Document:

EXHIBIT 10.7

 

FARMLAND PARTNERS INC.

EMPLOYMENT AGREEMENT

 

EMPLOYMENT AGREEMENT (this “Agreement”) dated as of                     , 2014, between Farmland Partners Inc., a Maryland corporation (the “Farmland”) and Farmland Partners Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership” and, together with Farmland, the “Company”), each with its principal place of business at 8670 Wolff Court, Suite 240, Westminster, CO 80031, and Luca Fabbri residing at the address on file with the Company (the “Employee”).

 

W I T N E S S E T H

 

WHEREAS, Farmland is the sole member of the general partner of the Operating Partnership;

 

WHEREAS, the parties desire to enter into this Agreement to reflect the Employee’s executive capacities in the Company’s business and to provide for the Company’s employment of the Employee; and

 

WHEREAS, the parties wish to set forth the terms and conditions of that employment.

 

NOW, THEREFORE, in consideration of the foregoing, of the mutual promises contained herein and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

1.                                      POSITION AND DUTIES.

 

(a)                                 During the Employment Term (as defined in Section 2 hereof), the Employee shall serve as the Chief Financial Officer of the Company.  In this capacity, the Employee shall have the duties, authorities and responsibilities as are required by the Employee’s position commensurate with the duties, authorities and responsibilities of persons in similar capacities in similarly sized companies, and such other duties, authorities and responsibilities as may reasonably be assigned to the Employee as the Chief Executive Officer of the Company shall designate from time to time that are not inconsistent with the Employee’s position with the Company and that are consistent with the bylaws of the Company and the amended and restated agreement of limited partnership of the Operating Partnership as it may be further amended from time to time, including, but not limited to, managing the affairs of the Company.  The Employee’s principal place of employment with the Company shall be in Westminster, Colorado, provided that the Employee understands and agrees that the Employee may be required to travel from time to time for business purposes. The Employee shall report directly to the Chief Executive Officer of the Company.

 

(b)                                 During the Employment Term, the Employee shall devote substantially all of the Employee’s business time, energy, business judgment, knowledge and skill and the Employee’s best efforts to the performance of the Employee’s duties with the Company, provided that the foregoing shall not prevent the Employee from (i) serving on the boards of directors of non-profit organizations, (ii) participating in charitable, civic, educational, professional, community

 

 

or industry affairs, and (iii) managing the Employee’s personal investments and/or personal business as necessary, so long as such activities in the aggregate do not interfere or conflict with the Employee’s duties hereunder or create a potential business or fiduciary conflict.

 

2.                                EMPLOYMENT TERM.  The Company agrees to employ the Employee pursuant to the terms of this Agreement, and the Employee agrees to be so employed, for a term of three years (the “Initial Term”) commencing as of the date hereof (the “Effective Date”).  Commencing with the last day of the Initial Term, and on each subsequent anniversary of such date, the term of this Agreement shall be automatically extended for successive one-year periods, provided, however, that either party hereto may elect not to extend this Agreement by giving written notice to the other party at least sixty (60) days prior to any such anniversary date.  Notwithstanding the foregoing, the Employee’s employment hereunder may be earlier terminated in accordance with Section 7  hereof, subject to Section 8 hereof.  The period of time between the Effective Date and the end of the Initial Term and any successor terms (or earlier upon a termination of the Employee’s employment hereunder) shall be referred to herein as the “Employment Term.” If the Employee’s employment continues following any expiration of the Employment Term due to either party giving notice not to extend this Agreement, such employment will be entirely “at-will,” and will not be covered by this Agreement (except for the applicable restrictive covenant provisions, which are intended to survive expiration of the Agreement in all cases).

 

3.                                      BASE SALARY.  The Company agrees to pay the Employee a base salary at an annual rate of not less than $200,000, payable in accordance with the regular payroll practices of the Company, but not less frequently than monthly.  The Employee’s Base Salary shall be subject to annual review by the Board of Directors of Farmland (the “Board”) (or a committee thereof), and may be adjusted from time to time by the Board or the Compensation Committee of the Board (the “Compensation Committee”) in its sole discretion.  The base salary as determined herein and adjusted from time to time shall constitute “Base Salary” for purposes of this Agreement.

 

4.                                      ANNUAL BONUS.  During the Employment Term, the Employee shall be eligible to receive an annual discretionary incentive payment under the Company’s annual bonus plan as may be in effect from time to time (the “Annual Bonus”) based on a percentage of the Employee’s Base Salary (the “Target Bonus”), upon the attainment of one or more pre-established performance goals established by the Board or the Compensation Committee in its sole discretion.

 

5.                                      EQUITY AWARDS.  The Employee shall be considered to receive equity and other long-term incentive awards (including long-term incentive units in the Operating Partnership) under any applicable plan adopted by the Company during the Employment Term.

 

6.                                      EMPLOYEE BENEFITS.

 

(a)                                 BENEFIT PLANS.  During the Employment Term, the Employee shall be entitled to participate in any employee benefit plan that the Company has adopted or may adopt, maintain or contribute to for the benefit of its employees generally, subject to satisfying the applicable eligibility requirements, except to the extent such plans are duplicative of the benefits

 

2

 

otherwise provided hereunder.  The Employee’s participation will be subject to the terms of the applicable plan documents and generally applicable Company policies.  Notwithstanding the foregoing, the Company may modify or terminate any employee benefit plan at any time.

