EXHIBIT 10.23
SEVERANCE AND CONSULTING AGREEMENT AND GENERAL RELEASE
------------------------------------------------------
This Severance and Consulting Agreement and General Release
("Agreement") is made and entered into as of the 12th day of February,
2003, by and between Xxxxxxx X. Xxxxxxxxxx, an individual ("Xxxxxxxxxx"),
and Monsanto Company, a corporation organized and existing under the laws
of the State of Delaware ("Monsanto"), herein collectively referred to as
the "Parties."
WHEREAS, until his retirement, Xxxxxxxxxx was employed as an
employee by Monsanto and previously served as President and Chief Executive
Officer of Monsanto;
WHEREAS, Verfaillie's employment with Monsanto terminated
effective January 31, 2003, and Monsanto seeks to retain Xxxxxxxxxx to
render services to Monsanto in a consulting capacity in accordance with the
terms hereof;
WHEREAS, the Parties seek to foreclose any potential claims or
disputes existing or arising between the Parties; and
WHEREAS, the Parties have agreed to reduce their agreements to
writing.
NOW, THEREFORE, in consideration of the mutual premises, covenants
and agreements contained herein, the adequacy and sufficiency of which are
hereby acknowledged and confessed, the Parties do hereby promise, covenant
and agree as follows:
1. Termination of Employment. Verfaillie's employment with Monsanto
-------------------------
will terminate effective January 31, 2003 ("Retirement Date"), under
circumstances constituting an ordinary retirement from employment by
Monsanto for all purposes including any retirement, health insurance,
welfare benefit and other plans sponsored by Monsanto in which he is
eligible to participate, except as otherwise set forth in Section 2 below.
Any stock options previously granted to Xxxxxxxxxx under the Monsanto
Company Management Incentive Plan are exercisable in accordance with the
terms and conditions of such grants, given his Retirement Date.
2. Severance Payment. In consideration of Xxxxxxxxxx agreeing to
-----------------
be bound by this Agreement, Monsanto shall pay to Xxxxxxxxxx a severance
payment in the amount of $3,500,000.00 (the "Severance Payment").
Xxxxxxxxxx understands and agrees that the Severance Payment is in lieu of
any payments or other benefits to which he may otherwise be entitled
pursuant to the provisions of The Monsanto Company Salaried and Hourly
Employees' Separation Plan and hereby waives all rights under such plan.
The Severance Payment shall be paid to Xxxxxxxxxx in one lump sum payment
in the amount of $3,500,000.00, less all applicable withholding taxes. The
lump-sum payment of $3,500,000.00 shall be paid to Xxxxxxxxxx on the
Effective Date (as defined in Section 20). In the event of Verfaillie's
death prior to the date of the Severance Payment, such Severance Payment
shall be payable to Verfaillie's spouse, Xxxxx X. Xxxxxxxxxx. In the event
of the death of both Xxxxxxxxxx and Verfaillie's spouse prior to the date
of the Severance Payment by Monsanto, such Severance Payment shall be made
as follows: (i) in trust for sons Xxxxx X. Xxxxxxxxxx and Xxxxx X.
Xxxxxxxxxx or, if no such trust exists at the time of payment, outright
payment to Xxxxx X. Xxxxxxxxxx and Xxxxx X. Xxxxxxxxxx in equal shares; or
(ii) if payment cannot be made in accordance with subparagraph (i) then to
Verfaillie's estate.
3. Consulting Services. Xxxxxxxxxx shall serve Monsanto in a consulting
-------------------
capacity for the two years following his Retirement Date, i.e. the period
commencing February 1, 2003, and ending January 31, 2005, inclusive (the
"Consulting Period", with each of the twelve month periods commencing
February 1, 2003 and February 1, 2004 being referred to herein as a
"Consulting Year"). During the Consulting Period, Xxxxxxxxxx will make
himself available to provide Monsanto the full benefit of his knowledge,
experience and skill with respect to work on legal matters, including
litigation, litigation support and settlement negotiations and any
2
similar matters (the "Consulting Services"). The Parties understand and
agree that during each of the two Consulting Years of the Consulting
Period, Xxxxxxxxxx will make himself available to Monsanto or its designee
on an as-needed and as-requested basis for up to 500 hours per Consulting
Year and further understand and agree that Monsanto will provide Xxxxxxxxxx
with as much notice as practicable under the circumstances. Additional time
above 500 hours in a Consulting Year will be compensated at the rate of
$830.00 per hour in addition to the Consulting Fee described in Section 5
below.
