26
EXHIBIT 99.2
May 1, 1997
Xxxxx X. Xxxxxxx
00000 Xxxx Xxxxxxx Xxxxx
Xxx Xxx, XX 00000
Dear Xx. Xxxxxxx:
This letter agreement (the "Agreement") will confirm our
understanding regarding your separation from employment with
Mycogen Corporation (the "Company").
1. Separation Date. Except as otherwise provided in
paragraph 4, you agree to voluntarily resign from your positions
as Chairman of the Company's Board of Directors and Chief
Executive Officer of the Company, from your employment with the
Company and any of its Affiliates (as defined in paragraph 14),
and from any other positions you may hold with the Company and
any of its Affiliates by reason of your employment, effective as
of May 1, 1997, the "Separation Date" for purposes of this
Agreement. You will remain (unless you choose otherwise) as a
director of the Company following the Separation Date and until
such time as you resign or are removed or not re-elected to the
Board.
2. Payments and Benefits. You shall be entitled to
compensation and other payments and benefits in accordance with
Exhibit 1 and Exhibit 2, which are attached to, and form a part
of, this Agreement.
3. No Mitigation or Offset.
(a)Except as otherwise provided in this Agreement, you shall not
be required to mitigate damages or the amount of any payment
provided for under this Agreement by seeking other employment
or otherwise.
(b)The Company's obligations to make the payments provided for
in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by a set-off, counterclaim,
recoupment, defense or other claim, or other action which the
Company may have against you or others.
4. Assistance to the Company. You agree that, for the period
beginning on your Separation Date, and continuing for so long as
you remain a director of the Company, you will provide the
Company and its Affiliates with such assistance as may reasonably
be requested by the Company from time to time. This assistance
includes, but is not limited to, assisting in the ongoing
business affairs of the Company and its Affiliates, assisting the
Company and its Affiliates in the defense of any third-party
claims that may be made against the Company and its Affiliates,
and assisting the Company and its Affiliates in the prosecution
of any claims that may be made by the Company or any Affiliate.
The Company will consult with you, and make reasonable efforts to
schedule such assistance so as not to materially disrupt your
business and personal affairs. You agree, unless precluded by
law, to promptly inform the Company if you are asked to
participate (or otherwise become involved) in any lawsuits
involving such claims that may be filed against the Company or
any Affiliate. You also agree, unless precluded by law, to
promptly inform the Company if you are asked to assist in any
investigation of the Company or any Affiliate (or their actions)
that may relate to services performed by you for the Company or
any Affiliate, regardless of whether a lawsuit has then been
filed against the Company or any Affiliate with respect to such
investigation. The Company agrees to reimburse you for all of
your reasonable out-of-pocket expenses associated with such
assistance, including travel expenses.
5. Confidentiality.
(a)You hereby acknowledge that the Company and the Affiliates
have, from time to time during your employment, disclosed to
you (and may, in the future, disclose to you as a director of
the Company or in any other role you may play with the
Company or its Affiliates) confidential information
pertaining to the Company's and the Affiliates' business and
affairs and client base, including (without limitation)
customer lists and accounts, other similar items indicating
the source of the Company's and Affiliates' income, and
information pertaining to the salaries, duties and
performance levels of the Company's and Affiliates'
employees. You will not, at any time, disclose to any third
party or directly or indirectly make use of any such
confidential information, including (without limitation) the
names, addresses and telephone numbers of the Company's or
Affiliates' customers, other than in connection with, and in
furtherance of, the Company's and Affiliates' business and
affairs, and then only to the extent specifically authorized
in advance in writing by the President of the Company.
Nothing contained in this paragraph shall be construed to
prevent you from disclosing the amount of your salary.
(b)Except as otherwise authorized in advance in writing by the
President of the Company, all documents and data (whether
written, printed or otherwise reproduced or recorded)
containing or relating to any such proprietary information of
the Company or the Affiliates which came into your possession
during your employment will be returned by you to the Company
forthwith as of the Separation Date, and you will not retain
any copies, notes or excerpts thereof. Notwithstanding the
foregoing, you shall be entitled to retain your file or
rolodex containing names, addresses and telephone numbers and
personal diaries and calendars; provided, however, that you
shall continue to be bound by the terms of paragraph 5(a) to
the extent such retained materials constitute confidential
information.
(c)The Company will have the right to communicate with any of
your future or prospective employers concerning your
continuing obligations under this
paragraph 5.
6. Ownership Rights.
(a) All materials, ideas, discoveries and inventions
pertaining to the Company's and Affiliates' business or
clients, including (without limitation) all patents and
copyrights, patent applications, patent renewals and
extensions and the names, addresses and telephone numbers of
customers, will belong solely to the Company.
(b) All materials, ideas, discoveries and inventions
which you may have devised, conceived, developed or reduced
to practice (whether individually or jointly with others)
during your employment with the Company or an Affiliate, or
in conjunction with your service in the future as a director
of the Company or in any other capacity with the Company or
its Affiliates, will be the sole property of the Company and
are hereby assigned by you to the Company, except for any
idea, discovery or invention (i) for which no Company or
Affiliate equipment, supplies, facility or trade secret
information was used, (ii) which was developed entirely on
your own time, and (iii) which neither (a) related at the
time of conception or reduction to practice, to the Company's
or Affiliate's business or any actual or demonstrably-
anticipated research or development program of the Company or
an Affiliate nor (b) resulted from any work performed by you
for the Company or an Affiliate. The foregoing exception
corresponds to the assignment of inventions precluded by
California Labor Code Section 2870, attached as Exhibit 3,
which is attached to, and forms a part of, this Agreement.
