MIA 184801699v3 EMPLOYMENT AGREEMENT THOMAS ERMI EMPLOYMENT AGREEMENT (the “Agreement”) dated as of September 15, 2015 by and between AgroFresh Solutions, Inc. (the “Company”), and Thomas Ermi (“Executive”). NOW THEREFORE, in consideration of the...
MIA 184801699v3
EMPLOYMENT AGREEMENT
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EMPLOYMENT AGREEMENT (the “Agreement”) dated as of September 15, 2015 by and between
AgroFresh Solutions, Inc. (the “Company”), and ▇▇▇▇▇▇ ▇▇▇▇ (“Executive”).
NOW THEREFORE, in consideration of the premises and mutual covenants herein and for other
good and valuable consideration, the parties agree as follows:
1. Term of Employment. Subject to the provisions of Section 7 of this Agreement, Executive
shall continue to be employed by the Company for a period commencing on July 31, 2015 (the
“Effective Date”) and ending on the day before the third anniversary of the Effective Date (the
“Employment Term”) on the terms and subject to the conditions set forth in this Agreement; provided,
however, that commencing with the third anniversary of the Effective Date and on each anniversary
thereafter (each an “Extension Date”), the Employment Term shall be automatically extended for an
additional one-year period, unless the Company or Executive provides the other party hereto 30 days
prior written notice before the next Extension Date that the Employment Term shall not be so extended.
2. Position.
a. During the Employment Term, Executive shall serve as Vice President, Secretary,
General Counsel and Chief Human Resources Officer of the Company and will report to the Chief
Executive Officer of the Company. In such position, Executive shall have the duties and authority
commensurate with the position as shall be determined from time to time by the Chief Executive Officer
or the Board of Directors of the Company (the “Board”) provided that his duties and authority will at all
times be commensurate with those of a general counsel and chief human resources officer of a company
comparable to the Company in the United States.
b. During the Employment Term, Executive will devote his full business time and best
efforts, in accordance with legal and regulatory requirements, to the performance of Executive’s duties
hereunder and will not engage in any other business, profession or occupation for compensation or
otherwise which would conflict or interfere with the rendition of such services either directly or
indirectly, without the prior written consent of the Board; provided that nothing herein shall preclude
Executive, subject to the prior approval of the Board, from accepting appointment to or continuing to
serve on any board of directors or trustees of any business corporation or any charitable organization;
provided in each case, and in the aggregate, that such activities do not conflict or interfere with the
performance of Executive’s duties hereunder or conflict with Section 8.
3. Base Salary. During the Employment Term, the Company shall pay Executive a base salary
(the “Base Salary”) at the annual rate of $300,000, payable in regular installments in accordance with the
Company’s usual payment practices. At the beginning of the 2016 calendar year, or earlier at the
discretion of the Compensation Committee of the Board of Directors (the “Compensation Committee”),
the Company shall perform a review of the Base Salary with the assistance of a qualified compensation
consultant to provide market data and Executive shall be entitled to an increase in Executive’s Base
Salary for 2016, if any, as may be determined in the sole discretion of the Compensation Committee.
Thereafter, Executive shall be entitled to annual reviews and increases in Executive’s Base Salary, if any,
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as may be determined in the sole discretion of the Compensation Committee. The Executive’s Base
Salary, as in effect from time to time, may not be decreased at any time during the Employment Term.
4. Incentive Compensation.
a. With respect to each full fiscal year during the Employment Term, Executive shall be
eligible to earn an annual bonus award (an “Annual Bonus”) payable in cash with a target amount equal to
40% of Executive’s Base Salary (the “Target”), based upon the achievement of performance objectives
established by the Compensation Committee each year. The “fiscal year” during the Employment Term
shall be equal to the calendar year unless otherwise established by the Board in consultation with
Executive. The performance objectives for payment of the Annual Bonus shall be established in writing
by the Compensation Committee, on or before the end of the third month of the applicable fiscal year and
shall include performance metrics which enable the Executive to earn up to two times the Target in the
event certain performance conditions are met. Any Annual Bonus earned for any calendar year shall be
paid within the first 2 ½ months of the immediately following calendar year.
b. Notwithstanding Section 4(a), Executive’s Annual Bonus for calendar year 2015 shall be
a pro rated portion of 100% of Target based upon the Company’s achievement of an EBITDA target of
$100,000,000 for 2015 (including the results of any predecessor company). If the Company’s
achievement of EBITDA for 2015 is above or below the target of $100,000,000, Executive’s Annual
Bonus for calendar year 2015 may be adjusted upwards to a maximum of 200% of Target (in the event the
Company’s achievement of EBITDA for 2015 is above the target) or downwards (in the event the
Company’s achievement of EBITDA for 2015 is below the target) as determined by the Compensation
Committee, in its sole and absolute discretion and in each case, pro rated as provided below. Any Annual
Bonus for calendar year 2015 shall be paid within the first 2 ½ months of the 2016 calendar year and shall
be pro rated by multiplying Executive’s Annual Bonus for calendar year 2015 by a fraction, the numerator
of which is the number of days during which Executive was employed by the Company in 2015 and the
denominator of which is 365.
c. The Company has adopted, subject to approval by the Company’s stockholders, an
equity incentive plan reserving 2,750,000 shares of common stock of the Company (the “Equity Plan”).
As soon as reasonably practicable following execution of this Agreement and the adoption of the Equity
Plan (the “Grant Date”), the Company shall grant the Executive an award (the “Equity Award”) under the
Equity Plan with respect to 123,780 shares of common stock of the Company, subject to the approval of
the Equity Plan by the Company’s stockholders and subject to applicable limits under the Equity Plan.