 

(b)                                 VACATIONS.  During the Employment Term, the Employee shall be entitled to paid vacation per calendar year (as prorated for partial years) in accordance with the Company’s policy on accrual and use applicable to employees as in effect from time to time.

 

(c)                                  BUSINESS AND ENTERTAINMENT EXPENSES.  Upon presentation of reasonable substantiation and documentation as the Company may specify from time to time, the Employee shall be reimbursed in accordance with the Company’s expense reimbursement policy, for all reasonable out-of-pocket business and entertainment expenses incurred and paid by the Employee during the Employment Term and in connection with the performance of the Employee’s duties hereunder.

 

7.                                      TERMINATION.  The Employee’s employment and the Employment Term shall terminate on the first of the following to occur:

 

(a)                                 DISABILITY.  Upon ten (10) days’ prior written notice by the Company to the Employee of termination due to Disability.  For purposes of this Agreement, “Disability” shall be defined as the inability of the Employee to have performed the Employee’s material duties hereunder due to a physical or mental injury, infirmity or incapacity for one hundred eighty (180) days (including weekends and holidays) in any 365-day period as determined by the Board in its reasonable discretion.

 

(b)                                 DEATH.  Automatically upon the date of death of the Employee.

 

(c)                                  CAUSE.  Immediately upon written notice by the Company to the Employee of a termination for Cause.  “Cause” shall mean:

 

(i)                                     Employee’s continued failure to substantially perform duties, or gross negligence or willful misconduct in connection with the performance of the Employee’s duties to the Company;

 

(ii)                                  Employee’s conviction or plea of guilty or nolo contendere of a felony;

 

(iii)                               Employee’s conviction of any other criminal offense involving an act of dishonesty intended to result in substantial personal enrichment of Employee at the expense of the Company or an affiliate of the Company; or

 

(iv)                              Employee’s material breach of any Company policy or term of this Agreement or any other employment, consulting or other services, confidentiality, intellectual property or non-competition agreements, if any, between the Employee and the Company or an affiliate of the Company.

 

Any determination of Cause by the Company will be made by a resolution approved by a majority of the members of the Board, provided that no such determination may be made until the Employee has been given written notice detailing the specific Cause event, an opportunity to

 

3

 

appear before the full Board with legal counsel, and a period of thirty (30) days following receipt of such notice to cure such event (if susceptible to cure) to the satisfaction of the Board.  Notwithstanding anything to the contrary contained herein, the Employee’s right to cure and appear before the full Board with legal counsel as set forth in the preceding sentence shall not apply if there are habitual or repeated breaches by the Employee.

 

(d)                                 WITHOUT CAUSE.  Immediately upon written notice by the Company to the Employee of an involuntary termination without Cause (other than for death or Disability).

 

(e)                                  GOOD REASON.  Upon written notice by the Employee to the Company of a termination for Good Reason.  “Good Reason” shall mean the occurrence of any of the following events, without the express written consent of the Employee, unless such events are fully corrected in all material respects by the Company within thirty (30) days following written notification by the Employee to the Company of the occurrence of one of the following:

 

(i)                                     material diminution in the Employee’s Base Salary or Target Bonus considered as a whole (as the same may be in effect from time to time);

 

(ii)                                  material diminution in the Employee’s duties, authorities or responsibilities (other than temporarily while physically or mentally incapacitated or as required by applicable law); or

 

(iii)                               the Company’s material breach of the terms of this Agreement.

 

The Employee shall provide the Company with a written notice detailing the specific circumstances alleged to constitute Good Reason within ninety (90) days after the first occurrence of such circumstances that the Employee knows or reasonably should have known to constitute Good Reason, and actually terminate employment within thirty (30) days following the expiration of the Company’s thirty (30)-day cure period described above.  The failure by the Employee to provide written notice in detail of the circumstances constituting “Good Reason” within the time period set forth in the preceding sentence shall result in the Employee being deemed not to have terminated employment for Good Reason and to have irrevocably waived any claim of such circumstances constituting Good Reason under this Agreement.

 

(f)                                   WITHOUT GOOD REASON.  Upon thirty (30) days’ prior written notice by the Employee to the Company of the Employee’s voluntary termination of employment without Good Reason (which the Company may, in its sole discretion, make effective earlier than any notice date).

 

(g)                                  EXPIRATION OF EMPLOYMENT TERM; NON-EXTENSION OF AGREEMENT.  Upon the expiration of the Employment Term due to a non-extension of the Agreement by the Company or the Employee pursuant to the provisions of Section 2 hereof.

 

8.                                      CONSEQUENCES OF TERMINATION.

 

(a)                                 DEATH.  In the event that the Employee’s employment and the Employment Term end on account of the Employee’s death, the Employee or the Employee’s estate, as the

 

4

 

case may be, shall be entitled to a lump sum payment of the following within sixty (60) days following termination of employment, or such earlier date as may be required by applicable law:

 

(i)                                     any unpaid Base Salary through the termination date;

 

(ii)                                  any Annual Bonus earned and accrued but unpaid;

 

(iii)                               any accrued but unused vacation time in accordance with Company policy; and

 

(iv)                              reimbursement for any unreimbursed business expenses incurred through the termination date (collectively, Sections 8(a)(i) through 8(a)(iv) hereof shall be hereafter referred to as the “Accrued Benefits”).

