EXHIBIT 10.3
PRIVILEGED AND CONFIDENTIAL
EMPLOYMENT AGREEMENT
AGREEMENT, made May 30, 2003, by and between Seminis Merger Corp., a
Delaware corporation ("Seminis Merger Corp.") and Xxxxxxx Xxxx Xxxxx (the
"Executive").
RECITALS
WHEREAS Seminis Inc. (the "Company") intends to enter into an Agreement
and Plan of Merger dated on May 30, 2003 by and among the Company, Seminis
Acquisition LLC and Seminis Merger Corp. (the "Merger Agreement") pursuant to
which, at the Effective Time (as defined in the Merger Agreement), the Company
will be the surviving corporation in the Merger (as defined in the Merger
Agreement); and
WHEREAS in order to induce Executive to continue to serve as the President
and Chief Executive Officer of Seminis Merger Corp. following such Merger, the
Company desires to provide Executive with compensation and other benefits on the
terms and conditions set forth in this Agreement; and
WHEREAS, Executive is willing to accept such employment and perform
services for the Company on the terms and conditions hereinafter set forth:
NOW, THEREFORE, it is hereby agreed by and between the parties as follows:
1. Employment.
1.1 With the exception of Sections 3.4(b) and the second sentence of
Section 16 of this Agreement, which shall become effective as of the date
hereof, this Agreement shall become effective as of the Closing Date (as defined
in the Merger Agreement) (the "Effective Date") and, except as otherwise
expressly provided herein, shall be of no force or effect prior to such
date, or in the event the Merger Agreement is terminated prior to the
consummation of the Merger.
1.2 Subject to the terms and conditions of this Agreement, Seminis Merger
Corp. agrees to employ Executive during the Term (as defined below) as its
President and Chief Executive Officer. In his capacity as President and Chief
Executive Officer of the Company, Executive shall report to the Company's Board
of Directors (the "Board") and shall have the customary powers, responsibilities
and authorities of presidents and chief executive officers of corporations of
the size, type and nature of the Company, as it exists from time to time.
1.3 Subject to the terms and conditions of this Agreement, Executive
hereby accepts employment as the President and Chief Executive Officer of the
Company, commencing on the Effective Date.
1.4 Executive shall perform his duties under this Agreement with
reasonable diligence and faithfulness, shall devote at least a majority of his
business time (excluding any periods of vacation or sick leave) and attention to
such duties as his primary employment, and, in any event shall devote an amount
of his time reasonably necessary to perform his duties hereunder. Nothing in
this Agreement shall preclude Executive from engaging in charitable and
community affairs, from managing any passive investment made by him in publicly
traded equity securities or other property or from continuing to serve as a
member of the board of directors or as a trustee of any other corporation,
association or entity with respect to which Executive serves as a director or
trustee as of the date of this Agreement (as set forth on Exhibit A), or, with
the prior written consent of the Committee (as defined in Section 3.2 hereof),
such consent not to be unreasonably withheld, serving as a member of a board of
directors or as a trustee of any other corporation, association or entity,
provided, that these activities do not
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interfere with the performance of Executive's duties and responsibilities
hereunder or violate the provisions of Section 12 of this Agreement.
1.5 The Executive agrees to serve, without additional compensation, as an
officer and director for each of the Company's 20% or more owned subsidiaries,
partnerships, joint ventures, and limited liability companies (collectively,
such entities, the "Affiliated Group"), provided, that such service does not
materially interfere with the Executive's performance of his duties and
responsibilities as President and Chief Executive Officer of the Company.
2. Term of Employment. Executive's term of employment under this Agreement
shall commence on the Effective Date and, subject to the terms hereof, shall
terminate on the earlier of (i) the fifth anniversary of the Effective Date (the
"Termination Date") or (ii) the termination of Executive's employment pursuant
to this Agreement (the period from the Effective Date until the termination of
Executive's employment under this Agreement shall be the "Term"). This Agreement
shall be renewed automatically for succeeding terms of one (1) year following
the Termination Date (in which case both the Termination Date and the Term shall
be extended one year on each renewal), unless either party gives written notice
to the other at least 120 days prior to the applicable Termination Date of its
intention not to renew.
3. Compensation.
3.1 Salary. The Company shall pay Executive an initial annual base salary
of $1,000,000. The Base Salary shall be reviewed by the Company no less
frequently than annually in a manner consistent with similarly situated
executives of the Company and may be increased but not decreased. For all
purposes under this Agreement, the term "Base Salary" shall refer to Base Salary
as in effect from time to time. Base Salary shall be payable in accordance with
the ordinary payroll practices of the Company.
