-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CDl/VBv1a8XndXFOQV04IQy+2xvaMrXewXgITBhxVxUk4pko2eVNnftWdm3S19QS ppIqJyntF+xC1ZKcKBB9Tw== 0000895345-06-000780.txt : 20060825 0000895345-06-000780.hdr.sgml : 20060825 20060825170732 ACCESSION NUMBER: 0000895345-06-000780 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20060821 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060825 DATE AS OF CHANGE: 20060825 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELTA & PINE LAND CO CENTRAL INDEX KEY: 0000902277 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 621040440 STATE OF INCORPORATION: DE FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-14136 FILM NUMBER: 061056602 BUSINESS ADDRESS: STREET 1: ONE COTTON ROW CITY: SCOTT STATE: MS ZIP: 38772 BUSINESS PHONE: 6017423351 MAIL ADDRESS: STREET 1: ONE COTTON ROW CITY: SCOTT STATE: MS ZIP: 38772 8-K 1 af8k2.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): August 21, 2006 DELTA AND PINE LAND COMPANY (Exact name of registrant as specified in its charter) DELAWARE 000-21788 62-1040440 (State or other (Commission File Number) (I.R.S. Employer jurisdiction of Identification No.) incorporation) One Cotton Row, Scott, Mississippi 38772 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (662) 742-4000 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) TABLE OF CONTENTS Item 1.01. Entry into a Material Definitive Agreement. Item 9.01. Exhibits. SIGNATURES EXHIBIT DESCRIPTION - ------- ------------------------------------------- 10.1 Amended and Restated Employment Agreement, dated August 25, 2006, by and between the Company and W.T. Jagodinski 10.2 Severance Protection Agreement, dated August 23, 2006, by and between the Company and Kenneth M. Avery 10.3 Severance Protection Agreement, dated August 24, 2006, by and between the Company and R.D. Greene 10.4 Severance Protection Agreement, dated August 21, 2006, by and between the Company and Charles R. Dismuke, Jr. 10.5 Severance Protection Agreement, dated August 24, 2006, by and between the Company and William V. Hugie 10.6 Form of Severance Protection Agreement, dated August 24, 2006, by and between the Company and James H. Willeke, and as entered into by and between the Company and certain other executives SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On August 18, 2006, Delta and Pine Land Company (the "Company") filed a Form 8-K describing employment and severance protection agreements (the "Agreements") offered to certain of the Company's executive officers. The Agreements have now been entered into and the prior description is repeated below, along with the date of execution. On August 25, 2006, the Company entered into an amended and restated employment agreement with W.T. Jagodinski, the Company's President and Chief Executive Officer (the "Amended Employment Agreement"). The Amended Employment Agreement amended and restated the employment agreement between the Company and Mr. Jagodinski dated September 1, 1997, as modified by a letter agreement dated January 14, 1998 (the "Prior Employment Agreement"). The term of the Amended Employment Agreement, which is the same as that of the Prior Employment Agreement, is for a two year period that renews each day unless either party gives prior written notice of the intention to terminate the automatic extensions. Except as the result of a Change in Control or in anticipation of a Change in Control (as such terms are defined in the Amended Employment Agreement), either party can terminate the Amended Employment Agreement upon three months notice (the Company may also terminate the Amended Employment Agreement upon thirty days notice if Mr. Jagodinski is unable to perform his duties due to illness or incapacity for a continuous period of six months or for a total of eight months or more during any twelve month period). The Prior Employment Agreement provided for an annual base salary of $150,000, as may be increased by the Board of Directors of the Company and which may not be decreased, and eligibility to receive a bonus consistent with standard practices of the Company in paying bonuses to other executive officers. Under the Amended Employment Agreement, Mr. Jagodinski is subject to the same compensation provisions except that his base salary is listed at $400,000, which is the level to which the Board of Directors had previously increased his base salary. Mr. Jagodinski will also have the same entitlement to health and welfare, retirement and fringe benefits under the Amended Employment Agreement as provided in the Prior Employment Agreement, including use of a Company-provided vehicle. Pursuant to the Prior Employment Agreement, following a Change in Control or in Anticipation of a Change in Control, if Mr. Jagodinski terminated employment for any reason or if the Company terminated Mr. Jagodinski other than for cause or disability (as such terms are defined in the Prior Employment Agreement), he would be entitled to receive (1) an amount equal to the largest base salary and bonus paid over the previous five calendar years, (2) twelve monthly payments equal, in the aggregate, to one half of his largest base salary and bonus paid over the previous five calendar years, (3) an amount equal to twenty percent of his largest base salary and bonus paid over the previous five calendar years for purposes of obtaining outplacement services, (4) continuation of health and welfare benefits, at the Company's cost (in addition to the right to COBRA coverage) for twenty-four months following the date of the termination, (5) continued use of a Company-provided cellular phone, secretarial assistance, voice mailbox, mail drop service and vehicle for twenty-four months following the date of the termination, (6) continued coverage under directors and officers liability insurance policy for at least thirty-six months and (7) the right to a cash payment in lieu of receiving shares of Company stock for exercisable options that Mr. Jagodinski elects to surrender. Pursuant to the Amended Employment Agreement, if Mr. Jagodinski is employed by the Company at the time of a Change in Control or has been terminated by the Company in Anticipation of a Change in Control, then upon a Change in Control, Mr. Jagodinski will be entitled to receive (1) an amount equal to earned but unpaid base salary plus a pro rata portion of his highest bonus earned in any of the five prior fiscal years, (2) an amount equal to three times base salary (determined at the time of the Change in Control) plus his highest bonus earned in any of the five prior fiscal years, (3) an amount equal to twenty percent of the sum of base salary (determined at the time of the Change in Control) plus his highest bonus earned in any of the five prior fiscal years for purposes of obtaining accounting services, (4) the value of the excess of Mr. Jagodinski's benefit under the Company Retirement Plan if he were to be credited with an additional three years of service and his actual benefit at the time of the Change in Control, (5) continuation of health and welfare benefits at the Company's cost (in addition to the right to COBRA coverage) for thirty-six months following the date of the Change in Control, (6) continued use of a Company-provided cellular phone, secretarial assistance, voice mailbox, mail drop service, laptop computer, email account and vehicle and continued coverage under directors and officers liability insurance policy, for thirty-six months after the Change in Control and (7) the right to a cash payment in lieu of receiving shares of Company stock for exercisable options that Mr. Jagodinski is required to surrender. Under both the Prior Employment Agreement and the Amended Employment Agreement, Mr. Jagodinski is entitled to receive a gross-up payment for any income taxes owed with respect to any payments or benefits received upon a Change in Control such that the amount he retains after tax is equal to the amount he would have retained had no income tax applied. Under the Prior Employment Agreement, the income tax gross-up applied to all payments and benefits except for the payment of one year of base salary and bonus and the twelve monthly payments equal to one-half of base salary and bonus and, under the Amended Employment Agreement, the income tax gross-up applies to all payments and benefits except payment of earned but unpaid base salary and pro rata bonus and the payments of three times base salary plus his highest bonus earned in any of the five prior fiscal years. The Amended Employment Agreement provides that Mr. Jagodinski is also entitled to receive a gross-up payment with respect to any excise taxes under Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"), incurred with respect to any payments or benefits received from the Company such that the amount he retains after tax is equal to the after-tax amount he would have retained had no excise tax applied. In order to comply with Section 409A of the Code, all amounts payable under the Amended Employment Agreement before January 1, 2007 will not be paid earlier than the first business day after December 31, 2006. Upon his termination of employment for any reason on or following a Change in Control or in Anticipation of a Change in Control, the Prior Employment Agreement provided that Mr. Jagodinski would not compete against the Company for twelve months from the date of termination of employment. The Amended Employment Agreement contains the same provision except that it applies for an eighteen month period. For purposes of the non-competition covenant of the Amended Employment Agreement, Mr. Jagodinski may not engage or participate in, assist or have an interest in, whether as an officer, director, partner, owner, employee or otherwise, the operation, management or conduct of any business or enterprise that engages in the cotton seed breeding, production and marketing process in the same geographical area with any line of business in which the Company is now engaged. The Amended Employment Agreement is attached as Exhibit 10.1 to this Current Report on Form 8-K and the information set forth therein is incorporated by reference into this Current Report. On August 23, 2006 and August 24, 2006, the Company entered into a Severance Protection Agreement with each of Kenneth Avery and R.D. Greene, respectively, that provides that, if the respective executive is employed by the Company at the time of a Change in Control (as such term is defined in the agreement) or has been terminated by the Company in anticipation of a Change in Control, then upon a Change in Control, the respective executive will be entitled to receive (1) a lump sum payment equal to (a) earned but unpaid base salary plus a pro rata portion of his highest bonus earned in any of the five prior fiscal years, (b) three times base salary (determined at the time of the Change in Control) plus his highest bonus earned in any of the five prior fiscal years, (c) with respect to Mr. Greene, thirty percent of the sum of base salary (determined at the time of the Change in Control) plus his highest bonus earned in any of the five prior fiscal years and, with respect to Mr. Avery, $30,000, for purposes of obtaining accounting services and (d) the value of the excess of the respective executive's benefit under the Company Retirement Plan if he were to be credited with an additional three years of service and his actual benefit at the time of the Change in Control, and (2) for thirty-six months following the date of the Change in Control, (a) continuation of health and welfare benefits, at the Company's cost (in addition to the right to COBRA coverage) and (b) continued use of Company-provided secretarial assistance, voice mailbox, laptop computer, email account, mail drop service and vehicle. Under the Severance Protection Agreement, Mr. Greene is entitled to receive a gross-up payment for any income taxes owed with respect to the payment made with respect to his obtaining accounting services such that the amount he retains after tax is equal to the amount he would have retained had no income tax applied. The Severance Protection Agreement provides that Messrs. Avery and Greene are each entitled to receive a gross-up payment on any excise taxes under Section 4999 of the Code, incurred with respect to any payments or benefits received from the Company such that the amount he retains after tax is equal to the after-tax amount he would have retained had no excise tax applied. Upon termination of employment for any reason on or following a Change in Control or in anticipation of a Change in Control, the Severance Protection Agreement provides that each respective executive agrees not to compete against the Company for eighteen months from the date of termination of employment. For purposes of the non-competition covenant of the Severance Protection Agreement, the respective executive may not engage or participate in, assist or have an interest in, whether as an officer, director, partner, owner, employee or otherwise, the operation, management or conduct of any business or enterprise that engages in the cotton seed breeding, production and marketing process in the same geographical area with any line of business in which the Company is now engaged. The Severance Protection Agreements of Messrs. Avery and Greene are attached as Exhibits 10.2 and 10.3, respectively, to this Current Report on Form 8-K and the information set forth therein is incorporated by reference into this Current Report. On August 21, 2006 and August 24, 2006, the Company entered into a Severance Protection Agreement with each of Charles Dismuke, Jr. and William Hugie, respectively, that provides that, if, within twenty-four months of a Change in Control, the respective executive's employment is terminated by the Company without Cause and other than due to Disability or death, or by the executive for Good Reason (as such capitalized terms are defined in the agreement) or during the thirty-day period following the first anniversary of the Change in Control, the respective executive will be entitled to receive (1) a lump sum payment equal to (a) earned but unpaid base salary plus a pro rata portion of his highest bonus earned in any of the five prior fiscal years, (b) three times base salary (determined at the time of the Change in Control or, if greater, the date of termination of employment) plus his highest bonus earned in any of the five prior fiscal years, (c) $30,000 for purposes of obtaining outplacement services and (d) the value of the excess of the respective executive's benefit under the Company Retirement Plan if he were to be credited with an additional three years of service and his actual benefit at the time of the termination, and (2) for thirty-six months following the date of termination of employment, (a) continuation of health and welfare benefits, at the Company's cost (in addition to the right to COBRA coverage) and (b) continued use of a Company-provided secretarial assistance, voice mailbox, laptop computer, email account, mail drop service and vehicle. The Severance Protection Agreement provides that Messrs. Dismuke and Hugie are each entitled to receive a gross-up payment with respect to any excise taxes under Section 4999 of the Code, incurred with respect to any payments or benefits received from the Company such that the amount he retains after tax is equal to the after-tax amount he would have retained had no excise tax applied. If Mr. Dismuke or Hugie qualifies as a "specified employee" under Section 409A of the Code, payments made to the respective executive under the Severance Protection Agreement may be delayed for six months from the date of termination of employment. If, during the term of the Severance Protection Agreement and within twenty-four months of a Change in Control, Mr. Dismuke's or Hugie's employment is terminated by the Company for Disability, due to death or by the executive for other than Good Reason and other than during the thirty-day period following the first anniversary of the Change in Control, the respective executive will receive earned but unpaid base salary plus a pro rata portion of his highest bonus earned in any of the five prior fiscal years. If either executive is terminated by the Company for Cause, such executive will only be entitled to earned but unpaid base salary. Upon termination of employment for any reason on or following a Change in Control or in anticipation of a Change in Control, the Severance Protection Agreement provides that each respective executive agrees not to compete against the Company for eighteen months from the date of termination of employment. For purposes of the non-competition covenant of the Severance Protection Agreement, the respective executive may not engage or participate in, assist or have an interest in, whether as an officer, director, partner, owner, employee or otherwise, the operation, management or conduct of any business or enterprise that engages in the cotton seed breeding, production and marketing process in the same geographical area with any line of business in which the Company is now engaged. The Severance Protection Agreements of Messrs. Dismuke and Hugie are attached as Exhibits 10.4 and 10.5, respectively, to this Current Report on Form 8-K and the information set forth therein is incorporated by reference into this Current Report. On August 24, 2006, the Company entered into a Severance Protection Agreement with James H. Willeke that provides that if, within twenty-four months of a Change in Control, Mr. Willeke's employment is terminated by the Company without Cause and other than due to Disability or death, or by Mr. Willeke for Good Reason (as such capitalized terms are defined in the agreement) or during the thirty-day period following the first anniversary of the Change in Control, Mr. Willeke will be entitled to receive (1) a lump sum payment equal to (a) earned but unpaid base salary plus a pro rata portion of his highest bonus earned in any of the five prior fiscal years, (b) one and one-half times base salary (determined at the time of the Change in Control or, if greater, the date of termination of employment) plus his highest bonus earned in any of the five prior fiscal years, (c) $30,000 for purposes of obtaining accounting services and (d) the value of the excess of Mr. Willeke's benefit under the Company Retirement Plan if he were to be credited with an additional one and one-half years of service and his actual benefit at the time of termination, and (2) continuation of health and welfare benefits, at the Company's cost for twenty-four months following the date of the termination (in addition to the right to COBRA coverage) and continued use of a Company-provided vehicle for eighteen months following the date of the termination. The Severance Protection Agreement provides that Mr. Willeke is entitled to receive a gross-up payment with respect to any excise taxes under Section 4999 of the Code, incurred with respect to any payments or benefits received from the Company such that the amount he retains after tax is equal to the after-tax amount he would have retained had no excise tax applied. If Mr. Willeke qualifies as a "specified employee" under Section 409A of the Code, payments made to him under the Severance Protection Agreement may be delayed for six months after the termination of employment. If, during the term of the Severance Protection Agreement and within twenty-four months of a Change in Control, the employment of Mr. Willeke is terminated by the Company for Disability, due to death or by Mr. Willeke for other than Good Reason and other than during the thirty-day period following the first anniversary of the Change in Control, he will receive earned but unpaid base salary plus a pro rata portion of his highest bonus earned in any of the five prior fiscal years. If Mr. Willeke is terminated by the Company for Cause, he will only be entitled to earned but unpaid base salary. Certain other executives of the Company have entered into Severance Protection Agreements that are substantially identical to the agreement entered into by Mr. Willeke. The Form of Severance Protection Agreement which Mr. Willeke and certain executives have entered into is attached as Exhibit 10.6 to this Current Report on Form 8-K and the information set forth therein is incorporated by reference into this Current Report. The foregoing summary is qualified in its entirety by the text of the applicable grant agreements, copies of which are attached as exhibits to this report. ITEM 9.01. EXHIBITS. 10.1 Amended and Restated Employment Agreement, dated August 25, 2006, by and between the Company and W.T. Jagodinski 10.2 Severance Protection Agreement, dated August 23, 2006, by and between the Company and Kenneth M. Avery 10.3 Severance Protection Agreement, dated August 24, 2006, by and between the Company and R.D. Greene 10.4 Severance Protection Agreement, dated August 21, 2006, by and between the Company and Charles R. Dismuke, Jr. 10.5 Severance Protection Agreement, dated August 24, 2006, by and between the Company and William V. Hugie 10.6 Form of Severance Protection Agreement, dated August 24, 2006, by and between the Company and James H. Willeke, and as entered into by and between the Company and certain other executives SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. DELTA AND PINE LAND COMPANY Date: August 21, 2006 By:/s/ Kenneth M. Avery --------------------------- Name: Kenneth M. Avery Title: Vice President- Finance, Treasurer and Assistant Secretary DELTA AND PINE LAND COMPANY EXHIBIT INDEX TO CURRENT REPORT ON FORM 8-K DATED AUGUST 21, 2006 EXHIBIT DESCRIPTION METHOD OF NO. FILING - ------- ------------------------------------------- ---------------- 10.1 Amended and Restated Employment Filed herewith Agreement, dated August 25, 2006, by and between the Company and W.T. Jagodinski 10.2 Severance Protection Agreement, dated Filed herewith August 23, 2006, by and between the Company and Kenneth M. Avery 10.3 Severance Protection Agreement, dated Filed herewith August 24, 2006, by and between the Company and R.D. Greene 10.4 Severance Protection Agreement, dated Filed herewith August 21, 2006, by and between the Company and Charles R. Dismuke, Jr. 10.5 Severance Protection Agreement, dated Filed herewith August 24, 2006, by and between the Company and William V. Hugie 10.6 Form of Severance Protection Agreement, Filed herewith dated August 24, 2006, by and between the Company and James H. Willeke, and as entered into by and between the Company and certain other executives EX-10 2 exh10_1.txt EXHIBIT 10.1 EXHIBIT 10.1 AMENDED AND RESTATED AGREEMENT THIS AMENDED AND RESTATED AGREEMENT is made and entered into as of August 25, 2006, by and between Delta and Pine Land Company, a Delaware corporation, with offices at One Cotton Row, Scott, Mississippi 38772 (hereinafter called the "Corporation") and W. T. Jagodinski, of 8836 Silverbark Dr., Germantown, Tennessee (hereinafter referred to as "Employee"). WHEREAS, the Corporation is engaged in the business of breeding, producing, conditioning and marketing cotton planting seed, and maintains its principal office in Scott, Mississippi; and WHEREAS, the Employee and the Corporation entered into an employment agreement dated as of September 1, 1997, as modified by the letter agreement, dated January 14, 1998, and the parties desire to amend and restate such agreement to reflect the Employee's current employment status with the Corporation and to provide other protections to the Employee; and WHEREAS, the Corporation desires to secure a non-competition covenant from Employee; and WHEREAS, the parties to this Agreement believe it is in their respective best interests to amend and restate this agreement and thereby provide certain additional benefits and considerations in favor of both the Corporation and the Employee. NOW, THEREFORE, in consideration of the mutual covenants contained therein, and other good and valuable considerations, the receipt and sufficiency of which is acknowledged by and between the parties, the parties agree as follows: I. PURPOSE OF AGREEMENT It is the specific intent of the parties to outline the agreed-upon terms of employment of the Employee. It is also the specific intent of the parties to protect the Employee from any adverse actions directed toward the Employee resulting from any Change in Control or in Anticipation of a Change in Control as the terms are utilized in this Agreement. The parties understand and acknowledge that a Change in Control may take place. Accordingly, this Agreement is entered into for the purpose of both providing for the continued employment of the Employee under current ownership circumstances, and further to protect the Employee in the event of a Change in Control or actions taken in Anticipation of a Change in Control. Nothing in this Agreement is intended to alter or affect stock options which have been granted or which may hereinafter be granted to the Employee. II. EMPLOYMENT 1. The Corporation hereby employs, engages and hires Employee as the Corporation's President and Chief Executive Officer. The Employee shall have and agrees to assume primary responsibility, subject at all times to the reasonable control of the Board of Directors, for supervising and overseeing all functions of the Corporation. 