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Exhibit 10.1
AGREEMENT
This Agreement by and among Monsanto Company, a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxxx (the "Executive") is dated as of the 19th day
of December, 1999.
WHEREAS, the Company, Pharmacia & Upjohn, Inc., a Delaware corporation
("PNU") and MP Sub, Incorporated, a Delaware corporation ("Merger Sub"), have
entered into an Agreement and Plan of Merger dated as of the 19th day of
December, 1999 (the "Merger Agreement"), pursuant to which Merger Sub will merge
with and into PNU (the "Merger"), with PNU becoming a wholly-owned subsidiary of
the Company; and
WHEREAS, the Executive and the Company are parties to an employment
agreement dated as of April 25, 1997 (the "Employment Agreement"), a
participation agreement under the Monsanto Executive Stock Purchase Incentive
Plan dated as of May 10, 1996 (the "Participation Agreement"), a letter
agreement dated June 25, 1990 relating to the Executive's Supplemental
Retirement Benefit (the "Supplemental Retirement Letter"), and a letter
agreement dated April 31, 1991 relating to Alternate Change of Control
Provisions for Stock Options and Stock Appreciation Rights (the "Option Letter"
and together with the Participation Letter and the Supplemental Retirement
Letter, the "Letter Agreements") and the Executive is entitled to various
compensation, stock options and benefits under employee benefit plans,
management incentive plans, annual and long-term incentive plans, savings and
investment plans, programs and policies of the Company, including without
limitation the Supplemental Executive Retirement Plan and the 1999 Premium
Option Purchase Program (such compensation and benefits, collectively the
"Employee Benefits"); and
WHEREAS, the Company has determined that it is in the best interest of its
shareholders to set forth, and the Executive has agreed to set forth, their
mutual agreement as to the rights and entitlements of the Executive under the
Employment Agreement, the Letter Agreements and the Employee Benefits from and
after the Effective Time (as defined in the Merger Agreement) and to provide for
the continuing availability to the Company of the Executive's services and
expertise following the Effective Time, all under the terms and conditions set
forth below;
NOW, THEREFORE, it is hereby agreed as follows:
1. Post-Merger Services. (a) The Company shall use its best efforts to
cause the Executive to be named Chairman of its Board of Directors (the "Board")
for the period beginning at the Effective Time and ending 18 months following
the Effective Time. While the Executive serves as Chairman of the Board, he
shall receive a fee at the annual rate of $50,000 in addition to all other
compensation and benefits to which he is entitled as a non-employee member of
the Board.
(b) From the Effective Time through December 31, 2003 or until such earlier
date as the Executive dies or becomes permanently disabled (the "Advisory
Term"), the Executive shall serve as senior advisor to the Chief Executive
Officer of the Company, in which
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capacity he shall make himself available for such advice, consultation and
assistance as may be requested by the Chief Executive Officer of the Company, on
transition and other business matters within the scope of the Executive's
business expertise and experience, at mutually convenient times and places
(including by telephone), for up to five days a month.
(c) During the Advisory Term the Company shall pay the Executive a fee of
$40,000 per month, payable monthly in advance. In addition, the Company shall
reimburse the Executive for all expenses reasonably incurred by him during the
Advisory Term in the performance of his services hereunder, within 30 days of
receipt by the Company of invoices setting forth a description of the items for
which reimbursement is sought together with the cost or fair market value of
such items and copies of invoices, receipts, credit card statements or other
appropriate supporting documentation.
(d) During the Advisory Term, the Company shall provide the Executive and
his dependents with medical, dental, vision and prescription drug coverage at
least comparable to the coverage under the plans and programs in effect for
active employees of the Company in which the Executive participates as of the
date hereof, with contributions by him required on the same basis as if he
remained an active employee. The Company shall also make gross-up payments to
the Executive or his spouse, as applicable, as and to the extent necessary to
make him or her whole on an after-tax basis for all applicable taxes imposed as
a result of the provision of such coverage.
(e) During the Advisory Term, the Company shall continue to provide to the
Executive, and to pay for the maintenance and upkeep of, the Executive's current
office in Chicago, Illinois, or if the Company ceases to maintain such office,
an office at a location in downtown Chicago, Illinois, reasonably satisfactory
to the Executive, in either case equipped and maintained with furniture,
fixtures and equipment (which shall be upgraded as appropriate from time to
time) comparable to that in his existing office.
(f) During the Advisory Term, the Company shall provide for the Executive's
offices at his two existing residences state-of-the-art computer, printer/fax
and telecommunications equipment (with software) and shall provide the Executive
with a state-of-the-art laptop computer. All such equipment shall be maintained
and upgraded as appropriate at Company expense.
(g) During the Advisory Term, the Company shall employ and provide the
Executive with the full-time services of his current executive assistant in
Chicago or, if she ceases to be an employee of the Company, with the full-time
services of another executive assistant reasonably satisfactory to the
Executive. During such assistant's employment with the Company pursuant to the
preceding sentence, she shall receive annual compensation (including any
incentive bonus) no less than her current compensation, increased as of each
anniversary of the Effective Time to reflect increases in the consumer price
index since the Effective Time or the last such anniversary as applicable, or,
if greater, as necessary to provide such executive assistant with increases at
least equal, on a percentage basis, to the increases provided to similarly
situated executive assistants of the Company.