 

(b)                                 DISABILITY.  In the event that the Employee’s employment and/or Employment Term ends on account of the Employee’s Disability, the Company shall pay or provide the Employee with the following:

 

(i)                                     the Accrued Benefits; and

 

(ii)                                  subject to (A) the Employee’s timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”) and (B) the Employee’s continued compliance with the obligations in Sections 9 and 10 hereof, Employee shall be reimbursed for the amount equal to the COBRA continuation coverage premiums paid by the Employee that is required for coverage of the Employee (or his eligible dependents) under the Company’s major medical group health plan, for a period of eighteen (18) months, or, if less, until the Employee or his eligible dependents are no longer entitled to such COBRA coverage.

 

(c)                                  TERMINATION FOR CAUSE OR WITHOUT GOOD REASON OR AS A RESULT OF EMPLOYEE NON-EXTENSION OF THIS AGREEMENT.  If the Employee’s employment and the Employment Term are terminated (x) by the Company for Cause, (y) by the Employee without Good Reason, or (z) as a result of the Employee’s non-extension of the Employment Term as provided in Section 2 hereof, the Company shall pay to the Employee the Accrued Benefits.

 

(d)                                 TERMINATION WITHOUT CAUSE OR FOR GOOD REASON; TERMINATION AS A RESULT OF COMPANY NON-EXTENSION OF THIS AGREEMENT.  If the Employee’s employment and the Employment Term are terminated (x) by the Company other than for Cause (other than death or Disability), (y) by the Employee for Good Reason, or (z) as a result of the Company’s non-extension of the Employment Term as provided in Section 2 hereof and Employee was willing and able to remain employed, the Company shall pay or provide the Employee with the following:

 

(i)                                     the Accrued Benefits;

 

(ii)                                  subject to the Employee’s continued compliance with the obligations in Sections 9 and 10 hereof, an amount equal to two (2) times the sum of (A) the Base Salary in

 

5

 

effect on the termination date, (B) the average Annual Bonus earned by the Employee for the two (2) Company fiscal years ending during the Employment Period and immediately preceding the Company fiscal year in which such termination occurs (regardless of whether such amount was paid out on a current basis or deferred), plus (C) the average Equity Award Value (as defined below) of the two (2) most recent Annual Grants (as defined below) made to the Employee by Farmland, paid monthly in equal installments for a period of twelve (12) months following such termination; provided that to the extent that the payment of any amount constitutes “nonqualified deferred compensation” for purposes of Code Section 409A (as defined in Section 22 hereof), any such payment scheduled to occur during the first sixty (60) days following the termination of employment shall not be paid until the first regularly scheduled pay period following the sixtieth (60th) day following such termination and shall include payment of any amount that was otherwise scheduled to be paid prior thereto;

 

(iii)                               subject to (A) the Employee’s timely election of continuation coverage under COBRA and (B) the Employee’s continued compliance with the obligations in Sections 9 and 10 hereof, Employee shall be reimbursed for the amount equal to the COBRA continuation coverage premiums paid by the Employee that is required for coverage of the Employee (or his eligible dependents) under the Company’s major medical group health plan, for a period of eighteen (18) months, or, if less, until the Employee or his eligible dependents are no longer entitled to such COBRA coverage; and

 

(iv)                              all of the Employee’s equity-based awards that are outstanding on the termination date shall immediately become fully vested and, as applicable, exercisable, without any action by the Board or Compensation Committee; provided, however, that to the extent an award is intended to qualify as performance-based compensation for purposes of Internal Revenue Code Section 162(m), such award shall not vest as a result of the termination of the Employee’s employment and shall, instead, remain outstanding after such termination and shall be subject to the terms and conditions of the applicable award agreement and plan document (other than continued employment).

 

Payments and benefits provided in this Section 8(d) shall be in lieu of any termination or severance payments or benefits for which the Employee may be eligible under any of the plans, policies or programs of the Company or under the Worker Adjustment Retraining Notification Act of 1988 or any similar state statute or regulation.

 

For purposes of Section 8(d)(ii)(B), in the event that the Employee’s termination occurs prior to the end of the completion of two (2) Company fiscal years during the Employment Term, then the amount in Section 8(d)(ii)(B) shall be determined by using the Employee’s Target Bonus for any such fiscal year not yet completed, together with Annual Bonus actually earned by the Executive for the fiscal year completed during the Employment Term (if any), annualized for any such partial fiscal year.

 

For purposes of Section 8(d)(ii)(C), in the event that the Employee’s termination occurs prior Executive receiving two (2) Annual Grants, then the amount in Section 8(d)(ii)(C) shall be determined based on the Equity Award Value of Annual Grants made to the Employee during the Employment Term prior to the Employee’s termination (if any).