2. The Employee agrees to make available to the Corporation all of his professional and managerial knowledge and skill, and to provide such portion of his time as may be reasonably required for the proper fulfillment of his duties. 3. Employee shall perform such other duties as are customarily performed by one holding such position in other, same or similar businesses or enterprises as that engaged in by the Corporation. 4. Employee shall serve in such additional offices and capacities to which he may be appointed or elected, from time to time, by the Board of Directors of the Corporation. 5. Employee agrees that he will at all times faithfully, industriously and to the best of his reasonable ability, experience and talents perform all of the duties that may be required of and from him pursuant to the expressed terms of this Agreement. 6. The parties agree that the Employee will perform his duties in Scott, Mississippi or Shelby County, Tennessee, or in such other place or places as the Corporation and the Employee shall both agree upon, subject to reasonable business-related travel required by the Employer of the Employee consistent with travel required of other executive officers of the Corporation. III. TERM 1. The term of this Agreement shall be for a period of two (2) years from the date hereof. The Agreement shall automatically be extended each day so that at on any given date, the time remaining under this contract shall be for an additional two (2) year period, unless a party shall have given written notice to the other party of said party's intent to terminate the automatic extensions which otherwise take place daily. 2. The parties agree that, except as a result of a Change in Control or in Anticipation of a Change in Control, either party can provide for an early termination of this Agreement upon three (3) months written notice to the other. If the Employee gives such notice (except as a result of Change in Control or in Anticipation of a Change in Control), the Corporation may elect to immediately terminate the Employee without providing the employment benefits otherwise due to the Employee during the remainder of the three (3) month period. Otherwise, the Employee will continue to perform his duties as required under this Agreement during said three (3) month period. If the Corporation elects to make an early termination of employment (except as a result of Change in Control or in Anticipation of a Change in Control), then the Employee shall remain in the employ of the Corporation for a period of three (3) months and receive all benefits otherwise payable to him pursuant to this Agreement. 3. If, during the term of this Agreement but before a Change in Control, the Employee shall become unable to perform his duties by reason of illness or incapacity for a continuous period of six (6) months, or for a total of eight (8) months or more during any twelve (12) month period, then the Corporation may, at its option, terminate this Agreement upon 30 days written notice, and make payment to the Employee of the compensation payable to the Employee pursuant to the terms of this Agreement as though the Agreement were terminated by the Corporation as allowed in paragraph 2 of this Section. The Corporation shall thereafter have no further obligations to the Employee or liabilities under this Agreement. IV. COMPENSATION OF EMPLOYEE The Corporation shall pay the Employee for all services to be performed under this Agreement as follows: 1. Effective as of the date of this Agreement, the Corporation will pay Employee an annual base salary of $400,000.00. Compensation shall be payable in equal monthly installments or more frequently if compensation is generally paid more frequently to other executive officers of the Corporation. Increases in the annual base compensation shall be considered annually by the Board of Directors for the Corporation and the Employee's compensation shall be subject to upward adjustment from time to time as determined by the Board of Directors of the Corporation. Increases in the Employee's compensation will be paid in conformity with the Corporation's practice for payment of other executive officers of the Corporation as such practice may be established or modified from time to time. The Employee's compensation may not be reduced. 2. The Corporation will pay the Employee bonuses consistent with standard practices of the Corporation in paying bonuses to other executive officers of the Corporation. 3. The Corporation will provide Employee employee benefits, such as group health insurance, including employee medical plan benefits, long term disability, accidental death and dismemberment, life insurance, the use of a company provided vehicle, a company provided cellular telephone and all expenses associated therewith, participation in retirement plans, profit sharing plans, 401 K plans, savings plans and all other fringe benefits upon the same terms as are or shall be granted or made available by the Corporation to its other executive officers. 4. The Employee is expected and encouraged from time to time to incur expenses for the promotion of the business of the Corporation. The Corporation shall timely reimburse the Employee for all reasonable and necessary expenses and disbursements incurred by Employee in the performance of his duties in keeping with past practices. The Employee shall, from time to time, but not more frequently than weekly, submit a report to the Vice President- Finance and Treasurer (or his designee) of the Corporation in a form with such detail as will constitute a proper record for tax deductible expenses together with necessary vouchers and receipts therefore. Expenses of a type which are typically reimbursed to other executive officers of the Corporation shall be timely paid or reimbursed by the Corporation. V. CHANGE IN CONTROL 1. This Section is intended to provide the Employee with reasonable protections against possible adverse employment consequences resulting from a "Change in Control" or in Anticipation of a "Change in Control". 2. Immediately upon a Change in Control (the "CIC Date"), if the Employee is employed by the Company or if the employment of the Employee was terminated by the Corporation for any reason in Anticipation of a Change in Control, the Corporation shall pay the Employee the following: (a) The Corporation shall immediately upon the CIC Date pay the Employee a lump sum payment, in cash, equal to any salary payments earned but not paid through the CIC Date plus a pro-rata bonus equal to the product of (1) the Employee's highest annual bonus earned (whether paid or unpaid) during any one of the last five (5) fiscal years that ended prior to the CIC Date (or, in each case, such lesser period for which annual bonuses were paid or payable to the Employee) (the "Bonus Amount") multiplied by (2) a fraction, the numerator of which is the number of days elapsed from the start of the fiscal year in which the Change in Control occurs through the CIC Date and the denominator of which is 365; and (b) The Corporation shall immediately upon the CIC Date pay the Employee a lump sum payment, in cash, in an amount equal to three times the sum of (1) the Employee's annual base salary at the rate in effect immediately prior to the Change in Control (including all amounts of his base salary that are deferred under the qualified and non-qualified employee benefit plans of the Company or any other agreement or arrangement) (the "Base Amount") and (2) the Bonus Amount; and (c) The Corporation shall pay all premiums on behalf of, and at no additional cost to the Employee, for the benefit of the Employee and his spouse and any dependents, for 36 months from the CIC Date (regardless of whether the employment of the Employee is terminated for any reason), on all employee benefit programs and arrangements, including but not limited to health insurance, including employee medical plan benefits, group life insurance, individual life insurance coverage, accidental death and dismemberment coverage, long term disability coverage, and other fringe benefits or benefit plans generally afforded other executive officers of the Corporation. If any such coverage cannot be maintained because of requirements of the insurance or other companies providing such benefits, the Corporation shall provide and pay for alternative coverage providing essentially identical benefits at no additional cost to the Employee. In the event that the Employee's employment is terminated for any reason during the above period, the remaining portion of such period is to be in addition to that period of time that the Employee may elect COBRA coverage under such applicable benefit plans. In this regard, it is the specific agreement of the parties that, if the Employee's employment has terminated, those benefits which are typically available under COBRA coverage, at the expense of the Employee, will be available to the Employee at his expense for a period of 18 months following the expiration of the 36 months listed above, even though COBRA coverage might otherwise be unavailable as provided by law; and (d) For a period of at least 36 months following the CIC Date, the Corporation shall continue to make available, at its expense, a cellular telephone and a company vehicle of the make and model to which the Employee is entitled in accordance with the vehicle policy in effect as of the CIC Date; and (e) In lieu of shares of common stock of the Corporation issuable upon exercise of outstanding options granted to the Employee under the Corporation's stock option plans, the Employee shall surrender on the CIC Date to the Corporation his rights in all outstanding stock options then exercisable, which are held by him, and upon such surrender the Corporation shall pay the Employee an amount in cash equal to the aggregate difference, on a per share basis, between (i) the option prices of the shares subject to such surrendered options; and (ii) the higher of the average aggregate price per share paid (in cash or other consideration) in connection with any Change in Control or the then fair market value of the shares, whichever is greater; and (f) Employee will likely be required to employ a reputable national accounting firm to assist and advise him with respect to his finances following a Change in Control. To compensate Employee for the costs which he will likely incur, the Corporation will pay to Employee at the CIC Date an amount equal to 20% of the sum of the Base Amount and the Bonus Amount; and (g) The Corporation shall continue to cover the Employee under its Directors and Officers liability insurance policy in substantially the form of coverage as such policy may be in effect as to the Employee on the CIC Date, for the longer of thirty six (36) months following the CIC Date or such period as similar such coverage is maintained by the Corporation, its successors or assigns for the benefit of former directors and officers, whichever period is longer; and (h) For 36 months following the CIC Date, the Corporation shall continue to provide the Employee with a reasonable secretarial assistance, a voice mailbox, a laptop computer, an email account and a mail drop service. (i) The Corporation shall pay the Employee a lump sum payment in an amount equal to difference between the present values of (1) the Employee's retirement benefit under the Corporation Retirement Plan (the "Retirement Plan"), determined on the date of termination as if the Employee were credited with an additional three Years of Credited Service (as such term is defined in the Retirement Plan) and annual compensation continued at the same rate as in effect on the CIC Date under the Retirement Plan and (2) the Employee's retirement benefit under the Retirement Plan, determined on the date of termination based on the Employee's actual Years of Credited Service under the Retirement Plan. 3. The Corporation shall pay all legal fees and related expenses (including the costs of experts, evidence and counsel) incurred by the Employee as they become due as a result of the Employee seeking to obtain or enforce any right or benefit provided by this Agreement (including, but not limited to, any such fees and expenses incurred in connection with (i) the dispute and (ii) the Gross-Up Payment whether as a result of any applicable government taxing authority proceeding, audit or otherwise) or by any other plan or arrangement maintained by the Corporation under which the Employee is or may be entitled to receive benefits). 4. In the event that any benefits provided and/or payments made to or on behalf of Employee pursuant to this Section V (other than those payments pursuant to Section V paragraph 2 (a) and Section V paragraph 2 (b)) are deemed to be taxable to the Employee for federal or state income tax purposes, the Corporation agrees to tax protect such payments by grossing up said taxable amount, using the highest marginal Federal and State income tax rates in effect (including FICA and Medicare taxes) for that year and paying to the Employee such additional amounts. Said payment amounts shall be calculated quarterly (on a calendar-year basis) and paid to the Employee by the fifteenth day of the second month following the close of each quarter. Final adjustments, if any, will be made for each calendar year by March 15 of the following calendar year and paid to the Employee by that date. 5. (a) In the event it shall be determined that any payment (other than the payment provided for in this Section) or distribution of any type to or for the benefit of the Employee, by the Corporation, any of its affiliates, any person who acquires ownership or effective control of the Corporation or ownership of a substantial portion of the Corporation's assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder) or any affiliate of such person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the "Excise Tax"), then the Employee shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Employee of all taxes (including any interest or penalties imposed with respect to such taxes), including any income tax, employment tax or Excise Tax, imposed upon the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed to pay federal, state and local income taxes and employment taxes at the highest marginal rate of federal, state and local income taxation and employment taxation in the calendar year in which the Gross-Up Payment is to be made and/or the calendar year in which the CIC Date occurs, as applicable, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. (b) All mathematical determinations, and all determinations as to whether any of the Total Payments are "parachute payments" (within the meaning of Section 280G of the Code), that are required to be made under this subsection, including determinations as to whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and amounts relevant to the last sentence of this subsection shall be made by an independent accounting firm selected by the Employee from among the four largest accounting firms in the United States (the "Accounting Firm"), which shall provide its determination (the "Determination"), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter, both to the Corporation and the Employee by no later than ten days following the CIC Date, if applicable, or such earlier time as is requested by the Corporation or the Employee. If the Accounting Firm determines that no Excise Tax is payable by the Employee, it shall furnish the Employee and the Corporation with an opinion reasonably acceptable to the Employee and the Corporation that no Excise Tax is payable (including the reasons therefor) and that he has substantial authority not to report any Excise Tax on his federal income tax return. If a Gross-Up Payment is determined to be payable, it shall be paid to the Employee within ten (10) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Corporation or the Employee. Any determination by the Accounting Firm shall be binding upon the Corporation and the Employee, absent manifest error. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Corporation should have been made ("Underpayment"), or that Gross-Up Payments will have been made by the Corporation which should not have been made ("Overpayments"). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with any interest and penalties payable by the Employee as a result of such Underpayment) shall be promptly paid by the Corporation to or for the benefit of the Employee. In the case of an Overpayment, the Employee shall, at the direction and expense of the Corporation, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Corporation, and otherwise reasonably cooperate with the Corporation to correct such Overpayment, provided, however, that (i) Employee shall not in any event be obligated to return to the Corporation an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent to make the Employee whole, on an after-tax basis, from the application of the Excise Tax, it being understood that the correction of an Overpayment may result in the Employee repaying to the Corporation an amount which is less than the Overpayment. The fees and expenses of the Accounting Firm shall be paid by the Corporation. 6. In the event that the Corporation determines that the payment of any amounts under this Agreement prior to January 1, 2007 would result in the imposition of an excise tax under Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"), and an independent accounting firm selected by the Employee from among the four largest accounting firms in the United States agrees with such determination by the Corporation, the payment of such amounts shall be delayed until the first business day after December 31, 2006 or the CIC Date, whichever is later. VI. NON-COMPETITION 1. Employer desires Employee to agree not to compete with the Corporation in the event of the termination of employment following a Change in Control or in Anticipation of a Change In Control. Employer is not willing to enter into this Agreement without such a covenant. As additional consideration for the agreement of Employer to make payments to or otherwise compensate Employee under this Agreement, Employer has required Employee to give a Non-Competition Covenant. Employer may not waive the non-competition obligations in this Section and be relieved of any of its other obligations under this Agreement. 2. In the event of a Change in Control or in Anticipation of a Change in Control, for the eighteen-month period following the termination of Employee's employment with the Corporation for any reason, Employee shall not, without the prior written consent of the Board of Directors of the Corporation, which consent may be withheld at the sole, absolute and uncontrolled discretion of such Board of Directors, engage or participate in, assist or have an interest in, whether as an officer, director, partner, owner, employee or otherwise, the operation, management or conduct of any business or enterprise that engages in the cotton seed breeding, production and marketing process in the same geographical area with any line of business in which the Corporation is now engaged. 3. Nothing in this Section shall prohibit Employee from acquiring or holding, for investment purposes only, securities or ownership interest of any entity which may compete directly or indirectly with the Corporation. 4. Nothing in this Section shall prohibit the Employee from seeking or securing employment with a corporation which has a subsidiary or affiliate whose business activities include cotton seed breeding, production and marketing so long as Employee's job duties and responsibilities do not require or allow the Employee to directly engage in any activities which would be in violation of this Section, and so long as he does not violate any of his confidentiality obligations to the Corporation as referred to in Section VIII. 5. In the event of a breach of this Agreement by Employee, Employer may seek injunctive relief to prohibit the Employee from engaging in prohibited competition and/or Employer may initiate legal proceedings to collect actual damages to Employer resulting from such breach. A breach by Employee shall not allow Employer to terminate its obligations to Employee under the other provisions of this Agreement. VII. VII. DEFINITIONS 1. As used herein the term "Change in Control" shall mean the occurrence of any of the following: (a) An acquisition (other than directly from the Company) by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of the then outstanding common shares ("Shares") or the combined voting power of the Company's then outstanding voting securities; provided, however, in determining whether a Change in Control has occurred pursuant to this Section, Shares or voting securities which are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a "Subsidiary"), (ii) the Company or its Subsidiaries, or (iii) any Person in connection with a "Non-Control Transaction" (as hereinafter defined); (b) The individuals who on August 1, 2006 are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least two-thirds of the members of the Board; provided, however, that if the election, or nomination for election by the Company's common stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or (c) The consummation of: (1) A merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued, unless such merger, consolidation or reorganization is a "Non-Control Transaction." A "Non-Control Transaction" shall mean a merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued where: (A) the stockholders of the Company, immediately before such merger, consolidation or reorganization, own directly or indirectly immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation or reorganization (the "Surviving Corporation") in substantially the same proportion as their ownership of the voting securities immediately before such merger, consolidation or reorganization, (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least two-thirds of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning a majority of the voting securities of the Surviving Corporation, and (C) no Person other than (1) the Company, (2) any Subsidiary, (3) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation or reorganization, was maintained by the Company or any Subsidiary, or (4) any Person who, immediately prior to such merger, consolidation or reorganization had Beneficial Ownership of twenty percent (20%) or more of the then outstanding voting securities or Shares, has Beneficial Ownership of twenty percent (20%) or more of the combined voting power of the Surviving Corporation's then outstanding voting securities or its common stock. (2) A complete liquidation or dissolution of the Company; or (3) The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary or the distribution to the Company's stockholders of the stock of a Subsidiary or any other assets). Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the then outstanding Shares or voting securities as a result of the acquisition of Shares or voting securities by the Company which, by reducing the number of Shares or voting securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Shares or voting securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Shares or voting securities which increases the percentage of the then outstanding Shares or voting securities Beneficially Owned by the Subject Person, then a Change in Control shall occur. 2. "Anticipation of a Change in Control" means any action taken during the twelve-month period prior to a Change in Control. Specifically, the termination of the Employee, other than for cause as defined below, during the twelve-month period prior to a Change in Control will be conclusively presumed to constitute a termination of the Employee in Anticipation of a Change in Control. 3. "Cause", as the term is used with respect to the termination of the Employee for cause, shall mean a conviction of the Employee of a felony involving moral turpitude. 4. "Confidential Information" means (a) all technical and business information of the Corporation, whether patentable or not, which is of a confidential, trade secret and/or proprietary character and that is either developed by the Employee (alone or with others) or to which the Employee has had access during his employment, (b) all confidential evaluations, and (c) the confidential use or non-use by the Corporation of technical or business information in the public domain. VIII. CONFIDENTIALITY 1. (a) The Employee shall use his best efforts and diligence both during and after employment by the Corporation to protect the confidential, trade secret and/or proprietary character of all Confidential Information. The Employee shall not, directly or indirectly, use (for the Employee or another) or disclose any Confidential Information, for so long as it shall remain proprietary or protectible as confidential or trade secret information, except as may be necessary for the performance of the Employee's duties with the Corporation. The Employee shall promptly deliver to the Corporation, at the termination of the Employee's employment, or at any other time at the Corporation's request, without retaining any copies, all documents and other material in the Employee's possession relating, directly or indirectly, to any Confidential Information. (b) Each of the Employee's obligations in this Section VIII shall also apply to the confidential, trade secret and proprietary information learned or acquired by the Employee during his employment from others with whom the Corporation has a business relationship. The Employee understands that he is not to disclose to the Corporation, or use for its benefit, any of the confidential, trade secret or proprietary information of others, including any of the Employee's former employers. (c) In no event shall an asserted violation of the provisions of this Section VIII constitute a basis for deferring or withholding any amounts otherwise payable to the Employee under this Agreement. IX. MISCELLANEOUS PROVISIONS 1. This Agreement shall constitute the entire agreement between the parties and any prior understanding or representations of any kind preceding the date of this Agreement and shall not be binding upon either party, except to the extent incorporated in this Agreement. 2. Any modification of this Agreement or additional obligation assumed by either party in connection with this Agreement shall be binding only if evidenced in writing and signed by the party to be charged. 3. It is agreed that this Agreement shall be governed by construed and enforced in accordance with the laws of the State of Delaware. 4. Any notice provided for or concerning this Agreement shall be in writing and shall be deemed sufficiently given when sent by certified or registered mail if sent to the respective addresses of the parties as set forth in the beginning of this Agreement. Either party may give written notice to the other that the addresses to be utilized for notice purposes have been altered. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above. Delta and Pine Land Company /s/ W.T. Jagodinski a Delaware corporation --------------------------------- W.T. Jagodinski By: /s/ Joseph M. Murphy ------------------------------- Name: Joseph M. Murphy Title: Director Chair of Comp. Comm. STATE OF Tennessee COUNTY OF Shelby Personally appeared before me, W.T. Jagodinski, with whom I am personally acquainted and who acknowledged that he executed the within instrument for the purposes therein contained. Witness my hand, at office, this 25th day of August, 2006. (SEAL) /s/ Janie Ferrell --------------------------------- Notary Public My commission expires: 2/10/10 - ---------------------------- STATE OF New York COUNTY OF New York Before me, a Notary Public in and for said state and county, duly commissioned and qualified, personally appeared Joseph M. Murphy with whom I am personally acquainted (or proved to me on the basis of satisfactory evidence), and who, upon oath, acknowledged himself to be a director and Chairman of Comp. Comm. of Delta and Pine Land Company, the within named bargainor, a Delaware corporation, and that he executed the foregoing instrument for the purpose therein. contained, by signing the name of the corporation by himself as Chairman Comp. Comm. and Director. Witness my hand, at office this 23rd day of August 2006. (SEAL) /s/ Kimberly Tieng --------------------------------- Notary Public My commission expires: April 15, 2010 - ---------------------------- EX-10 3 exh10_2.txt EXHIBIT 10.2 EXHIBIT 10.2 SEVERANCE PROTECTION AGREEMENT THIS AGREEMENT made as of the 23rd day of August, 2006 (the "Effective Date"), by and between Delta and Pine Land Company (the "Company") and Kenneth Avery (the "Executive"). WHEREAS, the Board of Directors of the Company (the "Board") recognizes that the possibility of a Change in Control (as hereinafter defined) exists and that the threat or the occurrence of a Change in Control can result in significant distractions of its key management personnel because of the uncertainties inherent in such a situation; WHEREAS, the Board has determined that it is essential and in the best interest of the Company and its stockholders to retain the services of the Executive in the event of the possibility of a Change in Control and to ensure his continued dedication and efforts in such event without undue concern for his personal financial and employment security; and WHEREAS, in order to induce the Executive to remain in the employ of the Company, in light of a possible Change in Control, the Company desires to enter into this Agreement with the Executive to provide the Executive with certain benefits. NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein, it is agreed as follows: 1. Term of Agreement. This Agreement shall commence as of the Effective Date and shall continue in effect until December 31, 2008; provided, however, that on December 31, 2008 and on each anniversary thereof, the term of this Agreement shall be automatically extended for one year unless either the Company or the Executive shall have given six months written notice to the other prior thereto that the term of this Agreement shall not be so extended. 2. Definitions. 2.1. Accrued Compensation. For purposes of this Agreement, "Accrued Compensation" shall mean an amount which shall include all amounts earned or accrued through the "CIC Date" (as hereinafter defined) but not paid as of the CIC Date including (a) base salary, (b) reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the CIC Date, (c) vacation and sick leave pay (to the extent provided by Company policy or applicable law), and (d) bonuses and incentive compensation (other than the "Pro Rata Bonus" (as hereinafter defined)). 2.2. Base Amount. For purposes of this Agreement, "Base Amount" shall mean the Executive's annual base salary at the rate in effect immediately prior to the Change in Control and shall include all amounts of his base salary that are deferred under the qualified and non-qualified employee benefit plans of the Company or any other agreement or arrangement. 2.3. Bonus Amount. For purposes of this Agreement, "Bonus Amount" shall mean the Executive's highest annual bonus earned (whether paid or unpaid) during any one of the last five fiscal years that ended prior to the CIC Date (or, in each case, such lesser period for which annual bonuses were paid or payable to the Executive). 2.4. Change in Control. For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any of the following: (a) An acquisition (other than directly from the Company) by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of the then outstanding common shares ("Shares") or the combined voting power of the Company's then outstanding voting securities; provided, however, in determining whether a Change in Control has occurred pursuant to this Section, Shares or voting securities which are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a "Subsidiary"), (ii) the Company or its Subsidiaries, or (iii) any Person in connection with a "Non-Control Transaction" (as hereinafter defined); (b) The individuals who on August 1, 2006 are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least two-thirds of the members of the Board; provided, however, that if the election, or nomination for election by the Company's common stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or (c) The consummation of: (1) A merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued, unless such merger, consolidation or reorganization is a "Non-Control Transaction." A "Non-Control Transaction" shall mean a merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued where: (A) the stockholders of the Company, immediately before such merger, consolidation or reorganization, own directly or indirectly immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation or reorganization (the "Surviving Corporation") in substantially the same proportion as their ownership of the voting securities immediately before such merger, consolidation or reorganization, (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least two-thirds of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning a majority of the voting securities of the Surviving Corporation, and (C) no Person other than (1) the Company, (2) any Subsidiary, (3) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation or reorganization, was maintained by the Company or any Subsidiary, or (4) any Person who, immediately prior to such merger, consolidation or reorganization had Beneficial Ownership of twenty percent (20%) or more of the then outstanding voting securities or Shares, has Beneficial Ownership of twenty percent (20%) or more of the combined voting power of the Surviving Corporation's then outstanding voting securities or its common stock. (2) A complete liquidation or dissolution of the Company; or (3) The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary or the distribution to the Company's stockholders of the stock of a Subsidiary or any other assets). Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the then outstanding Shares or voting securities as a result of the acquisition of Shares or voting securities by the Company which, by reducing the number of Shares or voting securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Shares or voting securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Shares or voting securities which increases the percentage of the then outstanding Shares or voting securities Beneficially Owned by the Subject Person, then a Change in Control shall occur. 2.5. CIC Date. For purposes of this Agreement, "CIC Date" shall mean the date on which a Change in Control is consummated. 2.6. 2.7. Company. For purposes of this Agreement, the "Company" shall include the Company's "Successors and Assigns" (as hereinafter defined). 2.8. Confidential Information. For purposes of this Agreement means (a) all technical and business information of the Company, whether patentable or not, which is of a confidential, trade secret and/or proprietary character and that is either developed by the Executive (alone or with others) or to which the Executive has had access during his employment, (b) all confidential evaluations, and (c) the confidential use or non-use by the Company of technical or business information in the public domain. 2.9. Pro Rata Bonus. For purposes of this Agreement, "Pro Rata Bonus" shall mean an amount equal to the Bonus Amount multiplied by a fraction the numerator of which is the number of days in the Company's fiscal year in which Executive's employment terminates through the CIC Date and the denominator of which is 365. 2.10. Successors and Assigns. For purposes of this Agreement, "Successors and Assigns" shall mean a corporation or other entity acquiring all or substantially all the assets and business of the Company whether by operation of law or otherwise, and any affiliate of such Successors and Assigns. 3. Change In Control. 3.1. If, during the term of this Agreement, a Change in Control occurs and (i) the Executive is employed on the CIC Date or (ii) the Executive's employment has been terminated prior to a Change in Control but the Executive reasonably demonstrates that the termination (A) was at the request of a third party, or (B) otherwise arose in connection with, or in anticipation of, a Change in Control which actually occurs, the Executive shall be entitled to the following compensation and benefits: (a) the Company shall pay the Executive all Accrued Compensation and a Pro-Rata Bonus. (b) the Company shall pay the Executive, in lieu of any further compensation for periods subsequent to the CIC Date, in a single payment an amount in cash equal to three times the sum of (1) the Base Amount and (2) the Bonus Amount. (c) the Company shall pay all premiums on behalf of and at no additional cost to the Executive, for the benefit of the Executive and his spouse and any dependents, for 36 months from the CIC Date (regardless of whether the employment of the Executive is terminated for any reason), on all employee benefit programs and arrangements, including but not limited to health insurance, including employee medical plan benefits, group life insurance, individual life insurance coverage, accidental death and dismemberment coverage, long term disability coverage, and other fringe benefits or benefit plans generally afforded other executive officers of the Company. If any such coverage cannot be maintained because of requirements of the insurance or other companies providing such benefits, the Company shall provide and pay for alternative coverage providing essentially identical benefits at no additional cost to the Executive. In the event that the Executive's employment is terminated for any reason during the above period, the remaining portion of such period is to be in addition to that period of time that the Executive may elect COBRA coverage under such applicable benefit plans. In this regard, it is the specific agreement of the parties that, if the Executive's employment has terminated, those benefits which are typically available under COBRA coverage, at the expense of the Executive, will be available to the Executive at his expense for a period of 18 months following the expiration of the 36 months listed above, even though COBRA coverage might otherwise be unavailable as provided by law. (d) for a period of at least 36 months following the CIC Date, the Company shall continue to make available, at its expense, a company vehicle of the make and model to which the Executive is entitled in accordance with the vehicle policy in effect as of the date of the Change in Control. (e) The Company shall pay the Executive a lump sum payment in an amount equal to difference between the present values of (1) the Executive's retirement benefit under the Company Retirement Plan (the "Retirement Plan"), determined on the date of termination as if the Executive were credited with an additional three Years of Credited Service (as such term is defined in the Retirement Plan) and annual compensation continued at the same rate as in effect on the CIC Date under the Retirement Plan and (2) the Executive's retirement benefit under the Retirement Plan, determined on the date of termination based on the Executive's actual Years of Credited Service under the Retirement Plan. (f) The Executive will likely be required to employ a reputable national accounting firm to assist and advise him with respect to his finances following a Change in Control. To compensate the Executive for the costs which he will likely incur, the Company will pay to the Executive at the CIC Date an amount equal to $30,000. (g) the Company shall continue to provide the Executive with a reasonable secretarial assistance, a voice mailbox, a laptop computer, an email account and a mail drop service for 36 months following the CIC Date, so long as the Executive is not employed by any entity other than the Company and its affiliates. 3.2. The amounts provided for in Sections 3.1(a), (b), (e), and (f) shall be paid in a single lump sum cash payment within five days after the CIC Date. 3.3. The Executive's entitlement to any other compensation or benefits or any indemnification shall be determined in accordance with the Company's employee benefit plans and other applicable programs, policies and practices or any indemnification agreement then in effect. 4. Treatment of Equity Awards. Nothing in this Agreement shall amend or modify the terms of any equity compensation award or grant document that the Executive holds or to which the Executive is a party. 5. Excise Tax Limitation. 5.1. Excise Tax Gross-Up Payment. In the event it shall be determined that any payment (other than the payment provided for in this Section) or distribution of any type to or for the benefit of the Executive, by the Company, any of its affiliates, any Person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder) or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any income tax, employment tax or Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal, state and local income taxes and employment taxes at the highest marginal rate of federal, state and local income taxation and employment taxation in the calendar year in which the Gross-Up Payment is to be made and/or the calendar year in which the CIC Date occurs, as applicable, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. 5.2. Determination By Accountant. All mathematical determinations, and determinations as to whether any of the Total Payments are "parachute payments" (within the meaning of Section 280G of the Code), that are required to be made under this Subsection, including determinations as to whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and amounts relevant to the last sentence of this Subsection shall be made by an independent accounting firm selected by the Executive from among the four largest accounting firms in the United States (the "Accounting Firm"), which shall provide its determination (the "Determination"), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter, both to the Company and the Executive by no later than ten days following the CIC Date, if applicable, or such earlier time as is requested by the Company or the Executive. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive and the Company that no Excise Tax is payable (including the reasons therefor) and that he has substantial authority not to report any Excise Tax on his federal income tax return. If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within ten (10) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, absent manifest error. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Company should have been made ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayments"). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Company to or for the benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Company, and otherwise reasonably cooperate with the Company to correct such Overpayment, provided, however, that (i) Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent to make the Executive whole, on an after-tax basis, from the application of the Excise Tax, it being understood that the correction of an Overpayment may result in the Executive repaying to the Company an amount which is less than the Overpayment. The fees and expenses of the Accounting Firm shall be paid by the Company. 6. Non-Competition Covenant. 6.1. The Company desires the Executive to agree not to compete with the Company in the event of the Executive's termination of employment following a Change in Control. The Company is not willing to enter into this Agreement without such a covenant. As additional consideration for the agreement of the Company to make payments to or otherwise compensate the Executive under this Agreement, the Company has required the Executive to give a Non-Competition Covenant. The Company may not waive the non-competition obligations in this Section and be relieved of any of its other obligations under this Agreement. 6.2. In the event of a Change in Control, for the eighteen-month period following the termination of the Executive's employment with the Company for any reason, the Executive shall not, without the prior written consent of the Board, which consent may be withheld at the sole, absolute and uncontrolled discretion of such Board, engage or participate in, assist or have an interest in, whether as an officer, director, partner, owner, employee or otherwise, the operation, management or conduct of any business or enterprise that engages in the cotton seed breeding, production and marketing process in the same geographical area with any line of business in which the Company is now engaged. 6.3. Nothing in this Section shall prohibit the Executive from acquiring or holding, for investment purposes only, securities or ownership interest of any entity which may compete directly or indirectly with the Company. 6.4. Nothing in this Section shall prohibit the Executive from seeking or securing employment with a corporation which has a subsidiary or affiliate whose business activities include cotton seed breeding, production and marketing so long as the Executive's job duties and responsibilities do not require or allow the Executive to directly engage in any activities which would be in violation of this Section, and so long as he does not violate any of his confidentiality obligations to the Company. 6.5. In the event of a breach of this Agreement by the Executive, the Company may seek injunctive relief to prohibit the Executive from engaging in prohibited competition and/or the Company may initiate legal proceedings to collect actual damages to the Company resulting from such breach. A breach by the Executive shall not allow the Company to terminate its obligations to the Executive under the other provisions of this Agreement. 7. Confidentiality. 7.1. The Executive shall use his best efforts and diligence both during and after employment by the Company to protect the confidential, trade secret and/or proprietary character of all Confidential Information. The Executive shall not, directly or indirectly, use (for the Executive or another) or disclose any Confidential Information, for so long as it shall remain proprietary or protectible as confidential or trade secret information, except as may be necessary for the performance of the Executive's duties with the Company. The Executive shall promptly deliver to the Company, at the termination of the Executive's employment, or at any other time at the Company's request, without retaining any copies, all documents and other material in the Executive's possession relating, directly or indirectly, to any Confidential Information. 7.2. Each of the Executive's obligations in this Section 7 shall also apply to the confidential, trade secret and proprietary information learned or acquired by the Executive during his employment from others with whom the Company has a business relationship. The Executive understands that he is not to disclose to the Company, or use for its benefit, any of the confidential, trade secret or proprietary information of others, including any of the Executive's former employers. 7.3. In no event shall an asserted violation of the provisions of this Section 7 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 8. Successors; Binding Agreement. 