Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement (the “Agreement”) is entered into by and between Village Farms International, Inc. (the “Company”), a corporation incorporated under the Canada Business Corporation Act, and Michael A. DeGiglio (the “Executive”) effective August 15, 2024 (the “Effective Date”). The Company and the Executive are referred to herein collectively as “Parties” and individually as “Party.”
WHEREAS, the Executive currently serves as President and Chief Executive Officer of the Company, Village Farms Canada Limited Partnership (“VFCLP”), Village Farms, L.P. (“VFLP”), and VF Clean Energy, Inc. (“VFCE” and together with the Company, VFCLP and VFLP, the “Village Farms Group”); and
WHEREAS, the Executive and VFLP are parties to that certain Executive Employment Agreement, dated as of July 13, 2020 (the “Prior Agreement”), the term of which expired as of July 12, 2023: and
WHEREAS, the Company and the Executive desire to enter into this Agreement to govern the terms and conditions of Executive’s employment with the Village Farms Group effective from the Effective Date.
NOW, THEREFORE, in consideration of the mutual promises contained herein, the Company and the Executive agree as follows:
For the Term (as described below), the Company hereby employs the Executive, and the Executive hereby accepts employment with the Company, to render service as President and Chief Executive Officer of the Company and the other respective members of the Village Farms Group, with such powers, duties and responsibilities customary to the positions of President and Chief Executive Officer as from time to time may be assigned to the Executive consistent with such positions. In addition, the Executive shall be required to serve as a member of the board of directors of the Company (the “Board”), if nominated and appointed by the Company’s stockholders and any other boards of directors or governing bodies of the Village Farms Group and other affiliates. The Executive agrees to devote substantially all of his business time to the business affairs of the Village Farms Group as directed by the Board and to perform all duties and fulfill all responsibilities incident to his employment in a manner reasonably expected of senior executives in similar positions, except the Executive may devote a reasonable portion of his business time to projects and businesses outside the Village Farms Group, provided each such project and/or business has been approved in writing by the independent members of the Board. The foregoing shall not be construed to prohibit the Executive from sitting on boards of directors of companies that are not engaged in a Competitive Business (as defined below), engaging in charitable activities and satisfying military obligations.
Executive acknowledges that Executive has a duty of loyalty to the Company and that Executive must discharge duties under this Agreement in good faith. The Executive, accordingly, agrees to perform Executive’s obligations herein loyally and in good faith.
Unless sooner terminated as provided in Section 4, the Executive’s term of employment under this Agreement shall run for a period of three (3) years, plus one month, from the Effective Date to August 15, 2027 (the “Initial Term”); provided that, the Executive’s term of employment under this Agreement will automatically be extended for one (1) additional year commencing on August 16, 2027 and on each anniversary thereafter (each a “Renewal Term”), unless terminated earlier under Section 4 or unless the Company gives written notice of non-renewal to the Executive at least ninety (90) days before the expiration of the Initial Term or then-current Renewal Term, as applicable. The Initial Term and any Renewal Terms are referred to collectively as the “Term.” A termination of the Executive’s
employment due to notice of non-renewal of the Term by the Company shall be treated as termination “Without Cause” under Section 4(d) and the Executive shall receive the applicable payments and benefits set forth in Section 4(g).
For all services to be rendered by the Executive in any capacity during the Term, including, without limitation, services for the Village Farms Group, the Company and/or another member of the Village Farms Group will pay and provide to Executive, the following:
The Company’s recoupment policies (the “VF Clawback Policy”) shall apply to all Short-Term Incentives, Long Term Incentives, bonuses, and awards payable to the Executive under this Agreement. If the Company restates its financial statements due to material noncompliance with any financial reporting requirements under applicable securities laws, any payments pursuant to this Agreement for or in respect of the year that is restated, may be recovered to the extent the payments made exceed the amount that would have been paid
2
as a result of the restatement. Additionally, without limitation of the foregoing, any amounts paid hereunder shall be subject to recoupment in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “SEC Clawback Rule”) and any implementing regulations or policies thereunder or as is required by applicable law or stock exchange listing conditions.
Such additional benefits may be generally made available from time to time by the Company and the Village Farms Group for the benefit of executives of the Executive’s level or its employees generally.
Notwithstanding the provisions of Section 2 of this Agreement, the Executive’s employment with the Company shall terminate upon the occurrence of any one or more of the following events:
3
4
If the Executive’s employment is terminated due to Death or Disability, the Village Farms Group shall continue to make Salary payments at the Executive’s then-current Salary (or to the Executive’s heirs in the case of Death), reimburse Executive (or Executive’s heirs in the case of Death) for expenses incurred prior to such Death or Disability (as described in 4(g)(ii) below), and benefits (as described in 4(g)(iii) and (iv) below) shall continue in the event of Disability, and to the extent then applicable to heirs of the deceased in the event of Death, until the end of the current Term or twelve (12) months, whichever is greater.