(c) You will, at all reasonable times, assist the
Company, at the Company's sole expense, in obtaining,
maintaining, defending and enforcing patents, copyrights and
other proprietary rights of the Company or an Affiliate.
Such assistance will include (without limitation) the
execution of documents and assistance and cooperation in
legal proceedings.
(d) Notwithstanding anything in this Agreement to the
contrary, you will continue to be bound by all the terms and
provisions of your existing Proprietary Information and
Invention Agreements with the Company, and nothing in this
document will be deemed to modify or affect your duties and
obligations under those other agreements.
7. Non-Solicitation. During the period beginning on
the Separation Date and ending two (2) years thereafter, you
will not directly or indirectly solicit any Company or Affiliate
employee to leave the Company's or Affiliate's employ for any
reason or interfere in any other manner with the employment
relationships at the time existing between either the Company or
an Affiliate and that Company's or Affiliate's then current
employees.
8. Non-Disclosure. You acknowledge that the benefits
provided by the Company under this Agreement are not generally
available to other employees of the Company, and you agree that,
except as may be compelled by legal process, you will keep the
terms of this Agreement secret and confidential indefinitely.
Notwithstanding the foregoing provisions of this paragraph 8, you
may disclose the contents of this Agreement to your attorneys,
accountants and financial advisors, any taxing authority, your
immediate family, any prospective employer in connection with its
decision to hire you, and any prospective lender in connection
with its decision to make a loan to you, provided that you take
steps that are reasonably calculated to assure that such persons
do not further disclose the terms of this Agreement. You may
also disclose this Agreement and its contents to such persons as
may be necessary in connection with your assertion of or defense
against any claim of breach of this Agreement. Nothing in this
Agreement shall preclude you from fully discussing with any
prospective employer, in connection with its decision to hire
you, the conditions and reasons surrounding your separation from
the Company.
9. Disparagement.
(a)You will not, at any time following the Separation Date, make
any statement or disclosure that disparages the Company or
its Affiliates and is intended or reasonably likely to result
in material harm to the Company or its Affiliates; provided
that the provisions of this paragraph (a): (i) shall not
apply to legally compelled testimony as a witness, compliance
with other legal obligations, your assertion of or defense
against any claim of breach of this Agreement (including the
Exhibits thereto and the referenced plans and arrangements),
defense against any statements by the Company about you that
are false or misleading, or your statements or disclosures to
officers or directors of the Company or its Affiliates, and
(ii) shall not require you to make false statements or
disclosures.
(b)The Company agrees that neither the Company nor any Affiliate
will, at any time following the Separation Date, make any
statement or disclosure that disparages you and is intended
or reasonably likely to result in material harm to you;
provided that the provisions of this paragraph (b): (i) shall
not apply to testimony as a witness, compliance with other
legal obligations, assertion of or defense against any claim
of breach of this Agreement (including the Exhibits thereto
and the referenced plans and arrangements), defense against
any statements by you that are determined by the Company to
be false, misleading, or otherwise adverse to the best
interests of the Company or its Affiliates, or statements or
disclosures to you, and (ii) shall not require false
statements or disclosures to be made.
10. Announcement. Your resignation from employment with the
Company and its Affiliates shall be announced by a joint
statement in the form of Exhibit 4 of this Agreement, which is
attached to, and forms a part of this Agreement. You are
required to execute the resignation letter set forth in Exhibit 5
of this Agreement, which is attached to, and forms a part of,
this Agreement. You and the Company will cooperate with each
other in any statements about your resignation so as not to
depart materially from the joint statement described in this
paragraph 10.
11. Indemnification. The indemnification provisions for
Officers and Directors under the Company's Bylaws will (to the
maximum extent permitted by law) be extended to you with respect
to any and all matters, events or transactions occurring or
effected during your employment or service in any other capacity
with the Company following the Separation Date.
12. Non-Alienation. Your interests under this Agreement are
not subject to the claims of your creditors, and may not
otherwise be voluntarily or involuntarily assigned, alienated or
encumbered. Your obligations under this Agreement may not be
assigned.
13. Amendment. This Agreement may be amended or canceled
only by mutual agreement of the parties in writing without the
consent of any other person. So long as you live, no person,
other than the parties hereto, shall have any rights under or
interest in this Agreement or the subject matter hereof. The
consent of the Company under this paragraph shall be valid only
if given by the President of the Company.
14. Affiliates. For purposes of this Agreement, the term
"Affiliate" means any corporation, partnership, joint venture,
or other entity (including without limitation any predecessor to,
or any successor to the assets or business of, any such
corporation, partnership, joint venture, or other entity) which,
at any time during the period of your employment with the Company
or during any other period thereafter while you are serving as a
director of the Company or in any other role you may have with
the Company or any of its Affiliates, directly, or through one of
its intermediaries, controls or is controlled by, or is under
common control with, the Company.
15. Effect of Breach. You acknowledge that the Company would
be irreparably injured by your violation of paragraph 5, 6, 7, or
9, and you agree that the Company, in addition to any other
remedies available to it for such breach or threatened breach,
shall be entitled to a preliminary injunction, temporary
restraining order, or other equivalent relief, restraining you
from any actual or threatened breach of paragraph 5, 6, 7, or 9.