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3.2 Annual Bonus. During the Term, Executive shall be eligible to receive
an annual bonus (the "Bonus") with a target Bonus set at 100% of Base Salary
(the "Target Bonus") and a maximum Bonus of 200% of Base Salary. 100% of such
Bonus shall be based upon the satisfaction of Targets (as defined in the
Stockholders' Agreement, of even date herewith, by and among Seminis Merger
Corp. and the Persons listed on the signature pages thereto ("Stockholders'
Agreement") for each fiscal year of the Term (the "Performance Objective")). The
Bonus shall be equal to the product of: (Target Bonus) (the Applicable
Percentage for the Performance Objective), where the Target Bonus is expressed
in dollars and the Applicable Percentage with respect to the Performance
Objective is determined as follows:
APPLICABLE
IF PERFORMANCE IS: PERCENTAGE:
------------------ -----------
LESS THAN 90%
of Performance Objective 0%
90%
of Performance Objective 50%
95%
of Performance Objective 75%
100% 100%
of Performance Objective
125% of Performance 200%
Objective OR GREATER
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In the event actual performance for any fiscal year falls between any threshold
listed in the chart above, (e.g. 91% of Performance Objective), then the
Applicable Percentage shall be adjusted accordingly using a straight line method
of interpolation (e.g. if actual performance is at 91% of Performance Objective,
then the Applicable Percentage shall be 55%; if actual performance is 92% of
Performance Objective, then the Applicable Percentage shall be 60%, etc.). The
bonus shall be applicable for fiscal years of the Company beginning after the
date hereof, and Executive's annual bonus for the Company's fiscal year ending
September 30, 2003, shall be based on the Company's bonus plan in effect as of
the date hereof as set forth on Schedule 6.16(b) to the Merger Agreement.
3.3 Compensation Plans and Programs. Executive shall be eligible to
participate in any compensation plans or programs maintained by the Company and
generally made available to other senior executives of the Company, on terms
comparable to those applicable to such other senior executives, provided, that
such participation shall not cause the duplication of any compensation or
benefits provided to Executive under this Agreement and shall not include the
grant of restricted stock units as of the Effective Time.
3.4 Rollover Equity. (a) Executive shall roll over all of his Options (as
defined in the Merger Agreement) into Retained Options (as defined in the Merger
Agreement), and such Retained Options shall be 100% vested and exercisable as of
the Closing Date and shall have substantially the same terms and conditions as
the Options.
(b) Notwithstanding anything to the contrary contained in this
Agreement, effective as of the date hereof, Executive waives any right to be
cashed out of all of his Options under the Merger Agreement or to exercise any
of his Options prior to the Effective Date.
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4. Employee Benefits.
4.1 Employee Benefit Programs, Plans and Practices. During the Term,
Executive shall be entitled to participate in welfare, health and life insurance
and pension benefit programs as may be in effect from time to time for senior
executives of the Company generally. Executive shall not be entitled to
participate in any severance plans provided to Company employees and hereby
waives any rights to receive severance benefits other than as provided in this
Agreement.
4.2 Vacation; Fringe Benefits; Perquisites. Executive shall be entitled to
no less than twenty-five (25) business days paid vacation in each calendar year.
Vacation days will accrue up to a maximum of fifty (50) days, at which time,
further accruals will cease until the accrued vacation day balance falls below
50 days. Executive shall receive an after-tax annual vacation allowance of
$7,700, which shall be payable in two equal installments, the first of which
shall be paid during January of each year and the second of which during July.
In addition, Executive shall be entitled to the perquisites and other fringe
benefits generally made available to senior executives of the Company,
commensurate with his position with the Company. In addition, Executive shall be
entitled to receive benefits reasonably comparable to those provided to
Executive as of the date of this Agreement with respect to the following
matters:
(a) family membership to a sport or social club of Executive's
choice;
(b) use of six (6) Company automobiles appropriate for Executive's
position, including the costs of necessary maintenance (although
Executive may incur taxable income as a result of his personal use
of such vehicles);
(c) private school tuition for Executive's dependant children in the
school(s) of his choice (up to, but not including university
education);
(d) all fees and expenses incurred in connection with satisfying
applicable government working requirements, including visas; and
(e) bi-annual medical checkups for Executive and his spouse.
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5. Expenses. (a) During the Term, Executive shall be entitled to receive
prompt reimbursement in accordance with the Company's policies for out-of-pocket
business expenses reasonably incurred in carrying out his duties and
responsibilities under this Agreement, including, without limitation, reasonable
expenses for travel and similar items related to such duties and
responsibilities.
(b) Solely to the extent that Executive's expenses for travel and
security are not reimbursed by ING Comercial America, S.A. de C.V., the
Executive's security expenses and travel expenses not related to his duties and
responsibilities under this agreement ("Other Expenses") and which are not
related primarily to leisure travel shall be reimbursed by the Company,
provided, that the cost of such reimbursement shall not be more than an annual
amount of $2.424 million.