If the Executive’s employment is terminated by the Company Without Cause (including as a result of the Company’s issuance of a notice of non-renewal of the Term pursuant to Section 2), or is terminated by the Executive for Good Reason, the Executive shall be entitled to receive, as liquidated damages, the following payments and benefits, subject to, in the case of items (i) and (iv) below, the Executive’s execution and timely return to the Company of a release of claims in a form consistent with the Company’s standard form of release for employees receiving severance:
Definitions. For purposes of this Section 5, the following terms shall have the meanings set forth below.
“Competitive Business” means any business engaged in providing products and services competitive with those products and services offered by any member of the Village Farms Group at the time of termination of Executive’s employment.
“Confidential Information” means all information relating to any member of the Village Farms Group and their respective customers and suppliers considered by any member of the Village Farms
5
Group to be confidential including, without limitation, (a) business plans, research, developments and marketing strategies, customer names and lists, employee names and information, product and service prices and lines, processes, designs, ideas, formulae, methods, financial information, costs, supplies, pricing information, computer programs, procedures, processes, methods, systems, strategies, production methods and (b) the Inventions and Trade Secrets (as defined below). “Confidential Information” shall not include the foregoing that is or becomes (i) in the public domain other than through acts by the Executive, (ii) already lawfully in the Executive’s possession at the time of disclosure by the Company as evidenced by the Executive’s written records, (c) disclosed to the Executive by a third party who is not prohibited from disclosing the information pursuant to any fiduciary, contractual, or other duty to any Related Companies, or (d) required by law, rule, regulation or court order to be disclosed.
“Inventions” means discoveries, concepts, ideas, methods, formulae, techniques, developments, know-how, inventions, and improvements relating to the business of any member of the Village Farms Group, whether or not patentable, conceived of or made by Executive at any time, whether before, during, or after business hours, or with the use of the facilities of any member of the Village Farms Group, materials, or personnel, either solely or jointly with others after the Effective Date and during Executive’s employment by the Village Farms Group.
“Trade Secrets” means any and all technology and information relating to businesses of the Company or any Related Companies or their respective patents, methods, formulae, software, algorithms, financial models, know-how, designs, products, processes, services, research development, inventions, systems, engineering, and manufacturing which have been designated and treated as trade secrets by the Company or any Related Companies and which provide competitive advantage to the Company or any Related Companies.
6
The covenants in Section 5(b)(i) shall be specifically enforceable. However, the covenants in this Section 5(b)(i) shall not be construed to prohibit the ownership of not more than five percent (5%) of the equity of any publicly held entity engaged in a Competitive Business, so long as the Executive is not otherwise engaged with such entity in any of the other activities specified in clauses (a) through (d). Notwithstanding the foregoing, if the severance payment provided for in Section 4(g) is
7
required to be made to the Executive and such payment is not made within 15 business days following the date on which the Company (by notice to the Chairman of the Board) is given notice by the Executive that payment was not timely made, then the Executive’s obligations under this Section 5(b) shall terminate.
The Executive represents and warrants that he is free to enter into this Agreement, that he has not made and will not make any agreements in conflict with the Agreement, and that he will not disclose to any member of the Village Farms Group, nor use for the benefit of any member of the Village Farms Group, any trade secrets or confidential information that are the property of any former employer or employers.
The Village Farms Group shall indemnify the Executive for acts undertaken as an officer, director or agent of the Village Farms Group to the fullest extent provided under applicable law. The Company or another member of the Village Farms Group will obtain officer and director liability insurance in an amount believed by the Board to be reasonable to the extent that such insurance can be obtained at commercially reasonable rates.
This Agreement shall be binding upon the Company and inure to the benefit of the Company and the Executive and any of their respective successors and permitted assigns, and any such successor or permitted assignee shall be deemed to be substitutes for the Company or the Executive, as the case may be, under the provisions of this Agreement.
If any provision of this Agreement shall be declared invalid or unenforceable, the remainder of this Agreement, or the application of such provision in circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each provision of this Agreement shall be valid and be enforceable to the fullest extent permitted by law. If any provision contained in this Agreement shall be held to be excessively broad as to scope, activity or subject so as to be unenforceable at law, such provision shall be construed by limiting and reducing it so as to be enforceable to the extent compatible with the applicable law as it shall then appear.
8
All notices or other communications which are required or permitted to be given to the Parties under this Agreement shall be sufficient in all respects only if given in writing and delivered in person, by telecopy, by overnight courier, or by certified mail, postage prepaid, return receipt requested, to (i) with respect to notices to the Company, the current address of the Company’s principal office (Attn: Chairman of the Board), and (ii) with respect to notices to the Executive, the current home address of the Executive (as indicated in the Company’s records). Notice shall be deemed given on the date of delivery, in the case of personal delivery or telecopy, or on the delivery or refusal date, as specified on the return receipt, in the case of overnight courier or certified mail.
