Exhibit 10.33
Land O’Lakes, Inc.
SEVERANCE AGREEMENT
     This Severance Agreement (the “Agreement”) was made and entered into
effective as of October 1, 2005 (the “Effective Date”), by and between Chris
Policinski (the “Executive”) and Land O’Lakes, Inc., a Minnesota cooperative
corporation (the “Company”) and is hereby restated effective as of January 1,
2009.
RECITALS
     The Land O’Lakes, Inc. Board of Directors (“Board”) has determined that it
is in the best interest of the Company to assure that the Company will have the
continued dedication and objectivity of the Executive, notwithstanding the
possibility, threat or occurrence of a Substantial Change of Circumstances of
the Company, as defined below. This agreement describes certain benefits that
will be available to the Executive in the event the Executive’s employment is
adversely affected by reason of a Substantial Change of Circumstances, in the
event Executive otherwise experiences involuntary termination for reasons other
than Cause, or in the event Executive experiences voluntary termination with
good reason as defined in this Agreement.
AGREEMENT
     In consideration of the mutual covenants herein contained and the offer of
employment of Executive by the Company, the parties agree as follows:

1.   Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:

  1.1.   Cause. “Cause” shall mean (i) any act of personal dishonesty taken by
the Executive in connection with responsibilities as an employee which is
intended to result in substantial personal enrichment of the Executive,
(ii) Executive’s conviction of a felony which the Board reasonably believes has
had or will have a material detrimental effect on the Company’s reputation or
business, (iii) a willful act by the Executive which constitutes misconduct and
results in material injury to the Company, or (iv) continued willful violations
by the Executive of the Executive’s material obligations to the Company after
there has been delivered to the Executive a written demand for performance from
the Company which describes the basis for the Company’s belief that the
Executive has not substantially performed the material duties of the position.  
  1.2.   Change of Control. “Change of Control” shall mean the occurrence of
either of the following events: (a) the approval by the Board of a merger or
consolidation of the Company with any other entity, other than a merger or
consolidation which would result in the owners of the Company immediately prior
thereto continuing to own more than fifty percent (50%) of the ownership
interest of the Company or the surviving entity immediately after such merger or
consolidation; (b) the approval by the Board of a plan of complete liquidation
of the Company or an agreement for the sale or disposition by the Company of all
or substantially all of the Company’s assets; or (c) any one person, or more
than one person acting as a group, acquires ownership of stock of the Company

 

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      that, together with stock held by such person or group, constitutes more
than 50 percent of the total fair market value or total voting power of the
Company.     1.3.   Involuntary Termination. “Involuntary Termination” shall
mean any termination of the Executive’s employment by the Company which is not
effected for Cause.     1.4.   Substantial Change of Circumstance. “Substantial
Change of Circumstances” means (a) a Change of Control; or (b) any single sale,
spinoff or other divestiture resulting in a reduction of 35% or more of
Company’s assets or revenue.     1.5.   Target Annual Variable Pay. “Target
Annual Variable Pay” means 80% of Executive’s annual base pay as of his
Termination Date.     1.6.   Termination Date. “Termination Date” shall mean the
effective date of any notice of termination of employment delivered by either
Company or Executive to the other party.     1.7.   Voluntary Termination for
Good Reason. “Voluntary Termination for Good Reason” means termination of
employment with the Company initiated by the Executive after any of the
following: (a) a material reduction by the Company of the Executive’s
compensation (including base salary, annual variable pay opportunity, and
long-term incentive and/or equity opportunity); (b) material change in scope of
Executive’s responsibilities or reporting relationship (provided however, the
parties acknowledge and agree that a change in the scope of Company’s operations
generally that is not the result of a Substantial Change of Circumstances shall
not constitute a material change in the scope of Executive’s responsibilities
for purposes of this Agreement); (c) relocation of Company headquarters outside
the Minneapolis-St. Paul metropolitan area; or (d) the failure of a successor to
assume this Agreement pursuant to paragraph 9.1.