6. Termination of Employment.
6.1 Termination for Death or Permanent Disability; Termination Not for
Cause or for Good Reason Following FPSH Shift or Change of Control. (a) If (i)
prior to the Termination Date, during the Term, Executive's employment is
terminated as a result of Executive's death or as a result of Executive's
Permanent Disability (as defined in Section 6.1(d) hereof) or (ii) Executive's
employment is terminated (A) by the Company other than for Cause (by action of
the Committee and as defined in Section 6.2(b) hereof) or (B) by Executive for
Good Reason (as defined in Section 6.1(c) hereof), in either case following the
occurrence of an FPSH Shift (as defined in Section 6.1 (e) hereof) or a Change
of Control (as defined in Section 6.2(f) hereof), Executive shall receive:
(i) such payments, if any, to which Executive is entitled under any
applicable plans or programs, including but not limited to those
referred to in Sections 3.3 and 4.1 hereof, in accordance with the
terms of such plans or programs;
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(ii) a cash lump sum payment in respect of accrued but unused
vacation days and Base Salary and, if any such termination of
employment occurs after the end of a Company fiscal year and prior
to the payment of Bonuses for such fiscal year, any Bonus payments
earned by Executive for such fiscal year but not yet paid;
(iii) continued coverage under any employee medical plans or
programs provided to Executive and his family members pursuant to
Section 4.1 hereof until the earlier of the fifth anniversary of
Executive's termination of employment or the date on which Executive
becomes entitled to receive medical coverage under another
employer's medical benefit program, provided, that Executive shall
continue to be required to pay any applicable premiums of a
participating employee in such plans and programs; and
(iv) a cash lump sum payment equal to five (5) times the sum of the
(I) Base Salary (as of immediately prior to Executive's date of
termination of employment, but excluding any decrease in Base Salary
causing Executive to have Good Reason), plus (II) the average annual
bonus paid or payable to Executive with respect to the two (2)
fiscal years immediately prior to the Executive's date of
termination of employment (provided, however, that if the
Executive's date of termination of employment occurs at any time
during the 2002-2003 fiscal year, then the "average annual bonus"
shall be deemed to be the bonus paid or payable with respect to the
2001-2002 fiscal year), less any applicable insurance benefits,
provided, that any reduction for disability benefits shall be with
respect to benefits received by Executive during the five-year
period following Executive's date of termination of employment.
(b) All payments payable by the Company to Executive pursuant to
this Section 6.1 shall be paid within 30 days after the termination of
Executive's employment by check payable to the order of Executive or by wire
transfer to an account specified by Executive to the extent that the Company is
permitted to so make such payments (under both applicable law and the Company's
and its Subsidiaries' indebtedness and contractual arrangements and agreements).
The Company shall fund any amount not so permitted to be paid with a Buy-Out
Note (as defined in the Stockholders' Agreement). All payments payable by the
Company to Executive pursuant to this Section 6.1 shall be subject to Executive
entering into and not revoking a release substantially in the form set forth as
Exhibit B hereto.
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(c) For purposes of this Agreement, "Good Reason" shall mean that
any of the events set forth in clauses (i) through (v) below shall occur without
the written consent of Executive, provided, that (x) Executive shall provide the
Company with written notice thereof within one hundred and twenty (120) days
after Executive has knowledge of the occurrence of any of the events or
circumstances set forth in clauses (i) through (v) below, which notice shall
specifically identify the event or circumstance that Executive believes
constitutes Good Reason, (y) the Company fails to correct the circumstance or
event so identified within twenty (20) days after the date of delivery of the
notice referred to in clause (x) above, and (z) Executive resigns his employment
for Good Reason within ninety (90) days after the date of delivery of the notice
referred to in (x) above:
(i) a reduction in Executive's Base Salary;
(ii) Executive's duties, titles, responsibilities or authority
(including offices and reporting relationships) are materially
diminished in comparison to the duties, titles and responsibilities
or authority set forth in this Agreement, or Executive is assigned
duties materially and adversely inconsistent with his position;
(iii) a material reduction in fringe benefits, perquisites or other
allowances provided to Executive pursuant to Section 4.2, other than
(except for perquisites specifically set forth in this Agreement) as
a result of a change applicable to employees of the Company
generally, or any material failure to provide such benefits to
Executive;
(iv) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform the Agreement, as
contemplated in Section 10 herein; or
(v) following the occurrence of a Change of Control, any requirement
that executive relocate to an office more than 25 miles from the
location of his principal office as of immediately prior to the
Change of Control;
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provided, however, that an FPSH Shift shall not, in and of itself, be considered
Good Reason for purposes of this Agreement unless the Company takes affirmative
action with respect to Executive's duties beyond the actions permitted by the
Stockholders' Agreement.
(d) For purposes of this Agreement, "Permanent Disability" shall
mean Executive's absence from full time performance of duties due to physical or
mental illness for six (6) consecutive months, that is reasonably determined to
be total and permanent by a physician selected by the Company or its insurers
and reasonably acceptable to Executive or his legal representative.
(e) For purposes of this Agreement, "FPSH Shift" shall mean FPSH (as
defined in the Stockholders' Agreement) acquires the right to have all customary
rights and privileges associated with majority control pursuant to Section 5.1.2
of the Stockholders' Agreement, entitled Default Composition.
(f) For purposes of this Agreement, "Change of Control" shall have
the meaning ascribed to such term in the Stockholders' Agreement.
6.2 Other Terminations. In the event that Executive's employment is
terminated, prior to the Termination Date, other than pursuant to Section 6.1 of
this Agreement, Executive shall be entitled to receive a lump sum cash payment
in respect of any earned but unpaid Base Salary and in respect of any accrued
vacation days. In addition, Executive shall be entitled to such payments and
benefits, if any, under any applicable plans or programs, including, but not
limited to, those referred to in Sections 3.3 and 4.1 hereof, to which he is
entitled pursuant to the terms of such plans or programs.