8.1. This Agreement shall be binding upon and shall inure to the benefit of the Company, its Successors and Assigns, and the Company shall require any Successors and Assigns to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. 8.2. Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, his beneficiaries or legal representatives, except by will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal personal representative. 9. Fees and Expenses. The Company shall pay all legal fees and related expenses (including the costs of experts, evidence and counsel) incurred by the Executive as they become due as a result of the Executive seeking to obtain or enforce any right or benefit provided by this Agreement (including, but not limited to, any such fees and expenses incurred in connection with (i) the dispute and (ii) the Gross-Up Payment whether as a result of any applicable government taxing authority proceeding, audit or otherwise) or by any other plan or arrangement maintained by the Company under which the Executive is or may be entitled to receive benefits). 10. Notice. For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, by overnight courier or by facsimile, addressed to the respective addresses and facsimile numbers last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company. All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that notice of change of address shall be effective only upon receipt. 11. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company (except for any severance or termination policies, plans, programs or practices) and for which the Executive may qualify, nor shall anything herein limit or reduce such rights as the Executive may have under any other agreements with the Company (except for any severance or termination agreement). Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Company shall be payable in accordance with such plan or program, except as explicitly modified by this Agreement. 12. No Guaranteed Employment. The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and may be terminated by either the Executive or the Company at any time. 13. Settlement of Claims. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others. 14. Mutual Non-Disparagement. The Executive agrees that it will not make or publish any statement critical of the Company, its affiliates and their respective executive officers and directors, or in any way adversely affecting or otherwise maligning the business or reputation of any member of the Company, its affiliates and subsidiaries and their respective officers, directors and employees. The Company, its affiliates and subsidiaries agree and the Company shall use its best efforts to cause their respective executive officers and directors to agree, that they will not make or publish any statement critical of the Executive, or in any way adversely affecting or otherwise maligning the Executive's reputation. 15. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. 16. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without giving effect to the conflict of laws principles thereof. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in the State of Delaware. 17. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 18. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the day and year first above written. DELTA AND PINE LAND COMPANY ATTEST: By: /s/ W.T. Jagodinski ---------------------- ------------------------------- Name: W.T. Jagodinski Title: President and Chief Executive Officer By: /s/ Kenneth Avery ------------------------------- Kenneth Avery EX-10 4 exh10_3.txt EXHIBIT 10.3 EXHIBIT 10.3 SEVERANCE PROTECTION AGREEMENT THIS AGREEMENT made as of the 24th day of August, 2006 (the "Effective Date"), by and between Delta and Pine Land Company (the "Company") and R.D. Greene (the "Executive"). WHEREAS, the Board of Directors of the Company (the "Board") recognizes that the possibility of a Change in Control (as hereinafter defined) exists and that the threat or the occurrence of a Change in Control can result in significant distractions of its key management personnel because of the uncertainties inherent in such a situation; WHEREAS, the Board has determined that it is essential and in the best interest of the Company and its stockholders to retain the services of the Executive in the event of the possibility of a Change in Control and to ensure his continued dedication and efforts in such event without undue concern for his personal financial and employment security; and WHEREAS, in order to induce the Executive to remain in the employ of the Company, in light of a possible Change in Control, the Company desires to enter into this Agreement with the Executive to provide the Executive with certain benefits. NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein, it is agreed as follows: 1. Term of Agreement. This Agreement shall commence as of the Effective Date and shall continue in effect until December 31, 2008; provided, however, that on December 31, 2008 and on each anniversary thereof, the term of this Agreement shall be automatically extended for one year unless either the Company or the Executive shall have given six months written notice to the other prior thereto that the term of this Agreement shall not be so extended. 2. Definitions. 2.1. Accrued Compensation. For purposes of this Agreement, "Accrued Compensation" shall mean an amount which shall include all amounts earned or accrued through the "CIC Date" (as hereinafter defined) but not paid as of the CIC Date including (a) base salary, (b) reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the CIC Date, (c) vacation and sick leave pay (to the extent provided by Company policy or applicable law), and (d) bonuses and incentive compensation (other than the "Pro Rata Bonus" (as hereinafter defined)). 2.2. Base Amount. For purposes of this Agreement, "Base Amount" shall mean the Executive's annual base salary at the rate in effect immediately prior to the Change in Control and shall include all amounts of his base salary that are deferred under the qualified and non-qualified employee benefit plans of the Company or any other agreement or arrangement. 2.3. Bonus Amount. For purposes of this Agreement, "Bonus Amount" shall mean the Executive's highest annual bonus earned (whether paid or unpaid) during any one of the last five fiscal years that ended prior to the CIC Date (or, in each case, such lesser period for which annual bonuses were paid or payable to the Executive). 2.4. Change in Control. For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any of the following: (a) An acquisition (other than directly from the Company) by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of the then outstanding common shares ("Shares") or the combined voting power of the Company's then outstanding voting securities; provided, however, in determining whether a Change in Control has occurred pursuant to this Section, Shares or voting securities which are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a "Subsidiary"), (ii) the Company or its Subsidiaries, or (iii) any Person in connection with a "Non-Control Transaction" (as hereinafter defined); (b) The individuals who on August 1, 2006 are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least two-thirds of the members of the Board; provided, however, that if the election, or nomination for election by the Company's common stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or (c) The consummation of: (1) A merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued, unless such merger, consolidation or reorganization is a "Non-Control Transaction." A "Non-Control Transaction" shall mean a merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued where: (A) the stockholders of the Company, immediately before such merger, consolidation or reorganization, own directly or indirectly immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation or reorganization (the "Surviving Corporation") in substantially the same proportion as their ownership of the voting securities immediately before such merger, consolidation or reorganization, (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least two-thirds of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning a majority of the voting securities of the Surviving Corporation, and (C) no Person other than (1) the Company, (2) any Subsidiary, (3) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation or reorganization, was maintained by the Company or any Subsidiary, or (4) any Person who, immediately prior to such merger, consolidation or reorganization had Beneficial Ownership of twenty percent (20%) or more of the then outstanding voting securities or Shares, has Beneficial Ownership of twenty percent (20%) or more of the combined voting power of the Surviving Corporation's then outstanding voting securities or its common stock. (2) A complete liquidation or dissolution of the Company; or (3) The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary or the distribution to the Company's stockholders of the stock of a Subsidiary or any other assets). Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the then outstanding Shares or voting securities as a result of the acquisition of Shares or voting securities by the Company which, by reducing the number of Shares or voting securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Shares or voting securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Shares or voting securities which increases the percentage of the then outstanding Shares or voting securities Beneficially Owned by the Subject Person, then a Change in Control shall occur. 2.5. CIC Date. For purposes of this Agreement, "CIC Date" shall mean the date on which a Change in Control is consummated. 2.6. 2.7. Company. For purposes of this Agreement, the "Company" shall include the Company's "Successors and Assigns" (as hereinafter defined). 2.8. Confidential Information. For purposes of this Agreement means (a) all technical and business information of the Company, whether patentable or not, which is of a confidential, trade secret and/or proprietary character and that is either developed by the Executive (alone or with others) or to which the Executive has had access during his employment, (b) all confidential evaluations, and (c) the confidential use or non-use by the Company of technical or business information in the public domain. 2.9. Pro Rata Bonus. For purposes of this Agreement, "Pro Rata Bonus" shall mean an amount equal to the Bonus Amount multiplied by a fraction the numerator of which is the number of days in the Company's fiscal year in which Executive's employment terminates through the CIC Date and the denominator of which is 365. 2.10. Successors and Assigns. For purposes of this Agreement, "Successors and Assigns" shall mean a corporation or other entity acquiring all or substantially all the assets and business of the Company whether by operation of law or otherwise, and any affiliate of such Successors and Assigns. 3. Change In Control. 3.1. If, during the term of this Agreement, a Change in Control occurs and (i) the Executive is employed on the CIC Date or (ii) the Executive's employment has been terminated prior to a Change in Control but the Executive reasonably demonstrates that the termination (A) was at the request of a third party, or (B) otherwise arose in connection with, or in anticipation of, a Change in Control which actually occurs, the Executive shall be entitled to the following compensation and benefits: (a) the Company shall pay the Executive all Accrued Compensation and a Pro-Rata Bonus. (b) the Company shall pay the Executive, in lieu of any further compensation for periods subsequent to the CIC Date, in a single payment an amount in cash equal to three times the sum of (1) the Base Amount and (2) the Bonus Amount. (c) the Company shall pay all premiums on behalf of and at no additional cost to the Executive, for the benefit of the Executive and his spouse and any dependents, for 36 months from the CIC Date (regardless of whether the employment of the Executive is terminated for any reason), on all employee benefit programs and arrangements, including but not limited to health insurance, including employee medical plan benefits, group life insurance, individual life insurance coverage, accidental death and dismemberment coverage, long term disability coverage, and other fringe benefits or benefit plans generally afforded other executive officers of the Company. If any such coverage cannot be maintained because of requirements of the insurance or other companies providing such benefits, the Company shall provide and pay for alternative coverage providing essentially identical benefits at no additional cost to the Executive. In the event that the Executive's employment is terminated for any reason during the above period, the remaining portion of such period is to be in addition to that period of time that the Executive may elect COBRA coverage under such applicable benefit plans. In this regard, it is the specific agreement of the parties that, if the Executive's employment has terminated, those benefits which are typically available under COBRA coverage, at the expense of the Executive, will be available to the Executive at his expense for a period of 18 months following the expiration of the 36 months listed above, even though COBRA coverage might otherwise be unavailable as provided by law. (d) for a period of at least 36 months following the CIC Date, the Company shall continue to make available, at its expense, a company vehicle of the make and model to which the Executive is entitled in accordance with the vehicle policy in effect as of the date of the Change in Control. (e) The Company shall pay the Executive a lump sum payment in an amount equal to difference between the present values of (1) the Executive's retirement benefit under the Company Retirement Plan (the "Retirement Plan"), determined on the date of termination as if the Executive were credited with an additional three Years of Credited Service (as such term is defined in the Retirement Plan) and annual compensation continued at the same rate as in effect on the CIC Date under the Retirement Plan and (2) the Executive's retirement benefit under the Retirement Plan, determined on the date of termination based on the Executive's actual Years of Credited Service under the Retirement Plan. (f) The Executive will likely be required to employ a reputable national accounting firm to assist and advise him with respect to his finances following a Change in Control. To compensate the Executive for the costs which he will likely incur, the Company will pay to the Executive at the CIC Date an amount equal to 30% of the sum of the Base Amount and the Bonus Amount. (g) the Company shall continue to provide the Executive with a reasonable secretarial assistance, a voice mailbox, a laptop computer, an email account and a mail drop service for 36 months following the CIC Date, so long as the Executive is not employed by any entity other than the Company and its affiliates. 3.2. The amounts provided for in Sections 3.1(a), (b),(e), and (f) shall be paid in a single lump sum cash payment within five days after the CIC Date. 3.3. The Executive's entitlement to any other compensation or benefits or any indemnification shall be determined in accordance with the Company's employee benefit plans and other applicable programs, policies and practices or any indemnification agreement then in effect. 4. Treatment of Equity Awards. Nothing in this Agreement shall amend or modify the terms of any equity compensation award or grant document that the Executive holds or to which the Executive is a party. 5. Income and Excise Tax Limitation. 5.1. Income Tax Gross-Up Payment. In the event that any payments made to the Executive pursuant to Section 3.1(f) are deemed to be taxable to the Executive for federal or state income tax purposes, the Company agrees to tax protect such payments by grossing up said taxable amount, using the highest marginal federal and state income tax rates in effect (including FICA and Medicare taxes) for that year and paying to the Executive such additional amounts. Said payment amounts shall be calculated quarterly (on a calendar-year basis) and paid to the Executive by the fifteenth day of the second month following the close of each quarter. 5.2. Excise Tax Gross-Up Payment. (a) In the event it shall be determined that any payment (other than the payment provided for in this Section) or distribution of any type to or for the benefit of the Executive, by the Company, any of its affiliates, any Person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder) or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any income tax, employment tax or Excise Tax, imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal, state and local income taxes and employment taxes at the highest marginal rate of federal, state and local income taxation and employment taxation in the calendar year in which the Gross-Up Payment is to be made and/or the calendar year in which the CIC Date occurs, as applicable, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. (b) Determination By Accountant. All mathematical determinations, and determinations as to whether any of the Total Payments are "parachute payments" (within the meaning of Section 280G of the Code), that are required to be made under this Subsection, including determinations as to whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and amounts relevant to the last sentence of this Subsection shall be made by an independent accounting firm selected by the Executive from among the four largest accounting firms in the United States (the "Accounting Firm"), which shall provide its determination (the "Determination"), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter, both to the Company and the Executive by no later than ten days following the CIC Date, if applicable, or such earlier time as is requested by the Company or the Executive. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive and the Company that no Excise Tax is payable (including the reasons therefor) and that he has substantial authority not to report any Excise Tax on his federal income tax return. If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within ten (10) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, absent manifest error. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Company should have been made ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayments"). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Company to or for the benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Company, and otherwise reasonably cooperate with the Company to correct such Overpayment, provided, however, that (i) Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent to make the Executive whole, on an after-tax basis, from the application of the Excise Tax, it being understood that the correction of an Overpayment may result in the Executive repaying to the Company an amount which is less than the Overpayment. The fees and expenses of the Accounting Firm shall be paid by the Company. 6. Non-Competition Covenant. 6.1. The Company desires the Executive to agree not to compete with the Company in the event of the Executive's termination of employment following a Change in Control. The Company is not willing to enter into this Agreement without such a covenant. As additional consideration for the agreement of the Company to make payments to or otherwise compensate the Executive under this Agreement, the Company has required the Executive to give a Non-Competition Covenant. The Company may not waive the non-competition obligations in this Section and be relieved of any of its other obligations under this Agreement. 6.2. In the event of a Change in Control, for the eighteen-month period following the termination of the Executive's employment with the Company for any reason, the Executive shall not, without the prior written consent of the Board, which consent may be withheld at the sole, absolute and uncontrolled discretion of such Board, engage or participate in, assist or have an interest in, whether as an officer, director, partner, owner, employee or otherwise, the operation, management or conduct of any business or enterprise that engages in the cotton seed breeding, production and marketing process in the same geographical area with any line of business in which the Company is now engaged. 6.3. Nothing in this Section shall prohibit the Executive from acquiring or holding, for investment purposes only, securities or ownership interest of any entity which may compete directly or indirectly with the Company. 6.4. Nothing in this Section shall prohibit the Executive from seeking or securing employment with a corporation which has a subsidiary or affiliate whose business activities include cotton seed breeding, production and marketing so long as the Executive's job duties and responsibilities do not require or allow the Executive to directly engage in any activities which would be in violation of this Section, and so long as he does not violate any of his confidentiality obligations to the Company. 6.5. In the event of a breach of this Agreement by the Executive, the Company may seek injunctive relief to prohibit the Executive from engaging in prohibited competition and/or the Company may initiate legal proceedings to collect actual damages to the Company resulting from such breach. A breach by the Executive shall not allow the Company to terminate its obligations to the Executive under the other provisions of this Agreement. 7. Confidentiality. 7.1. The Executive shall use his best efforts and diligence both during and after employment by the Company to protect the confidential, trade secret and/or proprietary character of all Confidential Information. The Executive shall not, directly or indirectly, use (for the Executive or another) or disclose any Confidential Information, for so long as it shall remain proprietary or protectible as confidential or trade secret information, except as may be necessary for the performance of the Executive's duties with the Company. The Executive shall promptly deliver to the Company, at the termination of the Executive's employment, or at any other time at the Company's request, without retaining any copies, all documents and other material in the Executive's possession relating, directly or indirectly, to any Confidential Information. 7.2. Each of the Executive's obligations in this Section 7 shall also apply to the confidential, trade secret and proprietary information learned or acquired by the Executive during his employment from others with whom the Company has a business relationship. The Executive understands that he is not to disclose to the Company, or use for its benefit, any of the confidential, trade secret or proprietary information of others, including any of the Executive's former employers. 7.3. In no event shall an asserted violation of the provisions of this Section 7 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 8. Successors; Binding Agreement. 8.1. This Agreement shall be binding upon and shall inure to the benefit of the Company, its Successors and Assigns, and the Company shall require any Successors and Assigns to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. 8.2. Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, his beneficiaries or legal representatives, except by will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal personal representative. 9. Fees and Expenses. The Company shall pay all legal fees and related expenses (including the costs of experts, evidence and counsel) incurred by the Executive as they become due as a result of the Executive seeking to obtain or enforce any right or benefit provided by this Agreement (including, but not limited to, any such fees and expenses incurred in connection with (i) the dispute and (ii) the Gross-Up Payment whether as a result of any applicable government taxing authority proceeding, audit or otherwise) or by any other plan or arrangement maintained by the Company under which the Executive is or may be entitled to receive benefits). 