants or the
Certified Public Accountants, as the case may be, shall be final and binding on
all parties absent manifest error.
9. (a) The Executive acknowledges that, during and as a result of his
employment hereunder, he may have access to trade secrets and other confidential
information of the Employer and
24
Holding Company and their respective affiliates, including but not limited to
the nature and material terms of business opportunities and proposals available
to the Employer, Holding Company and Calgene and their respective affiliates,
the Employer's, Holding Company's or Calgene's and their respective affiliates'
methods and systems, the names and addresses of the Employer's, Holding
Company's or Calgene's and their respective affiliates' customers and suppliers,
technical memoranda, research reports, designs and specifications, operating
procedures, ledgers and other information, data and documents relating to the
Employer's, Holding Company's and Calgene's and their respective affiliates'
present or future operations, whether or not any such information, data or
documents qualify as a "trade secret" under applicable federal or state law
(collectively, the "Confidential Information"). The Executive covenants and
agrees that he shall not at any time during or following any termination of this
Agreement, without the consent of the Employer, Holding Company or Calgene or
their affiliates, respectively, use or disclose (except for the sole and
exclusive benefit of the Employer, Holding Company or Calgene or their
affiliates, respectively, or as required to perform his duties under this
Agreement or as required by law or as is already in the public domain) any
Confidential Information which has been obtained by or disclosed to him as a
result of his employment with the Employer. The Executive agrees that the
Employer and Calgene would be irreparably harmed by any breach of the
Executive's agreements set forth in this Section 9, that such injury would not
be adequately compensated by monetary damages, and that, accordingly, Monsanto,
the Employer, Holding Company or Calgene, whichever corporation is appropriate,
may specifically enforce the provisions of this Section by injunction without
thereby affecting any claim for damages.
(b) Upon termination of this Agreement, the Executive shall promptly
return to the Employer, Holding Company and Calgene, respectively, all documents
(including without limitation copies
25
and notes relating to such documents) and other materials and property of the
Employer, Holding Company or Calgene, or pertaining to their businesses,
including without limitation customer and prospect lists, contracts, files,
manuals, letters, reports and records in his possession or control, including
all computerized records, files and computer programs, tapes or discs, no matter
from whom or in what manner acquired.
(c) The Executive agrees that he will fully disclose, and shall
assign and transfer to the Employer, its successors and assigns, the entire
right, title and interest in the development of a new variety of plant,
patentable or unpatentable, conceived by the Executive during the Employment
Term and relating, in the opinion of the Employer, in any way to the Employer's
business (an "Invention"). Such assignment shall include the right to obtain
letters of patent or plant patents, in the name of the Employer or otherwise, on
such Inventions in the United States or in any foreign countries, covering such
Inventions. The Executive agrees to sign all papers and to make all oaths
necessary for the filing and prosecution of any applications for such letter of
patent or plant patents, or any divisions, continuations, continuations in part,
renewals or reissue thereof, and to execute on request all papers necessary to
assign such Inventions to the Employer. The Executive will promptly disclose to
the Employer every Invention and every scientific product, process, apparatus or
design that the Executive, individually or jointly, during the Employment Term,
may invent, discover, conceive or originate, relating in any way to the
Employer's ability to develop new hybrids and plant varieties.
10. Any notice required or permitted to be given under this Agreement
shall be in writing, and shall be given by hand-delivery to the addressee, by
deposit in the U.S. mail, postage prepaid, certified mail, return receipt
requested, by overnight courier service, or facsimile transmission followed by
written confirmation sent in one of the manners specified above, as follows:
26
If to Employer, to:
Xxxxxxxx X.X.
00000 Xxx 00 Xxxxx
Xxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telefax No.: 813/597-8963
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxx & Genauer, P.A.
0 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxx 00000
Telefax No.: 305/461-3545
and, if the Partnership Reorganization
Transactions are consummated, to:
Tomato Investment Associates, Inc.
000 Xxxxx Xxxxxxxxx Xxxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Telefax No.: 314/694-3011
with a copy to:
Monsanto Company
000 Xxxxx Xxxxxxxxx Xxxx.
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Senior Vice President and General Counsel
Telefax No.: 314/694-3011
and, if the Partnership Reorganization
Transactions are consummated, with a
copy to:
Holding Company
0000 Xxxxx Xxxxxx
Xxxxx, Xxxxxxxxxx 00000
Attention: Chairman and Chief Executive Officer
Telefax No.: 916/753-1510
If to the Executive, to:
Xxxxxxx X. Xxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxx & Xxxxxxx, P.A.
0 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxx Xxxxxx, Xxxxxxx 00000
Telefax No.: 305/461-3545
27
or to such other address as any party may specify by notice hereunder to the
other. Any notice sent in accordance with the foregoing provisions shall be
deemed given on the date of receipt if personally delivered, or on the date
three (3) days after being deposited in the mail, if mailed.