(b) As used herein, the term "Cause" shall mean (i) Executive's
conviction of, or plea of guilty or nolo contendere to, a felony (or a
comparable level of crime in another
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jurisdiction); provided, however, that after indictment for a felony, the
Company may suspend Executive from the rendition of services, but without
limiting or modifying in any other way, the Company's obligations to Executive
under this Agreement, (ii) continued and repeated refusal by Executive to
perform his duties hereunder after fifteen (15) days written notice of any such
refusal to perform such duties or direction was given to Executive, (iii)
commission by Executive of fraud against, or misappropriation of significant
property belonging to, the Company, unless such action is neither willful nor
injurious to the Company or any of its Subsidiaries, or other willful misconduct
materially injurious to the Company or any of its Subsidiaries or (iv) during
any period in which FPSH and its affiliates are the beneficial owners of 20% or
more of the value of the Company's stock in the aggregate, a material breach by
Executive of the provisions of the Corporate Policies and Procedures (as defined
in the Stockholders' Agreement) or Section 12 of this Agreement, unless such
breach is neither willful nor materially injurious to the Company or any of its
Subsidiaries. Termination of Executive pursuant to this Section 6.2(b) shall be
made by delivery to Executive of a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the then members of the
Committee at a meeting of the Committee called and held for the purpose (after
30 days prior written notice to Executive and reasonable opportunity for
Executive and his counsel to be heard before the Committee prior to such vote),
finding that in the reasonable judgment of the Committee, Executive was guilty
of conduct set forth in any of clauses (i) through (iv) above and specifying the
particulars thereof.
6.3 Resignation from all Positions. Notwithstanding any other provision of
this Agreement, upon the termination of the Executive's employment for any
reason, unless otherwise requested by the Board, the Executive shall immediately
resign from all positions that he holds or has ever held with the Company and
any other member of the Affiliated Group (and
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with any other entities with respect to which the Company has requested the
Executive to perform services), including, without limitation, the Board and all
boards of directors of any member of the Affiliated Group. The Executive hereby
agrees to execute any and all documentation to effectuate such resignations upon
request by the Company, but he shall be treated for all purposes as having so
resigned upon termination of his employment, regardless of when or whether he
executes any such documentation.
6.4 Breach of Section 12. Notwithstanding anything to the contrary in this
Agreement, in the event of a breach by Executive of the provisions of Section 12
of this Agreement following Executive's termination of employment, or a material
breach by Executive of the provisions of Section 12 of this Agreement during
Executive's employment which the Committee determines would have been Cause to
terminate Executive's employment and that is discovered by the Company within
six (6) months following Executive's termination of employment, Executive shall
be entitled to no further payments under this Section 6, and shall repay to the
Company any payments previously made under this Section 6. Any amounts repaid by
Executive under this Section 6.4 will reduce (on a dollar for dollar basis) any
damages payable by Executive as a result of a breach of the terms of Section 12.
7. Mitigation of Damages. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise after the termination of his employment
hereunder, and any amounts earned by Executive, whether from self-employment, as
a common-law employee or otherwise, shall not reduce the amount of any payments
otherwise payable to him pursuant to this Agreement.
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8. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
To the Company:
Seminis, Inc.
0000 Xxxxxx xxx Xxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: General Counsel
with a copy to:
Fox Xxxxx & Company, LLC
000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: W. Xxxxxx Xxxxx, III
To Seminis Merger Corp.
Seminis Merger Corp.
c/o Fox Xxxxx & Company, LLC
000 Xxxxx Xxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: W. Xxxxxx Xxxxx, III
To Executive:
Xxxxxxx Xxxx Xxxxx
Last address in records of Company
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx, LLP
Xxx Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xx Xxxxxx
Any such notice or communication shall be delivered by hand or by courier or
sent certified or registered mail, return receipt requested, postage prepaid,
addressed as above (or to such other
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address as such party may designate in a notice duly delivered as described
above), and the third business day after the actual date of mailing shall
constitute the time at which notice was given.
9. Separability; Legal Fees. If any provision of this Agreement shall be
declared to be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. Each party shall bear the costs of any legal
fees and other fees and expenses which may be incurred in respect of enforcing
its respective rights under this Agreement.
10. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
Seminis Merger Corp. and Executive and their respective heirs, legal
representatives, successors and assigns. Executive may not assign this
Agreement, other than, with respect to payments in the event of Executive's
death, to Executive's estate or beneficiaries. Seminis Merger Corp. may assign
this Agreement to any of its affiliates in the event of any restructuring or
reorganization of Seminis Merger Corp. or to a successor to all or substantially
all of Seminis Merger Corp.'s assets, and the benefits of this Agreement shall
inure to such entity and the obligations of this Agreement shall be binding on
such entity; provided, that, if Seminis Merger Corp. assigns this Agreement to
an affiliate which is not a successor to all or substantially all of its assets,
Seminis Merger Corp. shall continue to guarantee the payments and benefits
hereunder. If Seminis Merger Corp. shall be merged into or consolidated with
another entity, the provisions of this Agreement shall be binding upon and inure
to the benefit of the entity surviving such merger or resulting from such
consolidation and Seminis Merger Corp. shall require any such successor, by
agreement in form and substance satisfactory to Executive, to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that Seminis Merger Corp. would be required to perform it if no
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such succession had taken place. For avoidance of doubt, upon the Effective Date
the Company will be the successor to Seminis Merger Corp. and Executive hereby
acknowledges that the provisions of Section 3.3 of the Merger Agreement shall
satisfy the obligations of Seminis Merger Corp. under the immediately preceding
sentence. The provisions of this Section 10 shall continue to apply to each
subsequent employer of Executive in the event of any subsequent merger or
consolidation of such subsequent employer. As used in this Agreement the term
"affiliates" shall include any entity controlled by, controlling, or under
common control with Seminis Merger Corp. or the Company, as applicable.