4. Non-Solicitation and Non-Competition Restrictions. Xxxxxxxxxx
-------------------------------------------------
hereby agrees that for a period of two years commencing February 1, 2003,
and ending January 31, 2005, he shall not, directly or indirectly, as an
employee, employer, consultant, agent, sole proprietor, principal,
associate, partner, stockholder, corporate officer or director, or in any
other individual or representative capacity:
(a) Hire or attempt to hire any employee or agent of Monsanto, its
subsidiaries or affiliates or solicit, persuade, induce or
encourage any employee or agent of Monsanto, its subsidiaries
or affiliates to terminate employment with Monsanto, its
subsidiaries or affiliates;
(b) Compete or attempt to compete with Monsanto's business, or
accept any form of employment or other affiliation (including,
but not limited to, acting as a director) with any person,
firm or entity which does so compete or is attempting or
planning to compete;
(c) Engage, directly or indirectly, in any Competitive Business;
3
(d) Provide any goods or services to any customer of Monsanto, or
any of its subsidiaries or affiliates, in competition with the
goods or services offered or provided by Monsanto, its
affiliates and/or subsidiaries; and
(e) Cause or attempt to cause any customer of Monsanto or any of
its subsidiaries or affiliates to divest, terminate, limit or
fail to enter into, any business or potential business with
Monsanto, its subsidiaries and/or affiliates.
Xxxxxxxxxx hereby acknowledges and agrees that Monsanto's business is
conducted throughout the world, and that he has been intimately involved in
the conduct of that business as conducted globally and that it is
reasonable, in light of his duties, responsibilities and the confidential,
competitive valuable information to which he has been privy, that his
post-termination employment and activities be restricted on a global basis.
For purposes of this Agreement, "Competitive Business" shall mean any
business engaged in the planning, development, production, distribution,
sales or marketing of any product or services currently being planned,
developed, produced, distributed, sold or marketed by Monsanto or any of
its subsidiaries or affiliates, or which competes against any such products
or services, including, but not limited to, the following products and
services:
(a) Glyphosate and other herbicides;
(b) Products that improve dairy cow productivity and swine genetics
or that involve the production of pharmaceutical products in
plants; and
(c) Seeds and related biotechnology traits and technology platforms
based on plant genomics.
4
Breach of the restrictions set forth in this Section 4 will result in
immediate forfeiture of any additional or future payments to be made to
Xxxxxxxxxx pursuant to Section 2 of this Agreement (including any payments
deferred pursuant to said Section 2). In addition, Monsanto reserves any
and all other legal or equitable rights it may have against Xxxxxxxxxx in
the event of such breach. In particular, the Parties hereto agree and
acknowledge that money damages will not be an adequate remedy for any
breach of this Section 4 or Section 7 below, and that Monsanto may in its
sole discretion apply to any court of law or equity of competent
jurisdiction (without posting any bond or deposit) for specific performance
and/or injunctive relief in order to enforce or prevent any violations of
the provisions of this Agreement.
5. Compensation for Consulting Services. As compensation for the
------------------------------------
Consulting Services, Xxxxxxxxxx will be paid a "Consulting Fee" in
accordance with the following: Xxxxxxxxxx shall be paid in equal monthly
installments of $62,500.00 each on the last day of each calendar month
commencing February 28, 2003, and continuing through the earliest of
January 31, 2005 or Verfaillie's death, disability, or failure or refusal
to perform Consulting Services in accordance with Section 3 of this
Agreement. For purposes of this Section 5, disability means a physical or
mental condition resulting from bodily injury, disease or mental disorder
which renders Xxxxxxxxxx incapable of performing Consulting Services for a
period of at least thirty (30) consecutive calendar days as determined by a
physician selected by Monsanto and Xxxxxxxxxx. In the event that Xxxxxxxxxx
unreasonably fails or refuses to perform Consulting Services in accordance
with Section 3 of this Agreement, in addition to forfeiting any additional
payments due under this Section (including any payments deferred pursuant
to this Section 5), Xxxxxxxxxx shall repay to Monsanto all Consulting Fees
previously paid under this Agreement.