The Equity Award shall consist of restricted stock (“Restricted Stock”) with respect to 41,250 shares of
common stock subject to the Equity Award and nonqualified stock options (“Options”) with respect to
82,500 shares of common stock subject to the Equity Award, with an exercise price per share equal to the
greater of $12.00 or the fair market value of a share of common stock on the Grant Date. The vesting
schedule for the Restricted Stock and Options subject to the Equity Award shall be as follows:
(i) Except as otherwise provided in the final paragraph of this Section 4(c), 100% of
the Options subject to the Equity Award shall vest over three (3) years in three equal
installments on each anniversary of the Grant Date, beginning on the first anniversary of
the Grant Date; provided that Executive’s employment with the Company continues
through and on the applicable vesting date; and
(ii) Except as otherwise provided in the final paragraph of this Section 4(c), 100% of
the Restricted Stock subject to the Equity Award shall vest over three (3) years in three
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equal installments on each anniversary of the Grant Date, beginning on the first
anniversary of the Grant Date; provided that Executive’s employment with the Company
continues through and on the applicable vesting date and the performance metrics to be
determined by the Compensation Committee have been achieved with respect to calendar
year ending immediately prior to the year in which the applicable vesting date occurs.
Notwithstanding the foregoing, in the event the applicable performance metrics are not
achieved with respect to an applicable vesting date, other than the third vesting date (the
“Missed Vesting Date”), and Executive’s employment with the Company continues
through and on the subsequent vesting date (the “Subsequent Vesting Date”), if (A) the
performance metrics for the performance period(s) applicable to the Missed Vesting
Date(s), and (B) the performance metrics for the performance period applicable to the
Subsequent Vesting Date, are achieved on a cumulative basis, then the Restricted Stock
subject to the Equity Award that would have vested on Missed Vesting Date(s) shall vest
on the Subsequent Vesting Date.
The Restricted Stock and Options subject to the Equity Award shall be subject to such other terms as set
forth in the applicable grant agreements and in the underlying Equity Plan as adopted by the Company;
provided, however, the grant agreements shall provide that 100% of any unvested shares subject to the
Restricted Stock and Options subject to the Equity Award will vest immediately upon a Change in
Control (as defined in Section 4(f) of the Agreement), or upon a termination of Executive’s employment
by the Company without Cause (as defined in Section 7(a)(ii)) or by the Executive with Good Reason (as
defined in Section 7(c)(iii)). To the extent of any conflict between this Agreement and the Equity Plan or
the agreements for the Equity Award, the terms of this Agreement shall govern.
d. The Executive shall be eligible for additional grants of Restricted Stock, Options and any
other forms of incentive compensation during the Employment Term.
e. The Company may (i) cause the cancellation of the Equity Award or any additional
grants of Restricted Stock, Options and any other forms of incentive compensation during the
Employment Term, (ii) require reimbursement of the Equity Award or any additional grants of Restricted
Stock, Options and any other forms of incentive compensation during the Employment Term, and (iii)
effect any other right of recoupment of equity or other compensation provided under this Agreement or
otherwise, in all respects as to subclauses (i), (ii) and (iii) hereof, as required by and in accordance with
applicable law.
f. For purposes of this Agreement, “Change in Control” shall mean the occurrence of any
of the following:
(A) The acquisition by any Person (as used under the Securities Exchange Act of 1934
(the “Exchange Act”)) of Beneficial Ownership (within the meaning Rule 13d-3
promulgated under the Exchange Act) of more than fifty percent (50%) of either (1) the
value of then outstanding equity securities of the Company (the “Outstanding Company
Stock”) or (2) the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”) (the foregoing Beneficial Ownership hereinafter being
referred to as a “Controlling Interest”); provided, however, that for purposes of this
definition, the following acquisitions shall not constitute or result in a Change in
Control: (w) any acquisition by the Company; (x) any acquisition by any Person that as
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of July 31, 2015 owns Beneficial Ownership of a Controlling Interest; (y) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the Company
or any of its Related Entities (as defined under the AgroFresh Solutions, Inc. 2015
Incentive Compensation Plan); or (z) any acquisition by any entity pursuant to a
transaction which complies with clauses (a), (b) and (c) of subsection (C) below; or
(B) During any period of two (2) consecutive years (not including any period prior to
July 31, 2015) individuals who constitute the Board on July 31, 2015 (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to July 31, 2015 whose
election, or nomination for election by the Company’s shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Board; or
(C) Consummation of (1) a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving (x) the Company or (y) any of its
Subsidiaries (as defined under the AgroFresh Solutions, Inc. 2015 Incentive Compensation
Plan), but in the case of this clause (y) only if equity securities of the Company are issued
or issuable in connection with the transaction (each of the events referred to in this clause
(1) being hereinafter referred to as a “Business Reorganization”), or (2) a sale or other
disposition of all or substantially all of the assets of the Company, or the acquisition of
assets or equity of another entity by the Company or any of its Subsidiaries (each an
“Asset Sale”), in each case, unless, following such Business Reorganization or Asset Sale,
(a) all or substantially all of the individuals and entities who were the Beneficial Owners,
respectively, of the Outstanding Company Stock and Outstanding Company Voting
Securities immediately prior to such Business Reorganization or Asset Sale beneficially
own, directly or indirectly, more than fifty percent (50%) of the value of the then
outstanding equity securities and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of members of the board of
directors (or comparable governing body of an entity that does not have such a board), as
the case may be, of the entity resulting from such Business Reorganization or Asset Sale
(including, without limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or through one
or more subsidiaries) (the “Continuing Entity”) in substantially the same proportions as
their ownership, immediately prior to such Business Reorganization or Asset Sale, of the
Outstanding Company Stock and Outstanding Company Voting Securities, as the case
may be (excluding any outstanding equity or voting securities of the Continuing Entity
that such Beneficial Owners hold immediately following the consummation of the
Business Reorganization or Asset Sale as a result of their ownership, prior to such
consummation, of equity or voting securities of any company or other entity involved in
or forming part of such Business Reorganization or Asset Sale other than the Company),
(b) no Person (excluding any employee benefit plan (or related trust) of the Company or
any Continuing Entity or any entity controlled by the Continuing Entity or any Person
that as of the Effective Date owns Beneficial Ownership of a Controlling Interest)
beneficially owns, directly or indirectly, fifty percent (50%) or more of the value of the
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then outstanding equity securities of the Continuing Entity or the combined voting power
of the then outstanding voting securities of the Continuing Entity except to the extent that
such ownership existed prior to the Business Reorganization or Asset Sale and (c) at least
a majority of the members of the Board of Directors or other governing body of the
Continuing Entity were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such Business
Reorganization or Asset Sale; and
provided that such event constitutes a “change in control” for purposes of Section 409A of the Internal
Revenue Code of 1986, as amended (“Section 409A”).
