Exhibit 10.1
TRANSITION
AGREEMENT
This TRANSITION AGREEMENT
(“ Agreement ”) is entered into as of
October 3, 2006, by and between The Mosaic Company, a Delaware
corporation (“ Mosaic ”), and Fredric W.
Corrigan (“ Mr. Corrigan ”), an individual
residing in the State of Minnesota.
WHEREAS , Mr. Corrigan has served as the Chief
Executive Officer (“ CEO ”) and President of
Mosaic since its inception as an operating company in October 2004,
and has been a member of the Board of Directors of Mosaic (the
“ Board ”) since inception;
WHEREAS , Mr. Corrigan has announced his intention
to retire from Mosaic, including from his officer positions with
Mosaic upon the election by the Board of Mr. Corrigan’s
successor as CEO of Mosaic;
WHEREAS , the Board wants to provide for the smooth
transition of the CEO position post-retirement;
WHEREAS , the parties desire to set forth all matters
regarding Mr. Corrigan’s retirement as CEO, future
resignation from the Board and his service as a consultant to the
new CEO; and
WHEREAS , the Board believes it is in the best interests
of Mosaic’s stockholders to enter into this
Agreement.
NOW THEREFORE
, in consideration of the premises
and the covenants herein, the sufficiency of which is hereby
acknowledged, Mr. Corrigan and Mosaic agree as
follows:
1. Retirement as CEO and
President; Board Position . Effective on the earlier of:
(i) January 1, 2007, and (ii) the effective date on
which his successor becomes CEO, as elected by the Board (the
“ Retirement Date ”), Mr. Corrigan shall
retire as Mosaic’s CEO and President, from all other officer
positions he currently holds with Mosaic and its subsidiaries and
controlled affiliates and from all director positions he holds with
Mosaic’s subsidiaries and controlled affiliates, but not from
Mosaic’s Board (Mr. Corrigan’s retirement from which
shall be governed as set forth below). Mr. Corrigan shall
continue in his position as a member of the Board through the date
of the annual meeting of Mosaic stockholders, to be held in October
of 2007 (the “ 2007 Annual Meeting ”). The date
of the 2007 Annual Meeting is referred to herein as the “
Departure Date .”
2. Consulting Regarding
Transition of CEO Duties . After the Retirement Date and for a
period not to continue beyond October 31, 2007 (the “
Transition Period ”), Mr. Corrigan shall assist
the new CEO in the transition of his duties as CEO in a diligent
and business-like manner, as and when reasonably requested by the
new CEO, pursuant to the terms and conditions set forth
below:
(a) Duration . Such
assistance shall be as reasonably requested by Mosaic but not
anticipated to be more than 100 hours per month of consultations by
Mr. Corrigan, which may be performed from any location that is
mutually acceptable to Mr. Corrigan and the new
CEO.
(b) Duties . Such assistance
may include, but shall not be limited to, and, in each case, at the
request of Mosaic’s new CEO: (i) representing Mosaic
with key industry, civic and philanthropic constituents,
(ii) assisting Mosaic’s new CEO in maintaining and
developing business relationships with key customers and strategic
partners, (iii) regularly meeting with the new CEO to review
progress toward the refinement and execution of Mosaic’s
strategy, and (iv) assisting the new CEO in the recognition
and motivation of employees in pursuing Mosaic’s
strategy.
(c) Manner of Performance .
During the Transition Period, Mr. Corrigan shall not take any
action that would be adverse to Mosaic’s business interests
or that may subject Mr. Corrigan, Mosaic or any of its
affiliates to civil or criminal liability. Mr. Corrigan agrees
to comply in full with all applicable laws, ethical standards,
rules and regulations including, without limitation, with
Mosaic’s Code of Business Conduct and Ethics during the
Transition Period. As a key consultant of Mosaic during the
Transition Period, Mr. Corrigan represents that he does not
have any interest in any entity that would conflict in any manner
with the performance of services under this Agreement. Subject to
the restrictive covenants contained in this Agreement, including
the non-disclosure and non-compete covenants, Mr. Corrigan may
engage in activities on his own behalf or on behalf of entities
other than Mosaic and its affiliates, and may allocate his time
between his obligations under this Agreement and such other
activities in any manner Mr. Corrigan deems appropriate, so
long as Mr. Corrigan’s obligations under this Agreement
are satisfied. Mr. Corrigan will have the sole right to
supervise, manage, control and direct the performance of the
details incident to Mr. Corrigan’ duties described in
this Agreement.