The Company acknowledges that you would be irreparably injured by
its violation of paragraph 9, and the Company agrees that you, in
addition to any other remedies available to you for such breach
or threatened breach, shall be entitled to a preliminary
injunction, temporary restraining order, or other equivalent
relief, restraining the Company from any actual or threatened
breach of paragraph 9.
16. Waiver of Breach. The waiver by either you or the
Company of a breach of any provision of this Agreement shall not
operate as or be deemed a waiver of any subsequent breach by
either you or the Company. Continuation of benefits hereunder by
the Company following a breach by you of any provision of this
Agreement shall not preclude the Company from thereafter
exercising any right that it may otherwise independently have to
terminate said benefits based upon the same violation.
17. Severability. The invalidity or unenforceability of any
provision of this Agreement will not affect the validity or
enforceability of any other provision of this Agreement, and this
Agreement will be construed as if such invalid or unenforceable
provision were omitted (but only to the extent that such
provision cannot be appropriately reformed or modified).
18. General Release and Waiver. As a part of this Agreement,
and in consideration of the mutual releases provided by you and
the Company to each other as set forth in Exhibit 6 of this
Agreement, and in consideration of the additional benefits
provided to you in accordance with this Agreement, you and the
Company each agree to enter into the mutual General Release and
Waiver as set forth in Exhibit 6 of this Agreement, which is
attached to and forms a part of this Agreement (the "Mutual
Release"). You further agree to execute the Mutual Release in
the presence of a notary public. This Agreement (including all
Exhibits to this Agreement), and the commitments and obligations
of all parties hereunder:
(a)shall become final and binding immediately following the
expiration of your right to revoke the execution of this
Agreement in accordance with paragraph 2(d) of Exhibit 6
(Mutual Release);
(b)shall not become final and binding until the expiration of
such right to revoke; and
(c)shall not become final and binding if you revoke such
execution prior to the expiration of such right to revoke.
19. Other Agreements. Except as otherwise specifically
provided in this Agreement, this instrument constitutes the
entire agreement between you and the Company and supersedes all
prior agreements and understandings, written or oral, including,
without limitation, the employment contract dated as of January
1, 1996 (referred to in this Agreement as the "Employment
Contract") and any other employment agreements that may have been
made by and between you and the Company or its predecessors or
Affiliates. You acknowledge and agree that the payments and
benefits provided to you under this Agreement, including but not
limited to, the payments and benefits to be provided to you
pursuant to Exhibit 1 of this Agreement, in exchange for your
agreement to voluntarily resign from your current employment with
the Company and its Affiliates (as more fully described in
paragraph 1 of this Agreement), are in lieu of any payments and
benefits to which you may have been entitled under the Employment
Contract, which payments and benefits you expressly and
unconditionally waive with your execution of this Agreement. As
of your Separation Date, all rights, duties and obligations of
both you and the Company pursuant to the Employment Contract
shall terminate.
20. Notices. Notices and all other communications provided
for in this Agreement shall be in writing and shall be delivered
personally or sent by registered or certified mail, return
receipt requested, postage prepaid (provided that international
mail shall be sent via overnight or two-day delivery), or sent by
facsimile or prepaid overnight courier to the parties at the
addresses set forth below (or such other addresses as shall be
specified by the parties by like notice). Such notices, demands,
claims and other communications shall be deemed given:
(a)in the case of delivery by overnight service with guaranteed
next day delivery, the next day or the day designated for
delivery;
(b) in the case of certified or registered U.S. mail,
five days after deposit in the U.S. mail; or
(c) in the case of facsimile, the date upon which the
transmitting party received confirmation of receipt by
facsimile, telephone or otherwise;
provided, however, that in no event shall any such communications
be deemed to be given later than the date they are actually
received. Communications that are to be delivered by the U.S.
mail or by overnight service are to be delivered to the addresses
set forth below:
to the Company:
Mycogen Corporation
0000 Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
with a copy to:
DowElanco
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxxx, XX 00000
Attn: General Counsel
or to you:
Xxxxx X. Xxxxxxx
00000 Xxxx Xxxxxxx Xxxxx
Xxx Xxx, XX 00000
with a copy to:
Xxxxxxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxxxx, Xxx. 0000
Xx Xxxxx, XX 00000
All notices to the Company shall be directed to the attention of
the President of the Company, with a copy to the Secretary of the
Company. Each party, by written notice furnished to the other
party, may modify the applicable delivery address, except that
notice of change of address shall be effective only upon receipt.
21. Arbitration of All Disputes. Any controversy or claim
arising out of or relating to this Agreement (or the breach
thereof) shall be settled by final, binding and non-appealable
arbitration in San Diego, California by three arbitrators.
Except as otherwise expressly provided in this paragraph 21, the
arbitration shall be conducted in accordance with the rules of
the American Arbitration Association (the "Association") then in
effect. One of the arbitrators shall be appointed by the
Company, one shall be appointed by you, and the third shall be
appointed by the first two arbitrators. If the first two
arbitrators cannot agree on the third arbitrator within 30 days
of the appointment of the second arbitrator, then the third
arbitrator shall be appointed by the Association. This paragraph
21 shall not be construed to limit the right of either you or the
Company to obtain relief under paragraph 15 with respect to any
matter or controversy subject to paragraph 15, and, pending a
final determination by the arbitrator with respect to any such
matter or controversy, either you or the Company shall be
entitled to obtain any such relief by direct application to a
court of law, without being required to first arbitrate such
matter or controversy.
22. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of California, without
regard to the conflict of law provisions of any state.
23. Exhibits, Other Documents. Except as otherwise expressly
provided in this Agreement, or except where the context clearly
requires otherwise, all references in this Agreement to "the
Agreement" or "this Agreement" shall be deemed to include
references to each of the Exhibits to this Agreement. To the
extent that the terms of this Agreement (including the Exhibits
to this Agreement) provide that your rights or obligations set
forth in this Agreement (including the Exhibits to this
Agreement) are to be determined under, or are to be subject to,
the terms of any other plan or other document, this Agreement
(including the Exhibits to this Agreement) shall be deemed to
incorporate by reference such plan or other document.
24. Successors. This Agreement shall be binding upon and
inure to the benefit of the Company and any successor of the
Company, including, without limitation, any corporation or
corporations acquiring directly or indirectly all or
substantially all of the stock, business or assets of the Company
whether by merger, consolidation, division, sale or otherwise
(and such successor shall thereafter be deemed "the Company" for
the purposes of this Agreement). The Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, to expressly assume and
agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if
no such succession had taken place. This Agreement shall be
binding upon and inure to your benefit, and the benefit of your
successors, assigns, executors, administrators or beneficiaries.
25. Counterparts. This Agreement may be executed in more
than one counterpart, but all of which together will constitute
one and the same agreement. Any such copy of this Agreement (and
its Exhibits) executed by you shall be so executed in the
presence of a notary public, who will so indicate where provided
for in this Agreement (and its Exhibits).
If you agree to the terms of this Agreement, please indicate
your agreement by signing, notarizing, and returning a copy of
this letter to the undersigned, along with a signed copy of
Exhibit 5 (Letter of Resignation), and a signed and notarized
copy of Exhibit 6 (Mutual Release).
Very truly yours,
MYCOGEN CORPORATION
By:
Printed: Xxxxxxx X. Xxxx
Its: President
Accepted and agreed to this _____ day of May, 1997.
_____________________________
Xxxxx X. Xxxxxxx
State of: ___________________
County of: _________________
Subscribed Before Me This
______ Day of _____________. 1997
_____________________________
Notary Public
APPROVED AS TO FORM:
By:___________________________
Printed_______________________
Attorney for Xxxxx X. Xxxxxxx
Exhibit 1
COMPENSATION AND BENEFITS
This Exhibit 1 describes your right to compensation, benefits
and other payments and distributions from the Company under the
Agreement.
1-1. Prior Amounts. The Company shall pay you on the
Separation Date, the amount of earned and previously unpaid
salary for the period ending on your Separation Date.
1-2. Separation Payment. The Company shall, on a date not
sooner than the Initial Payment Date, (i) pay you, in one lump
sum cash payment, the gross amount of One Million Five Hundred
Thirty Seven Thousand Five Hundred Dollars ($1,537,500), plus
(ii) pay you the equivalent of the gross amount of One Million
Two Hundred Thirty Two Thousand Eight Hundred Fifty Dollars
($1,232,850) in the form of shares of Mycogen common stock, the
number of such shares of Mycogen common stock to be issued to you
as an equivalent to be determined by dividing this One Million
Two Hundred Thirty Two Thousand Eight Hundred Fifty Dollar
($1,232,850) figure by the closing price of Mycogen common shares
on the Nasdaq National Market on the Separation Date.
1-3. Bonus. You shall not be entitled to any bonus payment
for performance periods ending on or after the Separation Date,
and you shall not be entitled to any other bonus payment not paid
to you prior to your Separation Date.
1-4. Welfare Benefits. For a period of one hundred twenty
(120) months following the Separation Date, you (and your
dependents, as applicable based upon your elections as of the
Separation Date and the terms of the plan as it may be amended
from time to time) shall be provided by the Company with the same
participation, benefits and other coverages which you had elected
under the Mycogen Corporation Health Plan as an employee
immediately before the Separation Date. For a period sixty (60)
months following the Separation Date, you (and your dependents,
as applicable based upon your elections as of the Separation Date
and the terms of each such plan as they may be amended from time
to time) shall be provided by the Company with the same life and
disability plan participation, benefits and other coverages which
you had elected under the respective Mycogen Corporation Life
Insurance and Mycogen Corporation Disability Plans as an employee
immediately before the Separation Date. In the event that under
applicable law or the terms of the relevant employee benefit
plans such participation, benefits and/or coverage cannot be
provided to you after the Separation Date, such coverage and/or
benefits shall be provided directly by the Company pursuant to
this Agreement on a comparable basis. In its sole discretion,
the Company may obtain such coverage and benefits for you through
private insurance acquired at the Company's expense. Amounts
paid or payable to you or on your behalf pursuant to any
"employee welfare benefit plan", as defined in ERISA, providing
health, life, and/or disability benefits, that is sponsored by
the Company or an Affiliate of the Company, shall be credited
against amounts due under this paragraph 1-4. To the maximum
extent permitted by applicable law, the benefits provided under
this paragraph 1-4 shall be in discharge of any rights and
obligations under the benefit continuation provisions under
Section 4980A of the Internal Revenue Code of 1986 (the "Code"),
and Part VI of Title I of the Employee Retirement Income Security
Act ("COBRA") or any other legislation of similar import.
1-5. Vacation. The Company has paid to you any and all
vacation that you have accrued but not used up to and including
the Separation Date, and to which you are entitled from the
Company under its present policies and procedures applicable to
you. You will not accrue or be entitled to any vacation after
your Separation Date.