5. Employee Benefits.
a. General. During the Employment Term, Executive shall be entitled to participate
in the Company’s employee benefit plans, as amended from time to time, as in effect from time to time
(collectively “Employee Benefits”), on the same basis as those benefits are generally made available to
other senior executives of the Company.
b. Life Insurance. During the Employment Term, the Company will provide
Executive life insurance covering at least 3 times his Base Salary.
c. Tax Preparation and Financial Planning Expenses. During the Employment Term,
the Company shall reimburse the Executive up to $5,000 per calendar year for annual tax preparation and
financial planning expenses.
6. Business Expenses. During the Employment Term, reasonable business expenses incurred by
Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in
accordance with Company policies.
7. Termination. The Employment Term and Executive’s employment hereunder may be
terminated by either party at any time and for any reason; provided that Executive will be required to give
the Company at least 60 days advance written notice of any resignation of Executive’s employment,
subject to and in accordance with the provisions of this Section 7. Notwithstanding any other provision of
this Agreement, subject to Sections 8, 9, 10, 11(f), 11(j), 11(m) and 11(o), the provisions of this Section 7
shall exclusively govern Executive’s and the Company’s rights and obligations related to termination of
this Agreement and the rights and remedies upon termination of employment with the Company and its
affiliates.
a. By the Company For Cause or Resignation by the Executive without Good Reason.
(i) The Employment Term and Executive’s employment hereunder may be terminated
by the Company for “Cause” (as defined below) and shall terminate automatically upon
Executive’s resignation without “Good Reason” (as defined below), provided that
Executive will be required to give the Company at least 60 days advance written notice of
any such resignation, and provided further that the Company may elect to waive such
notice period and to pay Executive his Base Salary then in effect and to continue his
benefits during the portion of the notice period that is waived in lieu of such notice.
(ii) For purposes of this Agreement “Cause” shall mean (A) Executive’s continued
failure to substantially perform Executive’s duties hereunder (other than as a result of
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total or partial incapacity due to physical or mental illness) for a period of 30 days
following written notice by the Company to Executive of such failure; provided that it is
understood that this clause (A) shall not permit the Company to terminate Executive’s
employment for Cause because of dissatisfaction with the quality of services provided
by or disagreement with the actions taken by Executive in the good faith performance of
Executive’s duties to the Company, (B) theft or embezzlement of Company property,
(C) Executive’s conviction of or plea of guilty or no contest to (x) a felony or (y) a
crime involving moral turpitude, (D) Executive’s willful malfeasance or willful
misconduct in connection with Executive’s duties hereunder or in connection with any
act or omission which is materially injurious to the financial condition or business
reputation of the Company or any of its subsidiaries or affiliates, or (E) Executive’s
material breach of any provisions of this Agreement.
(iii) If Executive’s employment is terminated by the Company for Cause, or if
Executive resigns without Good Reason, Executive shall be entitled to receive, within 30
days following such termination with respect to (A)-(C) below, and at such time, if any,
as the Employee Benefits under (D) below become due in accordance with the applicable
terms thereof:
(A) the Base Salary through the date of termination, to the extent not already paid;
(B) any Annual Bonus earned but unpaid as of the date of termination for any
previously completed fiscal year;
(C) reimbursement for any unreimbursed business expenses properly incurred by
Executive in accordance with the Company policy prior to the date of Executive’s
termination; and
(D) such vested Employee Benefits, if any, as to which Executive may be entitled under
the employee benefit plans of the Company as described in Section 5(a) (including,
without limitation, any retirement benefits, medical, life insurance or disability benefits,
accrued but unpaid vacation or other benefits Executive is entitled to pursuant to the terms
of the applicable plans then in effect (the amounts described in clauses (A) through (D)
hereof being referred to as the “Accrued Obligations”).
Following such termination of Executive’s employment by the Company for Cause or resignation
by Executive without Good Reason, except as set forth in this Section 7(a)(iii), Executive shall have no
further rights to any compensation or any other benefits in the nature of severance or termination pay or in
connection with the termination of his employment. Notwithstanding the foregoing, nothing in this
Section 7(a) shall affect the Executive’s right to any vested benefits under any employee benefit plans
sponsored by the Company, including but not limited to any retirement plans.
b. Disability or Death.
(i) The Employment Term and Executive’s employment hereunder shall terminate
upon Executive’s death and may be terminated by the Company if Executive becomes
physically or mentally incapacitated and is therefore unable for a period of six (6)
consecutive months or for an aggregate of nine (9) months in any twenty-four (24)
consecutive month period to perform Executive’s duties (such incapacity is hereinafter
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referred to as “Disability”); provided that a termination on the basis of a Disability must
occur within 90 days of the date when Executive is subject to termination due to
Disability. Any question as to the existence of the Disability of Executive as to which
Executive and the Company cannot agree shall be determined in writing by a qualified
independent physician mutually acceptable to Executive and the Company. If Executive
and the Company cannot agree as to a qualified independent physician, each shall appoint
such a physician and those two physicians shall select a third who shall make such
determination in writing. The determination of Disability made in writing to the Company
and Executive shall be final and conclusive for all purposes of the Agreement.