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(h) If the Executive should die or become permanently disabled before
December 31, 2003, the Company shall pay to the Executive's estate or to the
Executive or his legal guardian, as applicable, any portion of the payments and
expense reimbursements pursuant to Section 1(c) above that have accrued through
the date of death or disability but remain unpaid.
2. Security Measures. From the Effective Time through December 31, 2003,
and thereafter subject to review as provided below, the Company will provide to
Executive, for his benefit and that of his family, the following security
measures: (i) a personal car, equivalent to the car he currently uses, and
driver for the exclusive use of the Executive and his family; (ii) such other
personal security services as the Executive determines, from time to time, in
his reasonable judgment, are necessary when he determines that circumstances
exist that cause the Executive concern for his personal safety or that of his
family; (iii) continued maintenance and upgrade of the security systems
presently installed in the Executive's two existing residences and installation,
maintenance and upgrade of adequate security systems in any residences hereafter
occupied by the Executive or his family; and (iv) use of aircraft equivalent to
those currently being used by the Executive at the Company, to be available for
business and personal use for the Executive and his family (when accompanying
the Executive), on the same basis as currently provided (including reimbursement
for the cost of such personal use). From time to time after December 31, 2003,
but no less frequently than annually, the Company and (during his lifetime) the
Executive shall review the security needs of the Executive and his family and
the Company shall provide such security measures as shall be reasonably
effective and desirable from time to time, to assure the continuation of
adequate security.
3. New Status. (a) It is acknowledged and agreed that as a result of the
consummation of the Merger and the other transactions contemplated by the Merger
Agreement, as of the Effective Time, the change of control provisions of the
Employment Agreement shall have become effective. Immediately following the
Effective Time, the Executive shall cease to be the Chief Executive Officer of
the Company. The Executive's ceasing to be Chief Executive Officer of the
Company shall be deemed to be (i) a termination of his employment by the
Executive for "Good Reason" under the Employment Agreement, with the
consequences described in Section 3(b) below, and (ii) retirement by the
Executive for purposes of the Letter Agreements and the Employee Benefits.
(b) As a result of the foregoing, the Executive shall be entitled to
receive all payments and benefits provided for in Section 6 of the Employment
Agreement in accordance with the terms thereof; provided, that the Executive
hereby waives his rights to receive (i) benefits pursuant to Section 6(a)(ii) of
the Employment Agreement to the extent they would duplicate the benefits
provided pursuant to Section 1(d) above, and (ii) outplacement services pursuant
to Section 6(a)(iii) of the Employment Agreement. In addition, the provisions of
Sections 7, 8, 9, 10, 11 and 12 of the Employment Agreement shall remain in full
force and effect following the Effective Time. Without limiting the generality
of the foregoing, it is agreed and understood that the cash payments due to the
Executive pursuant to Section 6(a)(i) of the Employment Agreement shall be paid
to him as soon as practicable, and in any event not more than 30 days, after
the Effective Time.
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4. Indemnification. The Company agrees to indemnify, protect, defend and
hold the Executive and his estate, heirs, and personal representatives, harmless
from and against any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative or investigative, and all losses, liabilities,
damages and expenses, including reasonable attorney's fees incurred by counsel
reasonably designated or approved by him, in connection with this Agreement or
his services hereunder, provided that any services giving rise to such
indemnification shall have been performed by the Executive in good faith and, to
the best of his knowledge, in a lawful manner. The foregoing indemnification is
in addition to any indemnification to which he may be entitled as a director of
the Company under its charter and by-laws, any indemnification agreement with
the Company, or otherwise.
5. Successors. (a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns.
(c) The Company shall require any successor (whether direct or indirect, by
the purchase, merger, consolidation or otherwise) to all or substantially all of
their respective businesses and/or assets to assume expressly 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 success had taken place. As
used in this Agreement, the "Company" shall mean the Company, as hereinbefore
defined and any successor to its respective businesses and/or assets as
aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
6. Miscellaneous. (a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties thereto or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows:
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If to the Executive:
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Xxxxxx X. Xxxxxxx
Merchandise Mart
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
If to the Company:
-----------------
000 X. Xxxxxxxxx Xxxxxxxxx
Xx. Xxxxx, XX 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision (or portion
thereof) of this Agreement shall not affect the validity or enforceability of
any other provision (or portion thereof) of this Agreement.
(d) The Executive's status after he ceases to be Chief Executive Officer of
the Company shall be that of an independent contractor and not, for any purpose,
that of an employee or agent with authority to bind the Company in any respect.
All payments made or provided to the Executive under Section 1 shall be made as
provided without withholding or deduction of any kind except as required by
applicable law, and the Executive shall assume sole responsibility for
discharging all tax or other obligations associated therewith.
(e) This Agreement represents the entire agreement of the parties with
respect to the subject matter of Section 1 and Section 2 hereof. Except as
specifically provided herein, this Agreement shall not modify or supersede any
other agreement between the parties, including without limitation the Employment
Agreement, the Letter Agreements and agreements with respect to Employee
Benefits.
(f) This Agreement may be executed in several counterparts, each of which
shall be deemed an original, and said counterparts shall constitute but one and
the same instrument.
(g) This Agreement shall be null and void, ab initio, and of no further
effect if the Merger Agreement is terminated before the Effective Time.
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
MONSANTO COMPANY
By /s/ R. Xxxxxxx Xxx III
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