(d) Office Space and Technology
Support . Mr. Corrigan shall not retain any office space
at Mosaic headquarters after the Retirement Date. During the
Transition Period, however, Mr. Corrigan shall be entitled to
continue to work with the administrative assistant currently
assigned to the CEO to assist Mr. Corrigan in the performance
of his consulting duties. Mosaic shall make available to
Mr. Corrigan and to such assistant, to the extent necessary to
enable them to perform their services as contemplated hereunder
during the Transition Period, laptop computers and other required
equipment (e.g., printers) and information technology support.
Mr. Corrigan and such assistant shall return the equipment to
Mosaic upon completion of services under this Agreement
.
(e) Independent Contractor
Status . During the Transition Period, Mosaic will retain
Mr. Corrigan in the capacity of an independent contractor and
not as an employee or agent of Mosaic or any of its affiliates.
Mr. Corrigan shall not be authorized at any time to execute
any transaction on behalf of Mosaic or any of its affiliates.
Nothing in this Agreement shall create, or shall be construed as
creating, any form of partnership, joint venture, employer-employee
relationship, or other affiliation that would permit
Mr. Corrigan to bind Mosaic or any of its affiliates with
respect to any matter or would cause Mosaic or any of its
affiliates to be liable for any action of Mr. Corrigan.
Neither Mosaic nor Mr. Corrigan will represent to any third
party that Mr. Corrigan’s engagement by Mosaic hereunder
is in any capacity other than as an independent contractor. Mosaic
shall not be obligated to maintain any insurance for
Mr. Corrigan, including, but not limited to, medical, dental,
life or disability insurance. Except as
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required by law and except with respect to the
continued vesting of previously granted equity awards (as described
in Section 4(c)), Mr. Corrigan will no longer participate
in employee benefit plans or programs of Mosaic. To the extent
Mr. Corrigan employs others in providing services under this
Agreement, Mr. Corrigan agrees to comply with all applicable
workers’ compensation laws.
3. Compensation Until the
Retirement Date . Mr. Corrigan shall continue to receive
his current salary of $700,000 per year, his annual bonus payable
in connection with Mosaic’s financial performance for its
fiscal year ending May 31, 2007 (“ Fiscal 2007
”), as more fully described in Section 4, and other
compensation to which he is entitled in his current position with
Mosaic to the Retirement Date. Mr. Corrigan shall continue to
receive the standard executive officer benefits of Company-paid
reimbursements for an annual physical and for financial and tax
planning for 2006, in accordance with Mosaic’s existing
executive physical program, and its existing financial and tax
planning program for executive officers (the “ Financial
Services and Tax Planning Program ”). On the Retirement
Date, Mosaic shall pay to Mr. Corrigan, the unused remaining
balance of the $20,000 available to him under the Financial
Services and Tax Planning Program. On the Retirement Date,
Mr. Corrigan shall also be compensated for all earned but
unused vacation for Fiscal 2007 consistent with Mosaic’s
vacation policies. On the Retirement Date, all compensation related
to Mr. Corrigan’s employment with Mosaic under all other
agreements and arrangements, including all perquisite programs,
shall cease, and no further compensation shall be due from or paid
by Mosaic to Mr. Corrigan, except as contemplated in this
Agreement or as otherwise required by law.
4. Fiscal 2007 Incentive
Compensation . The Compensation Committee of the Board (the
“ Committee ”) has previously authorized the
participation of Mr. Corrigan in Mosaic’s annual
incentive plans ( i.e. , the Mosaic Incentive Plan (“
MIP ”) and the Synergy Incentive Plan (“
SIP ”)) for Fiscal 2007, and has made an award to
Mr. Corrigan under Mosaic’s annual long-term incentive
program for Fiscal 2007. The Committee shall take the following
actions and/or authorize certain modifications to the terms of
those awards as follows:
(a) Annual Bonus .