(ii) Upon termination of Executive’s employment hereunder for either Disability or
death, Executive or Executive’s estate (as the case may be) shall be entitled to receive, at
the times set forth in Section 7(a)(iii) hereof, the Accrued Obligations.
Following Executive’s termination of employment due to death or Disability, except as set forth in
this Section 7(b)(ii), Executive shall have no further rights to any compensation or any other benefits in
the nature of severance or termination pay or in connection with the termination of his employment.
Notwithstanding the foregoing, nothing in this Section 7(b) shall affect the Executive’s right to any vested
benefits under any employee benefit plans sponsored by the Company, including but not limited to any
retirement plans.
c. By the Company Without Cause or Resignation by Executive for Good Reason.
(i) The Employment Term and Executive’s employment hereunder may be terminated by
the Company without Cause or by Executive’s resignation for Good Reason.
(ii) If Executive’s employment is terminated by the Company without Cause (other than by
reason of death or Disability) or by Executive’s resignation for Good Reason, other than in
the event such termination occurs within six (6) months following a Change in Control,
which shall be governed exclusively by Section 7(d) hereof, and subject to the conditions
described below, Executive shall be entitled to receive:
(A) At the times set forth in Section 7(a)(iii) hereof, the Accrued Obligations;
(B) payment of an amount equal to 1.5 times the Base Salary in effect at the time of
termination, payable in equal installments in accordance with regular payroll procedures
established by the Company over a twelve month period beginning with the first payroll
date that occurs on or after the sixtieth (60th) day following the date on which the
Employment Term and Executive’s employment hereunder terminated;
(C) a pro rata portion of the Annual Bonus for the remainder of the calendar year in
which the Employment Term and Executive’s employment hereunder is terminated
calculated by taking the product of (a) Executive’s Annual Bonus that he would have
actually earned for the fiscal year in which the Employment Term and Executive’s
employment hereunder is terminated, had his employment with the Company continued
through the end of such calendar year (based upon the extent to which the performance
goals for the year are met, but without any exercise of negative discretion), multiplied by
(b) a fraction, the numerator of which is the number of days during which Executive was
employed by the Company in the year in which the Employment Term and Executive’s
employment hereunder is terminated and the denominator of which is 365. The amount
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due under this sub-paragraph (C), if any, shall be payable as and when the Annual Bonus
would have been payable to Executive had the Employment Term and Executive’s
employment hereunder not terminated; and
(D) if Executive elects continued coverage for himself or his eligible dependents under
any of the Company’s health plans pursuant to Section 4980B of the Code or any
comparable law (“COBRA”), for each month during which such coverage is in effect (but
not more than twelve (12) months), an amount equal to the difference between the
premium paid for such COBRA coverage and the premium charged by the Company to an
active employee for comparable coverage, which monthly amount shall be payable over a
12 month period (or shorter period to the extent the Executive elects COBRA coverage
for less than 12 months), beginning with the first payroll date that occurs on or after the
sixtieth (60th) day following the date on which the Employment Term and Executive’s
employment hereunder terminated.
(iii) For purposes of this Agreement, “Good Reason” shall mean (A) a material failure of
the Company to pay or cause to be paid Executive’s Base Salary or Annual Bonus (if any)
when due, (B) a material reduction in Executive’s Base Salary or the Target for his
Annual Bonus opportunity described in Section 4 herein, (C) a relocation of Executive’s
primary work location that is more than 50 miles further from Executive’s residence on
the Effective Date from the Executive’s primary work location on the Effective Date,
without written consent of Executive, (D) a material reduction in Executive’s duties and
responsibilities as described in Section 2(a) of this Agreement, or (E) a material breach by
the Company of any of the terms of this Agreement (or any other material written
agreement between the Company and Executive); provided that none of these events shall
constitute Good Reason unless Executive’s termination of employment for Good Reason
occurs within 90 days following the initial existence of one of the conditions specified in
clauses (A) through (D) above, the Executive provides the Company with written notice
of the existence of such condition within 60 days after the initial existence of the
condition, and the Company fails to remedy the condition within 30 days after its receipt
of such notice.
The payments and benefits described in subparagraphs 7(c)(ii)(B) - (D) above shall be subject to
and conditioned upon (1) Executive’s execution and delivery of a valid and effective general release and
waiver in such form as reasonably provided by the Company to effectuate a valid release of claims
(exempting any claims to enforce Executive’s rights under this Agreement), which release shall be
provided to Executive reasonably promptly following the date of termination, and shall not impose any
additional restrictive covenants upon Executive’s activities following termination, that becomes
irrevocable within sixty (60) days of the date on which the Employment Term and Executive’s
employment hereunder terminates; and (2) Executive’s continued compliance with his obligations under
Sections 8 and 9 of this Agreement. Following Executive’s termination of employment by the Company
without Cause (other than by reason of Executive’s death or Disability) or by Executive’s resignation for
Good Reason, except as set forth in Section 7(c)(ii), and subject to Section 7(d), Executive shall have no
further rights to any compensation or any other benefits in the nature of severance or termination pay or in
connection with the termination of his employment. Notwithstanding the foregoing, nothing in this
Section 7(c) shall affect the Executive’s right to any vested benefits under any employee benefit plans
sponsored by the Company, including but not limited to any retirement plans.
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d. By the Company Without Cause or Resignation by Executive for Good Reason Following
a Change In Control.