11. This Agreement and the Cooperation Agreement incorporate the entire
agreement between the parties hereto pertaining to the subject matter hereof,
and supersede all prior and contemporaneous agreements, understandings,
negotiations and discussions of the parties, whether oral or written (including,
without limitation, any agreements or contracts regarding employment of the
Executive with NTG or any other predecessor to any business of the Employer,
which agreements and contracts are in all respects cancelled and any rights or
remedies thereunder are hereby waived by the Executive and the Employer), and
there are no warranties, representations or other agreements between the parties
in connection with the subject matter hereof, except as specifically set forth
herein. No amendment, supplement, modification or waiver of this Agreement shall
be binding upon a party hereto unless in writing and executed by such party.
12. It is the intention of the parties hereto that all questions with
respect to the construction of this Agreement and the rights and liabilities of
the parties hereto shall be determined in accordance with the laws of the State
of Delaware applicable to business agreements entered into and performed
entirely within the State of Delaware.
13. Each of the provisions of this Agreement shall be independent of all
other provisions, and if any provision of this Agreement is declared void or
invalid by any court or other governmental agency of competent jurisdiction,
each other provision of this Agreement shall remain in full force and effect and
shall be construed to the extent possible as consistent with all other valid
provisions in order to carry out the intent of the parties hereto.
Notwithstanding the termination or expiration of this Agreement for any reason,
the Executive's obligations under
28
Sections 6 and 9 hereof shall survive and remain in full force and effect for
the periods therein provided, and the provisions for equitable relief in
Sections 6 and 9 hereof shall continue in force.
14. This Agreement shall be binding upon and inure to the benefit of the
respective heirs, executors, administrators, successors and assigns of the
Employer and the Executive. If the Employer shall, at any time, be merged with
or consolidated into or with any other corporation or person or if all or
substantially all of the assets of the Employer are transferred to another
corporation or person in connection with the Partnership Reorganization
Transactions or otherwise, the provisions of this Agreement shall be binding
upon and inure to the benefit of the entity resulting from such merger or
consolidation or the corporation or person to which or to whom such assets shall
be transferred, and this provision shall apply in the event of any subsequent
mergers, consolidations or transfers of assets. Except as provided in this
Section 14, and except for the Partnership Reorganization Transactions, neither
the Employer nor the Executive may assign its or his interest in this Agreement
or any part hereof. The Executive acknowledges and agrees that he has had the
opportunity and been given sufficient time to read this Agreement, that he
understands this Agreement's terms and conditions, that he has had any questions
regarding the meaning of this Agreement answered to his satisfaction, and that
he has retained competent counsel to represent him with respect to this
Agreement. Nothing in this Agreement shall require the Employer to segregate
monies from its general funds or create any trusts or special deposits to secure
payment of any obligations hereunder. This Agreement shall not be construed
more strictly against one party than against the other merely by virtue of the
fact that this Agreement may have been physically prepared by one of the
parties, or such party's counsel, it being agreed that both parties and their
respective counsel have mutually participated in the negotiation and preparation
of this Agreement.
29
15. If the Partnership Reorganization Transactions are consummated, the
Executive agrees to execute with Holding Company and its affiliates (including,
without limitation, Calgene), agreements relating to noncompetition,
Confidential Information and Inventions substantially similar to those set forth
in this Agreement as may reasonably be advisable or necessary in furtherance of
the transaction and as may be needed by Holding Company or Calgene and its
affiliates to protect their interests with respect to the transaction. In the
event that the Partnership Reorganization Transactions are not consummated, all
references in this Agreement to Holding Company or Calgene shall be null and
void, except to the extent necessary to protect any information about its
businesses and operations that the Executive may have learned as part of his
involvement, if any, in connection with the proposed Partnership Reorganization
Transactions. Each of Holding Company and Calgene may enforce the terms of this
Agreement with respect to the provisions applicable to it even though it is not
a party to this Agreement.
16. The Executive acknowledges the fact that another employee of the
Employer will receive a similar Employment Agreement providing the employee with
eligibility for Annual and Long-Term Incentive Awards similar to those for which
the Executive is eligible under this Agreement. Executive acknowledges and
agrees that, in the event that the other employee terminates his employment with
the Employer in such a way that he is not eligible for all or any Annual or
Long-Term Incentive Awards, or if either the Annual or Long-Term Incentive
Awards shall, for whatever reason, not be paid to the other employee, the amount
of the Annual or Long-Term Incentive Awards otherwise payable to the Executive
hereunder shall not be increased or decreased.
17. The Executive hereby acknowledges that right to the use of the name
"Xxxxxxxx" is an asset of the Company and the
30
Partnership and may be used by the Employer and its successors and assigns both
during and after the Employment Term.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on and as of
the date first above written.
XXXXXXXX, X. X.
By: XXXXXXXX X. X., Inc.
its General Partner
By:/s/ Xxxx Xxxxxxxx
___________________________
Xxxx Xxxxxxxx
Executive Vice President
/s/ Xxxxxxx X. Xxxxxxxx
___________________________
Xxxxxxx X. Xxxxxxxx
31