2.   Term of Agreement. This Agreement shall terminate upon the earlier of the
date that all obligations of the parties hereto under this Agreement have been
satisfied, or the date established by separate written consent of the parties.  
3.   At-Will Employment. The Company and the Executive acknowledge that the
Executive’s employment is at-will. Either Executive or the Company can terminate
the employment relationship at any time, with or without cause, subject to their
respective continuing post-employment obligations contained in this Agreement.
If the Executive’s employment terminates for any reason, including the death or
disability of the Executive, the Executive shall not be entitled to any
payments, benefits, damages, awards or compensation other than as provided by
this Agreement, or, to the extent not modified by this agreement, as may
otherwise be established under the Company’s then existing employee benefit
plans or policies at the time of termination.   4.   Eligibility for Severance
Benefits. The benefits described in Section 5 are subject to the conditions
outlined in this Section 4. If Executive is eligible for Severance Benefits
under paragraphs 5.1 or 5.2 of this Agreement, such benefits will be in lieu of
any other Company plan or practice relating to severance pay.

 

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  4.1.   Notification. The Executive must provide notice to Company of Voluntary
Termination with Good Reason within sixty days after the occurrence of the event
described in Paragraph 1.7 giving rise to “good reason.” The Effective
Termination Date specified in the notice shall be not more than thirty days
after the date of the notice unless otherwise mutually agreed by the parties.  
  4.2.   Confidentiality. Executive has signed an Invention and Trade Secret
Agreement and has other legal and fiduciary obligations to maintain the
confidentiality of Company information, including information relating to
potential or planned Substantial Change of Circumstance events. Executive’s
compliance with his obligations of confidentiality is a condition to receiving
any payments or benefits under this Agreement.     4.3.   Separation Agreement
and Release. As consideration for the benefits provided pursuant to Section 5 of
the agreement, Executive must execute a Separation Agreement and Release
reasonably satisfactory to the Company. The Separation Agreement and Release
will be provided to Executive within seven (7) days of his Termination Date, and
shall include the following provision:         Non-competition;
Non-solicitation.

  (a)   Executive agrees that for the two-year period from and after his
Termination Date, he will not, within the Restricted Area (as hereinafter
defined) either directly, alone or with others, own, manage, operate, control,
participate in, or be connected in any manner with the ownership, management,
operation, or control of any business which involves the manufacture, sale,
marketing, or distribution of Products (as hereafter defined) which compete with
Products currently produced or sold by Land O’Lakes or its subsidiaries or
affiliates. Executive further agrees that for the two-year period from and after
his Termination Date, he will not solicit, induce, or attempt to persuade any
agent, employee, or customer of Land O’Lakes or its legal successors to
terminate an existing employment, agency, or business relationship with Land
O’Lakes or its legal successors in order to enter into any such relationship
with, or on behalf of, any Competitor (as hereinafter defined), or otherwise
knowingly interfere with the relationship of Land O’Lakes or its legal
successors with any of its employees, contractors, agents, or customers.     (b)
  For purposes of this non-compete agreement, “Products” means all products and
related services manufactured, marketed, distributed and sold by Land O’Lakes or
any subsidiary or affiliate of Land O’Lakes during the five year period
preceding the Termination Date; “Restricted Area” means the United States; and
“Competitor” means any person or entity that manufactures, sells, markets, or
distributes Products within the Restricted Area.     (c)   If, at the time of
enforcement of this provision, a court shall hold that the duration, scope,
area, or other restrictions stated herein are unreasonable duration, scope,
area, or other restrictions that are reasonable under such circumstances shall
be substituted for the stated duration, scope, area, or other restrictions.

 

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  (d)   The foregoing non-competition provision shall not preclude Executive
from owning less than two percent (2%) of any company, the stock of which is
traded on any national or regional exchange or any established over-the-counter
trading market.

5.   Severance Benefits. If the Executive complies with the conditions described
in Section 4 above, the Executive shall be entitled to the following benefits
under the limited and specific circumstances described below:

  5.1.   Involuntary Termination; Voluntary Termination with Good Reason
Following Change of Control or Other Substantial Change of Circumstances. The
benefits described in this paragraph shall be paid or provided upon the
occurrence of any one of the following events: (a) Executive’s Involuntary
Termination; (b) Executive’s Voluntary Termination with Good Reason following a
Change of Control, if an event giving rise to such Voluntary Termination with
Good Reason occurs within twenty-four (24) months after the Change of Control;
or (c) Executive’s Voluntary Termination with Good Reason following a
Substantial Change of Circumstances, if an event giving rise to such Voluntary
Termination with Good Reason occurs within twelve (12) months after a
Substantial Change of Circumstances other than a Change of Control. In any of
these events, Company will provide Executive with Separation Allowance comprised
of the following amounts: thirty-six (36) months of the Executive’s base salary
(as in effect immediately prior to the Substantial Change of Circumstances or
Involuntary Termination, as applicable); three times Target Annual Variable Pay;
an amount equivalent to the value of unvested options or units forfeited by
operation of the Cooperative Value Incentive Plan (“CVIP”) determined as of the
Termination Date and payable at the normal time established by the elected
distribution schedule under the terms of the CVIP; an amount equivalent to
Long-Term Incentive target pro-rated as of the Termination Date and payable at
the time(s) LTIP payments are normally made to participants. No payment in this
paragraph is intended to duplicate any benefits payable under the terms of the
LTIP or CVIP.     5.2.   Other Voluntary Termination with Good Reason. In the
event of Executive’s Voluntary Termination with Good Reason in circumstances
other than those described in Paragraph 5.1 above, Company will provide
Executive with a Separation Allowance in an amount equal to twenty-four
(24) months of the Executive’s base salary (as in effect immediately prior to
the Substantial Change of Circumstances).     5.3.   Timing of Payments. Except
for the CVIP and LTIP components described in 5.1 above, the Separation
Allowance will be paid in three equal installments: the first installment will
be paid sixty (60) days after the Termination Date provided the rescission
period described in the Separation Agreement and Release has expired; the
rescission period must end before sixty (60) days after the Termination Date or
the payments will not be made. The second and third installments will be paid on
the first and second anniversaries of the Termination Date, respectively. No
part of the Separation Allowance shall be taken into account to determine any
benefit calculation or contribution in any qualified or non-qualified retirement
plan maintained by Company. Executive acknowledges that Company is required to
withhold from the Separation Allowance federal income taxes at the rate required
by law, regardless of any other withholding election that Executive may have
made with respect to his wages.

 

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  5.4.   Employee Benefits. On and after the Termination Date, all employee
benefits will be treated as provided in the relevant plan documents or according
to Company’s normal practices and procedures, except that if Executive is
entitled to benefits under paragraph 5.1 or paragraph 5.2 above, he shall also
be entitled to the benefits described in this paragraph 5.4, as well as
paragraphs 5.5 and 5.6.

  (a)   Health Care Continuation. Company agrees to offer to Executive, and
Executive at his sole option may elect to continue his current health care
coverage (including medical, dental, hearing and/or vision coverage) at active
employee rates for up to the Specified Period following his Termination Date
upon the timely payment by Executive to Company or its designated representative
of the amount due for such coverage; the Company will continue to pay its share
of such costs for such coverage on an active employee basis. That portion of the
cost of coverage paid by the Company will be reported as income to Executive.
For purposes of this Agreement, the Specified Period will be thirty-six
(36) months if Executive is eligible for benefits under paragraph 5.1 above, and
twenty-four (24) months if Executive is eligible for benefits under paragraph
5.2 above. Health care coverage under such plans shall continue until the
earlier of: (i) the effective date on which Executive secures comparable
coverage under another group health plan, or (ii) the expiration of the
Specified Period. Executive shall notify Company as soon as reasonably
practicable of the effective date of any health care coverage he secures
following his separation from employment with Company, provided such coverage is
obtained during the Specified Period. Executive acknowledges that the health
care coverage continuation provided under this paragraph 5.4(a) will satisfy
Company’s obligations under the Consolidated Omnibus Budget Reconciliation Act
of 1985 (“COBRA”), provided that if circumstances occur which would extend COBRA
eligibility beyond the Specified Period, Executive may continue such coverage
for any additional period of COBRA eligibility at normal COBRA rates. Executive
acknowledges and agrees that he is solely responsible for signing and returning
to Company or its designated representative all documents required by Company in
order to effect health care options selected by him.     (b)   Life Insurance
Continuation. Company agrees to pay on behalf of Executive the premiums for
continuation of his current life insurance coverage for the duration of the
statutory continuation period.

  5.5.   Executive Outplacement. Executive will be provided with executive
outplacement assistance through a provider of his choice, at a cost not to
exceed Twenty Thousand Dollars ($20,000). No cash payment in lieu of
outplacement services will be provided in the event Executive declines such
services. All services must be completed by the end of the second calendar year
following the Termination Date and reimbursement must be provided no later than
the third calendar year following that date.     5.6.   Annual Variable
Compensation. Executive will be paid a prorated portion of annual variable
compensation for the year in which Termination Date occurs, based on projected

 

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      results as of Termination Date; such amount will be payable in the next
calendar year when such payments are normally made, not later than two and one
half months after the end of the year in which the Termination Date occurs.