10. Notice. For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, by overnight courier or by facsimile, addressed to the respective addresses and facsimile numbers last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company. All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that notice of change of address shall be effective only upon receipt. 11. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company (except for any severance or termination policies, plans, programs or practices) and for which the Executive may qualify, nor shall anything herein limit or reduce such rights as the Executive may have under any other agreements with the Company (except for any severance or termination agreement). Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Company shall be payable in accordance with such plan or program, except as explicitly modified by this Agreement. 12. No Guaranteed Employment. The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and may be terminated by either the Executive or the Company at any time. 13. Settlement of Claims. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others. 14. Mutual Non-Disparagement. The Executive agrees that it will not make or publish any statement critical of the Company, its affiliates and their respective executive officers and directors, or in any way adversely affecting or otherwise maligning the business or reputation of any member of the Company, its affiliates and subsidiaries and their respective officers, directors and employees. The Company, its affiliates and subsidiaries agree and the Company shall use its best efforts to cause their respective executive officers and directors to agree, that they will not make or publish any statement critical of the Executive, or in any way adversely affecting or otherwise maligning the Executive's reputation. 15. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. 16. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without giving effect to the conflict of laws principles thereof. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in the State of Delaware. 17. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 18. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the day and year first above written. DELTA AND PINE LAND COMPANY ATTEST: By: /s/ W.T. Jagodinski ---------------------- ------------------------------- Name: W.T. Jagodinski Title: President and Chief Executive Officer By: /s/ R.D. Greene ----------------------------- R.D. Greene EX-10 5 exh10_4.txt EXHIBIT 10.4 EXHIBIT 10.4 SEVERANCE PROTECTION AGREEMENT FOR EXECUTIVE OFFICERS THIS AGREEMENT made as of 21st the day of August, 2006 (the "Effective Date"), by and between Delta and Pine Land Company (the "Company") and Charles R. Dismuke, Jr. (the "Executive"). WHEREAS, the Board of Directors of the Company (the "Board") recognizes that the possibility of a Change in Control (as hereinafter defined) exists and that the threat or the occurrence of a Change in Control can result in significant distractions of its key management personnel because of the uncertainties inherent in such a situation; WHEREAS, the Board has determined that it is essential and in the best interest of the Company and its stockholders to retain the services of the Executive in the event of the possibility of a Change in Control and to ensure his continued dedication and efforts in such event without undue concern for his personal financial and employment security; and WHEREAS, in order to induce the Executive to remain in the employ of the Company in light of a possible Change in Control, the Company desires to enter into this Agreement with the Executive to provide the Executive with certain benefits. NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein, it is agreed as follows: 1. Term of Agreement. This Agreement shall commence as of the Effective Date and shall continue in effect until December 31, 2008; provided, however, that on December 31, 2008 and on each anniversary thereof, the term of this Agreement shall be automatically extended for one year unless either the Company or the Executive shall have given six months written notice to the other prior thereto that the term of this Agreement shall not be so extended; and provided, further, however, that notwithstanding any such notice by the Company not to extend, the term of this Agreement shall not expire prior to the expiration of 24 months after the occurrence of a Change in Control. 2. Definitions. 2.1. Accrued Compensation. For purposes of this Agreement, "Accrued Compensation" shall mean an amount which shall include all amounts earned or accrued through the "Termination Date" (as hereinafter defined) but not paid as of the Termination Date including (a) base salary, (b) reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the Termination Date, (c) vacation and sick leave pay (to the extent provided by Company policy or applicable law), and (d) bonuses and incentive compensation (other than the "Pro Rata Bonus" (as hereinafter defined)). 2.2. Base Amount. For purposes of this Agreement, "Base Amount" shall mean the greater of (a) the Executive's annual base salary at the rate in effect immediately prior to the Change in Control and (b) the Executive's annual base salary at the rate in effect on the Termination Date, and shall include all amounts of his base salary that are deferred under the qualified and non-qualified employee benefit plans of the Company or any other agreement or arrangement. 2.3. Bonus Amount. For purposes of this Agreement, "Bonus Amount" shall mean the Executive's highest annual bonus earned (whether paid or unpaid) during any one of the last five fiscal years that ended prior to the Change in Control (or, in each case, such lesser period for which annual bonuses were paid or payable to the Executive). 2.4. Cause. For purposes of this Agreement, a termination of employment is for "Cause" if the Executive has been convicted of a felony involving moral turpitude or the termination is evidenced by a resolution adopted in good faith by two-thirds of the Board that the Executive (a) intentionally and continually failed substantially to perform his reasonably assigned duties with the Company (other than a failure resulting from the Executive's incapacity due to physical or mental illness or from the Executive's assignment of duties that would constitute "Good Reason" as hereinafter defined) which failure continued for a period of at least thirty days after a written notice of demand for substantial performance has been delivered to the Executive specifying the manner in which the Executive has failed substantially to perform, or (b) intentionally engaged in conduct which is demonstrably and materially injurious to the Company; provided, however, that no termination of the Executive's employment shall be for Cause as set forth in clause (b) above until (x) there shall have been delivered to the Executive a copy of a written notice setting forth that the Executive was guilty of the conduct set forth in clause (b) and specifying the particulars thereof in detail, and (y) the Executive shall have been provided an opportunity to be heard in person by the Board (with the assistance of the Executive's counsel if the Executive so desires). Neither an act nor a failure to act, on the Executive's part shall be considered "intentional" unless the Executive has acted or failed to act with a lack of good faith and with a lack of reasonable belief that the Executive's action or failure to act was in the best interest of the Company. Notwithstanding anything contained in this Agreement to the contrary, no failure to perform by the Executive after a Notice of Termination is given by the Executive shall constitute Cause for purposes of this Agreement. 2.5. Change in Control. For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any of the following: (a) An acquisition (other than directly from the Company) by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of the then outstanding common shares ("Shares") or the combined voting power of the Company's then outstanding voting securities; provided, however, in determining whether a Change in Control has occurred pursuant to this Section, Shares or voting securities which are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a "Subsidiary"), (ii) the Company or its Subsidiaries, or (iii) any Person in connection with a "Non-Control Transaction" (as hereinafter defined); (b) The individuals who on August 1, 2006 are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least two-thirds of the members of the Board; provided, however, that if the election, or nomination for election by the Company's common stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or (c) The consummation of: (1) A merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued, unless such merger, consolidation or reorganization is a "Non-Control Transaction." A "Non-Control Transaction" shall mean a merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued where: (A) the stockholders of the Company, immediately before such merger, consolidation or reorganization, own directly or indirectly immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation or reorganization (the "Surviving Corporation") in substantially the same proportion as their ownership of the voting securities immediately before such merger, consolidation or reorganization, (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least two-thirds of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning a majority of the voting securities of the Surviving Corporation, and (C) no Person other than (1) the Company, (2) any Subsidiary, (3) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation or reorganization, was maintained by the Company or any Subsidiary, or (4) any Person who, immediately prior to such merger, consolidation or reorganization had Beneficial Ownership of twenty percent (20%) or more of the then outstanding voting securities or Shares, has Beneficial Ownership of twenty percent (20%) or more of the combined voting power of the Surviving Corporation's then outstanding voting securities or its common stock. (2) A complete liquidation or dissolution of the Company; or (3) The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary or the distribution to the Company's stockholders of the stock of a Subsidiary or any other assets). Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the then outstanding Shares or voting securities as a result of the acquisition of Shares or voting securities by the Company which, by reducing the number of Shares or voting securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Shares or voting securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Shares or voting securities which increases the percentage of the then outstanding Shares or voting securities Beneficially Owned by the Subject Person, then a Change in Control shall occur. 2.6. Company. For purposes of this Agreement, the "Company" shall include the Company's "Successors and Assigns" (as hereinafter defined). 2.7. Confidential Information. For purposes of this Agreement means (a) all technical and business information of the Company, whether patentable or not, which is of a confidential, trade secret and/or proprietary character and that is either developed by the Executive (alone or with others) or to which the Executive has had access during his employment, (b) all confidential evaluations, and (c) the confidential use or non-use by the Company of technical or business information in the public domain. 2.8. Disability. For purposes of this Agreement, "Disability" shall mean a physical or mental infirmity which impairs the Executive's ability to substantially perform his duties with the Company for a period of one hundred eighty consecutive days and the Executive has not returned to his full time employment prior to the Termination Date as stated in the "Notice of Termination" (as hereinafter defined). 2.9. Good Reason. (a) For purposes of this Agreement, "Good Reason" shall mean the occurrence after a Change in Control of any of the events or conditions described in subsections (1) through (9) hereof: (1) a change in the Executive's status, title, position or responsibilities (including reporting responsibilities) which represents an adverse change from his status, title, position or responsibilities as in effect at any time within ninety days preceding the date of a Change in Control or at any time thereafter; the assignment to the Executive of any duties or responsibilities which are inconsistent with his status, title, position or responsibilities as in effect at any time within ninety days preceding the date of a Change in Control or at any time thereafter; or any removal of the Executive from or failure to reappoint or reelect him to any of such offices or positions, except in connection with the termination of his employment for Disability, Cause, as a result of his death or by the Executive other than for Good Reason; (2) a reduction in the Executive's base salary or any failure to pay the Executive any compensation or benefits to which he is entitled within five days of notice thereof; (3) a termination or reduction, without consent, of the facilities (including office space and general location) and staff reporting available to the Executive; (4) the Company's requiring the Executive to be based at any office or location more than 30 miles from that location at which he performed his services for the Company immediately prior to the Change in Control, except for (x) travel reasonably required in the performance of the Executive's responsibilities and (y) any relocation as to which the Executive has consented in writing; (5) the failure by the Company to provide the Executive with compensation and benefits, in the aggregate, at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each other employee benefit plan, program and practice in which the Executive was participating at any time within ninety days preceding the date of a Change in Control or at any time thereafter; (6) the insolvency or the filing (by any party, including the Company) of a petition for bankruptcy of the Company, which petition is not dismissed within sixty days; (7) any material breach by the Company of any provision of this Agreement; (8) any purported termination of the Executive's employment for Cause by the Company which does not comply with the terms of Section 2.4; or (9) the failure of the Company to obtain an agreement, satisfactory to the Executive, from any Successors and Assigns to assume and agree to perform this Agreement, as contemplated in Section 9 hereof. (b) Any event or condition described in Section 2.9(a)(1) through (9) which occurs prior to a Change in Control but which the Executive reasonably demonstrates (1) was at the request of a third party, or (2) otherwise arose in connection with, or in anticipation of, a Change in Control which actually occurs, shall constitute Good Reason for purposes of this Agreement notwithstanding that it occurred prior to the Change in Control. (c) The Executive's right to terminate his employment pursuant to this Section 2.9 shall not be affected by his incapacity due to a Disability. 2.10. Notice of Termination. For purposes of this Agreement, following a Change in Control, "Notice of Termination" shall mean a written notice of termination from the Company of the Executive's employment which indicates the specific termination provision in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. 2.11. Pro Rata Bonus. For purposes of this Agreement, "Pro Rata Bonus" shall mean an amount equal to the Bonus Amount multiplied by a fraction the numerator of which is the number of days in the Company's fiscal year in which Executive's employment terminates through the Termination Date and the denominator of which is 365. 2.12. Successors and Assigns. For purposes of this Agreement, "Successors and Assigns" shall mean a corporation or other entity acquiring all or substantially all the assets and business of the Company whether by operation of law or otherwise, and any affiliate of such Successors and Assigns. 2.13. Termination Date. For purposes of this Agreement, "Termination Date" shall mean (a) in the case of the Executive's death, his date of death, (b) in the case of Good Reason, the last day of his employment, and (b) in all other cases, the date specified in the Notice of Termination; provided, however, that if the Executive's employment is terminated by the Company for Cause or due to Disability, the date specified in the Notice of Termination shall be at least 30 days from the date the Notice of Termination is given to the Executive, provided that in the case of Disability the Executive shall not have returned to the full-time performance of his duties during such period of at least 30 days. 3. Termination of Employment. If, during the term of this Agreement, the Executive's employment with the Company shall be terminated within twenty-four months following a Change in Control, the Executive shall be entitled to the following compensation and benefits: 3.1. If the Executive's employment with the Company shall be terminated (a) by the Company for Cause or Disability, (b) by reason of the Executive's death, or (c) by the Executive other than for Good Reason and other than during the 30 day period commencing on the first anniversary of the date of the occurrence of a Change in Control (the "Window Period"), the Company shall pay to the Executive the Accrued Compensation and, if such termination is other than by the Company for Cause, the Pro Rata Bonus. 3.2. If the Executive's employment with the Company shall be terminated for any reason other than as specified in Section 3.1 or during the Window Period, the Executive shall be entitled to the following: (a) the Company shall pay the Executive all Accrued Compensation and a Pro-Rata Bonus. (b) the Company shall pay the Executive as severance pay and in lieu of any further compensation for periods subsequent to the Termination Date, in a single payment an amount in cash equal to three times the sum of (1) the Base Amount and (2) the Bonus Amount. (c) the Company shall maintain for the benefit of the Executive and his spouse and any dependents, at the expense of the Company and at no additional cost to the Executive, for 36 months from the Termination Date, all Executive benefit programs and arrangements, including but not limited to health insurance, including employee medical plan benefits, group life insurance, individual life insurance coverage, accidental death and dismemberment coverage, long term disability coverage, and other fringe benefits or benefit plans generally afforded other executive officers of the Company. If any such coverage cannot be maintained because of requirements of the insurance or other companies providing such benefits, the Company shall provide and pay for alternative coverage providing essentially identical benefits at no additional cost to the Executive. The above period is to be in addition to that period of time that the Executive may elect COBRA coverage under such applicable benefit plans. In this regard, it is the specific agreement of the parties that those benefits which are typically available under COBRA coverage, at the expense of the Executive, will be available to the Executive at his expense for a period of 18 months following the expiration of the 36 months listed above, even though COBRA coverage might otherwise be unavailable as provided by law. (d) the Company shall make available at its expense for the Executive's use for 36 months following the Termination Date, a company vehicle of a make and model in accordance with the vehicle policy in effect as of the date of the Change in Control. (e) the Executive will likely be required to employ a reputable national executive career transition agency to assist him in locating and securing suitable employment opportunities. To compensate the Executive for the costs which he will likely incur, the Company will pay to the Executive at the time of termination an amount equal to $30,000. The Executive will be responsible for any and all expenses in pursuing an executive level employment or job opportunity search and the Company shall have no other or further obligations to the Executive except as otherwise provided in this Agreement. (f) The Company shall pay the Executive a lump sum payment in an amount equal to difference between the present values of (1) the Executive's retirement benefit under the Company Retirement Plan (the "Retirement Plan"), determined on the date of termination as if the Executive were credited with an additional three Years of Credited Service (as such term is defined in the Retirement Plan) and annual compensation continued at the same rate as in effect on the CIC Date under the Retirement Plan and (2) the Executive's retirement benefit under the Retirement Plan, determined on the date of termination based on the Executive's actual Years of Credited Service under the Retirement Plan. (g) the Company shall provide the Executive with reasonable secretarial assistance, a voice mailbox, a laptop computer, an email account and a mail drop service for 36 months following the Termination Date to allow the Executive to initiate and continue his job search as though he were still actively employed by the Company, and actively handling Company matters. 3.3. (a) The amounts provided for in Sections 3.1 and 3.2(a), (b), (e) and (f) shall be paid in a single lump sum cash payment within five days after the Executive's Termination Date (or earlier, if required by applicable law). (b) In the event that the Executive is a "specified employee" for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") on the Executive's Termination Date, and if the Company determines that the delay is necessary in order to comply with Section 409A(a)(2)(B) of the Code and an Accounting Firm (as defined in Section 6.2) agrees with the Company's determination, payments of benefits upon termination of employment (other than under Section 3.1 and Accrued Compensation under Section 3.2(a)) shall be made (with interest) within ten (10) days following (i) the date that is six months after the Termination Date or (ii) the date of the Executive's death, if earlier. 3.4. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Executive in any subsequent employment except as provided in Section 3.2(c). 3.5. The Executive's entitlement to any other compensation or benefits or any indemnification shall be determined in accordance with the Company's employee benefit plans and other applicable programs, policies and practices or any indemnification agreement then in effect. 4. Notice of Termination. Following a Change in Control, any purported termination of the Executive's employment by the Company shall be communicated by Notice of Termination to the Executive. For purposes of this Agreement, no such purported termination shall be effective without such Notice of Termination. 5. Treatment of Equity Awards. Nothing in this Agreement shall amend or modify the terms of any equity compensation award or grant document that the Executive holds or to which the Executive is a party. 6. Excise Tax Limitation. 6.1. Gross-Up Payment. In the event it shall be determined that any payment (other than the payment provided for in this Section) or distribution of any type to or for the benefit of the Executive, by the Company, any of its affiliates, any Person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder) or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any income tax, employment tax or Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal, state and local income taxes and employment taxes at the highest marginal rate of federal, state and local income taxation and employment taxation in the calendar year in which the Gross-Up Payment is to be made and/or the calendar year in which the Termination Date occurs, as applicable, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. 