The failure of any Party to require the performance of any term or obligation of the Agreement, or the waiver by any Party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
This Agreement constitutes the entire understanding of the Executive and the Company with respect to the Executive’s employment. As of the Effective Date, this Agreement supersedes any prior agreement or arrangement with the Village Farms Group, including without limitation the Prior Agreement. No modification or waiver of any provisions of this Agreement shall be made unless made in writing and signed by the Executive and by such other person on behalf of the Company as the Board may designate for such purpose.
The interpretation, construction and application of this Agreement shall be governed by the internal laws of the State of Florida without application of any conflict of law principles.
Any controversy or claim arising out of or related to this Agreement (except for equitable or injunctive actions pursuant to Section 5 above, or claims by the Executive for workers’ compensation or unemployment compensation) shall be settled by arbitration in Trenton, New Jersey, under the Commercial Rules of the Arbitration Association in effect at the time such controversy or claim arises (the “Rules”) by one arbitrator appointed by the American Arbitration Association in accordance with the Rules, the arbitrator also apportioning the costs of arbitration. The award of the arbitrator shall be in writing, shall be final and binding upon the parties, shall not be appealed from or contested in any court and may, in appropriate circumstances, include injunctive relief. Should any party fail to appear or be represented at the arbitration proceedings after due notice in accordance with the Rules, then the arbitrator may nevertheless render a decision in the absence of said party, and such decision shall the same force and effect as if the absent party had been present, whether or not it shall be adverse to the interests of that party. Any award rendered hereunder may be entered for enforcement, if necessary, in any court of competent jurisdiction, and the party against whom enforcement is sought shall bear the expenses, including attorney’s fees, of enforcement.
The Company and Executive acknowledge that it is the intention of the parties that this Section 15 shall apply to all disputes, controversies and claims, including, without limitation, any rights or claims the Executive may have under the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, Title VII of the Civil Rights Act of 1964, the Equal Pay Act, and all other federal, state or local laws, rules or regulations relating to employment discrimination or otherwise pertaining to this Agreement, Executive’s employment or termination thereof. THE COMPANY AND EXECUTIVE KNOWINGLY AND VOLUNTARILY AGREE TO THIS ARBITRATION PROVISION AND ACKNOWLEDGE THAT ARBITRATION SHALL BE INSTEAD OF ANY CIVIL LITIGATION, MEANING THAT THE EXECUTIVE AND THE COMPANY ARE EACH WAIVING ANY RIGHTS TO A JURY TRIAL.
9
If any amounts or benefits provided for in this Agreement, when aggregated with any other payments or benefits payable or provided to the Executive (the “Total Payments”) would (i) constitute “parachute payments” within the meaning of Section 280G of the Code (which will not include any portion of payments allocated to the restrictive covenant provisions of Section 5 that are classified as payments of reasonable compensation for purposes of Section 280G of the Code), and (ii) but for this Section 17, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the Total Payments will be either: (a) provided in full, or (b) provided as to such lesser extent as would result in no portion of such Total Payments being subject to the Excise Tax, whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the Excise tax, results in Executive’s receipt on an after-tax basis of the greatest amount of the Total Payments, notwithstanding that all or some portion of the Total Payments may be subject to the Excise Tax. To the extent any reduction in Total Payments is required by this Section 17, such reduction shall occur to the payments and benefits in the order that results in the greatest economic present value of all payments and benefits actually made to the Executive.
The Company’s recoupment policies shall apply to all bonuses and awards payable to the Executive under this Agreement. If the Company restates its financial statements due to material noncompliance with any financial reporting requirements under applicable securities laws, any payments pursuant to this Agreement for or in respect of the year that is restated, may be recovered to the extent the payments made exceed the amount would have been paid as a result of the restatement. Additionally, without limitation of the foregoing, any amounts paid hereunder shall be subject to recoupment in accordance with the Dodd-Frank Wall Street Reform and Consumer Protection Act and any implementing regulations or policies thereunder or as is otherwise required by applicable law or stock exchange listing conditions.
The captions set forth in this Agreement are for convenience only and shall not be considered as part of this Agreement or as in any way limiting or amplifying the terms and provisions hereof.
10
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
11
The Parties have signed, sealed and delivered this Employment Agreement as of the date signed below.
By: Village Farms International, Inc.
By:/s/ John McLernon
John McLernon
Independent Director
Board Chair
Corporate Governance & Nominating Committee
By:/s/ Christopher Woodward
Christopher Woodward
Independent Director
Compensation Committee Chair
Audit & Risk Committee
Corporate Governance & Nominating Committee Chair
Executive:
/s/ Michael A. DeGiglio
Michael A. DeGiglio
12