6.   Severance Benefits; Other Termination. If the Executive’s employment with
the Company terminates at any time under circumstances which do not entitle him
to the benefits described in Paragraph 5.1 or 5.2, then the only benefits for
which he may be eligible are those benefits (if any) provided under the
Company’s then existing severance and benefits plans and policies at the
Termination Date or under another agreement with the Company.

7.   Accrued Wages and Vacation; Expenses. Without regard to the reason for, or
the timing of, Executive’s termination of employment: (i) the Company shall pay
the Executive any unpaid base salary due for periods prior to the Termination
Date; (ii) the Company shall pay the Executive all of the Executive’s accrued
and unused PTO through the Termination Date; and (iii) following submission of
proper expense reports by the Executive, the Company shall reimburse the
Executive for all expenses reasonably and necessarily incurred by the Executive
in connection with the business of the Company prior to the Termination Date.
All such payments will be made in compliance with applicable state law.   8.  
Limitation on Payments and Benefits

  8.1   Limitation. Notwithstanding anything to the contrary contained in this
Agreement if, after taking into account all amounts and benefits to be paid or
payable to the Executive under this Agreement or otherwise, any amount or
benefit to be paid or provided under this Agreement or any other plan or
agreement would be a “parachute payment,” within the meaning of Section 280G of
the Internal Revenue Code of 1986, as amended (the “Code”), or any successor
provision thereto, and but for this Section 8 would be subject to the excise tax
imposed by Section 4999 of the Code, then the payments and benefits to be so
paid or provided under this Agreement or any other plan or agreement shall be as
follows:

  (a)   if termination occurs on or before December 31, 2010, the Executive
shall be entitled to receive an additional payment (a “280G Gross-Up Payment”)
in an amount such that, after payment by the Executive of all taxes (and any
interest or penalties imposed with respect to such taxes), including any income
and employment taxes and Excise Taxes imposed upon the 280G Gross-Up Payment,
the Executive retains an amount as if Section 280G did not apply to any of the
payments described in Section 5 and 8.1(a).     (b)   if termination occurs
after December 31, 2010, then such payments and benefits shall either be:

  (1)   delivered in full in the amounts and at the times set forth in this
Agreement, or     (2)   delivered as to such lesser extent which would result in
no portion of such payments and benefits being subject to excise tax under
Section 4999 of the Code, or any successor provision thereto, or any tax imposed
by any comparable provision of state law, whichever of the foregoing amounts,
taking

 

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      into account the applicable federal, state and local income taxes and the
excise tax imposed by Section 4999 of the Code, or any successor provision
thereto, or any tax imposed by any comparable provision of state law, results in
the receipt by the Executive on an after-tax basis, of the greatest amount of
payments and benefits, notwithstanding that all or some portion of such payments
and benefits may be taxable under Section 4999 of the Code, or any successor
provision thereto, or any tax imposed by any comparable provision of state law.
Any taxes due under Section 4999 of the Code, or any successor provision
thereto, or any tax imposed by any comparable provision of state law shall be
the responsibility of the Executive.

  8.2.   Auditor’s Determination. Any determination as to the amount or timing
of payments required under this Section 8 shall be made in writing by the
Company’s independent accountants or other qualified professional engaged by the
Company (the “Auditor”) immediately prior to the Change of Control, whose
determination shall be conclusive and binding upon the Executive and the Company
for all purposes. For purposes of making the calculations required by this
Section 8, the Auditor may, after taking into account the information provided
by the Executive, make reasonable assumptions and approximations concerning
applicable taxes and may rely on reasonable, good faith interpretations
concerning the application of Section 280G and 4999 of the Code. The Company and
the Executive shall furnish to the Auditor such information and documents as the
Auditor may reasonably request in order to make a determination under this
Section. If the auditor identifies more than one option which would meet the
requirements of Paragraph 8.1, the Executive may select among the identified
options within 30 days after receiving the Auditor’s written determination. The
Company shall bear all costs the Auditor may reasonably incur in connection with
any calculations contemplated by this Section 8. If, as a result of any
reduction required by Paragraph 8.1, amounts previously paid to the Executive
exceed the amount to which the Executive is entitled, the Executive will
promptly return the excess amount to the Company.     8.3.   Timing of Payment.
Any payment made under this Section 8 beyond what is payable under the other
provisions of this Agreement shall be made not later than the due date,
including extension, on which Executive must remit the taxes related to such
payments.