5
6. Expenses. Monsanto will reimburse Xxxxxxxxxx for all reasonable
--------
travel and living expenses actually incurred by him in the performance of
the Consulting Services while away from his normal place of residence upon
submission by him and approval by Monsanto of itemized expenses.
7. Confidential Information. The Parties recognize that during
------------------------
Verfaillie's employment by Monsanto and in rendering the Consulting
Services, he may have acquired or may acquire from Monsanto or its
subsidiaries or affiliates or may develop certain information and data
which Monsanto wishes to keep confidential, including, but not limited to,
information and data concerning Monsanto's businesses, plans, projects,
programs, processes, products, costs, equipment, raw materials, suppliers,
customers, operations and employees ("Monsanto Information"). Xxxxxxxxxx
shall not disclose any Monsanto Information to third parties or use any
Monsanto Information without, in each instance, securing the prior written
consent of Monsanto. All files, correspondence, notes, memoranda, records,
computer disks, tapes, print-outs and other documents and recordings
(including, but not limited to, all drafts, copies and excerpts thereof)
embodying or referring to the Monsanto Information or supplied to
Xxxxxxxxxx by Monsanto ("Documents") shall be the property of Monsanto and
shall be subject to this Agreement. Monsanto shall be free to use all
Documents in its business. Xxxxxxxxxx shall deliver all Documents to
Monsanto or destroy them, at Monsanto's request.
Nothing contained in this Agreement shall prevent Xxxxxxxxxx from
using or disclosing Monsanto Information which he can prove (i) has become
part of the public domain other than by his acts or omissions, (ii) has
been furnished or made known to him by third parties (other than those
acting on behalf of Monsanto) as a matter of right and without restriction
on disclosure or use, or (iii) was in his possession prior to disclosure by
Monsanto and was not
6
acquired directly or indirectly from Monsanto. Specific information will
not be deemed to fall within the scope of the foregoing exceptions merely
because it is embraced by more general information, which falls within the
scope of one or more of those exceptions. Xxxxxxxxxx shall not disclose to
others that specific information was received from Monsanto even though it
falls within the scope of one or more of those exceptions. Xxxxxxxxxx
acknowledges and agrees that the existence of Monsanto's particular
interests and plans in the area of the Consulting Services is a type of
such specific information. If Xxxxxxxxxx is required by any court of
competent jurisdiction or legally constituted authority to disclose any
Monsanto Information, prior to any disclosure thereof, he shall notify
Monsanto and shall give Monsanto the opportunity to challenge any such
disclosure order or to seek protection for those portions it regards as
confidential. Breach of this confidentiality provision, as established in a
court of law, will result in immediate forfeiture of any future or deferred
payments to be made to Xxxxxxxxxx pursuant to Section 2 of this Agreement
(including any payments deferred pursuant to said Section 2). In addition,
Monsanto reserves and shall be entitled to pursue any and all other legal
or equitable rights it may have against Xxxxxxxxxx in the event of a breach
of this confidentiality provision, and in particular to seek the relief set
forth in Section 4 of this Agreement.
8. Independent Contractor. In performing the Consulting Services
----------------------
hereunder, Verfaillie's status will be that of an independent contractor,
and not that of an employee or part-time employee of Monsanto. Monsanto
shall not have any right to exercise any control or direction over the
manner in which he performs the Consulting Services hereunder. During the
Consulting Period, Xxxxxxxxxx shall not be, represent himself as, act or
purport to act as or be deemed to be the agent, representative, employee or
servant of Monsanto. Xxxxxxxxxx shall be
7
responsible for all applicable taxes and other matters, if any, required of
self-employed individuals by any governmental authority. Xxxxxxxxxx shall
not be entitled to any of the benefits, directly or indirectly, available
to employees of Monsanto or accrue any further benefits under Monsanto's
employee plans beyond his Retirement Date. Notwithstanding that Xxxxxxxxxx
acknowledges and agrees that he is an "Independent Contractor" within the
meaning of that term in the Missouri Workers Compensation Statute, Mo. Rev.