1-6. Stock Options. Any unvested shares of Company common
stock which you hold under the Company's 1990 Restricted Stock
Issuance Plan (as revised on April 18, 1991, and as further
amended from time to time) (the "Restricted Stock Issuance Plan")
at the time of your Separation Date will immediately vest in
full. Each of your options under the Company's 1992 Stock Option
Plan (including the 1983 predecessor Stock Option Plan and as
further amended from time to time) (the "Stock Option Plan") at
the time of your Separation Date will (to the extent not then
otherwise exercisable) automatically accelerate so that each such
option will become immediately exercisable for the total number
of shares purchasable thereunder. Each such accelerated option,
together with all of your other vested options, will remain
exercisable until three (3) years from the Separation Date,
provided that no such option shall be exercised after a
previously specified expiration date of the option term where
that specified expiration date occurs earlier than three (3)
years after the Separation Date, and may be exercised for any or
all of the accelerated shares in accordance with the exercise
provisions of the option agreement evidencing the grant.
However, should you die before you exercise your outstanding
vested options, then each such option may be exercised, within
twelve (12) months after your death, by the executors or
administrators of your estate or by the person to whom the option
is transferred pursuant to your will or in accordance with the
laws of inheritance; provided that, no such vested option may be
exercised after a previously specified expiration date of the
option term where that specified expiration date occurs earlier
than twelve (12) months after your death.
1-7 Club Membership. The Company shall transfer its existing
membership at Fairbanks Ranch County Club to you to the extent
permissible under the club by-laws, rules, and regulations in
effect as of the Separation Date. If and to the extent such
membership is non-transferable, the Company shall promptly
purchase a comparable membership for you at such club or a
comparable club. After the Company has transferred and/or
purchased such club membership, you shall be solely responsible
for all ongoing club dues and assessments.
1-8. Expense Reimbursement.
(a)You will be entitled to be reimbursed for the business
expenses you incurred as an employee of the Company during
the period ending on your Separation Date and during any
period thereafter while you are serving as a director of the
Company or in any other role you may play with the Company or
its Affiliates, subject to the rules established by the
Company relating to such reimbursement, including the
requirement that you furnish the Company with vouchers,
receipts and other substantiation of such expenses within
thirty (30) days after they are incurred.
(b)The amount of the reimbursement due to you in accordance with
the provisions of paragraph 1-8(a) shall be reduced by the
amount of any outstanding advances to you from the Company.
To the extent that the amount of such outstanding advances
exceeds the reimbursement due to you under paragraph 1-8(a),
and notwithstanding the provisions of paragraph 3 of the
Agreement (relating to set-off), you shall owe the difference
to the Company, and the Company shall be entitled to offset
this amount against other amounts due to you.
1-9. Internal Revenue Code Limitations. The Company and you
agree to be subject to the provisions of Exhibit 2 of this
Agreement (relating to Internal Revenue Code limitations), which
is attached to, and forms a part of, this Agreement.
1-10. Property.
(a)As of your Separation Date, and as may be agreeable to the
President of the Company, ownership of certain items of
property which are currently being provided to you by the
Company will be transferred to you.
(b) Your right to receive any computer equipment and software
in accordance with this paragraph 1-10 shall be subject to your
obligations under paragraph 5 of the Agreement (relating to
confidentiality), and nothing in this paragraph 1-10 shall give
you the right to retain any software or data belonging to the
Company or any data or software that is subject to paragraph 5 of
the Agreement.
1-11. Additional Benefits as Director. In addition to
those benefits to which you are otherwise entitled as a director
of the Company, the Company will, for as long as you remain a
director of the Company following the Separation Date and without
a break in service, provide to you, at its own cost and expense,
the following additional benefits ancillary to your service as a
director of the Company: a furnished off-site office (computer,
fax, phone, phone service), at a site to be selected by the
Company in its sole discretion, full-time secretarial support
services, and other supporting amenities, including but not
limited to, computer, fax, phone, and other such supporting
amenities as may be agreeable to the President, in an amount not
to exceed One Thousand Dollars ($1,000) per month.
1-12. Other Benefits. Except as otherwise
expressly provided in this Agreement, you shall be entitled to
benefits under the employee benefit plans maintained by the
Company as in effect from time to time based on the fact that
your employment with the Company ceased on your Separation Date.
1-13. Legal Fees. The Company will reimburse you for the
reasonable legal fees you incur in connection with the
negotiation of the Agreement, subject to a Three Thousand Dollar
($3,000) overall limit on such reimbursement. If any legal
action or other proceeding is brought by either you or the
Company for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the
prevailing party in such action or other proceeding shall be
entitled to recovery reasonable attorneys fees and other costs
incurred in that action or proceeding, in addition to any other
relief to which that prevailing party may be entitled. The
Company shall bear all legal costs and expenses incurred in
contesting or disputing the characterization of any amounts paid
or benefits realized pursuant to this Agreement, the Restricted
Stock Issuance Plan, or the Stock Option Plan as being
nondeductible under Section 280G of the Code or subject to
imposition of an excise tax under Section 4999 of the Code.
1-14. Withholding. The Company will deduct and withhold,
from the amounts of cash payable hereunder, any and all
applicable Federal, state and local income and employment
withholding taxes and any other amounts required to be deducted
or withheld by the Company under applicable statute or
regulation.