9.   Successors.

  9.1.   Company’s Successors. Any successor to the Company (whether direct or
indirect and whether by purchase, lease, merger, consolidation, liquidation or
otherwise) to all or substantially all of the Company’s business and/or assets
shall assume the Company’s obligations under this Agreement and agree to perform
the Company’s obligations under this Agreement in the same manner and to the
same extent as the Company would be required to perform such obligations in the
absence of a succession..     9.2.   Executive’s Successors. Without the written
consent of the Company, Executive shall not assign or transfer this Agreement or
any right or obligation under this Agreement to any other person or entity.
Notwithstanding the foregoing, the terms of this Agreement and all rights of
Executive hereunder shall inure to the benefit of, and be enforceable by,
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.

 

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10.   Notices.

  10.1.   General. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of the Executive, mailed
notices shall be addressed to him at the home address which he most recently
communicated to the Company in writing. In the case of the Company, mailed
notices shall be addressed to its corporate headquarters, and all notices shall
be directed to the attention of Vice President, Human Resources.     10.2.  
Notice of Termination. Any Involuntary Termination by the Company or Voluntary
Termination for Good Reason by the Executive shall be communicated by a notice
of termination to the other party hereto given in accordance with this Section.
Such notice shall indicate the specific termination provision in this Agreement
relied upon, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision so indicated, and
shall specify the Termination Date (which shall be not less than 30 days after
the giving of such notice).

11.   Dispute Resolution. All disputes arising hereunder shall be settled in
accordance with the following dispute resolution process:

  11.1.   Negotiation; Mediation. The parties hereto will attempt to settle any
claim or controversy arising out of this Agreement through consultation and
negotiation in good faith and a spirit of mutual cooperation. However, at any
time before or during such negotiations, or following any unsuccessful
negotiations, either party may by written notice to the other demand that the
dispute be submitted to mediation. When such a demand is made, the parties shall
within ten (10) days jointly make arrangements for the mediation of the dispute
within the State of Minnesota pursuant to the Model Procedure for Mediation of
Business Disputes produced by the Center for Public Resources (CPR).     11.2.  
Effect on other legal proceedings. Neither party shall initiate any litigation
or other formal claim procedure before the parties have in good faith exhausted
the negotiation and mediation steps described in paragraph 11.1; provided,
however, nothing in this Agreement will prevent either party from resorting to
judicial proceedings prior to that time for the limited purposes of seeking a
preliminary injunction or to avoid the barring of the claim under the applicable
statute of limitations. In addition, resort by either party to negotiation or
mediation pursuant to this Agreement shall not be construed under the doctrine
of laches, waiver or estoppel to affect adversely the rights of either party to
pursue any such judicial relief; provided, however, that irrespective of the
filing of any such request for judicial relief the party shall continue to
participate in the dispute resolution proceedings required by this Section 11.
Any negotiation or mediation which takes place pursuant to this Agreement shall
be confidential and shall be treated as a compromise and settlement negotiation
for purposes of the Federal Rules of Evidence and State rules of Evidence.

 

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12.   Miscellaneous Provisions.

  12.1.   Waiver. No provision of this Agreement may be modified, waived or
discharged unless the modification, waiver or discharge is agreed to in writing
and signed by the Executive and by an authorized officer of the Company (other
than the Executive). No waiver by either party of any breach of, or of
compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision or of the same
condition or provision at another time.     12.2.   Integration. This Agreement
represents the entire agreement and understanding between the parties as to the
Company’s obligation to make payments and provide benefits to the Executive in
the event of Involuntary Termination, or in the event of Voluntary Termination
for Good Reason under the circumstances defined herein, and supersedes all prior
or contemporaneous agreements on the subject, whether written or oral.     12.3.
  Choice of Law. The validity, interpretation, construction and performance of
this Agreement shall be governed by the internal substantive laws, but not the
conflicts of law rules, of the State of Minnesota.     12.4.   Severability. The
invalidity or unenforceability of any provision or provisions of this Agreement
shall not affect the validity or enforceability of any other provision hereof,
which shall remain in full force and effect.     12.5.   Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but all of which together will constitute one and the same instrument.

     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the day and year first
above written.

         
CHRIS POLICINSKI
  LAND O’LAKES, INC.    
 
       
/s/ C J Policinski

 
  /s/ Peter S. Janzen
 
Title: SVP & General Counsel    
 
       
 
  Acknowledged and agreed to by:    
 
       
 
  /s/ Pete Kappelman

 
Pete Kappelman    
 
  Chairman, Land O’Lakes, Inc.    
 
  Board of Directors