 

6

 

For purposes of this Agreement:

 

“Equity Award Value” means (x) with respect to options and stock appreciation rights, the grant date fair value, as computed in accordance with FASB Accounting Standards Codification Topic 718, Compensation — Stock Compensation (or any successor accounting standard), and (y) with respect to equity-based awards other than options and stock appreciation rights, the product of (1) the number of shares or units subject to such award, times (2) the “fair market value” of a share of Farmland’s common stock on the date of grant as determined under the plan under which such award was granted; and

 

“Annual Grant” means the grant of equity-based awards that constitute a component of a given year’s annual compensation package and shall not include any isolated, one-off or non-recurring grant outside of the Employee’s annual compensation package, such as (but not limited to) an initial hiring award, a retention award, an award that relates to multi-year or other long-term performance, an outperformance award or other similar award, in any event, as determined in the sole discretion of the Board or the Compensation Committee.

 

(e)                                  CODE SECTION 280G.  If the Employee is a “disqualified individual,” as defined in Code Section 280G(c), then, notwithstanding any other provision of this Agreement or of any other agreement, contract, or understanding heretofore or hereafter entered into by the Employee with the Company (an “Other Agreement”), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Employee (including groups or classes of employees or beneficiaries of which the Employee is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Employee (a “Benefit Arrangement”), any right to exercise, vesting, payment or benefit to the Employee under this Agreement, any Other Agreement and/or any Benefit Arrangement shall be reduced or eliminated:

 

(i)                                     to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Employee under this Agreement, all Other Agreements, and all Benefit Arrangements, would cause any exercise, vesting, payment or benefit to the Employee under this Agreement to be considered a “parachute payment” within the meaning of Code Section 280G(b)(2) as then in effect (a “Parachute Payment”); and

 

(ii)                                  if, as a result of receiving such Parachute Payment, the aggregate after-tax amounts received by the Employee from the Company under this Agreement, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by the Employee without causing any such payment or benefit to be considered a Parachute Payment.

 

The Company shall accomplish such reduction by first reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting of performance awards, then by reducing or eliminating any accelerated vesting of options or stock appreciation rights, then by reducing or eliminating any accelerated vesting of restricted stock or stock units, then by reducing or eliminating any other remaining Parachute Payments.

 

7

 

(f)                                   OTHER OBLIGATIONS.  Upon any termination of the Employee’s employment with the Company, unless otherwise specified in a written agreement between the Company and the Employee, the Employee shall be deemed to have resigned from the Board and any other position as an officer, director or fiduciary of the Company and its affiliates, and shall take any and all actions reasonably requested by the Company to effectuate the foregoing.

 

(g)                                  EXCLUSIVE REMEDY.  The amounts payable to the Employee following termination of employment and the Employment Term hereunder pursuant to Sections 7 and 8 hereof shall be in full and complete satisfaction of the Employee’s rights under this Agreement and any other claims that the Employee may have in respect of the Employee’s employment with the Company or any of its affiliates, and the Employee acknowledges that such amounts are fair and reasonable, and are the Employee’s sole and exclusive remedy, in lieu of all other remedies at law or in equity, with respect to the termination of the Employee’s employment hereunder or any breach of this Agreement.

 

9.                                      RELEASE.  Any and all amounts payable and benefits or additional rights provided pursuant to this Agreement beyond the Accrued Benefits shall only be payable if the Employee delivers to the Company and does not revoke a general release of claims in favor of the Company in substantially the form attached on Exhibit A hereto. Such release shall be executed and delivered (and no longer subject to revocation, if applicable) within sixty (60) days following termination.

 

10.                               RESTRICTIVE COVENANTS.

 

(a)                                 CONFIDENTIALITY.  During the course of the Employee’s employment with the Company, the Employee will have access to Confidential Information.  For purposes of this Agreement, “Confidential Information” means all data, information, ideas, concepts, discoveries, trade secrets, inventions (whether or not patentable or reduced to practice), innovations, improvements, know-how, developments, techniques, methods, processes, treatments, drawings, sketches, specifications, designs, plans, patterns, models, plans and strategies, and all other confidential or proprietary information or trade secrets in any form or medium (whether merely remembered or embodied in a tangible or intangible form or medium) whether now or hereafter existing, relating to or arising from the past, current or potential business, activities and/or operations of the Company or any of its affiliates, including, without limitation, any such information relating to or concerning finances, sales, marketing, advertising, transition, promotions, pricing, personnel, customers, suppliers, vendors, raw partners and/or competitors.  The Employee agrees that the Employee shall not, directly or indirectly, use, make available, sell, disclose or otherwise communicate to any person, other than in the course of the Employee’s assigned duties and for the benefit of the Company, either during the period of the Employee’s employment or at any time thereafter, any Confidential Information or other confidential or proprietary information received from third parties subject to a duty on the Company’s and its affiliates’ part to maintain the confidentiality of such information, and to use such information only for certain limited purposes, in each case, which shall have been obtained by the Employee during the Employee’s employment by the Company (or any predecessor).  The foregoing shall not apply to information that (i) was known to the public prior to its disclosure to the Employee; (ii) becomes generally known to the public subsequent to disclosure to the Employee through no wrongful act of the Employee or any representative of the Employee; or

 

8

 

(iii) the Employee is required to disclose by applicable law, regulation or legal process (provided that the Employee provides the Company with prior notice of the contemplated disclosure and cooperates with the Company at its expense in seeking a protective order or other appropriate protection of such information).

