Exhibit 10.28
Land O’Lakes, Inc.
SEVERANCE AGREEMENT
     This Severance Agreement (the “Agreement”) is made and entered into
effective as of                                         , 2005 (the “Effective
Date”), by and between                                           (the
“Executive”) and Land O’Lakes, Inc., a Minnesota cooperative corporation (the
“Company”).
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 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 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.   Target Annual Variable Pay. “Target Annual Variable Pay”
means 80% of Executive’s annual base pay as of his Termination Date.     1.5.  
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.     1.6.   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.     1.7.   Substantial Change of Circumstance.
“Substantial Change of Circumstances” means (a) a Change of Control; (b) any
single sale, spinoff or other divestiture resulting in a reduction of 35% or
more of Company’s assets or revenue.

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 below will be made only in the
circumstances described in Paragraphs 4.1, 4.2, 4.3, and 4.4 and then only
provided Executive complies with the conditions set forth in Paragraphs 4.5,
4.6, and 4.7. If Executive is eligible for Severance Benefits under the terms 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   Change of Control. The applicable benefits described in Section 5 below
will be paid or provided in the event of a Change of Control, and then only if
Executive’s Involuntary Termination occurs prior to and in anticipation of, or
within twenty-four (24) months after a Change of Control, or if an event giving
rise to Voluntary Termination for Good Reason occurs within twenty-four
(24) months after a Change of Control.     4.2   Other Substantial Change of
Circumstances. The applicable benefits described in Section 5 below will be paid
or provided in the event of a Substantial Change of Circumstance other than a
Change of Control, and then only if Executive’s Involuntary Termination occurs
prior to and in anticipation of, or within twelve (12) months after such
Substantial Change of Circumstance, or if an event giving rise to Voluntary
Termination for Good Reason occurs within twelve (12) months after such
Substantial Change of Circumstance.     4.3   Other Involuntary Termination.
Pursuant to the terms of the Offer Letter dated July 15, 2005, in the event of
Executive’s Involuntary Termination at any time under circumstances which do not
constitute a Substantial Change of Circumstances, Executive will be entitled to
the applicable benefits described in Section 5 below.     4.4   Other Voluntary
Termination for Good Reason. In the event of Executive’s Voluntary Termination
for Good Reason under circumstances which do not constitute a Substantial Change
of Circumstances, Executive will be entitled to the applicable benefits
described in Section 5 below.     4.5   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 1.6 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.     4.6   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.     4.7  
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,

 

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      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.     (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.

  4.7.   Burden of Proof. Executive shall have the burden of proof to establish
that an Involuntary Termination has occurred “in anticipation of” a Substantial
Change of Circumstances by demonstrating that but for the anticipated
Substantial Change of Circumstances, such Involuntary Termination would not have
occurred.

5.   Severance Benefits. If the Executive meets the eligibility requirements
described in Section 4 above, the Executive shall be entitled to the following
benefits:

  5.1.   Involuntary Termination Caused by Substantial Change of Circumstances;
Voluntary Termination with Good Reason Following Change of Control. In the event
of Executive’s Involuntary Termination prior to and in anticipation of, or
following any Substantial Change of Circumstances, or in the event of
Executive’s Voluntary Termination with Good Reason following a Change of
Control, 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

 

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      Substantial Change of Circumstances); three times Target Annual Variable
Pay; an amount equivalent to the value of unvested options or units forfeited by
operation of the CVIP; an amount equivalent to Long-Term Incentive target
pro-rated as of the Termination Date. 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; Other Involuntary
Termination. In the event of Executive’s Voluntary Termination with Good Reason
in circumstances other than a Change of Control, or in the event of Executive’s
Involuntary Termination under circumstances which do not constitute a
Substantial Change of Circumstances, 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. The Separation
Allowance will be paid in three equal installments: the first installment will
be paid within ten (10) days after the Termination Date or the expiration of the
rescission period described in the Separation Agreement and Release, whichever
is later; the second and third installments will be paid on the first and second
anniversaries of the Termination Date, respectively. The Separation Allowance
shall not 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.     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 as
specifically provided in this Agreement.

  (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. 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

 

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      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.     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 results as of Termination Date; such
amount will be payable in the next calendar year when such payments are normally
made.

6.   Severance Benefits; Other Termination. If the Executive’s employment with
the Company terminates at any time under circumstances which do not meet the
eligibility requirements described in Paragraph 4.1, 4.2, 4.3, or 4.4, then the
Executive shall not be entitled to receive severance or other benefits described
in Section 5 above, but may be eligible for those benefits (if any) as may then
be established 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.  
8.   Limitation on Payments and Benefits

      8.1Limitation. 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
either

 

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      (a) delivered in full in the amounts and at the times set forth in this
Agreement, or         (b) 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 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.

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

 

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      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.

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.

                  EXECUTIVE       LAND O’LAKES, INC.    
 
               
/s/ Christopher J. Policinski
      By:   /s/ Peter Kappelman    
 
               
 
          Title: Board Chairman    
 
               
 
      By:   /s/ Karen M. Grabow    
 
               
 
          Title: Vice President, Human Resources