(i) If Executive’s employment is terminated by the Company without Cause (other than
by reason of death or Disability) or by Executive’s resignation for Good Reason within
six (6) months following a Change in Control, and subject to the conditions described
below, Executive shall be entitled to receive:
(A) at the times set forth in Section 7(a)(iii) hereof, the Accrued Obligations;
(B) payment of an amount equal to 1.5 times Base Salary in effect at the time of
termination, payable in equal installments in accordance with regular payroll procedures
established by the Company over a twelve month period beginning with the first payroll
date that occurs on or after the sixtieth (60th) day following the date on which the
Employment Term and Executive’s employment hereunder terminated;
(C) 1.5 times Annual Bonus calculated at Target for the calendar year in which the
Employment Term and Executive’s employment hereunder is terminated, payable in
equal installments in accordance with regular payroll procedures established by the
Company over a twelve month period beginning with the first payroll date that occurs on
or after the sixtieth (60th) day following the date on which the Employment Term and
Executive’s employment hereunder terminated;
(D) a pro rata portion of the Annual Bonus for the remainder of the fiscal year in which
the Executive was terminated calculated by taking the product of (a) his Target for
Annual Bonus in effect at the time of termination multiplied by (b) a fraction, the
numerator of which is the number of days during which Executive was employed by the
Company in the fiscal year of her termination and the denominator of which is 365,
payable as a lump sum on the sixtieth (60th) day following the date on which the
Employment Term and Executive’s employment hereunder terminated; and
(E) if Executive elects continued coverage for himself or his eligible dependents under
any of the Company’s health plans pursuant to COBRA, for each month during which
such coverage is in effect (but not more than twelve (12) months), an amount equal to the
difference between the premium paid for such COBRA coverage and the premium
charged by the Company to an active employee for comparable coverage, which monthly
amount shall be payable over a 12 month period (or shorter period to the extent the
Executive elects COBRA coverage for less than 12 months), beginning with the first
payroll date that occurs on or after the sixtieth (60th) day following the date on which the
Employment Term and Executive’s employment hereunder terminated.
The payments and benefits described in subparagraphs 7(d)(i)(B) - (E) above shall be subject to and
conditioned upon (1) Executive’s execution and delivery of a valid and effective general release and
waiver in such form as reasonably provided by the Company to effectuate a valid release of claims
(exempting any claims to enforce Executive’s rights under this Agreement), which release shall be
provided to Executive reasonably promptly following the date of termination, and shall not impose any
additional restrictive covenants upon Executive’s activities following termination, that becomes
irrevocable within sixty (60) days of the date on which the Employment Term and Executive’s
employment hereunder terminates; and (2) Executive’s continued compliance with his obligations under
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Sections 8 and 9 of this Agreement. Following Executive’s termination of employment by the Company
without Cause or by Executive’s resignation for Good Reason within six (6) months following a Change
in Control, except as set forth in Section 7(d)(i), Executive shall have no further rights to any
compensation or any other benefits in the nature of severance or termination pay or in connection with the
termination of his employment, including without limitation benefits under Section 7(c)(ii) above.
Notwithstanding the foregoing, nothing in this Section 7(d) shall affect the Executive’s right to any vested
benefits under any employee benefit plans sponsored by the Company, including but not limited to any
retirement plans.
e. Election Not to Extend the Employment Term. In the event either party elects not to
extend the Employment Term by providing thirty (30) days’ written notice prior to the end of the then-
current term pursuant to Section 1, unless Executive’s employment is earlier terminated pursuant to
paragraphs (a), (b), (c) or (d) of this Section 7, Executive’s termination of employment hereunder
(whether or not Executive continues as an employee of the Company thereafter) shall be deemed to occur
on the close of business on the day immediately preceding the next scheduled Extension Date. If
Executive’s employment is terminated following Executive’s election not to extend the Employment
Term, Executive shall be entitled to receive the Accrued Obligations. If the Company elects not to extend
the Employment Term, Executive shall be entitled to receive the severance payments and benefits set
forth in Section 7(c). The payments and benefits described in this Section 7(e) shall be subject to and
conditioned upon (1) Executive’s execution and delivery of a valid and effective general release and
waiver, in such form as reasonably provided by the Company to effectuate a valid release of claims
(exempting any claims to enforce Executive’s rights under this Agreement), which release shall be
provided to Executive reasonably promptly following the date of termination, and shall not impose any
additional restrictive covenants upon Executive’s activities following termination, that becomes
irrevocable within sixty (60) days of the date on which the Employment Term and Executive’s
employment hereunder terminates; and (2) Executive’s continued compliance with his obligations under
Sections 8 and 9 of this Agreement. Following such termination of Executive’s employment hereunder as
a result either party’s election not to extend the Employment Term, except as set forth in this Section 7(e),
Executive shall have no further rights to any compensation or any other benefits in the nature of severance
or termination pay or in connection with the termination of his employment. Notwithstanding the
foregoing, nothing in this Section 7(e) shall affect the Executive’s right to any vested benefits under any
employee benefit plans sponsored by the Company, including, but not limited to, any retirement plans.
f. Notice of Termination. Any purported termination of employment by the Company or by
Executive (other than due to Executive’s death) shall be communicated by written Notice of Termination
to the other party hereto in accordance with Section 11(h) hereof. For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of employment under the provision so indicated.
g. Continuing Rights Under Equity Plan. Notwithstanding anything herein to the contrary,
upon a termination of employment, Executive’s rights and obligations post-termination with respect to
awards made under the Equity Plan shall be determined in accordance with the Equity Plan and Section 4
hereof.
h. Parachute Payments. Notwithstanding any other provision of this Agreement to the
contrary, to the extent that any payment or distribution of any type to or for the Employee by the
Company (or by any affiliate of the Company, any person or entity who acquires ownership or effective
control of the Company or ownership of a substantial portion of the Company’s assets (within the
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meaning of Section 280G of the Code and the regulations thereunder)), or any affiliate of such person or
entity, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise (the “Total Payments”), is or will be subject to the excise tax imposed under Section 4999 of
the Code (the “Excise Tax”), then the Total Payments shall be reduced (but not below zero) if and to the
extent that a reduction in the Total Payments would result in the Employee retaining a larger amount, on
an after-tax basis (taking into account federal, state and local income taxes and the Excise Tax), than if
the Employee received the entire amount of such Total Payments. The determination of whether the Total
Payments shall be reduced and the amount of such reduction shall be determined by an accounting firm
selected by the Employee and the Company, shall be paid for by the Company, and shall be final and
binding upon the Employee and the Company. The accounting firm’s decision as to which of the Total
Payments are to be reduced, if any, shall be made (A) only from the Total Payments that the accounting
firm determines reasonably may be characterized as “parachute payments” under Section 280G of the
Code; (B) only from the Total Payments that are required to be made in cash, (C) only with respect to any
amounts that are not payable pursuant to a “nonqualified deferred compensation plan” subject to Section
409A of the Code, until those payments have been reduced to zero, and (D) in reverse chronological
order, to the extent that any of the Total Payments subject to reduction are made over time (e.g., in
installments). In no event, however, shall any of the Total Payments be reduced if and to the extent such
reduction would cause a violation of Section 409A of the Code or other applicable law.