11. Amendment. This Agreement may only be amended by written agreement of
the parties hereto.
12. Nondisclosure of Confidential Information; Work Product;
Non-Disparagement; Non-Competition; Non-Solicitation.
12.1 Confidential Information of the Company and Its Affiliates. All
Confidential Information relating to or obtained from the Company or its
affiliates shall be held in the strictest confidence by Executive. Executive
shall not, directly or indirectly, disclose, use, publish, release, transfer or
otherwise make available Confidential Information of, or obtained from the
Company or any of its affiliates in any form to, or for the use or benefit of,
any person or entity without the Company's prior written consent, except (i)
while employed by the Company, in the business of and/or for the benefit of the
Company or (ii) when required to do so by a court of competent jurisdiction, by
any governmental agency having supervisory authority over the business of the
Company, or by any administrative body or legislative body (including a
committee thereof) with jurisdiction to order Executive to divulge, disclose or
make accessible such information. For purposes of this Section 12.1,
"Confidential Information" shall mean all
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information and documentation of the Company or its affiliates, whether
disclosed to or accessed by Executive in connection with his employment with the
Company or the Affiliated Group that is not otherwise available to the public
(other than by Executive's breach of the terms hereof), including all (i) data
and information of the Company or its affiliates or the customers, suppliers,
contractors or other third parties doing business with any of the Company or its
affiliates, including business plans, memoranda, reports, drawings, research
results, research plans, inventions (patentable or otherwise), trade secrets and
research products and (ii) Work Product (as defined below) created by Executive.
12.2 Executive hereby acknowledge that any ideas, concepts, designs,
discoveries, techniques, research results, inventions, methodologies, know-how,
improvements, discoveries, processes or products, whether or not patentable,
that Executive conceives of or reduces to practice during the term of his/her
employment with the Company or the Affiliated Group and which are in connection
with Executive's employment or related to the nature of Executive's employment
(collectively, the "Work Product") shall be, or be deemed to be, "work for hire"
and owned by the Company. Furthermore, the Company shall have all right, title
and interest, including worldwide ownership of copyright and patent, in and to
the Work Product and all copies made from them. To the extent (a) any of the
Work Product is not deemed a "work for hire" by operation of law and (b)
permissible under applicable law, Executive hereby irrevocably assigns,
transfers and conveys to the Company all of his right, title and interest in and
to such Work Product, including all rights of patent, copyright, trade secret or
other intellectual property or proprietary rights in such materials. Executive
acknowledges that the Company and the successors and permitted assigns of the
Company shall have the right to obtain and hold in their own name any
intellectual property rights in and to such Work Product.
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12.3 During the Term and for a period of 24 months from the date of the
termination of Executive's employment for any reason (the "Restricted Period"),
Executive shall not compete with the Company or the Affiliated Group, by
directly or indirectly engaging in any business or activity, whether as an
employee, consultant, partner, principal, agent, representative or stockholder
or in any other individual, corporate or representative capacity, or render any
services or provide any advice or substantial assistance to any business, person
or entity, if such business, person or entity, directly or indirectly, competes
(or, to Executive's knowledge after due inquiry, intends to compete or is
preparing to compete during the Restricted Period) with the Business of the
Company or the Affiliated Group in any material manner. It is the intention of
the parties that the potential restrictions on Executive's activities imposed by
this paragraph be and are reasonable in duration, scope and geography and in all
other respects. For purposes of this Section 12, "Business" shall mean the
business of marketing, developing, producing and researching new fruit or
vegetable seeds and fruit or vegetable plants, or any other material businesses
entered into by the Company or the Affiliated Group during the Term, or with
respect to which the Company or the Affiliated Group has taken material steps to
enter into as of the termination of Executive's employment. During the
Restricted Period, Executive shall be available to consult with the Company on
Company-related matters within his knowledge in person or by phone, as
determined by Executive, for a period of no more than five (5) days per calendar
quarter, subject to not interfering with Executive's work schedule; provided,
however that for each full or partial day during which Executive provides such
services (other than with respect to de minimis services of less than two (2)
hours on a given day), the Company shall pay to Executive a sum of $1,000 (such
limitations and payments shall not apply to any lawsuits in
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which Executive is a named party). In addition, the Company shall promptly
reimburse Executive for his reasonable expenses, if any, in providing such
consulting services.