Stat. Section 287 et seq. (the "Workers Compensation Law"), Xxxxxxxxxx
------
agrees to limit recovery of damages in any action he may bring against
Monsanto in connection with, resulting from or arising out of the
performance of the Consulting Services (other than a breach by Monsanto of
this Agreement) or his presence on Monsanto property to that which he could
recover if he were an employee of Monsanto and thus subject to the Workers
Compensation Law.
9. Compliance with Laws. Xxxxxxxxxx agrees, represents and warrants
--------------------
that he will comply with all applicable federal and state laws in the
provision of Consulting Services, including, but not limited to, all
applicable federal and state laws relating to trading in Monsanto
securities.
10. Assignment. Xxxxxxxxxx shall not (by operation of law or otherwise)
----------
assign his rights or delegate his performance hereunder without the prior
written consent of Monsanto, and any attempted assignment or delegation
without such consent shall be null and void. This Agreement and Monsanto's
rights hereunder may be assigned by Monsanto (by operation of law or
otherwise) without notice to or the consent of Xxxxxxxxxx to (a) a
subsidiary or affiliate of Monsanto or (b) any entity that acquires
Monsanto or all or substantially all of the business or assets to which
this Agreement relates, whether as a result of (i) merger, reorganization
or acquisition, (ii) a sale of stock, (iii) a sale of assets, (iv) a
spinoff or similar transaction,
8
(v) consolidation of the business with the business of the successor in
interest or assignee, or (vi) the creation of a joint venture or
partnership in which the transferring party is a member or partner. Subject
to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the Parties and, except as regards personal services, shall be
binding upon and inure to the benefit of the successors, assigns, personal
representatives, executors and administrators of the Parties. In the event
of any assignment, Monsanto shall continue to be liable jointly for all
payment obligations to Xxxxxxxxxx as set forth in this Agreement.
11. Indemnification. Xxxxxxxxxx hereby agrees to indemnify and hold
---------------
Monsanto, its directors, officers, employees and agents, harmless from and
against all claims, liabilities, losses, damages and expenses (including
reasonable attorneys' fees and expenses) incurred by any of them as a
result of or in connection with his willful misconduct by Xxxxxxxxxx in
performing his Consulting Services hereunder. Monsanto agrees that
Xxxxxxxxxx is not a guarantor of the outcome of any litigation for which
Consulting Services are rendered by Xxxxxxxxxx.
12. Other Agreements and Obligations. The terms and provisions of
--------------------------------
this Agreement shall not amend or otherwise affect any obligations that
Xxxxxxxxxx may have under any other agreement with Monsanto and are in
addition to and not exclusive of any and all other obligations and duties,
whether express or implied, in fact or in law, that he may have with
respect to the subject matter of this Agreement; provided, however, that
the provisions of Sections 4 and 7 of this Agreement shall replace and
supercede the "Confidential Information" and "Competitive Activity"
provisions of the Agreement dated November 13, 1979, by and between the
corporation then known as Monsanto Company and Xxxxxxxxxx (the "Employment
Agreement"). The remaining provisions of such Employment Agreement,
particularly the
9
provision entitled "Ideas, Inventions or Discoveries," shall remain in full
force and effect. Xxxxxxxxxx hereby recognizes, acknowledges and agrees to
the assignment and transfer of the Employment Agreement from Pharmacia
Corporation, formerly known as Monsanto Company ("Pharmacia"), to Monsanto
pursuant to the terms of the Employee Benefits and Compensation Allocation
Agreement by and between Pharmacia and Monsanto dated September 1, 2000 and
the Assignment and Assumption Agreement by and between Pharmacia and
Monsanto dated September 1, 2000. Except as set forth specifically herein,
all rights of Xxxxxxxxxx pursuant to any other written contracts or
agreements with Monsanto shall remain in full force and effect.