8. Non-Competition.
a. Executive acknowledges and recognizes the highly competitive nature of the businesses
of the Company and accordingly agrees as follows:
(i) During his employment with the Company and, for a period of one year following the
date Executive ceases to be employed by the Company (the “Restricted Period”),
Executive will not, whether on Executive’s own behalf or on behalf of or in conjunction
with any person, company, business entity or other organization engaged in a Competitive
Business (as defined below), directly or indirectly, solicit or assist in soliciting any
business related to a Competitive Business from any client or prospective client of the
Company:
(A) with whom Executive had material personal contact or dealings on behalf of the
Company during the one year period preceding Executive’s termination of employment;
(B) with whom employees reporting to Executive have had material personal contact or
dealings on behalf of the Company during the one-year period immediately preceding
Executive’s termination of employment; or
(C) for whom Executive had direct responsibility during the one-year period immediately
preceding Executive’s termination of employment.
(ii) During the Restricted Period and within the Continents of North America, South
America, Africa, Europe, Asia, and Australia (the “Restricted Territory”), which is the
territory in which the Company does business and the Executive provides services to the
Company, Executive will not directly or indirectly:
(A) engage in a Competitive Business;
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(B) enter the employ of, or render any services to, any person or entity (or any division of
any person or entity) who or which engages in a Competitive Business; provided that
Executive shall not be prohibited from rendering any services to any entity that derives
less than 10% of its revenues from a Competitive Business (a “Permitted Company”), if
such services or employment relate solely to a business of the Permitted Company that
does not relate to a Competitive Business;
(C) acquire a financial interest in, or otherwise become actively involved with, any
Competitive Business, directly or indirectly, as an individual, partner, shareholder,
officer, director, principal, agent, trustee or consultant; provided, however, this restriction
will not apply to a Permitted Company, or
(D) interfere with, or attempt to interfere with, business relationships (whether formed
before, on or after the date of this Agreement) between the Company and customers,
clients, suppliers, partners, members or investors of the Company.
(iii) For purposes of this Agreement, “Competitive Business” means the development,
manufacture, license, sale or provision of products or services in the agricultural products
industry and any other business in which the Company or any of its subsidiaries engaged
while the Executive was employed by the Company.
(iv) Notwithstanding anything to the contrary in this Agreement, Executive may, directly
or indirectly own, solely as a passive investment, securities of any person engaged in a
Competitive Business which is publicly traded on a national or regional stock exchange or
on the over-the-counter market if Executive (i) is not a controlling person of, or a member
of a Group which controls, such person and (ii) does not, directly or indirectly, own 5% or
more of any class of securities of such person.
(v) During the Restricted Period, Executive will not, whether on Executive’s own behalf
or on behalf of or in conjunction with any person, company, business entity or other
organization whatsoever, directly or indirectly:
(A) solicit or encourage any employee of the Company to leave the employment of the
Company; or
(B) hire any such employee who was employed by the Company as of the date of
Executive’s termination of employment with the Company or who left the employment of
the Company coincident with, or within six months prior to or after, the termination of
Executive’s employment with the Company. Notwithstanding the foregoing, following a
Change in Control, Executive will not be restricted from hiring any employee who is
terminated without Cause following such Change in Control.
(vi) During the Restricted Period, Executive will not, directly or indirectly, solicit or
encourage to cease to work with the Company any individual consultant then under
contract with the Company.
b. The parties agree that the Restricted Period shall be tolled during the pendency of any
litigation or arbitration relating to the interpretation or enforcement of the covenants set forth in this
Section 8.
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c. It is expressly understood and agreed that although Executive and the Company consider
the restrictions contained in this Section 8 to be reasonable, if a final judicial determination is made by a
court of competent jurisdiction that the time or territory or any other restriction contained in this
Agreement is an unenforceable restriction against Executive, the provisions of this Agreement shall not
be rendered void but shall be deemed amended to apply as to such maximum time and territory and to
such maximum extent as such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that any restriction contained in this
Agreement is unenforceable, and such restriction cannot be amended so as to make it enforceable, such
finding shall not affect the enforceability of any of the other restrictions contained herein.
9. Confidentiality; Inventions.
a. Confidentiality. During the Employment Term and thereafter, Executive will not disclose
or use for Executive’s own benefit or purposes or the benefit or purposes of any other person, firm,
partnership, joint venture, association, corporation or other business organization, entity or enterprise
other than the Company, any trade secrets, or other confidential information or data of the Company
relating to the Company’s customers, development programs, costs, marketing, trading, investment, sales
activities, promotion, credit and financial data, manufacturing processes, financing methods, plans, or the
business and affairs of the Company generally; provided that the foregoing shall not apply to information
which is not unique to the Company or which is generally known to the industry or the public other than
as a result of Executive’s breach of this covenant. Except as required by law, Executive will not disclose
to anyone, other than his immediate family, legal or financial advisors or any subsequent employer, the
contents of this Agreement. Executive agrees that upon termination of Executive’s employment with the
Company for any reason, he will return to the Company immediately all memoranda, books, papers,
plans, information, letters and other data, and all copies thereof or therefrom, in any way relating to the
business of the Company, except that he may retain personal notes, notebooks and diaries and personally
owned books, reference material or information of a similar nature, that do not contain confidential
information of the type described in the preceding sentence of this section. Executive further agrees that
he will not retain or use for Executive’s account at any time any trade names, trademark or other
proprietary business designation used or owned in connection with the business of the Company.