1-15. Initial Payment Date. For purposes of this Agreement,
the "Initial Payment Date" shall be the first business day
following the expiration of your right to revoke the execution of
this Agreement in accordance with paragraph 2(d) of Exhibit 6
(Employee Release) of this Agreement (which period of permitted
revocation is seven days from the date of execution of this
Agreement, as set forth in such paragraph 2(d)).
1-16. Other Payments. Except as specified in this Exhibit 1,
or otherwise expressly provided in or pursuant to the Agreement,
you shall be entitled to no compensation, benefits or other
payments or distributions, and references in the Employee Release
to the release of claims against the Company shall be deemed to
also include reference to the release of claims against all
compensation and benefit plans and arrangements established or
maintained by the Company and its Affiliates.
Exhibit 2
INTERNAL REVENUE CODE LIMITATIONS
2-1. Code Limitations. Notwithstanding anything to the
contrary in this Agreement, if you are entitled to benefits under
this Agreement, the Restricted Stock Issuance Plan, or the Stock
Option Plan following the occurrence of a change in control, as
that term is defined in Code section 280G of the Code or any
comparable state statute, with respect to the Company (a "Change
in Control"), in no event shall the present value of benefits
payable under this Agreement, taken together with your benefits
under the Stock Option Plan and Restricted Stock Issuance Plan
and other applicable sources (a "Payment"), that are ultimately
determined to be "parachute payments" under Section 4999 of the
Code, be reduced by the excise tax imposed by Section 4999 of the
Code or any comparable state statute. In the event that such
benefits so taken together would exceed the amount which is
exempt from the excise tax imposed by Section 4999 of the Code,
the Company shall pay to you an additional amount (the "Gross-Up
Payment") such that the net amount retained by you, after
deduction for the amount of any excise tax under Section 4999 and
any interest charges or penalties in respect of the imposition of
such excise tax (but not any Federal, state or local income tax)
on the present value of such benefits, and any Federal, state and
local income tax, excise tax and penalties and interest, if
applicable, upon the additional payment provided for by this
paragraph 2-1, shall be equal to the present value of such
benefits.
2-2. Definitions. For purposes of this Exhibit 2, the term
"parachute payment" shall have the meaning ascribed to it under
Section 280G(b)(2) of the Code, and "present value" shall be
determined in accordance with Section 280G(d)(4) of the Code.
2-3. Interpretation. Subject to the provisions of paragraph
2-4, all determinations required to be made under this paragraph
2-3, including whether and when a Gross-Up Payment is required
and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by
such nationally recognized certified public accounting firm as
may be designated by the Company (the "Accounting Firm") which
shall provide detailed supporting calculations both to the
Company and you within fifteen (15) business days of a request by
you or by the Company. All fees and expenses of the Accounting
Firm shall be borne solely by the Company. Any Gross-Up Payment,
as determined pursuant to of this Exhibit 2, shall be paid by the
Company to you within five (5) days after the receipt of the
Accounting Firm determination. If the Accounting Firm determines
that no Excise Tax is payable by you, it shall so indicate to
you in writing. Any determination by the Accounting Firm shall
be binding upon the Company and you unless and until successfully
challenged by the appropriate taxing authority. As a result of
the uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be
made hereunder. In the event that the Company exhausts its
remedies pursuant to paragraph 2-4 and you thereafter are
required to make a payment of any Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the
Company to you or for your benefit.
2-4. Internal Revenue Service or State Taxing Authority
Claims. You shall notify the Company in writing of any claim by
the Internal Revenue Service or any state taxing authority that,
if successful, would require the payment by the Company of the
Gross-Up Payment. Such notification shall be given as soon as
practicable and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.
You shall not pay such claim prior to the expiration of the
thirty (30) day period following the date on which you give such
notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If
the Company notifies you in writing prior to the expiration of
such period that it desires to contest such claim, you shall:
(a)give the Company any information reasonably requested by the
Company relating to such claim (without requiring a waiver of
your attorney-client privilege);
(b)take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company;
(c)cooperate with the Company in good faith in order to
effectively contest such claim; and
(d)permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly
all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall
indemnify and hold you harmless, on an after-tax basis, for any
excise tax or income tax (including interest and penalties and
respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the
foregoing provisions of this paragraph 2-4, the Company shall
control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences
with the taxing authority in respect of such claim and may, at
its sole option, either direct you to pay the tax claimed and xxx
for a refund or contest the claim in any permissible manner, and
you agree to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and
in one or more appellate courts, as the Company shall determine;
provided, however, that if the Company directs you to pay such
claim and xxx for a refund, the Company shall advance the amount
of such payment to you, on an interest-free basis, and shall
indemnify and hold you harmless, on an after-tax basis, from any
excise tax or income tax (including interest or penalties with
respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and
further provided that any extension of the statute of limitations
which may be required by the Company relating to payment of taxes
for the taxable years of you with respect to which such contested
amount is claimed to be due is limited solely to issues relating
to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a
Gross-Up Payment shall be payable hereunder and you shall be
entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing
authority.
2-5. Internal Revenue Service Refunds. If, after the
receipt by you of an amount advanced by the Company pursuant to
paragraph 2-4 of this Exhibit 2, you become entitled to receive
any refund with respect to such claim, you shall (subject to the
Company's complying with the requirements of paragraph 2-4 of
this Exhibit 2), promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by you of any
amount advanced by the Company pursuant to paragraph 2-4 of this
Exhibit 2, a determination is made that you shall not be entitled
to any refund with respect to such claim and the Company does not
notify you in writing of its intent to contest such denial or
refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
Exhibit 3
SECTION 2870
Section 2870. APPLICATION OF PROVISION PROVIDING THAT EMPLOYEE
WILL ASSIGN OR OFFER TO ASSIGN RIGHTS IN INVENTION TO EMPLOYER.