 

(b)                                 NONCOMPETITION.  The Employee acknowledges that (i) the Employee performs services of a unique nature for the Company that are irreplaceable, and that the Employee’s performance of such services to a competing business will result in irreparable harm to the Company, (ii) the Employee has had and will continue to have access to Confidential Information which, if disclosed, would unfairly and inappropriately assist in competition against the Company or any of its affiliates, (iii) in the course of the Employee’s employment by a competitor, the Employee would inevitably use or disclose such Confidential Information, (iv) the Company and its affiliates have substantial relationships with their customers and the Employee has had and will continue to have access to these customers, (v) the Employee has received and will receive specialized training from the Company and its affiliates, and (vi) the Employee has generated and will continue to generate goodwill for the Company and its affiliates in the course of the Employee’s employment.  Accordingly, during the Employee’s employment and (A) if the Employee’s employment and the Employment Term are terminated by the Company for Cause, by the Employee without Good Reason or as a result of the Employee’s non-extension of the Employment Term as provided in Section 2 hereof, for a period of one (1) year thereafter, or (B) if the Employee’s employment and the Employment Term are terminated by the Company other than for Cause, by the Employee for Good Reason or as a result of the Company’s non-extension of the Employment Term as provided in Section 2 hereof and Employee was willing and able to remain employed, for a period of six (6) months thereafter, the Employee agrees that the Employee will not, directly or indirectly, own, manage, operate, control, be employed by (whether as an employee, consultant, independent contractor or otherwise, and whether or not for compensation) or render services to (i) any person, firm, corporation or other entity, in whatever form, with a class of securities listed on a national securities exchange, engaged in the business of owning and leasing agricultural real estate or in any other material business in which the Company or any of its affiliates is engaged on the termination date or in which they have planned, on or prior to such date, to be engaged in on or after such date, in any locale of any country in which the Company conducts business or (ii) any person, firm, corporation or other entity, in whatever form, with assets under management or committed capital in excess of $50,000,000, engaged in the business of owning and leasing agricultural real estate or in any other material business in which the Company or any of its affiliates is engaged on the termination date or in which they have planned, on or prior to such date, to be engaged in on or after such date, in any locale of any country in which the Company conducts business.  Notwithstanding the foregoing, nothing herein shall prohibit the Employee from (i) being a passive owner of not more than one percent (1%) of the equity securities of a publicly traded corporation engaged in a business that is in competition with the Company or any of its affiliates, so long as the Employee has no active participation in the business of such corporation or (ii) owning, managing, operating, controlling, or being employed by any firm, corporation or other entity in the same capacity in which the Employee was engaged immediately prior to the Termination of the Employee’s employment hereunder, as long as (a) the Board has been apprised of the identity of, and the Employee’s role with, such firm, corporation or other entity and (b) the Board has previously approved the Employee’s role with such firm, corporation or other entity, in the case of both (a) and (b), prior to the Employee’s

 

9

 

termination of employment.  In addition, the provisions of this Section 10(b) shall not be violated by the Employee commencing employment with a subsidiary, division or unit of any entity that engages in a business in competition with the Company or any of its affiliates so long as the Employee and such subsidiary, division or unit does not engage in a business in competition with the Company or any of its affiliates.

 

(c)                                  NONSOLICITATION; NONINTERFERENCE.  (i)  During the Employee’s employment with the Company and (A) if the Employee’s employment and the Employment Term are terminated by the Company for Cause, by the Employee without Good Reason or as a result of the Employee’s non-extension of the Employment Term as provided in Section 2 hereof, for a period of one (1) year thereafter, or (B) if the Employee’s employment and the Employment Term are terminated by the Company other than for Cause, by the Employee for Good Reason or as a result of the Company’s non-extension of the Employment Term as provided in Section 2 hereof and Employee was willing and able to remain employed, for a period of six (6) months thereafter, the Employee agrees that the Employee shall not, except in the furtherance of the Employee’s duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, solicit, aid or induce any customer of the Company or any of its affiliates to purchase goods or services then sold by the Company or any of its affiliates from another person, firm, corporation or other entity or assist or aid any other persons or entity in identifying or soliciting any such customer.

 

(ii)                                  During the Employee’s employment with the Company and (A) if the Employee’s employment and the Employment Term are terminated by the Company for Cause, by the Employee without Good Reason or as a result of the Employee’s non-extension of the Employment Term as provided in Section 2 hereof, for a period of one (1) year thereafter, or (B) if the Employee’s employment and the Employment Term are terminated by the Company other than for Cause, by the Employee for Good Reason or as a result of the Company’s non-extension of the Employment Term as provided in Section 2 hereof and Employee was willing and able to remain employed, for a period of six (6) months thereafter, the Employee agrees that the Employee shall not, except in the furtherance of the Employee’s duties hereunder, directly or indirectly, individually or on behalf of any other person, firm, corporation or other entity, (A) solicit, aid or induce any employee, representative or agent of the Company or any of its affiliates to leave such employment or retention or to accept employment with or render services to or with any other person, firm, corporation or other entity unaffiliated with the Company or hire or retain any such employee, representative or agent, or take any action to materially assist or aid any other person, firm, corporation or other entity in identifying, hiring or soliciting any such employee, representative or agent, or (B) interfere, or aid or induce any other person or entity in interfering, with the relationship between the Company or any of its affiliates and any of their respective vendors, joint venturers, licensors or tenants.  An employee, representative or agent shall be deemed covered by this Section 10(c)(ii) while so employed or retained and for a period of six (6) months thereafter.