b. Ownership of Inventions. Executive agrees that Executive will promptly make full written
disclosure to the Company, and hereby assigns to the Company, or its designee, all of Executive’s right,
title, and interest in and to any and all creations, inventions or developments, whether or not patentable,
which Executive may solely or jointly conceive or develop or reduce to practice, during the period of time
Executive is in the employ of the Company (collectively referred to as “the Company Inventions”), other
than (and the Company Inventions shall not include) any such creations, inventions or developments
which demonstrably bear no relationship whatsoever to the business of the Company, or the application of
technologies, ideas, or processes directly or indirectly related to the business of the Company. For the
avoidance of doubt, the Company Inventions shall include any creations, inventions or developments that
relate directly or indirectly to a Competitive Business. Executive further acknowledges that all original
works of authorship which are created or contributed to by Executive (solely or jointly with others) within
the scope of and during the period of Executive’s employment with the Company (“the Company
Copyrights”) are to be deemed “works made for hire,” as that term is defined in the United States
Copyright Act, and the copyright and all intellectual property rights therein shall be the sole property of
the Company. To the extent any of such works are deemed not to be “works made for hire,” Executive
hereby assigns the copyright and all other intellectual property rights in such works to the Company.
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c. Contracts with the United States. Executive agrees to execute any licenses or assignments
of the Company Inventions or the Company Copyrights as required by any contract between the Company
and the United States or any of its agencies.
d. Further Assurances. Executive covenants to take all requested actions and execute all
requested documents to assist the Company, or its designee, at the Company’s expense, in every way;
consistent with applicable law, (1) to secure the Company’s above rights in the Company Inventions
and any of the Company’s Copyrights, patents, mask work rights or other intellectual property rights
relating thereto in any and all countries, and (2) to pursue any patents or registrations with respect
thereto. This covenant shall survive the termination of this Agreement. If the Company is unable for
any reason, after reasonable efforts, to secure Executive’s signature on any document for this purpose,
then Executive hereby irrevocably designates and appoints the Company and its duly authorized
officers and agents as Executive’s agent and attorney in fact, for the limited purpose of acting for and in
Executive’s behalf and stead to execute such documents and to do all other lawfully permitted acts in
connection with the execution of such documents.
10. Specific Performance. Executive acknowledges and agrees that the Company’s remedies at
law for a breach or threatened breach of any of the provisions of Sections 8 and 9 would be inadequate
and, in recognition of this fact, Executive agrees that, in the event of such a breach or threatened breach,
in addition to any remedies at law, the Company, without posting any bond, shall be entitled to obtain
equitable relief in the form of specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available and in the event of a breach of
Sections 8 and 9 shall be entitled to cease making any payments or providing any benefit otherwise
required by this Agreement.
11. Miscellaneous.
a. Governing Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware, without regard to conflicts of laws principles thereof. The parties agree to
litigate any claims or disputes between them or between Executive and any affiliate or employee of the
Company, including any dispute arising under or related to this Agreement, Executive’s employment or
termination of employment, Executive’s compensation or benefits, and any other dispute between the
parties, exclusively in the state or federal courts located in the state of Executive’s primary place of
business; provided, however, that the Company may initiate a lawsuit in another state to the extent the
Company deems it necessary or desirable to enjoin a breach of this Agreement by Executive. The parties
hereby waive any objection to the personal jurisdiction or venue of the state and federal courts located in
the state of Executive’s primary place of business, hereby submit to the personal jurisdiction and venue of
such courts, and waive the defense of inconvenient forum and/or lack of personal jurisdiction.
b. Entire Agreement/Amendments. Except for the documents related to the Company and its
affiliates’ equity incentive plans, this Agreement contains the entire understanding of the parties with
respect to the employment of Executive by the Company, there are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the subject matter herein other
than those expressly set forth herein. This Agreement may not be altered, modified, or amended except by
written instrument signed by the parties hereto.
c. No Waiver. The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive such party
of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.
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d. Severability. In the event that any one or more of the provisions of this Agreement shall be
or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
e. Assignment. This Agreement shall not be assignable by Executive. This Agreement may
be assigned by the Company to a person or entity which is an affiliate or a successor in interest to
substantially all of the business operations of the Company. Upon such assignment, the rights and
obligations of the Company hereunder shall become the rights and obligations of such affiliate or
successor person or entity.
f. No Mitigation, No Offset. Executive will not be required to mitigate the amount of any
payment contemplated by Section 7, nor will any such payment be reduced by any earnings Executive
may receive from any other source. 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 set off,
counterclaim, recoupment, defense or other claim, right or action which the Company may have against
the Executive or others.
g. Successors; Binding Agreement; Survival. This Agreement shall inure to the benefit of
and be binding upon personal or legal representatives, executors, administrators, successors, heirs,
distributes, devises and legatees. All provisions of this Agreement shall survive the termination and/or
expiration of this Agreement and/or the termination of Executive’s employment with the Company for
any reason, including without limitation, the Company’s obligations under Section 7 and the Executive’s
obligations under Sections 8 and 9 above, to the extent necessary to enable the parties to enforce their
respective rights hereunder.
h. Notice. For the purpose 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 delivered by
hand or overnight courier or three days after it has been mailed by United States registered mail, return
receipt requested, postage prepaid, addressed to the respective addresses set forth below Agreement, or to
such other address as either party may have furnished to the other in writing in accordance herewith,
except that notice of change of address shall be effective only upon receipt.