12.4 Except as is required or appropriate in the furtherance of the
business of the Company or the Affiliated Group, Executive shall not, during the
Restricted Period, either alone or in concert with others, directly or
indirectly, (1) solicit, entice, induce or encourage (a) any customer of the
Company or the Affiliated Group (including, during the Term, the Company's
affiliates) to discontinue using the services or purchasing the products of the
Company or the Affiliated Group (including, during the Term, the Company's
affiliates), (b) any customer to refer prospective customers or business to any
competitor of the Company or the Affiliated Group or (c) any person or entity
that is part of any existing or proposed arrangement or has any other
affiliation with the Company or the Affiliated Group (including, during the
Term, the Company's affiliates) to discontinue such relationship or affiliation
with the Company or its affiliates or (2) recruit or hire, or assist others in
recruiting or hiring, or otherwise solicit for employment, any consultants or
employees of the Company or its affiliates, or former consultants or employees
of the Company or its affiliates within six (6) months following their
termination of employment.
12.5 Upon request by the Company at any time during Executive's employment
or upon termination of Executive's employment with the Company for any reason,
Executive shall promptly (1) return to the Company or its affiliates all copies
of all materials, including documentary or other recorded materials, which are
in Executive's possession or control and which contain or embody any
Confidential Information of the Company or its affiliates and (2) deliver to the
Company or its affiliates all copies of any Work Product in Executive's
possession
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or control. Executive shall not copy, reproduce or otherwise re-create in any
fashion any of the items referenced above for personal retention by Executive.
12.6 The Executive acknowledges and agrees that: (i) the purposes of the
foregoing covenants are to protect the goodwill and Work Product and
Confidential Information of the Company and its affiliates in connection with
the transactions contemplated by the Merger Agreement, and to prevent the
Executive from interfering with the business of the Company and the Affiliated
Group as a result of or following termination of the Executive's employment with
the Company or the Affiliated Group, as applicable, (ii) because of the nature
of the business in which the Company and the Affiliated Group are engaged and
because of the nature of the Work Product and Confidential Information to which
the Executive has access, it would be impractical and excessively difficult to
determine the actual damages to the Company and the Affiliated Group in the
event the Executive breached any of the covenants of this Section 12; and (iii)
remedies at law (such as monetary damages) for any breach of the Executive's
obligations under this Section 12 would be inadequate. The Executive therefore
agrees and consents that if the Executive commits any breach of a covenant under
this Section 12 or threatens to commit any such breach, the Company, and its
affiliates shall have the right (in addition to, and not in lieu of, any other
right or remedy that may be available to each of them) to temporary and
permanent injunctive relief from a court of competent jurisdiction, without
posting and bond or other security and without the necessity of proof of actual
damage. With respect to any provision of this Section 12 finally determined by a
court of competent jurisdiction to be unenforceable, the Executive and the
Company and its affiliates hereby agree that such court shall have jurisdiction
to reform this Agreement or any provision hereof so that it is enforceable to
the maximum extent permitted by law, and the parties agree to abide by such
court's determination. If any of the
19
covenants of this Section 12 are determined to be wholly or partially
unenforceable in any jurisdiction, such determination shall not be a bar to or
in any way diminish the rights of the Company or its affiliates, as applicable,
to enforce any such covenant in any other jurisdiction.
12.7 The provisions of this Section 12 shall remain in full force and
effect until the expiration of the period specified herein notwithstanding he
earlier termination of the Executive's employment hereunder or the Employment
Period.
12.8 Executive acknowledges and agrees that the provisions of this Section
12 are in part in consideration for his sale of his interests in the Company.
13. Beneficiaries; References. Executive shall be entitled to select (and
change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder following
Executive's death, and may change such election, in either case by giving the
Company written notice thereof. In the event of Executive's death or a judicial
determination of his incompetence, reference in this Agreement to Executive
shall be deemed, where appropriate, to refer to his beneficiary, estate or other
legal representative. Any reference to the masculine gender in this Agreement
shall include, where appropriate, the feminine.
14. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
15. Governing Law; Consent to Jurisdiction.
15.1 Governing Law. This Agreement shall be construed, interpreted and
governed in accordance with the laws of the State of Delaware, without reference
to rules relating to conflicts of law.
20
15.2 Consent to Jurisdiction. The parties hereto hereby agree and consent
to be subject to the exclusive jurisdiction of the courts of the State of
Delaware and the United States District Court of the State of Delaware in any
suit, action or proceeding seeking to enforce any provision of, or based on any
matter arising out of or in connection with, this Agreement or the Merger. Each
party hereto hereby irrevocably waives, to the fullest extent permitted by law,
(i) any objection that it may now or hereafter have to laying venue of any suit,
action or proceeding brought in such courts, and (ii) any claim that any suit,
action or proceeding brought in such courts has been brought in an inconvenient
forum.