13. Confidentiality of this Agreement. Xxxxxxxxxx agrees and warrants
---------------------------------
that he has not and will not publicize or publicly discuss the terms of this
Agreement, except as provided in Section 22 below. It is expressly
understood and agreed that any breach of this Section by Xxxxxxxxxx shall
constitute a material breach of this Agreement and shall give rise to an
action for breach of contract. Xxxxxxxxxx agrees that Monsanto may disclose
this Agreement and its terms. Monsanto recognizes that this information may
become public through no action on Verfaillie's part.
14. Notices. All notices, demands or other communications to be given
-------
or delivered under or by reason of the provisions of this Agreement shall be
in writing and will be deemed to have been given when delivered personally,
mailed by certified or registered mail, return receipt requested and
postage prepaid, or sent via a nationally-recognized overnight courier or
sent via facsimile to the recipient. Such notices, demands and other
communications shall be sent to the address indicated below:
To Monsanto:
Xxxxxxx X. Xxxxxx, General Counsel
Monsanto Company
000 Xxxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
10
To Xxxxxxxxxx:
Xx. Xxxxxxx X. Xxxxxxxxxx
00000 Xxxxxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
(or last address provided in writing to Monsanto)
15. General Release. In consideration of the Severance Payment and
---------------
other obligations of Monsanto provided for under this Agreement and other good
and valuable consideration, Xxxxxxxxxx, with the intent of binding himself
and his successors, heirs, assigns, attorneys and family members, hereby
releases and forever discharges Monsanto and any and all related,
affiliated or subsidiary corporations and entities, as well as the
officers, directors, attorneys, agents, representatives, employees and
predecessors of Monsanto and/or any and all related, affiliated or
subsidiary corporations and entities from and against any and all
liabilities, claims, grievances, demands, charges, actions and causes of
actions whatsoever (whether known or unknown, foreseen or unforeseen and
accrued or unaccrued) which first arose prior to and through the date of
which this Agreement is executed including, but not limited to, any and all
claims for attorneys' fees, any and all claims arising under or pursuant to
the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C.
Section 621 et seq., the Employee Retirement Income Security Act of 1974,
------
as amended, 29 U.S.C. Section 1001 et seq., except as to any vested
------
benefits, Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C.
Section 2000 et seq., the Civil Rights Act of 1991, 42 U.S.C. 1981(a)
------
et seq., the Americans With Disabilities Act of 1990, 42 U.S.C. Section 12101
------
et seq., the Missouri Human Rights Act, Mo. Rev. Stat. Section 213.010
------
et seq., and any and all other statutes or ordinances, and any and all other
------
claims arising under or pursuant to common law or any other legislation.
Xxxxxxxxxx expressly
11
waives the benefit of any statute or rule of law that, if applied to this
Agreement, would otherwise exclude from its binding effect any claims not
known by Xxxxxxxxxx to exist. Xxxxxxxxxx also agrees that he will not
institute any claim for damages or for other relief by charge or otherwise,
nor will he authorize any other party, governmental or otherwise, to enter
into any claim for damages or otherwise via administrative or legal
proceedings against Monsanto and/or any related, affiliated or subsidiary
corporations or entities and/or any of their officers, directors,
attorneys, agents, representatives, employees and predecessors. Monsanto
and Xxxxxxxxxx agree and recognize that, except as specifically set forth
in this Agreement, Xxxxxxxxxx is not releasing any claim to a benefit
provided in any other written agreement in effect between Xxxxxxxxxx and
Monsanto.
16. No Other Inducement. Xxxxxxxxxx represents and warrants that no
-------------------
promise or inducement has been offered or made except as set forth herein
and that this Agreement is executed without reliance by Xxxxxxxxxx or any
person acting on his behalf upon any statement or representation.
17. Knowing and Voluntary Waiver. Xxxxxxxxxx expressly acknowledges
----------------------------
that the waiver of his claims, including, but not limited to, claims under the
Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. Section
621 et seq.; the Employee Retirement Income Security Act of 1974, as
------
amended, 29 U.S.C. Section 1001 et seq. Title VII of the Civil Rights Act
------
of 1964, as amended, 42 U.S.C. Section 2000 et seq. the Civil Rights Act of
------
1991, 42 U.S.C. 1981(a) et seq. the Americans With Disabilities Act of
------
1990, 42 U.S.C. Section 12101 et seq. the Missouri Human Rights Act, Mo.