If to the Company:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
If to Executive:
Executive’s address as reflected on the payroll records of the Company.
i. Executive Representation. Executive hereby represents to the Company that the execution
and delivery of this Agreement by Executive and the Company and the performance by Executive of
Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms of any
employment agreement or other agreement or policy to which Executive is a party or otherwise bound.
j. Cooperation. Following termination of Executive’s employment with the Company,
Executive shall provide his reasonable cooperation in connection with any action or proceeding (or any
appeal from any action or proceeding) which relates to events occurring during Executive’s employment
hereunder and the Company agrees that it shall promptly reimburse Executive for his reasonable and
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documented expenses in connection with his rendering assistance and/or cooperation under this Section
11(j) upon his presentation of documentation for such expenses. This provision shall survive any
termination of this Agreement.
k. Withholding Taxes. The Company may withhold from any amounts payable under this
Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation.
l. Counterparts. This Agreement may be signed in counterparts, each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
m. Insurance. Notwithstanding anything to the contrary herein:
(i) All rights Executive has to indemnification as a director, officer or fiduciary pursuant to
any agreement, applicable statue, Company bylaws or articles of organization as in effect
from time to time shall not be impacted by the provisions of this Agreement and all such
rights, if any, shall survive the termination and/or expiration of this Agreement and/or the
termination of Executive’s employment with the Company; and
(ii) So long as Executive is employed by the Company, and for a period of six (6) years
following Executive’s termination of employment, the Company agrees to purchase and
maintain insurance for Executive’s benefit, covering director, officer and fiduciary liability
on the same basis as active directors, officers and/or fiduciaries, as applicable, of the
Company.
n. Section 409A. The intent of the parties is that payments and benefits under this Agreement
comply with or are exempt from Section 409A and this Agreement shall be interpreted and construed in a
manner that establishes an exemption from (or compliance with) the requirements of Section 409A. Any
terms of this Agreement that are undefined or ambiguous shall be interpreted in a manner that complies
with Section 409A to the extent necessary to comply with Section 409A. Notwithstanding anything herein
to the contrary, (i) if, on the date of termination, the Executive is a “specified employee” as defined in
Section 409A, and the deferral of the commencement of any payments or benefits otherwise payable
hereunder as a result of such termination of employment is necessary in order to prevent any accelerated
or additional tax under Section 409A, then the Company will defer the commencement of the payment of
any such payments or benefits hereunder (without any reduction in such payments or benefits ultimately
paid or provided to the Executive) until the date that is the first business day of the seventh month
following the date of termination (or the date of Executive’s death, if earlier), and (ii) if any other
payments of money or other benefits due to the Executive hereunder could cause the application of an
accelerated or additional tax under Section 409A, such payments or other benefits shall be deferred if
deferral will make such payment or other benefits compliant under Section 409A, or otherwise such
payment or other benefits shall be restructured, to the extent possible, in a manner, reasonably determined
by the Company, that preserves the economic benefit and original intent thereof but does not cause such
an accelerated or additional tax. Notwithstanding anything to the contrary herein, to the extent required by
Section 409A, a termination of employment shall not be deemed to have occurred for purposes of any
provision of this Agreement providing for the payment of amounts or benefits upon or following a
termination of employment unless such termination is also a “separation from service” within the
meaning of Section 409A and, for purposes of any such provision of this Agreement, references to a
“termination,” “termination of employment” or like terms shall mean separation from service.
Notwithstanding anything to the contrary herein, except to the extent any expense, reimbursement or in-
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kind benefit provided pursuant to this Agreement does not constitute a “deferral of compensation” within
the meaning of Section 409A (1) the amount of expenses eligible for reimbursement or in-kind benefits
provided to the Executive during any calendar year will not affect the amount of expenses eligible for
reimbursement or in-kind benefits provided to the Executive in any other calendar year, (2) the
reimbursements for expenses for which the Executive is entitled to be reimbursed shall be made on or
before the last day of the calendar year following the calendar year in which the applicable expense is
incurred, and (3) the right to payment or reimbursement or in-kind benefits hereunder may not be
liquidated or exchanged for any other benefit. Each payment made under this Agreement shall be treated
as a separate payment and the right to a series of installment payments under this Agreement is to be
treated as a right to a series of separate payments. Notwithstanding the foregoing, the Company does not
make any representation to Executive that the payments or benefits provided under this Agreement are
exempt from, or satisfy, the requirements of Section 409A, and the Company shall have no liability or
other obligation to indemnify or hold harmless Executive or any beneficiary of Executive for any tax,
additional tax, interest or penalties that Executive or any beneficiary of Executive may incur in the event
that any provision of this Agreement, or any amendment or modification thereof, or any other action
taken with respect thereto, is deemed to violate any of the requirements of Section 409A.
o. Costs and Expenses. If any action or proceeding is brought by either party hereto seeking
to collect any damages resulting from, or the injunction of any action constituting, a breach of any of the
terms or provisions of this Agreement, then the party found to be at fault shall pay all reasonable costs
and attorneys’ fees of the other party.
p. No Drafting Party. The Executive acknowledges that he has had an opportunity to
negotiate any and all of these provisions and no rule of construction shall be used that would interpret any
provision in favor of or against a party on the basis of who drafted this Agreement.
q. Jury Trial Waiver. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH
PARTY HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
PROCEEDING (WHETHER BASED IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR EXECUTIVE’S EMPLOYMENT BY THE COMPANY.
r. Nondisparagement. At all times during the Employment Term and thereafter, regardless
of the reason for termination, Executive will not publicly disparage the Company, the members of its
Board and its senior executives, and its products or services, and the Company will not, and will not
permit the members of the Board or its senior executives to, publicly disparage Executive. Nothing
contained herein shall apply to truthful testimony given by any persons in any judicial or other
governmental proceeding pursuant to subpoena or other legal process.
*****
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day
and year first above written.
AgroFresh Solutions, Inc.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: CEO
/s/ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇
By: ▇▇▇▇▇▇ ▇▇▇▇