16. Effect on Prior Agreements. This Agreement contains the entire
understanding between the parties hereto and, as of the Effective Date,
Executive waives all payments and benefits under any prior or other employment
agreement or understanding between the Company or any affiliate of the Company
and Executive, including, but not limited to, the employment agreement between
SVS Mexicana S.A. de C.V. and Executive dated as of November 15, 1999 (the
"Prior Agreement"). Notwithstanding the forgoing, effective as of the date
hereof, Executive waives his right to, and agrees not to accept, all payments
under the Prior Agreement upon voluntary termination of Executive's employment
with the Company or termination of Executive's employment with the Company by
the Company for Cause, and will repay to Seminis Merger Corp. on the Effective
Date any such payments made, provided, that such provisions of the Prior
Agreement shall again become operative in the event that the Merger Agreement is
terminated prior to consummation of the Merger.
17. Withholding. The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be required
to be withheld pursuant to any applicable law or regulation, or may permit
Executive to elect to pay the Company any
21
such required withholding taxes. If Executive so elects, the payment by
Executive of such taxes shall be a condition to the receipt of amounts payable
to Executive under this Agreement. The Company shall, to the extent permitted or
required by law, have the right to deduct any such taxes from any payment
otherwise due to Executive.
18. Counterparts. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original.
22
IN WITNESS WHEREOF, as of the date first above written, the Company has
caused this Agreement to be executed on its behalf by a duly authorized officer
and Executive has hereunto set Executive's hand.
SEMINIS MERGER CORP.
By: /s/ Xxxxxxxx Xxxxxxx Date: May 30, 2003
---------------------------- -------------------
Name: Xxxxxxxx Xxxxxxx
Title:
/s/ Xxxxxxx Xxxx Xxxxx Date: May 30, 2003
------------------------------ -------------------
Xxxxxxx Xxxx Xxxxx
23
EXHIBIT A
Savia
Seminis
Cementos Mexicanos
ING Mexico
Nacional de Drogas
Grupo Meseca
Grupo Comercial Chedraui
G-Accion
Consejo Mexicano de Hombres de Negocios
Consejo Empresarial para America Latina
Xxxxxx Xxxxxxxx Plant Science
Consejero Externo del Banco Mundial para latinoamerica y el Caribe
EXHIBIT B
FORM OF RELEASE AGREEMENT
This Release Agreement ("Release") is entered into as of this ______day of
________, (hereinafter "Execution Date"), by and between [Employee Full Name]
(hereinafter "Employee"), and Seminis, Inc. and its successors and assigns
(hereinafter, the "Company"). Employee and the Company are sometimes
collectively referred to herein as the "Parties".
1. Employee's employment with the Company is terminated effective [Month, Day,
Year] (hereinafter "Termination Date").
2. The company has agreed to provide employee the severance payments, awards and
benefits provided for in his/her employment agreement with the company, dated
as of may __, 2003, after he/she executes this release and the release becomes
effective pursuant to its terms [for 40+ and does not revoke it as permitted
in section 7 below, the expiration of such revocation period being] the
("effective date").
3. Employee represents that he/she has not filed, and will not file, any
complaints, lawsuits, administrative complaints or charges relating to his/her
employment with, or resignation from, the Company[; provided, however, that
nothing contained in this Section 3 shall prohibit Employee from bringing a
claim to challenge the validity of the ADEA Release in Section 7 herein]. In
consideration of the severance payments, awards and benefits described in
Section 2, Employee, for himself/herself and for his/her heirs,
administrators, representatives, executors, successors and assigns
(collectively, "Releasers") agrees to release the Company, its subsidiaries
and affiliates, and their respective parents, direct or indirect subsidiaries,
divisions, affiliates and related companies or entities, regardless of its or
their form of business organization, any predecessors, successors, joint
ventures, and parents of any such entity, and any and all of their respective
past or present shareholders, partners, directors, officers, employees,
consultants, independent contractors, trustees, administrators, insurers,
agents, attorneys, representatives and fiduciaries, including without
limitation all persons acting by, through, under or in concert with any of
them, in each instance in their capacities as representatives of the Company
(collectively, the "Released Parties"), from any and all claims, charges,
complaints, causes of action or demands of whatever kind or nature that
Employee and his/her Releasers now have or have ever had against the Released
Parties, whether known or unknown, including but not limited to: wrongful or
tortious termination; constructive discharge; implied or express employment
contracts and/or estoppel; discrimination and/or retaliation under any
federal, state or local statute or regulation, specifically including any
claims Employee may have under the Fair Labor Standards Act, the Americans
with Disabilities Act, Title VII of the Civil Rights Act of 1964 as amended,
and the Family and Medical Leave Act; the discrimination or other employment
laws of the State of [ ](1); any claims brought under any federal
or state statute or regulation for non-payment of wages or other compensation,
including grants of stock options or any other equity compensation); and
libel, slander, or breach of contract, other than the breach of this Release.
This Release specifically excludes claims, charges, complaints, causes of
action or demand that post-date the Termination Date. Notwithstanding anything
herein to the contrary, expressly
-------------------------------
1 Insert state of employment.
excluded from this Release are any claims (i) for payments, awards and
benefits under the Employment Agreement between the Parties dated _________,
2003, (ii) under the Stockholders' Agreement dated as of _______, 2003 by and
among Seminis, Inc. and the Investors listed on the signature pages thereto,
(iii) for benefits provided under Company benefit plans, incentive plans or
equity plans (including, but not limited to, stock options, restricted stock
units and stock grants) or (iv) for indemnification and any applicable
directors and officers liability insurance coverage to which Employee was
entitled with regard to service as an officer of the Company.