Mr. Corrigan shall be paid a pro-rated portion of the bonus
that he would otherwise receive under the MIP and the SIP for the
first two fiscal quarters of Fiscal 2007, ending November 30,
2006, during which he is expected to continue serving as CEO.
Mr. Corrigan shall not defer any portion of this bonus under
Mosaic’s Nonqualified Deferred Compensation Plan (the “
Deferral Plan ”). Such bonus payout would be made on
or before January 5, 2007.
(b) Long-Term Incentives .
The Committee has previously awarded to Mr. Corrigan
non-qualified stock options to acquire 835,018 shares of
Mosaic’s common stock (having an exercise price equal to the
market price per share on the date of grant) (collectively, the
“ Options ”), and 271,209 restricted stock units
evidencing the right to receive one share per unit of Mosaic common
stock (collectively, the “ RSUs ”) under
Mosaic’s Long-Term Incentive Program (“ LTIP
”), in each case, subject to the standard terms and
conditions of the Mosaic’s 2004 Omnibus Stock and Incentive
Plan (the “ Omnibus Stock Plan ”) and applicable
award agreements for each such grant or award.
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The Committee shall take such
actions as are necessary to accelerate the vesting in full,
effective as of the Retirement Date, of all Options granted to
Mr. Corrigan in 2004 and 2005 that are outstanding and
unvested on the Retirement Date, and to recognize
Mr. Corrigan’s retirement as an early retirement with
the consent of the Committee under the terms of the agreements
covering such outstanding Options held by Mr. Corrigan on the
Retirement Date. In addition, the Committee shall, effective with
the Retirement Date, recognize Mr. Corrigan’s retirement
as a retirement with its consent under the terms of the RSU award
agreements entered into with Mr. Corrigan in 2004 and 2005,
such that all RSUs covered by such award agreements shall vest as
of the Retirement Date.
With respect to the Options awarded
in 2006, such Options shall continue to vest and become exercisable
in accordance with the terms of the award agreement covering such
Options. With respect to the RSUs awarded in 2006, such RSUs shall
continue to vest in accordance with the terms of the award
agreement covering such RSUs.
A schedule detailing
Mr. Corrigan’s Option and RSU grants after giving effect
to the Committee’s actions set forth in this
Section 4(b) is set forth in Exhibit A attached hereto.
The schedule is for informational purposes only and does not modify
or supersede any of the terms of the agreements under which the
grants were made.
Except for Mr. Corrigan’s
ongoing services as a non-employee director of Mosaic as provided
in Section 7 below, Mr. Corrigan will not receive
additional grants or awards under the LTIP.
5. Compensation as Consultant
. In consideration for Mr. Corrigan’s services as a
consultant to his successor as CEO, Mosaic shall make the following
payments to, and distributions for the benefit of,
Mr. Corrigan:
(a) Consultant Fees . During
the Transition Period, Mosaic shall pay Mr. Corrigan at the
rate of $60,000 per month for services performed as a consultant,
all of which shall be payable on October 31, 2007.
(b) Consultant Bonus .
Subject to Mr. Corrigan’s performance of consulting
services in accordance with the terms and conditions of this
Agreement through the Departure Date, the Compensation Committee
shall authorize Mr. Corrigan to receive a one-time bonus, for
the period between December 1, 2006 and October 31, 2007,
of $962,500, payable on October 31, 2007. Mr. Corrigan
shall not defer any portion of this bonus under the Deferral Plan.
Mr. Corrigan will not be eligible for any bonuses under the
MIP or SIP during this period.
(c) Expenses . Mosaic shall
reimburse Mr. Corrigan for all reasonable out-of-pocket
expenses incurred by him in connection with the performance of his
services during the Transition Period within thirty (30) days
following his delivery of an accounting of those expenses to Mosaic
in accordance with Mosaic’s then-current travel and business
expense policy.
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6. Continued Executive
Benefits .