6.2. Determination By Accountant. All mathematical determinations, and determinations as to whether any of the Total Payments are "parachute payments" (within the meaning of Section 280G of the Code), that are required to be made under this Subsection, including determinations as to whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and amounts relevant to the last sentence of this Subsection shall be made by an independent accounting firm selected by the Executive from among the four largest accounting firms in the United States (the "Accounting Firm"), which shall provide its determination (the "Determination"), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter, both to the Company and the Executive by no later than ten days following the Termination Date, if applicable, or such earlier time as is requested by the Company or the Executive. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive and the Company that no Excise Tax is payable (including the reasons therefor) and that he has substantial authority not to report any Excise Tax on his federal income tax return. If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within ten (10) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, absent manifest error. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Company should have been made ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayments"). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Company to or for the benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Company, and otherwise reasonably cooperate with the Company to correct such Overpayment, provided, however, that (i) Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent to make the Executive whole, on an after-tax basis, from the application of the Excise Tax, it being understood that the correction of an Overpayment may result in the Executive repaying to the Company an amount which is less than the Overpayment. The fees and expenses of the Accounting Firm shall be paid by the Company. 7. Non-Competition Covenant. 7.1. The Company desires the Executive to agree not to compete with the Company in the event of the Executive's termination of employment following a Change in Control. The Company is not willing to enter into this Agreement without such a covenant. As additional consideration for the agreement of the Company to make payments to or otherwise compensate the Executive under this Agreement, the Company has required the Executive to give a Non-Competition Covenant. The Company may not waive the non-competition obligations in this Section and be relieved of any of its other obligations under this Agreement. 7.2. In the event of a Change in Control, for the eighteen-month period following the termination of the Executive's employment with the Company for any reason, the Executive shall not, without the prior written consent of the Board, which consent may be withheld at the sole, absolute and uncontrolled discretion of such Board, engage or participate in, assist or have an interest in, whether as an officer, director, partner, owner, employee or otherwise, the operation, management or conduct of any business or enterprise that engages in the cotton seed breeding, production and marketing process in the same geographical area with any line of business in which the Company is now engaged. 7.3. Nothing in this Section shall prohibit the Executive from acquiring or holding, for investment purposes only, securities or ownership interest of any entity which may compete directly or indirectly with the Company. 7.4. Nothing in this Section shall prohibit the Executive from seeking or securing employment with a corporation which has a subsidiary or affiliate whose business activities include cotton seed breeding, production and marketing so long as the Executive's job duties and responsibilities do not require or allow the Executive to directly engage in any activities which would be in violation of this Section, and so long as he does not violate any of his confidentiality obligations to the Company. 7.5. In the event of a breach of this Agreement by the Executive, the Company may seek injunctive relief to prohibit the Executive from engaging in prohibited competition and/or the Company may initiate legal proceedings to collect actual damages to the Company resulting from such breach. A breach by the Executive shall not allow the Company to terminate its obligations to the Executive under the other provisions of this Agreement. 8. Confidentiality. 8.1. The Executive shall use his best efforts and diligence both during and after employment by the Company to protect the confidential, trade secret and/or proprietary character of all Confidential Information. The Executive shall not, directly or indirectly, use (for the Executive or another) or disclose any Confidential Information, for so long as it shall remain proprietary or protectible as confidential or trade secret information, except as may be necessary for the performance of the Executive's duties with the Company. The Executive shall promptly deliver to the Company, at the termination of the Executive's employment, or at any other time at the Company's request, without retaining any copies, all documents and other material in the Executive's possession relating, directly or indirectly, to any Confidential Information. 8.2. Each of the Executive's obligations in this Section 8 shall also apply to the confidential, trade secret and proprietary information learned or acquired by the Executive during his employment from others with whom the Company has a business relationship. The Executive understands that he is not to disclose to the Company, or use for its benefit, any of the confidential, trade secret or proprietary information of others, including any of the Executive's former employers. 8.3. In no event shall an asserted violation of the provisions of this Section 8 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 9. Successors; Binding Agreement. 9.1. This Agreement shall be binding upon and shall inure to the benefit of the Company, its Successors and Assigns, and the Company shall require any Successors and Assigns to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. 9.2. Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, his beneficiaries or legal representatives, except by will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal personal representative. 10. Fees and Expenses. The Company shall pay all legal fees and related expenses (including the costs of experts, evidence and counsel) incurred by the Executive as they become due as a result of (a) the Executive seeking to obtain or enforce any right or benefit provided by this Agreement (including, but not limited to, any such fees and expenses incurred in connection with (i) the dispute and (ii) the Gross-Up Payment whether as a result of any applicable government taxing authority proceeding, audit or otherwise) or by any other plan or arrangement maintained by the Company under which the Executive is or may be entitled to receive benefits), and (b) the Executive's hearing before the Board as contemplated in Section 2.4 of this Agreement; provided, however, that the circumstances set forth in clause (a) occurred on or after a Change in Control. 11. Notice. For the purposes of this Agreement, notices and all other communications provided for in the Agreement (including the Notice of Termination) shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, by overnight courier or by facsimile, addressed to the respective addresses and facsimile numbers last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company. All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that notice of change of address shall be effective only upon receipt. 12. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company (except for any severance or termination policies, plans, programs or practices) and for which the Executive may qualify, nor shall anything herein limit or reduce such rights as the Executive may have under any other agreements with the Company (except for any severance or termination agreement). Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Company shall be payable in accordance with such plan or program, except as explicitly modified by this Agreement. 13. No Guaranteed Employment. The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and may be terminated by either the Executive or the Company at any time. 14. Settlement of Claims. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others. 15. Mutual Non-Disparagement. The Executive agrees that it will not make or publish any statement critical of the Company, its affiliates and their respective executive officers and directors, or in any way adversely affecting or otherwise maligning the business or reputation of any member of the Company, its affiliates and subsidiaries and their respective officers, directors and employees. The Company, its affiliates and subsidiaries agree and the Company shall use its best efforts to cause their respective executive officers and directors to agree, that they will not make or publish any statement critical of the Executive, or in any way adversely affecting or otherwise maligning the Executive's reputation. 16. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. 17. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without giving effect to the conflict of laws principles thereof. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in the State of Delaware. 18. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 19. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the day and year first above written. DELTA AND PINE LAND COMPANY ATTEST: By: /s/ W.T. Jagodinski ---------------------- ------------------------------- Name: W.T. Jagodinski Title: President and Chief Executive Officer By: /s/ Charles R. Dismuke, Jr. ----------------------------------- Charles R. Dismuke, Jr. EX-10 6 exh10_5.txt EXHIBIT 10.5 EXHIBIT 10.5 SEVERANCE PROTECTION AGREEMENT FOR EXECUTIVE OFFICERS THIS AGREEMENT made as of 24th the day of August, 2006 (the "Effective Date"), by and between Delta and Pine Land Company (the "Company") and William V. Hugie (the "Executive"). WHEREAS, the Board of Directors of the Company (the "Board") recognizes that the possibility of a Change in Control (as hereinafter defined) exists and that the threat or the occurrence of a Change in Control can result in significant distractions of its key management personnel because of the uncertainties inherent in such a situation; WHEREAS, the Board has determined that it is essential and in the best interest of the Company and its stockholders to retain the services of the Executive in the event of the possibility of a Change in Control and to ensure his continued dedication and efforts in such event without undue concern for his personal financial and employment security; and WHEREAS, in order to induce the Executive to remain in the employ of the Company in light of a possible Change in Control, the Company desires to enter into this Agreement with the Executive to provide the Executive with certain benefits. NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein, it is agreed as follows: 1. Term of Agreement. This Agreement shall commence as of the Effective Date and shall continue in effect until December 31, 2008; provided, however, that on December 31, 2008 and on each anniversary thereof, the term of this Agreement shall be automatically extended for one year unless either the Company or the Executive shall have given six months written notice to the other prior thereto that the term of this Agreement shall not be so extended; and provided, further, however, that notwithstanding any such notice by the Company not to extend, the term of this Agreement shall not expire prior to the expiration of 24 months after the occurrence of a Change in Control. 2. Definitions. 2.1. Accrued Compensation. For purposes of this Agreement, "Accrued Compensation" shall mean an amount which shall include all amounts earned or accrued through the "Termination Date" (as hereinafter defined) but not paid as of the Termination Date including (a) base salary, (b) reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the Termination Date, (c) vacation and sick leave pay (to the extent provided by Company policy or applicable law), and (d) bonuses and incentive compensation (other than the "Pro Rata Bonus" (as hereinafter defined)). 2.2. Base Amount. For purposes of this Agreement, "Base Amount" shall mean the greater of (a) the Executive's annual base salary at the rate in effect immediately prior to the Change in Control and (b) the Executive's annual base salary at the rate in effect on the Termination Date, and shall include all amounts of his base salary that are deferred under the qualified and non-qualified employee benefit plans of the Company or any other agreement or arrangement. 2.3. Bonus Amount. For purposes of this Agreement, "Bonus Amount" shall mean the Executive's highest annual bonus earned (whether paid or unpaid) during any one of the last five fiscal years that ended prior to the Change in Control (or, in each case, such lesser period for which annual bonuses were paid or payable to the Executive). 2.4. Cause. For purposes of this Agreement, a termination of employment is for "Cause" if the Executive has been convicted of a felony involving moral turpitude or the termination is evidenced by a resolution adopted in good faith by two-thirds of the Board that the Executive (a) intentionally and continually failed substantially to perform his reasonably assigned duties with the Company (other than a failure resulting from the Executive's incapacity due to physical or mental illness or from the Executive's assignment of duties that would constitute "Good Reason" as hereinafter defined) which failure continued for a period of at least thirty days after a written notice of demand for substantial performance has been delivered to the Executive specifying the manner in which the Executive has failed substantially to perform, or (b) intentionally engaged in conduct which is demonstrably and materially injurious to the Company; provided, however, that no termination of the Executive's employment shall be for Cause as set forth in clause (b) above until (x) there shall have been delivered to the Executive a copy of a written notice setting forth that the Executive was guilty of the conduct set forth in clause (b) and specifying the particulars thereof in detail, and (y) the Executive shall have been provided an opportunity to be heard in person by the Board (with the assistance of the Executive's counsel if the Executive so desires). Neither an act nor a failure to act, on the Executive's part shall be considered "intentional" unless the Executive has acted or failed to act with a lack of good faith and with a lack of reasonable belief that the Executive's action or failure to act was in the best interest of the Company. Notwithstanding anything contained in this Agreement to the contrary, no failure to perform by the Executive after a Notice of Termination is given by the Executive shall constitute Cause for purposes of this Agreement. 2.5. Change in Control. For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any of the following: (a) An acquisition (other than directly from the Company) by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of the then outstanding common shares ("Shares") or the combined voting power of the Company's then outstanding voting securities; provided, however, in determining whether a Change in Control has occurred pursuant to this Section, Shares or voting securities which are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a "Subsidiary"), (ii) the Company or its Subsidiaries, or (iii) any Person in connection with a "Non-Control Transaction" (as hereinafter defined); (b) The individuals who on August 1, 2006 are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least two-thirds of the members of the Board; provided, however, that if the election, or nomination for election by the Company's common stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or (c) The consummation of: (1) A merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued, unless such merger, consolidation or reorganization is a "Non-Control Transaction." A "Non-Control Transaction" shall mean a merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued where: (A) the stockholders of the Company, immediately before such merger, consolidation or reorganization, own directly or indirectly immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation or reorganization (the "Surviving Corporation") in substantially the same proportion as their ownership of the voting securities immediately before such merger, consolidation or reorganization, (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least two-thirds of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning a majority of the voting securities of the Surviving Corporation, and (C) no Person other than (1) the Company, (2) any Subsidiary, (3) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation or reorganization, was maintained by the Company or any Subsidiary, or (4) any Person who, immediately prior to such merger, consolidation or reorganization had Beneficial Ownership of twenty percent (20%) or more of the then outstanding voting securities or Shares, has Beneficial Ownership of twenty percent (20%) or more of the combined voting power of the Surviving Corporation's then outstanding voting securities or its common stock. (2) A complete liquidation or dissolution of the Company; or (3) The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary or the distribution to the Company's stockholders of the stock of a Subsidiary or any other assets). Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the then outstanding Shares or voting securities as a result of the acquisition of Shares or voting securities by the Company which, by reducing the number of Shares or voting securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Shares or voting securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Shares or voting securities which increases the percentage of the then outstanding Shares or voting securities Beneficially Owned by the Subject Person, then a Change in Control shall occur. 2.6. Company. For purposes of this Agreement, the "Company" shall include the Company's "Successors and Assigns" (as hereinafter defined). 2.7. Confidential Information. For purposes of this Agreement means (a) all technical and business information of the Company, whether patentable or not, which is of a confidential, trade secret and/or proprietary character and that is either developed by the Executive (alone or with others) or to which the Executive has had access during his employment, (b) all confidential evaluations, and (c) the confidential use or non-use by the Company of technical or business information in the public domain. 2.8. Disability. For purposes of this Agreement, "Disability" shall mean a physical or mental infirmity which impairs the Executive's ability to substantially perform his duties with the Company for a period of one hundred eighty consecutive days and the Executive has not returned to his full time employment prior to the Termination Date as stated in the "Notice of Termination" (as hereinafter defined). 2.9. Good Reason. (a) For purposes of this Agreement, "Good Reason" shall mean the occurrence after a Change in Control of any of the events or conditions described in subsections (1) through (9) hereof: (1) a change in the Executive's status, title, position or responsibilities (including reporting responsibilities) which represents an adverse change from his status, title, position or responsibilities as in effect at any time within ninety days preceding the date of a Change in Control or at any time thereafter; the assignment to the Executive of any duties or responsibilities which are inconsistent with his status, title, position or responsibilities as in effect at any time within ninety days preceding the date of a Change in Control or at any time thereafter; or any removal of the Executive from or failure to reappoint or reelect him to any of such offices or positions, except in connection with the termination of his employment for Disability, Cause, as a result of his death or by the Executive other than for Good Reason; (2) a reduction in the Executive's base salary or any failure to pay the Executive any compensation or benefits to which he is entitled within five days of notice thereof; (3) a termination or reduction, without consent, of the facilities (including office space and general location) and staff reporting available to the Executive; (4) the Company's requiring the Executive to be based at any office or location more than 30 miles from that location at which he performed his services for the Company immediately prior to the Change in Control, except for (x) travel reasonably required in the performance of the Executive's responsibilities and (y) any relocation as to which the Executive has consented in writing; (5) the failure by the Company to provide the Executive with compensation and benefits, in the aggregate, at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each other employee benefit plan, program and practice in which the Executive was participating at any time within ninety days preceding the date of a Change in Control or at any time thereafter; (6) the insolvency or the filing (by any party, including the Company) of a petition for bankruptcy of the Company, which petition is not dismissed within sixty days; (7) any material breach by the Company of any provision of this Agreement; (8) any purported termination of the Executive's employment for Cause by the Company which does not comply with the terms of Section 2.4; or (9) the failure of the Company to obtain an agreement, satisfactory to the Executive, from any Successors and Assigns to assume and agree to perform this Agreement, as contemplated in Section 9 hereof. (b) Any event or condition described in Section 2.9(a)(1) through (9) which occurs prior to a Change in Control but which the Executive reasonably demonstrates (1) was at the request of a third party, or (2) otherwise arose in connection with, or in anticipation of, a Change in Control which actually occurs, shall constitute Good Reason for purposes of this Agreement notwithstanding that it occurred prior to the Change in Control. (c) The Executive's right to terminate his employment pursuant to this Section 2.9 shall not be affected by his incapacity due to a Disability. 2.10. Notice of Termination. For purposes of this Agreement, following a Change in Control, "Notice of Termination" shall mean a written notice of termination from the Company of the Executive's employment which indicates the specific termination provision in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. 2.11. Pro Rata Bonus. For purposes of this Agreement, "Pro Rata Bonus" shall mean an amount equal to the Bonus Amount multiplied by a fraction the numerator of which is the number of days in the Company's fiscal year in which Executive's employment terminates through the Termination Date and the denominator of which is 365. 2.12. Successors and Assigns. For purposes of this Agreement, "Successors and Assigns" shall mean a corporation or other entity acquiring all or substantially all the assets and business of the Company whether by operation of law or otherwise, and any affiliate of such Successors and Assigns. 2.13. Termination Date. For purposes of this Agreement, "Termination Date" shall mean (a) in the case of the Executive's death, his date of death, (b) in the case of Good Reason, the last day of his employment, and (b) in all other cases, the date specified in the Notice of Termination; provided, however, that if the Executive's employment is terminated by the Company for Cause or due to Disability, the date specified in the Notice of Termination shall be at least 30 days from the date the Notice of Termination is given to the Executive, provided that in the case of Disability the Executive shall not have returned to the full-time performance of his duties during such period of at least 30 days. 3. Termination of Employment. If, during the term of this Agreement, the Executive's employment with the Company shall be terminated within twenty-four months following a Change in Control, the Executive shall be entitled to the following compensation and benefits: 3.1. If the Executive's employment with the Company shall be terminated (a) by the Company for Cause or Disability, (b) by reason of the Executive's death, or (c) by the Executive other than for Good Reason and other than during the 30 day period commencing on the first anniversary of the date of the occurrence of a Change in Control (the "Window Period"), the Company shall pay to the Executive the Accrued Compensation and, if such termination is other than by the Company for Cause, the Pro Rata Bonus. 