4. Employee agrees to keep the terms of this Release in strict confidence, but
he/she may disclose the terms of this Release and provide a copy hereof to
his/her immediate family and his/her financial and legal advisors.
5. Employee warrants that no promise or inducement has been offered for this
Release other than as set forth herein and in the Employment Agreement and
that this Release is executed without reliance upon any other promises or
representations, oral or written. Any modification of this Release must be
made in writing and be signed by Employee and the Company.
6. If any provision of this Release or compliance by Employee or the Company
with any provision of the Release constitutes a violation of any law, or is or
becomes unenforceable or void, then such provision, to the extent only that it
is in violation of law, unenforceable or void, will be deemed modified to the
extent necessary so that it is no longer in violation of law, unenforceable or
void, and such provision will be enforced to the fullest extent permitted by
law. If such modification is not possible, such provision, to the extent that
it is in violation of law, unenforceable or void, will be deemed severable
from the remaining provisions of this Release, which provisions will remain
binding on both Employee and the Company. This Release is governed by, and
construed and interpreted in accordance with the laws of the State of [ ],
without regard to principles of conflicts of law. Employee consents to venue
and personal jurisdiction in the State of [ ] for disputes arising under this
Release. [ONLY IF THE STATE IS EMPLOYEE'S STATE OF EMPLOYMENT.] This Release
represents the entire understanding with the Parties with respect to subject
matter herein, no oral representations have been made or relied upon by the
Parties.
7. [FOR EMPLOYEES OVER 40 ONLY -- In further recognition of the above, Employee
hereby releases and discharges the Released Parties from any and all claims,
actions and causes of action that he/she may have against the Released
Parties, as of the date of the execution of this Release, arising under the
Age Discrimination in Employment Act of 1967, as amended ("ADEA"), and the
applicable rules and regulations promulgated thereunder. Employee acknowledges
and understands that ADEA is a federal statute that prohibits discrimination
on the basis of age in employment, benefits and benefit plans. Employee
specifically agrees and acknowledges that: (A) the release in this Section 7
was granted in exchange for the receipt of consideration that exceeds the
amount to which he/she would otherwise be entitled to receive upon termination
of his/her employment; (B) his/her waiver of rights under this Release is
knowing and voluntary as required under the Older Workers Benefit Protection
Act; (B) that he/she has read and understands the terms of this Release; (C)
he/she has hereby been advised in writing by the Company to consult with an
attorney prior to executing this Release; (D) the Company has given him/her a
period of twenty-one (21) days within which to consider this Release, which
period may be waived by the Employee's voluntary execution prior to the
expiration of the twenty-one day period; and (E) following his/her execution
of this Release he/she has seven (7) days in which to revoke his/her release
as set forth in
this Section 7 only and that, if he/she chooses not to so revoke, the Release
in this Section 7 shall then become effective and enforceable and the
payments, awards and benefits provided herein shall then be made to him/her in
accordance with the terms of this Release, as well as the terms of the
Employment Agreement. To revoke this Release, Employee understands that he/she
must give a written revocation to the General Counsel of the Company at [
](2), either by hand delivery or certified mail within the seven-day period.
If he/she revokes the Release, it will not become effective or enforceable and
he/she will not be entitled to any benefits from the Company.]
8. EMPLOYEE ACKNOWLEDGES AND AGREES THAT HE/SHE HAS CAREFULLY READ AND
VOLUNTARILY SIGNED THIS RELEASE, THAT HE/SHE HAS HAD AN OPPORTUNITY TO CONSULT
WITH AN ATTORNEY OF HIS/HER CHOICE, AND THAT HE/SHE SIGNS THIS RELEASE WITH
THE INTENT OF RELEASING THE RELEASED PARTIES TO THE EXTENT SET FORTH HEREIN.
9. In the event that any provision of this Release should be held to be invalid
or unenforceable, each and all of the other provisions of this Release shall
remain in full force and effect. If any provision of this Release is found to
be invalid or unenforceable, such provision shall be modified as necessary to
permit this Release to be upheld and enforced to the maximum extent permitted
by law.
10. Employee acknowledges that he/she is familiar with the provisions of
California Civil Code Section 1542, which provides as follows: "A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT
TO EXIST IN HIS/HER FAVOR AT HE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN
BY HIM/HER MUST HAVE MATERIALLY AFFECTED HIS/HER SETTLEMENT WITH THE DEBTOR.
EMPLOYEE BEING AWARE OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHT
HE/SHE MAY HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTES OR COMMON LAW
PRINCIPLES OF SIMILAR EFFECT."
Employee being aware of said code section, hereby expressly waives
any right he/she may have thereunder, as well as under any other statutes or
common law principles of similar effect.
11. This Release inures to the benefit of the Company and its successors and
assigns.
ACCEPTED AND AGREED TO:
--------------------------------- ----------------------------------
Seminis, Inc. [Employee Full Name]
Dated: Dated:
--------------------------- -----------------------------
-------------------------------
2 Insert address.