(a) Prior to Retirement Date
. Until the Retirement Date, Mr. Corrigan shall be eligible
for such medical, disability, life insurance coverage, vacation,
sick leave, holiday benefits and any other benefits, in each case
as are customarily made available to Mosaic’s executive
officers, all in accordance with Mosaic’s benefits program in
effect from time to time.
(b) After Retirement Date .
After the Retirement Date, Mr. Corrigan shall not be entitled
to receive any benefits from Mosaic other than as required by law
and other than continued participation in Mosaic’s travel
services program (i.e., the ability to use Mosaic’s travel
services group to book airfare, hotel and car rentals) (for which
he will continue to have access to during the Transition Period and
will pay the same rates for services as all other eligible
participants are required to pay). For the avoidance of doubt, the
parties acknowledge and agree that Mr. Corrigan shall not
continue to participate, after the Retirement Date, in any of the
following plans, in each case, as amended to date: (i) the
Omnibus Stock Plan, (ii) the Mosaic Investment Plan, and
(iii) any executive perquisite plan of Mosaic, other than the
availability of the travel services program described in the
preceding sentence.
(c) Death or Disability . In
the event that Mr. Corrigan dies prior to the Retirement Date,
his heirs, representatives or his estate shall be entitled to the
compensation and benefits described in Section 4(a) (using the
actual days for which he acted as CEO to determine the pro-rated
portion described therein) and Section 5(b); provided that an
authorized representative enters into the Release (as defined
below) on behalf of such heirs, representatives or estate. In the
event that Mr. Corrigan becomes disabled to the degree that he
cannot perform his normal duties as CEO prior to the Retirement
Date, then he shall be entitled to the compensation and benefits
described in Sections 4(a) (using the actual days for which he
acted as CEO to determine the pro-rated portion described therein)
and Section 5(b); provided that, he or his authorized
representative enters into the Release on his behalf.
7. Director Compensation .
From and after the Retirement Date and for the period through and
including the Departure Date, Mr. Corrigan shall receive all
compensation to which any non-management member of the Board (other
than the non-executive Chairman of the Board) is entitled to
receive for service as a director. For the avoidance of doubt, this
would include the following:
(a) Cash Retainer : A cash
retainer of $75,000;
(b) Equity Compensation Award
: An equity compensation award, made under the Omnibus Stock Plan,
of RSUs having a value on the date of grant of $65,000;
and
(c) Deferral Plan :
Eligibility to participate in the Deferral Plan for director
compensation (in which Mr. Corrigan is currently eligible to
participate as an executive officer of Mosaic).
8. Release and Termination of
Severance Agreement . In consideration of the promises,
covenants and other valuable consideration provided by Mosaic in
this Agreement including, without limitation, Mosaic’s
agreements to provide the compensation set forth herein,
Mr. Corrigan agrees that: (i) for him to be entitled to
receive the payments and other benefits described in this
Agreement, he will execute the release attached hereto as
Exhibit B on the
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Retirement Date (the “ Release
”), (ii) he will also execute the Release on the
Departure Date; and (iii) effective on the Retirement Date,
that certain Severance Agreement entered into between Mosaic and
Mr. Corrigan, dated September 12, 2005, shall terminate
and be of no further force or effect.
9. Non-Disclosure,
Non-Solicitation, and Non-Competition Covenants . As an
inducement to Mosaic to enter into this Agreement,
Mr. Corrigan agrees as follows:
(a) Non-Disclosure .
Mr. Corrigan acknowledges that he has received and will
continue to receive access to confidential and proprietary business
information or trade secrets (“ Confidential
Information ”) about Mosaic, that this information was
obtained by Mosaic at great expense and is reasonably protected by
Mosaic from unauthorized disclosure, and that
Mr. Corrigan’s possession of this special knowledge is
due solely to his employment with Mosaic. In recognition of the
foregoing, Mr. Corrigan will not, at any time during the
Transition Period or thereafter, disclose, use or otherwise make
available to any third party any Confidential Information relating
to Mosaic’s business, including its products, production
methods, and development; manufacturing and business methods and
techniques; trade secrets, data, specifications, developments,
inventions, engineering and research activity; marketing and sales
strategies, information and techniques; long and short term plans;
current and prospective dealer, customer, vendor, supplier and
distributor lists, con