 

(iii)                               Notwithstanding the foregoing, the provisions of this Section 10(c) shall not be violated by (A) general advertising or solicitation not specifically targeted at Company-related persons or entities, (B) the Employee serving as a reference, upon request, for any employee of the Company or any of its affiliates so long as such reference is not for an entity that is employing or retaining the Employee, or (C) actions taken by any person or entity with

 

10

 

which the Employee is associated if the Employee is not personally involved in any manner in the matter and has not identified such Company-related person or entity for soliciting or hiring.

 

(d)                                 NONDISPARAGMENT.  The Employee agrees not to make negative comments or otherwise disparage the Company or its officers, directors, employees, shareholders, agents or products other than in the good faith performance of the Employee’s duties to the Company while the Employee is employed by the Company.  The Company hereby covenants and agrees that it shall not, directly or indirectly, make or solicit or encourage others to make or solicit any negative comments or otherwise disparaging remarks concerning the Employee. The foregoing shall not be violated by truthful statements in response to legal process, required governmental testimony or filings, or administrative or arbitral proceedings (including, without limitation, depositions in connection with such proceedings).

 

(e)                                  RETURN OF COMPANY PROPERTY.  On the date of the Employee’s termination of employment with the Company for any reason (or at any time prior thereto at the Company’s request), the Employee shall return all property belonging to the Company or its affiliates (including, but not limited to, any Company-provided laptops, computers, cell phones, wireless electronic mail devices or other equipment, or documents and property belonging to the Company).  The Employee may retain the Employee’s rolodex and similar address books provided that such items only include contact information.

 

(f)                                   REASONABLENESS OF COVENANTS.  In signing this Agreement, the Employee gives the Company assurance that the Employee has carefully read and considered all of the terms and conditions of this Agreement, including the restraints imposed under this Section 10 hereof.  The Employee agrees that these restraints are necessary for the reasonable and proper protection of the Company and its affiliates and their Confidential Information and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area, and that these restraints, individually or in the aggregate, will not prevent the Employee from obtaining other suitable employment during the period in which the Employee is bound by the restraints.  The Employee acknowledges that each of these covenants has a unique, very substantial and immeasurable value to the Company and its affiliates and that the Employee has sufficient assets and skills to provide a livelihood while such covenants remain in force.  The Employee further covenants that the Employee will not challenge the reasonableness or enforceability of any of the covenants set forth in this Section 10.  It is also agreed that each of the Company’s affiliates will have the right to enforce all of the Employee’s obligations to that affiliate under this Agreement, including without limitation pursuant to this Section 10.

 

(g)                                  REFORMATION.  If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 10 is excessive in duration or scope or is unreasonable or unenforceable under applicable law, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the laws of that state.

 

(h)                                 TOLLING.  In the event of any violation of the provisions of this Section 10, the Employee acknowledges and agrees that the post-termination restrictions contained in this Section 10 shall be extended by a period of time equal to the period of such violation, it being the

 

11

 

intention of the parties hereto that the running of the applicable post-termination restriction period shall be tolled during any period of such violation.

 

(i)                                     SURVIVAL OF PROVISIONS.  The obligations contained in Sections 10 hereof shall survive the termination or expiration of the Employment Term and the Employee’s employment with the Company and shall be fully enforceable thereafter.

 

(j)                                    COOPERATION.   Upon the receipt of reasonable notice from the Company (including outside counsel), the Employee agrees that while employed by the Company, the Employee will respond and provide information with regard to matters in which the Employee has knowledge as a result of the Employee’s employment with the Company, and will provide reasonable assistance to the Company, its affiliates and their respective representatives in defense of any claims that may be made against the Company or its affiliates, and will assist the Company and its affiliates in the prosecution of any claims that may be made by the Company or its affiliates, to the extent that such claims may relate to the period of the Employee’s employment with the Company.

 

11.                               EQUITABLE RELIEF AND OTHER REMEDIES.  The Employee acknowledges and agrees that the Company’s remedies at law for a breach or threatened breach of any of the provisions of Section 10 hereof would be inadequate and, in recognition of this fact, the Employee agrees that, in the event of such a breach or threatened breach, in addition to any remedies at law, the Company, without posting any bond or other security, shall be entitled to obtain equitable relief in the form of specific performance, a temporary restraining order, a temporary or permanent injunction or any other equitable remedy which may then be available, without the necessity of showing actual monetary damages.  In the event of a violation by the Employee of Section 10 hereof, any severance being paid to the Employee pursuant to this Agreement or otherwise shall immediately cease. If the Company adopts a “clawback” or recoupment policy, payments under this Agreement will be subject to repayment to the Company to the extent so provided under the terms of such policy.