(a) Any provision in an employment agreement which provides
that an employee will assign, or offer to assign, any of his or
her rights in an invention to his or her employer will not apply
to an invention that the employee developed entirely on his or
her own time without using the employer's equipment, supplies,
facilities, or trade secret information except for those
inventions that either:
(1) Relate at the time of conception or reduction to
practice of the invention to the employer's business, or actual
or demonstrably anticipated research or development of the
employer.
(2) Result from any work performed by the employee for his
employer.
(b) To the extent a provision in an employment agreement
purports to require an employee to assign an invention otherwise
excluded from being required to be assigned under subdivision
(a), the provision is against the public policy of this state and
is unenforceable.
Exhibit 4
FOR IMMEDIATE RELEASE
Contact:
Xxxxxxx Xxxx
May 2, 1997
(000) 000-0000
MYCOGEN ANNOUNCES MANAGEMENT TRANSITION
SAN DIEGO, Calif. - The board of directors of Mycogen
Corporation (Nasdaq: MYCO) announced today that Xxxxx Xxxxxxx,
the company's longtime chairman of the board and chief executive
officer will step away from day-to-day management as part of a
planned transition in leadership. Xxxxxxx, 54, will remain on
the board as chairman emeritus and continue to be active in the
company's strategic direction.
In a special meeting yesterday (May 1), Mycogen's board
elected current director Xxxxxxxx X. Xxxx, 52, vice president,
global growth, of DowElanco, chairman and placed the company's
president, Xxxx Xxxx, 37, in charge of the company's management
team.
Xxxxxxx said that plans for this transition began with
Eibl's appointment as president and chief operating officer in
September 1995.
"With Xxxx Xxxx having assumed broad responsibility for
operations over the past two years, the board and I agreed that
the time was right to begin this process," Xxxxxxx said.
Xxxx acknowledged Xxxxxxx'x contributions in guiding
Mycogen from a biotech startup to its current leadership position
in agricultural biotechnology.
"Without Xxxxx Xxxxxxx, there wouldn't be a Mycogen
today," Xxxx said. "He not only shaped the vision and built the
company, he was instrumental in creating a new industry. Both
as a stockholder and as a strategic ally, DowElanco is fortunate
to have that kind of foundation on which to continue building
what we believe will become a major agribusiness company."
Xxxx said that while DowElanco is taking a more active
role in Mycogen's strategic direction, Mycogen will remain an
independent public company.
"DowElanco and the board believe that the interests of all
of Mycogen's stockholders will be best served by retaining and
fostering the entrepreneurial spark that Xxxxx Xxxxxxx, Xxxx Xxxx
and the existing management team have created," Xxxx emphasized.
Xxxxxxx has been a driving force in shaping the development
of the emerging agricultural biotechnology industry. He is past
chairman of the Industrial Biotechnology Association (IBA), and
will continue to represent Mycogen as a director of IBA's
successor, the Biotechnology Industry Association (BIO), and
chair its Food and Agriculture Section.
Mycogen is a diversified agricultural biotechnology company
that develops and markets technology-based products and services
to control agricultural pests and improve food and fiber
production. Mycogen Seeds develops and markets planting seeds
for improved crop varieties with genetically enhanced pest-
resistance and other value-added characteristics. Mycogen Crop
Protection develops and markets environmentally compatible
biopesticides and provides crop protection services.
# # #
Exhibit 5
LETTER OF RESIGNATION
Board of Directors
Mycogen Corporation
0000 Xxxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Dear Sirs:
Effective May 1, 1997, I hereby resign from my positions
as Chief Executive Officer and Chairman of the Board of Directors
of Mycogen Corporation, from employment with Mycogen Corporation
and any of its affiliates, and from any other positions I may
hold with Mycogen Corporation or any of its affiliates by reason
of my employment. However, I will remain as a director of
Mycogen Corporation until such time as I resign or am either
removed from or not re-elected to the Board.
Very truly yours,
Xxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
Mycogen Corporation
Exhibit 6
MUTUAL RELEASE
GENERAL RELEASE AND WAIVER
This document is attached to, is incorporated into, and forms
a part of, an agreement dated as of the same date as this
document (the "Agreement") by and between Mycogen Corporation
(the "Company") and Xxxxx X. Xxxxxxx (the "Employee").