3.2. If the Executive's employment with the Company shall be terminated for any reason other than as specified in Section 3.1 or during the Window Period, the Executive shall be entitled to the following: (a) the Company shall pay the Executive all Accrued Compensation and a Pro-Rata Bonus. (b) the Company shall pay the Executive as severance pay and in lieu of any further compensation for periods subsequent to the Termination Date, in a single payment an amount in cash equal to three times the sum of (1) the Base Amount and (2) the Bonus Amount. (c) the Company shall maintain for the benefit of the Executive and his spouse and any dependents, at the expense of the Company and at no additional cost to the Executive, for 36 months from the Termination Date, all Executive benefit programs and arrangements, including but not limited to health insurance, including employee medical plan benefits, group life insurance, individual life insurance coverage, accidental death and dismemberment coverage, long term disability coverage, and other fringe benefits or benefit plans generally afforded other executive officers of the Company. If any such coverage cannot be maintained because of requirements of the insurance or other companies providing such benefits, the Company shall provide and pay for alternative coverage providing essentially identical benefits at no additional cost to the Executive. The above period is to be in addition to that period of time that the Executive may elect COBRA coverage under such applicable benefit plans. In this regard, it is the specific agreement of the parties that those benefits which are typically available under COBRA coverage, at the expense of the Executive, will be available to the Executive at his expense for a period of 18 months following the expiration of the 36 months listed above, even though COBRA coverage might otherwise be unavailable as provided by law. (d) the Company shall make available at its expense for the Executive's use for 36 months following the Termination Date, a company vehicle of a make and model in accordance with the vehicle policy in effect as of the date of the Change in Control. (e) the Executive will likely be required to employ a reputable national executive career transition agency to assist him in locating and securing suitable employment opportunities. To compensate the Executive for the costs which he will likely incur, the Company will pay to the Executive at the time of termination an amount equal to $30,000. The Executive will be responsible for any and all expenses in pursuing an executive level employment or job opportunity search and the Company shall have no other or further obligations to the Executive except as otherwise provided in this Agreement. (f) The Company shall pay the Executive a lump sum payment in an amount equal to difference between the present values of (1) the Executive's retirement benefit under the Company Retirement Plan (the "Retirement Plan"), determined on the date of termination as if the Executive were credited with an additional three Years of Credited Service (as such term is defined in the Retirement Plan) and annual compensation continued at the same rate as in effect on the CIC Date under the Retirement Plan and (2) the Executive's retirement benefit under the Retirement Plan, determined on the date of termination based on the Executive's actual Years of Credited Service under the Retirement Plan. (g) the Company shall provide the Executive with reasonable secretarial assistance, a voice mailbox, a laptop computer, an email account and a mail drop service for 36 months following the Termination Date to allow the Executive to initiate and continue his job search as though he were still actively employed by the Company, and actively handling Company matters. 3.3. (a) The amounts provided for in Sections 3.1 and 3.2(a), (b), (e) and (f) shall be paid in a single lump sum cash payment within five days after the Executive's Termination Date (or earlier, if required by applicable law). (b) In the event that the Executive is a "specified employee" for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") on the Executive's Termination Date, and if the Company determines that the delay is necessary in order to comply with Section 409A(a)(2)(B) of the Code and an Accounting Firm (as defined in Section 6.2) agrees with the Company's determination, payments of benefits upon termination of employment (other than under Section 3.1 and Accrued Compensation under Section 3.2(a)) shall be made (with interest) within ten (10) days following (i) the date that is six months after the Termination Date or (ii) the date of the Executive's death, if earlier. 3.4. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Executive in any subsequent employment except as provided in Section 3.2(c). 3.5. The Executive's entitlement to any other compensation or benefits or any indemnification shall be determined in accordance with the Company's employee benefit plans and other applicable programs, policies and practices or any indemnification agreement then in effect. 4. Notice of Termination. Following a Change in Control, any purported termination of the Executive's employment by the Company shall be communicated by Notice of Termination to the Executive. For purposes of this Agreement, no such purported termination shall be effective without such Notice of Termination. 5. Treatment of Equity Awards. Nothing in this Agreement shall amend or modify the terms of any equity compensation award or grant document that the Executive holds or to which the Executive is a party. 6. Excise Tax Limitation. 6.1. Gross-Up Payment. In the event it shall be determined that any payment (other than the payment provided for in this Section) or distribution of any type to or for the benefit of the Executive, by the Company, any of its affiliates, any Person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder) or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any income tax, employment tax or Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal, state and local income taxes and employment taxes at the highest marginal rate of federal, state and local income taxation and employment taxation in the calendar year in which the Gross-Up Payment is to be made and/or the calendar year in which the Termination Date occurs, as applicable, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. 6.2. Determination By Accountant. All mathematical determinations, and determinations as to whether any of the Total Payments are "parachute payments" (within the meaning of Section 280G of the Code), that are required to be made under this Subsection, including determinations as to whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and amounts relevant to the last sentence of this Subsection shall be made by an independent accounting firm selected by the Executive from among the four largest accounting firms in the United States (the "Accounting Firm"), which shall provide its determination (the "Determination"), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter, both to the Company and the Executive by no later than ten days following the Termination Date, if applicable, or such earlier time as is requested by the Company or the Executive. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive and the Company that no Excise Tax is payable (including the reasons therefor) and that he has substantial authority not to report any Excise Tax on his federal income tax return. If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within ten (10) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, absent manifest error. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Company should have been made ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayments"). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Company to or for the benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Company, and otherwise reasonably cooperate with the Company to correct such Overpayment, provided, however, that (i) Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent to make the Executive whole, on an after-tax basis, from the application of the Excise Tax, it being understood that the correction of an Overpayment may result in the Executive repaying to the Company an amount which is less than the Overpayment. The fees and expenses of the Accounting Firm shall be paid by the Company. 7. Non-Competition Covenant. 7.1. The Company desires the Executive to agree not to compete with the Company in the event of the Executive's termination of employment following a Change in Control. The Company is not willing to enter into this Agreement without such a covenant. As additional consideration for the agreement of the Company to make payments to or otherwise compensate the Executive under this Agreement, the Company has required the Executive to give a Non-Competition Covenant. The Company may not waive the non-competition obligations in this Section and be relieved of any of its other obligations under this Agreement. 7.2. In the event of a Change in Control, for the eighteen-month period following the termination of the Executive's employment with the Company for any reason, the Executive shall not, without the prior written consent of the Board, which consent may be withheld at the sole, absolute and uncontrolled discretion of such Board, engage or participate in, assist or have an interest in, whether as an officer, director, partner, owner, employee or otherwise, the operation, management or conduct of any business or enterprise that engages in the cotton seed breeding, production and marketing process in the same geographical area with any line of business in which the Company is now engaged. 7.3. Nothing in this Section shall prohibit the Executive from acquiring or holding, for investment purposes only, securities or ownership interest of any entity which may compete directly or indirectly with the Company. 7.4. Nothing in this Section shall prohibit the Executive from seeking or securing employment with a corporation which has a subsidiary or affiliate whose business activities include cotton seed breeding, production and marketing so long as the Executive's job duties and responsibilities do not require or allow the Executive to directly engage in any activities which would be in violation of this Section, and so long as he does not violate any of his confidentiality obligations to the Company. 7.5. In the event of a breach of this Agreement by the Executive, the Company may seek injunctive relief to prohibit the Executive from engaging in prohibited competition and/or the Company may initiate legal proceedings to collect actual damages to the Company resulting from such breach. A breach by the Executive shall not allow the Company to terminate its obligations to the Executive under the other provisions of this Agreement. 8. Confidentiality. 8.1. The Executive shall use his best efforts and diligence both during and after employment by the Company to protect the confidential, trade secret and/or proprietary character of all Confidential Information. The Executive shall not, directly or indirectly, use (for the Executive or another) or disclose any Confidential Information, for so long as it shall remain proprietary or protectible as confidential or trade secret information, except as may be necessary for the performance of the Executive's duties with the Company. The Executive shall promptly deliver to the Company, at the termination of the Executive's employment, or at any other time at the Company's request, without retaining any copies, all documents and other material in the Executive's possession relating, directly or indirectly, to any Confidential Information. 8.2. Each of the Executive's obligations in this Section 8 shall also apply to the confidential, trade secret and proprietary information learned or acquired by the Executive during his employment from others with whom the Company has a business relationship. The Executive understands that he is not to disclose to the Company, or use for its benefit, any of the confidential, trade secret or proprietary information of others, including any of the Executive's former employers. 8.3. In no event shall an asserted violation of the provisions of this Section 8 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 9. Successors; Binding Agreement. 9.1. This Agreement shall be binding upon and shall inure to the benefit of the Company, its Successors and Assigns, and the Company shall require any Successors and Assigns to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. 9.2. Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, his beneficiaries or legal representatives, except by will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal personal representative. 10. Fees and Expenses. The Company shall pay all legal fees and related expenses (including the costs of experts, evidence and counsel) incurred by the Executive as they become due as a result of (a) the Executive seeking to obtain or enforce any right or benefit provided by this Agreement (including, but not limited to, any such fees and expenses incurred in connection with (i) the dispute and (ii) the Gross-Up Payment whether as a result of any applicable government taxing authority proceeding, audit or otherwise) or by any other plan or arrangement maintained by the Company under which the Executive is or may be entitled to receive benefits), and (b) the Executive's hearing before the Board as contemplated in Section 2.4 of this Agreement; provided, however, that the circumstances set forth in clause (a) occurred on or after a Change in Control. 11. Notice. For the purposes of this Agreement, notices and all other communications provided for in the Agreement (including the Notice of Termination) shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, by overnight courier or by facsimile, addressed to the respective addresses and facsimile numbers last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company. All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that notice of change of address shall be effective only upon receipt. 12. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company (except for any severance or termination policies, plans, programs or practices) and for which the Executive may qualify, nor shall anything herein limit or reduce such rights as the Executive may have under any other agreements with the Company (except for any severance or termination agreement). Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Company shall be payable in accordance with such plan or program, except as explicitly modified by this Agreement. 13. No Guaranteed Employment. The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and may be terminated by either the Executive or the Company at any time. 14. Settlement of Claims. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others. 15. Mutual Non-Disparagement. The Executive agrees that it will not make or publish any statement critical of the Company, its affiliates and their respective executive officers and directors, or in any way adversely affecting or otherwise maligning the business or reputation of any member of the Company, its affiliates and subsidiaries and their respective officers, directors and employees. The Company, its affiliates and subsidiaries agree and the Company shall use its best efforts to cause their respective executive officers and directors to agree, that they will not make or publish any statement critical of the Executive, or in any way adversely affecting or otherwise maligning the Executive's reputation. 16. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. 17. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without giving effect to the conflict of laws principles thereof. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in the State of Delaware. 18. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 19. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the day and year first above written. DELTA AND PINE LAND COMPANY ATTEST: By: /s/ W.T. Jagodinski ---------------------- ------------------------------- Name: W.T. Jagodinski Title: President and Chief Executive Officer By: /s/ William V. Hugie ------------------------------ William V. Hugie EX-10 7 exh10_6.txt EXHIBIT 10.6 EXHIBIT 10.6 SEVERANCE PROTECTION AGREEMENT FOR EXECUTIVE OFFICERS THIS AGREEMENT made as of the 24th day of August, 2006 (the "Effective Date"), by and between Delta and Pine Land Company (the "Company") and James H. Willeke (the "Executive"). WHEREAS, the Board of Directors of the Company (the "Board") recognizes that the possibility of a Change in Control (as hereinafter defined) exists and that the threat or the occurrence of a Change in Control can result in significant distractions of its key management personnel because of the uncertainties inherent in such a situation; WHEREAS, the Board has determined that it is essential and in the best interest of the Company and its stockholders to retain the services of the Executive in the event of the possibility of a Change in Control and to ensure his continued dedication and efforts in such event without undue concern for his personal financial and employment security; and WHEREAS, in order to induce the Executive to remain in the employ of the Company in light of a possible Change in Control, the Company desires to enter into this Agreement with the Executive to provide the Executive with certain benefits. NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein, it is agreed as follows: 1. Term of Agreement. This Agreement shall commence as of the Effective Date and shall continue in effect until December 31, 2008; provided, however, that on December 31, 2008 and on each anniversary thereof, the term of this Agreement shall be automatically extended for one year unless either the Company or the Executive shall have given six months written notice to the other prior thereto that the term of this Agreement shall not be so extended; and provided, further, however, that notwithstanding any such notice by the Company not to extend, the term of this Agreement shall not expire prior to the expiration of 24 months after the occurrence of a Change in Control. 2. Definitions. 2.1. Accrued Compensation. For purposes of this Agreement, "Accrued Compensation" shall mean an amount which shall include all amounts earned or accrued through the "Termination Date" (as hereinafter defined) but not paid as of the Termination Date including (a) base salary, (b) reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the Termination Date, (c) vacation and sick leave pay (to the extent provided by Company policy or applicable law), and (d) bonuses and incentive compensation (other than the "Pro Rata Bonus" (as hereinafter defined)). 2.2. Base Amount. For purposes of this Agreement, "Base Amount" shall mean the greater of (a) the Executive's annual base salary at the rate in effect immediately prior to the Change in Control and (b) the Executive's annual base salary at the rate in effect on the Termination Date, and shall include all amounts of his base salary that are deferred under the qualified and non-qualified employee benefit plans of the Company or any other agreement or arrangement. 2.3. Bonus Amount. For purposes of this Agreement, "Bonus Amount" shall mean the Executive's highest annual bonus earned (whether paid or unpaid) during any one of the last five fiscal years that ended prior to the Change in Control (or, in each case, such lesser period for which annual bonuses were paid or payable to the Executive). 2.4. Cause. For purposes of this Agreement, a termination of employment is for "Cause" if the Executive has been convicted of a felony involving moral turpitude or the termination is evidenced by a resolution adopted in good faith by two-thirds of the Board that the Executive (a) intentionally and continually failed substantially to perform his reasonably assigned duties with the Company (other than a failure resulting from the Executive's incapacity due to physical or mental illness or from the Executive's assignment of duties that would constitute "Good Reason" as hereinafter defined) which failure continued for a period of at least thirty days after a written notice of demand for substantial performance has been delivered to the Executive specifying the manner in which the Executive has failed substantially to perform, or (b) intentionally engaged in conduct which is demonstrably and materially injurious to the Company; provided, however, that no termination of the Executive's employment shall be for Cause as set forth in clause (b) above until (x) there shall have been delivered to the Executive a copy of a written notice setting forth that the Executive was guilty of the conduct set forth in clause (b) and specifying the particulars thereof in detail, and (y) the Executive shall have been provided an opportunity to be heard in person by the Board (with the assistance of the Executive's counsel if the Executive so desires). Neither an act nor a failure to act, on the Executive's part shall be considered "intentional" unless the Executive has acted or failed to act with a lack of good faith and with a lack of reasonable belief that the Executive's action or failure to act was in the best interest of the Company. Notwithstanding anything contained in this Agreement to the contrary, no failure to perform by the Executive after a Notice of Termination is given by the Executive shall constitute Cause for purposes of this Agreement. 2.5. Change in Control. For purposes of this Agreement, a "Change in Control" shall mean the occurrence of any of the following: (a) An acquisition (other than directly from the Company) by any "Person" (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), immediately after which such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty percent (20%) or more of the then outstanding common shares ("Shares") or the combined voting power of the Company's then outstanding voting securities; provided, however, in determining whether a Change in Control has occurred pursuant to this Section, Shares or voting securities which are acquired in a "Non-Control Acquisition" (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an employee benefit plan (or a trust forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (for purposes of this definition, a "Subsidiary"), (ii) the Company or its Subsidiaries, or (iii) any Person in connection with a "Non-Control Transaction" (as hereinafter defined); (b) The individuals who on August 1, 2006 are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least two-thirds of the members of the Board; provided, however, that if the election, or nomination for election by the Company's common stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest") including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or (c) The consummation of: (1) A merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued, unless such merger, consolidation or reorganization is a "Non-Control Transaction." A "Non-Control Transaction" shall mean a merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued where: (A) the stockholders of the Company, immediately before such merger, consolidation or reorganization, own directly or indirectly immediately following such merger, consolidation or reorganization, at least fifty percent (50%) of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation or reorganization (the "Surviving Corporation") in substantially the same proportion as their ownership of the voting securities immediately before such merger, consolidation or reorganization, (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least two-thirds of the members of the board of directors of the Surviving Corporation, or a corporation beneficially directly or indirectly owning a majority of the voting securities of the Surviving Corporation, and (C) no Person other than (1) the Company, (2) any Subsidiary, (3) any employee benefit plan (or any trust forming a part thereof) that, immediately prior to such merger, consolidation or reorganization, was maintained by the Company or any Subsidiary, or (4) any Person who, immediately prior to such merger, consolidation or reorganization had Beneficial Ownership of twenty percent (20%) or more of the then outstanding voting securities or Shares, has Beneficial Ownership of twenty percent (20%) or more of the combined voting power of the Surviving Corporation's then outstanding voting securities or its common stock. (2) A complete liquidation or dissolution of the Company; or (3) The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary or the distribution to the Company's stockholders of the stock of a Subsidiary or any other assets). Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the "Subject Person") acquired Beneficial Ownership of more than the permitted amount of the then outstanding Shares or voting securities as a result of the acquisition of Shares or voting securities by the Company which, by reducing the number of Shares or voting securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Shares or voting securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Shares or voting securities which increases the percentage of the then outstanding Shares or voting securities Beneficially Owned by the Subject Person, then a Change in Control shall occur. 2.6. Company. For purposes of this Agreement, the "Company" shall include the Company's "Successors and Assigns" (as hereinafter defined). 2.7. Confidential Information. For purposes of this Agreement means (a) all technical and business information of the Company, whether patentable or not, which is of a confidential, trade secret and/or proprietary character and that is either developed by the Executive (alone or with others) or to which the Executive has had access during his employment, (b) all confidential evaluations, and (c) the confidential use or non-use by the Company of technical or business information in the public domain. 2.8. Disability. For purposes of this Agreement, "Disability" shall mean a physical or mental infirmity which impairs the Executive's ability to substantially perform his duties with the Company for a period of one hundred eighty consecutive days and the Executive has not returned to his full time employment prior to the Termination Date as stated in the "Notice of Termination" (as hereinafter defined). 2.9. Good Reason. (a) For purposes of this Agreement, "Good Reason" shall mean the occurrence after a Change in Control of any of the events or conditions described in subsections (1) through (9) hereof: (1) a change in the Executive's status, title, position or responsibilities (including reporting responsibilities) which represents an adverse change from his status, title, position or responsibilities as in effect at any time within ninety days preceding the date of a Change in Control or at any time thereafter; the assignment to the Executive of any duties or responsibilities which are inconsistent with his status, title, position or responsibilities as in effect at any time within ninety days preceding the date of a Change in Control or at any time thereafter; or any removal of the Executive from or failure to reappoint or reelect him to any of such offices or positions, except in connection with the termination of his employment for Disability, Cause, as a result of his death or by the Executive other than for Good Reason; (2) a reduction in the Executive's base salary or any failure to pay the Executive any compensation or benefits to which he is entitled within five days of notice thereof; (3) a termination or reduction, without consent, of the facilities (including office space and general location) and staff reporting available to the Executive; (4) the Company's requiring the Executive to be based at any office or location more than 30 miles from that location at which he performed his services for the Company immediately prior to the Change in Control, except for (x) travel reasonably required in the performance of the Executive's responsibilities and (y) any relocation as to which the Executive has consented in writing; (5) the failure by the Company to provide the Executive with compensation and benefits, in the aggregate, at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each other employee benefit plan, program and practice in which the Executive was participating at any time within ninety days preceding the date of a Change in Control or at any time thereafter; (6) the insolvency or the filing (by any party, including the Company) of a petition for bankruptcy of the Company, which petition is not dismissed within sixty days; (7) any material breach by the Company of any provision of this Agreement; (8) any purported termination of the Executive's employment for Cause by the Company which does not comply with the terms of Section 2.4; or (9) the failure of the Company to obtain an agreement, satisfactory to the Executive, from any Successors and Assigns to assume and agree to perform this Agreement, as contemplated in Section 8 hereof. (b) Any event or condition described in Section 2.9(a)(1) through (9) which occurs prior to a Change in Control but which the Executive reasonably demonstrates (1) was at the request of a third party, or (2) otherwise arose in connection with, or in anticipation of, a Change in Control which actually occurs, shall constitute Good Reason for purposes of this Agreement notwithstanding that it occurred prior to the Change in Control. (c) The Executive's right to terminate his employment pursuant to this Section 2.9 shall not be affected by his incapacity due to a Disability. 2.10. Notice of Termination. For purposes of this Agreement, following a Change in Control, "Notice of Termination" shall mean a written notice of termination from the Company of the Executive's employment which indicates the specific termination provision in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. 2.11. Pro Rata Bonus. For purposes of this Agreement, "Pro Rata Bonus" shall mean an amount equal to the Bonus Amount multiplied by a fraction the numerator of which is the number of days in the Company's fiscal year in which Executive's employment terminates through the Termination Date and the denominator of which is 365. 2.12. Successors and Assigns. For purposes of this Agreement, "Successors and Assigns" shall mean a corporation or other entity acquiring all or substantially all the assets and business of the Company whether by operation of law or otherwise, and any affiliate of such Successors and Assigns. 2.13. Termination Date. For purposes of this Agreement, "Termination Date" shall mean (a) in the case of the Executive's death, his date of death, (b) in the case of Good Reason, the last day of his employment, and (b) in all other cases, the date specified in the Notice of Termination; provided, however, that if the Executive's employment is terminated by the Company for Cause or due to Disability, the date specified in the Notice of Termination shall be at least 30 days from the date the Notice of Termination is given to the Executive, provided that in the case of Disability the Executive shall not have returned to the full-time performance of his duties during such period of at least 30 days. 3. Termination of Employment. If, during the term of this Agreement, the Executive's employment with the Company shall be terminated within twenty-four months following a Change in Control, the Executive shall be entitled to the following compensation and benefits: 3.1. If the Executive's employment with the Company shall be terminated (a) by the Company for Cause or Disability, (b) by reason of the Executive's death, or (c) by the Executive other than for Good Reason and other than during the 30 day period commencing on the first anniversary of the date of the occurrence of a Change in Control (the "Window Period"), the Company shall pay to the Executive the Accrued Compensation and, if such termination is other than by the Company for Cause, the Pro Rata Bonus. 3.2. If the Executive's employment with the Company shall be terminated for any reason other than as specified in Section 3.1 or during the Window Period, the Executive shall be entitled to the following: (a) the Company shall pay the Executive all Accrued Compensation and a Pro-Rata Bonus. (b) the Company shall pay the Executive as severance pay and in lieu of any further compensation for periods subsequent to the Termination Date, in a single payment, an amount in cash equal to one and one-half times the sum of (1) the Base Amount and (2) the Bonus Amount. (c) the Company shall maintain for the benefit of the Executive and his spouse and any dependents, at the expense of the Company and at no additional cost to the Executive, for 24 months from the Termination Date, all Executive benefit programs and arrangements, including but not limited to health insurance, including employee medical plan benefits, group life insurance, individual life insurance coverage, accidental death and dismemberment coverage, long term disability coverage, and other fringe benefits or benefit plans generally afforded other executive officers of the Company. If any such coverage cannot be maintained because of requirements of the insurance or other companies providing such benefits, the Company shall provide and pay for alternative coverage providing essentially identical benefits at no additional cost to the Executive. The above period is to be in addition to that period of time that the Executive may elect COBRA coverage under such applicable benefit plans. In this regard, it is the specific agreement of the parties that those benefits which are typically available under COBRA coverage, at the expense of the Executive, will be available to the Executive at his expense for a period of 18 months following the expiration of the 24 months listed above, even though COBRA coverage might otherwise be unavailable as provided by law. (d) the Company shall make available at its expense for the Executive's use for 18 months following the Termination Date, a company vehicle of a make and model in accordance with the vehicle policy in effect as of the date of the Change in Control. (e) the Executive will likely be required to employ a reputable national executive career transition agency to assist him in locating and securing suitable employment opportunities. To compensate the Executive for the costs which he will likely incur, the Company will pay to the Executive at the time of termination an amount equal to $30,000. The Executive will be responsible for any and all expenses in pursuing an executive level employment or job opportunity search and the Company shall have no other or further obligations to the Executive except as otherwise provided in this Agreement. (f) The Company shall pay the Executive a lump sum payment in an amount equal to difference between the present values of (1) the Executive's retirement benefit under the Company Retirement Plan (the "Retirement Plan"), determined on the date of termination as if the Executive were credited with an additional one and one-half Years of Credited Service (as such term is defined in the Retirement Plan) and annual compensation continued at the same rate as in effect on the CIC Date under the Retirement Plan and (2) the Executive's retirement benefit under the Retirement Plan, determined on the date of termination based on the Executive's actual Years of Credited Service under the Retirement Plan. 3.3. (a) The amounts provided for in Sections 3.1 and 3.2(a), (b), (e) and (f) shall be paid in a single lump sum cash payment within five days after the Executive's Termination Date (or earlier, if required by applicable law). (b) In the event that the Executive is a "specified employee" for purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code") on the Executive's Termination Date, and if the Company determines that the delay is necessary in order to comply with Section 409A(a)(2)(B) of the Code and an Accounting Firm (as defined in Section 6.2) agrees with the Company's determination, payments of benefits upon termination of employment (other than under Section 3.1 and Accrued Compensation under Section 3.2(a)) shall be made (with interest) within ten (10) days following (i) the date that is six months after the Termination Date or (ii) the date of the Executive's death, if earlier. 3.4. The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Executive in any subsequent employment except as provided in Section 3.2(c). 3.5. The Executive's entitlement to any other compensation or benefits or any indemnification shall be determined in accordance with the Company's employee benefit plans and other applicable programs, policies and practices or any indemnification agreement then in effect. 4. Notice of Termination. Following a Change in Control, any purported termination of the Executive's employment by the Company shall be communicated by Notice of Termination to the Executive. For purposes of this Agreement, no such purported termination shall be effective without such Notice of Termination. 5. Treatment of Equity Awards. Nothing in this Agreement shall amend or modify the terms of any equity compensation award or grant document that the Executive holds or to which the Executive is a party. 6. Excise Tax Limitation. 6.1. Gross-Up Payment. In the event it shall be determined that any payment (other than the payment provided for in this Section) or distribution of any type to or for the benefit of the Executive, by the Company, any of its affiliates, any Person who acquires ownership or effective control of the Company or ownership of a substantial portion of the Company's assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder) or any affiliate of such Person, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the "Total Payments"), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest and penalties, are collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including any income tax, employment tax or Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments. For purposes of determining the amount of the Gross-Up Payment, the Executive shall be deemed to pay federal, state and local income taxes and employment taxes at the highest marginal rate of federal, state and local income taxation and employment taxation in the calendar year in which the Gross-Up Payment is to be made and/or the calendar year in which the Termination Date occurs, as applicable, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. 6.2. Determination By Accountant. All mathematical determinations, and determinations as to whether any of the Total Payments are "parachute payments" (within the meaning of Section 280G of the Code), that are required to be made under this Subsection, including determinations as to whether a Gross-Up Payment is required, the amount of such Gross-Up Payment and amounts relevant to the last sentence of this Subsection shall be made by an independent accounting firm selected by the Executive from among the four largest accounting firms in the United States (the "Accounting Firm"), which shall provide its determination (the "Determination"), together with detailed supporting calculations regarding the amount of any Gross-Up Payment and any other relevant matter, both to the Company and the Executive by no later than ten days following the Termination Date, if applicable, or such earlier time as is requested by the Company or the Executive. If the Accounting Firm determines that no Excise Tax is payable by the Executive, it shall furnish the Executive and the Company with an opinion reasonably acceptable to the Executive and the Company that no Excise Tax is payable (including the reasons therefor) and that he has substantial authority not to report any Excise Tax on his federal income tax return. If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive within ten (10) days after the Determination (and all accompanying calculations and other material supporting the Determination) is delivered to the Company or the Executive. Any determination by the Accounting Firm shall be binding upon the Company and the Executive, absent manifest error. As a result of uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments not made by the Company should have been made ("Underpayment"), or that Gross-Up Payments will have been made by the Company which should not have been made ("Overpayments"). In either such event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred. In the case of an Underpayment, the amount of such Underpayment (together with any interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly paid by the Company to or for the benefit of the Executive. In the case of an Overpayment, the Executive shall, at the direction and expense of the Company, take such steps as are reasonably necessary (including, if reasonable, the filing of returns and claims for refund), follow reasonable instructions from, and procedures established by, the Company, and otherwise reasonably cooperate with the Company to correct such Overpayment, provided, however, that (i) Executive shall not in any event be obligated to return to the Company an amount greater than the net after-tax portion of the Overpayment that he has retained or has recovered as a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a manner consistent with the intent to make the Executive whole, on an after-tax basis, from the application of the Excise Tax, it being understood that the correction of an Overpayment may result in the Executive repaying to the Company an amount which is less than the Overpayment. The fees and expenses of the Accounting Firm shall be paid by the Company. 7. Confidentiality. 7.1. The Executive shall use his best efforts and diligence both during and after employment by the Company to protect the confidential, trade secret and/or proprietary character of all Confidential Information. The Executive shall not, directly or indirectly, use (for the Executive or another) or disclose any Confidential Information, for so long as it shall remain proprietary or protectible as confidential or trade secret information, except as may be necessary for the performance of the Executive's duties with the Company. The Executive shall promptly deliver to the Company, at the termination of the Executive's employment, or at any other time at the Company's request, without retaining any copies, all documents and other material in the Executive's possession relating, directly or indirectly, to any Confidential Information. 7.2. Each of the Executive's obligations in this Section 7 shall also apply to the confidential, trade secret and proprietary information learned or acquired by the Executive during his employment from others with whom the Company has a business relationship. The Executive understands that he is not to disclose to the Company, or use for its benefit, any of the confidential, trade secret or proprietary information of others, including any of the Executive's former employers. 7.3. In no event shall an asserted violation of the provisions of this Section 7 constitute a basis for deferring or withholding any amounts otherwise payable to the Executive under this Agreement. 8. Successors; Binding Agreement. 8.1. This Agreement shall be binding upon and shall inure to the benefit of the Company, its Successors and Assigns, and the Company shall require any Successors and Assigns to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. 8.2. Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, his beneficiaries or legal representatives, except by will or by the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal personal representative. 9. Fees and Expenses. The Company shall pay all legal fees and related expenses (including the costs of experts, evidence and counsel) incurred by the Executive as they become due as a result of (a) the Executive seeking to obtain or enforce any right or benefit provided by this Agreement (including, but not limited to, any such fees and expenses incurred in connection with (i) the dispute and (ii) the Gross-Up Payment whether as a result of any applicable government taxing authority proceeding, audit or otherwise) or by any other plan or arrangement maintained by the Company under which the Executive is or may be entitled to receive benefits), and (b) the Executive's hearing before the Board as contemplated in Section 2.4 of this Agreement; provided, however, that the circumstances set forth in clause (a) occurred on or after a Change in Control. 10. Notice. For the purposes of this Agreement, notices and all other communications provided for in the Agreement (including the Notice of Termination) shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, by overnight courier or by facsimile, addressed to the respective addresses and facsimile numbers last given by each party to the other, provided that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company. All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that notice of change of address shall be effective only upon receipt. 11. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Executive's continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company (except for any severance or termination policies, plans, programs or practices) and for which the Executive may qualify, nor shall anything herein limit or reduce such rights as the Executive may have under any other agreements with the Company (except for any severance or termination agreement). Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Company shall be payable in accordance with such plan or program, except as explicitly modified by this Agreement. 12. No Guaranteed Employment. The Executive and the Company acknowledge that, except as may otherwise be provided under any other written agreement between the Executive and the Company, the employment of the Executive by the Company is "at will" and may be terminated by either the Executive or the Company at any time. 13. Settlement of Claims. The Company's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others. 14. Mutual Non-Disparagement. The Executive agrees that it will not make or publish any statement critical of the Company, its affiliates and their respective executive officers and directors, or in any way adversely affecting or otherwise maligning the business or reputation of any member of the Company, its affiliates and subsidiaries and their respective officers, directors and employees. The Company, its affiliates and subsidiaries agree and the Company shall use its best efforts to cause their respective executive officers and directors to agree, that they will not make or publish any statement critical of the Executive, or in any way adversely affecting or otherwise maligning the Executive's reputation. 15. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. 16. Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without giving effect to the conflict of laws principles thereof. Any action brought by any party to this Agreement shall be brought and maintained in a court of competent jurisdiction in the State of Delaware. 17. Severability. The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof. 18. Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof. IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer and the Executive has executed this Agreement as of the day and year first above written. DELTA AND PINE LAND COMPANY ATTEST: By: /s/ W.T. Jagodinski ---------------------- ------------------------------- Name: W.T. Jagodinski Title: President and Chief Executive Officer By: /s/ James H. Willeke ----------------------------- James H. Willeke -----END PRIVACY-ENHANCED MESSAGE-----