------
Rev. Stat. Section 213.010 et seq. and any and all other statutes or
------
ordinances; and any and all other claims arising under or pursuant to
common law or any other legislation, is knowing and voluntary, that this
waiver is a part of this Agreement, that the
12
waiver and the Agreement have been written in a manner calculated to be,
and which is, understood by Xxxxxxxxxx, that Xxxxxxxxxx is not waiving
rights for claims first arising under the Age Discrimination in Employment
Act after the date this Agreement is signed and that the rights and claims
that he is waiving are in exchange for consideration to which he is not
otherwise entitled.
18. Advice. Xxxxxxxxxx expressly agrees that: (i) he has carefully
------
read and understands this Severance and Consulting Agreement and General
Release; (ii) he has been given 21 days within which to consider this
Agreement; (iii) he has been advised by this writing to consult with his
attorney regarding this Agreement, its meaning and application; and (iv) he
is signing this Agreement knowingly and voluntarily of his own free will
and with the intent of being bound by it.
19. Entire Agreement. Subject to the provisions of Section 12 hereof,
----------------
this Agreement constitutes the full and complete agreement between Xxxxxxxxxx
and Monsanto with respect to the subject matter hereof.
20. Effective Date. This Agreement shall not become effective until
--------------
the eighth day following the date on which this Agreement has been fully
executed (the "Effective Date"). Xxxxxxxxxx shall be allowed to revoke his
acceptance of this Agreement in writing at any time during the first seven
days following the execution of this Agreement.
21. Governing Law. This Agreement shall be signed by the Parties in
-------------
St. Louis, Missouri. All questions concerning the construction, validity and
interpretation of this Agreement will be governed by and construed in
accordance with the laws of the State of Missouri, without giving effect to
any choice of law or conflict of law provision or rule (whether of the
State of Missouri or any other jurisdiction) that would cause the
application of
13
the laws of any jurisdiction other than the State of Missouri. Any
litigation relating to or arising out of this Agreement, Verfaillie's
employment with Monsanto and/or his separation from Monsanto shall be filed
and litigated exclusively in the St. Louis County Circuit Court or the
United States District Court for the Eastern District of Missouri.
22. Future Employment. Xxxxxxxxxx shall disclose the existence of
-----------------
Sections 4 and 7 of this Agreement to any new employer or potential new
employer that engages in any Competitive Business. Xxxxxxxxxx consents to
Monsanto informing any subsequent employer of Xxxxxxxxxx, or any entity
that Monsanto in good faith believes is, or is likely to be, considering
employing Xxxxxxxxxx, of the existence and terms of this Agreement.
23. Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under
applicable law. If any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in
any jurisdiction, (i) the Parties agree that such provision(s) will be
enforced to the maximum extent permissible under the applicable law and
(ii) any invalidity, illegality or unenforceability of a particular
provision will not affect any other provision of this Agreement.
24. Descriptive Headings. The descriptive headings of this Agreement
--------------------
are inserted for convenience only and do not constitute a part of this
Agreement.
25. Counterparts. This Agreement may be executed in one or more
------------
identical counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
26. Waiver. Neither any course of dealing nor any failure or neglect
------
of either party hereto in any instance to exercise any right, power or
privilege hereunder or under law shall
14
constitute a waiver of such right, power or privilege or of any other
right, power or privilege or of the same right, power or privilege in any
other instance. All waivers by either of the Parties hereto must be
contained in a written instrument signed by the party to be charged
therewith, and, in the case of Monsanto, by its duly authorized officer.
27. Amendment. This Agreement may be amended only by a writing
---------
which makes express reference to this Agreement as the subject of such
amendment and which is signed by Xxxxxxxxxx and by a duly authorized
officer of Monsanto.
XXXXXXX X. XXXXXXXXXX
/s/ Xxxxxxx X. Xxxxxxxxxx
----------------------------------------
Date: 02/12/03
---------------------------------
MONSANTO COMPANY
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------------
Xxxx X. Xxxxxxxx, Senior Vice President-
Human Resources and Corporate Services
Date: 02/13/03
---------------------------------
15