1. Except for a claim based upon a breach of the Agreement
(including the Exhibits thereto, and including the plans and
arrangements under which the Employee is entitled to benefits in
accordance with the Agreement and the Exhibits), the Employee, on
behalf of himself and his heirs, representatives, agents, and
insurers (hereinafter the "Employee Releasors") releases and
forever discharges the Company, its officers, directors,
trustees, members, representatives, agents, employees, partners,
shareholders, attorneys, and insurers, and its Affiliates (as
defined in the Agreement), and their respective officers,
directors, representatives, agents, employees, partners,
shareholders, attorneys, and insurers, as well as any respective
successors or predecessors of the Company or its Affiliates
(hereinafter collectively and individually the "Company
Releasees"), and the Company, for and on behalf of itself and its
stockholders and Affiliates (as defined in the Agreement), and
their officers, directors, trustees, members, representatives,
agents, employees, partners, attorneys, and insurers, and their
predecessors and successors (hereinafter collectively and
individually, the "Company Releasors"), releases and forever
discharges the Employee (for himself, and for his heirs,
representatives, agents, and insurers, hereinafter referred to as
the "Employee Releasees"), from any and all rights, claims,
demands, debts, dues, sums of money, accounts, attorneys' fees,
complaints, judgments, executions, actions and causes of action
of any nature whatsoever, cognizable at law or equity (sometimes
referred to in this Release as "Claims") which the Employee (or
the other Employee Releasors may have, to the extent that it is
derived from a Claim which the Employee may have) now has or
claims, or might hereafter have or claim, against the Company
Releasees or which the Company (or any of the Company Releasors)
now has or claims, or might hereafter have or claim, against the
Employee (or against the other Employee Releasees, to the extent
that it is derived from a Claim against the Employee), based upon
or arising out of any matter or thing whatsoever, through the
date of this General Release and Waiver, including but not
limited to, any rights, claims, complaints or actions or causes
of action which were or could have been asserted either by the
Employee (or by the other Employee Releasors, to the extent that
it is derived from a Claim which the Employee may have asserted)
or by the Company (or by any of the Company Releasors) arising
out of or related to Employee's employment by the Company or its
Affiliates and/or the Employee's termination or resignation
therefrom, arising out of or related to the Employment Contract,
or arising out of or related to Employee's service as a director
of the Company.
In addition, the Employee Releasors acknowledge that the above-
described agreement to release and discharge the Company
Releasees as respects Claims also includes, but is not limited
to, any rights, claims complaints or actions or causes of actions
which were or could have been asserted by the Employee (or by the
other Employee Releasors, to the extent it is derived from a
Claim which the Employee may have asserted) arising under any
local, state, or Federal law dealing with employment
discrimination including the Age Discrimination in Employment
Act, as amended by the Older Workers Benefit Protection Act.
BOTH EMPLOYEE AND COMPANY EACH EXPRESSLY WAIVE AND RELINQUISH
ALL RIGHTS AND BENEFITS AFFORDED BY SECTION 1542 OF THE CIVIL
CODE OF THE STATE OF CALIFORNIA WHICH PROVIDES, GENERALLY, THAT A
RELEASE DOES NOT EXTEND TO UNKNOWN CLAIMS. SPECIFICALLY, SECTION
1542 OF THE CIVIL CODE OF THE STATE OF CALIFORNIA STATES AS
FOLLOWS:
"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR
AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY
HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR."
2. The following provisions are applicable to and made a part
of the Agreement and this General Release and Waiver:
(a)By this General Release and Waiver, the Employee Releasors do
not release or waive any right or claim which they may have
under the Age Discrimination in Employment Act, as amended by
the Older Workers Benefit Protection Act, which arises after
the date of execution of this General Release and Waiver.
(b)In exchange for this General Release and Waiver, the Employee
hereby acknowledges that he has received separate
consideration beyond that to which he is otherwise entitled
under the Company's policy or practice or applicable law.
(c)The Company hereby expressly advises the Employee to consult
with an attorney of his choosing prior to executing the
Agreement or this General Release and Waiver.
(d)The Employee has twenty-one (21) days from the date of
presentment to consider whether or not to execute the
Agreement and this General Release and Waiver. In the event
of such execution, the Employee has a further period of seven
(7) days from the date of said execution in which to revoke
said execution. The Agreement and this General Release and
Waiver will not become effective until expiration of such
revocation period.
(e)The Agreement (including this General Release and Waiver and
all other Exhibits to the Agreement), and the commitments and
obligations of all parties thereunder:
(i)shall become final and binding immediately following the
expiration of the Employee's right to revoke the
execution of the Agreement in accordance with paragraph
2(d) of this Exhibit 6;
(ii) shall not become final and binding until the
expiration of such right to revoke; and
(iii) shall not become final and binding if the Employee
revokes such execution prior to the expiration of such
right to revoke.
(f)The Employee hereby acknowledges that he has carefully read
and understands the terms of the Agreement and this General
Release and Waiver and each of his rights as set forth
therein. The Employee further acknowledges that Employee
has, to the extent desired, availed himself of the right to
consult with an attorney before signing this Agreement
(including this General Release and Waiver), has discussed
with his attorney the existence and implications of the
waiver of rights under California Civil Code Section 1542
that is contained in this General Release and Waiver, and
that Employee signs this Agreement (including this General
Release and Waiver) knowingly and voluntarily.
3. Capitalized terms not defined in this General Release and
Waiver shall have the meanings ascribed to them in the Agreement.
Mycogen Corporation
By:
Printed: Xxxxxxx X. Xxxx
Its: President
Date:
State of
County of
Subscribed Before Me This
____ Day of _________, 1997.
Notary Public
"Employee"
Xxxxx X. Xxxxxxx
Date:
State of
County of
Subscribed Before Me This
____ Day of _________, 1997
Notary Public
APPROVED AS TO FORM:
The undersigned, as the attorney for
Xxxxx X. Xxxxxxx, approves the
Agreement (and all Exhibits) as to
form and further represents that he
has advised Xx. Xxxxxxx of the
existence and implications of the
waiver of rights under California
Civil Code Section 1542 that is
contained in this General Release and
Waiver.
By:______________________________
Xxxxxxx X. Xxxxxxx
Attorney for Xxxxx X. Xxxxxxx