 

12.                               NO ASSIGNMENTS.  This Agreement is personal to each of the parties hereto.  Except as provided in this Section 12 hereof, no party may assign or delegate any rights or obligations hereunder without first obtaining the written consent of the other party hereto.  The Company may assign this Agreement to any successor to all or substantially all of the business and/or assets of the Company, provided that the Company shall require such successor to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall mean the Company and any successor to its business and/or assets, which assumes and agrees to perform the duties and obligations of the Company under this Agreement by operation of law or otherwise.

 

13.                               NOTICE.  For purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given (a) on the date of delivery, if delivered by hand, (b) on the date of transmission, if delivered by confirmed facsimile or electronic mail, (c) on the first business day following the date of deposit, if delivered by guaranteed overnight delivery service, or (d) on the fourth business day following

 

12

 

the date delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

 

If to the Employee:

 

At the address (or to the facsimile number) shown
 in the books and records of the Company.

 

If to the Company:

8670 Wolff Court, Suite 240,

Westminster, CO 80031

 

Attention:  Chief Executive Officer

 

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

 

14.                               SECTION HEADINGS; INCONSISTENCY.  The section headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.  In the event of any inconsistency between the terms of this Agreement and any form, award, plan or policy of the Company, the terms of this Agreement shall govern and control.

 

15.                               SEVERABILITY.  The provisions of this Agreement shall be deemed severable.  The invalidity or unenforceability of any provision of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by applicable law.

 

16.                               COUNTERPARTS.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

17.                               INDEMNIFICATION.  The Company hereby agrees to indemnify the Employee and hold the Employee harmless to the extent provided under the By-Laws of the Company against and in respect of any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including reasonable attorney’s fees), losses, and damages resulting from the Employee’s good faith performance of the Employee’s duties and obligations with the Company.  This obligation shall survive the termination of the Employee’s employment with the Company.

 

18.                               LIABILITY INSURANCE.  The Company shall cover the Employee under directors’ and officers’ liability insurance both during and, while potential liability exists, after the term of this Agreement in the same amount and to the same extent as the Company covers its other officers and directors.

 

19.                               GOVERNING LAW.  This Agreement, the rights and obligations of the parties hereto, and any claims or disputes relating thereto, shall be governed by and construed in

 

13

 

accordance with the laws of the State of Colorado (without regard to its choice of law provisions).  The parties acknowledge and agree that in connection with any dispute hereunder, each party shall pay all of its own costs and expenses, including, without limitation, its own legal fees and expenses.

 

20.                               MISCELLANEOUS.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Employee and such officer or director as may be designated by the Board.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  This Agreement together with all exhibits hereto sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and supersedes any and all prior agreements or understandings between the Employee and the Company with respect to the subject matter hereof.  No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement. The payment or provision to the Employee by the Company of any remuneration, benefits or other financial obligations pursuant to this Agreement and any indemnification obligations, shall be allocated between the Company and the Operating Partnership by the Compensation Committee based on any reasonable method.

 

21.                               REPRESENTATIONS.  The Employee represents and warrants to the Company that (a) the Employee has the legal right to enter into this Agreement and to perform all of the obligations on the Employee’s part to be performed hereunder in accordance with its terms, and (b) the Employee is not a party to any agreement or understanding, written or oral, and is not subject to any restriction, which, in either case, could prevent the Employee from entering into this Agreement or performing all of the Employee’s duties and obligations hereunder. In addition, the Employee acknowledges that the Employee is aware of Section 304 (Forfeiture of Certain Bonuses and Profits) of the Sarbanes-Oxley Act of 2002 and the right of the Company to be reimbursed for certain payments to the Employee in compliance therewith.

 

22.                               TAX MATTERS.

 

(a)                                 WITHHOLDING.  The Company may withhold from any and all amounts payable under this Agreement or otherwise such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

 

(b)                                 SECTION 409A COMPLIANCE.

 

(i)                                     The intent of the parties is that payments and benefits under this Agreement comply with (or qualify for an exemption from) Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted accordingly.  To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Employee and the Company of the applicable provision without violating the provisions of Code Section 409A.  In

 

14

 

no event whatsoever shall the Company be liable for any additional tax, interest or penalty that may be imposed on the Employee by Code Section 409A or damages for failing to comply with Code Section 409A.

 

(ii)                                  A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amounts or benefits upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms shall mean “separation from service.”  Notwithstanding anything to the contrary in this Agreement, if the Employee is deemed on the termination date to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered deferred compensation under Code Section 409A payable on account of a “separation from service,” such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of such “separation from service” of the Employee, and (B) the date of the Employee’s death, to the extent required under Code Section 409A.  Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this Section 22(b)(ii) (whether they would have otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to the Employee in a lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.

 

(iii)                               To the extent that reimbursements or other in-kind benefits under this Agreement constitute “nonqualified deferred compensation” for purposes of Code Section 409A, (A) all expenses or other reimbursements hereunder shall be made on or prior to the last day of the taxable year following the taxable year in which such expenses were incurred by the Employee, (B) any right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (C) no such reimbursement, expenses eligible for reimbursement, or in-kind benefits provided in any taxable year shall in any way affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year.

 

(iv)                              For purposes of Code Section 409A, the Employee’s right to receive any installment payments pursuant to this Agreement shall be treated as a right to receive a series of separate and distinct payments.  Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period shall be within the sole discretion of the Company.

 

(v)                                 Notwithstanding any other provision of this Agreement to the contrary, in no event shall any payment under this Agreement that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

15

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

 

 

	
 
    	
FARMLAND   PARTNERS INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
FARMLAND   PARTNERS OPERATING PARTNERSHIP, LP
    
	
 
    	
 
    
	
 
    	
By: Farmland Partners OP GP, LLC, its general   partner
    
	
 
    	
 
    
	
 
    	
 
    	
By: Farmland Partners Inc., its sole member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
EMPLOYEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Luca   Fabbri
    
											

 

16

 

EXHIBIT A

 

GENERAL RELEASE

 

I,                 , in consideration of and subject to the performance by Farmland Partners Inc., a Maryland corporation (“Farmland”), and Farmland Partners Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership” and, together with the Farmland and its subsidiaries, the “Company”), of its obligations under the Employment Agreement dated as of                     , 2014 (the “Agreement”), do hereby release and forever discharge as of the date hereof the Company and its respective affiliates and all present, former and future managers, directors, officers, employees, attorneys, advisors, successors and assigns of the Company and its affiliates and direct or indirect owners (collectively, the “Released Parties”) to the extent provided below (this “General Release”).  The Released Parties are intended to be third-party beneficiaries of this General Release, and this General Release may be enforced by each of them in accordance with the terms hereof in respect of the rights granted to such Released Parties hereunder.  Terms used herein but not otherwise defined shall have the meanings given to them in the Agreement.

 

1.                                      I understand that any payments or benefits paid or granted to me under Section 8 of the Agreement represent, in part, consideration for signing this General Release and are not salary, wages or benefits to which I was already entitled.  I understand and agree that I will not receive certain of the payments and benefits specified in Section 8 of the Agreement unless I execute this General Release and do not revoke this General Release within the time period permitted hereafter.  Such payments and benefits will not be considered compensation for purposes of any employee benefit plan, program, policy or arrangement maintained or hereafter established by the Company or its affiliates.

 

2.                                      Except as provided in paragraphs 4 and 5 below and except for the provisions of the Agreement which expressly survive the termination of my employment with the Company, I knowingly and voluntarily (for myself, my heirs, executors, administrators and assigns) release and forever discharge the Company and the other Released Parties from any and all claims, suits, controversies, actions, causes of action, cross-claims, counter-claims, demands, debts, compensatory damages, liquidated damages, punitive or exemplary damages, other damages, claims for costs and attorneys’ fees, or liabilities of any nature whatsoever in law and in equity, both past and present (through the date that this General Release becomes effective and enforceable) and whether known or unknown, suspected, or claimed against the Company or any of the Released Parties which I, my spouse, or any of my heirs, executors, administrators or assigns, may have, which arise out of or are connected with my employment with, or my separation or termination from, the Company (including, but not limited to, any allegation, claim or violation, arising under:  Title VII of the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as amended (including the Older Workers Benefit Protection Act); the Equal Pay Act of 1963, as amended; the Americans with Disabilities Act of 1990; the Family and Medical Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the Employee Retirement Income Security Act of 1974; any applicable Executive Order Programs; the Fair Labor Standards Act; or their state or local counterparts; or under any other federal, state or local civil or human rights law, or

 

B-1

 

under any other local, state, or federal law, regulation or ordinance; or under any public policy, contract or tort, or under common law; or arising under any policies, practices or procedures of the Company; or any claim for wrongful discharge, breach of contract, infliction of emotional distress, defamation; or any claim for costs, fees, or other expenses, including attorneys’ fees incurred in these matters) (all of the foregoing collectively referred to herein as the “Claims”).

 

3.                                      I represent that I have made no assignment or transfer of any right, claim, demand, cause of action or other matters covered by paragraph 2 above.

 

4.                                      I agree that this General Release does not waive or release any rights or claims that I may have under the Age Discrimination in Employment Act of 1967 which arise after the date I execute this General Release. I acknowledge and agree that my separation from employment with the Company in compliance with the terms of the Agreement shall not serve as the basis for any claim or action (including, without limitation, any claim under the Age Discrimination in Employment Act of 1967).

 

5.                                      I agree that I hereby waive all rights to sue or obtain equitable, remedial or punitive relief from any or all Released Parties of any kind whatsoever in respect of any Claims, including, without limitation, reinstatement, back pay, front pay, and any form of injunctive relief.  Notwithstanding the above, I further acknowledge that I am not waiving and am not being required to waive any right that cannot be waived under law, including the right to file an administrative charge or participate in an administrative investigation or proceeding; provided, however, that I disclaim and waive any right to share or participate in any monetary award resulting from the prosecution of such charge or investigation or proceeding.  Additionally, I am not waiving (i) any right to the Accrued Benefits or any severance benefits to which I am entitled under the Agreement, (ii) any claim relating to directors’ and officers’ liability insurance coverage or any right of indemnification under the Company’s organizational documents or otherwise, or (iii) my rights as an equity or security holder in the Company or its affiliates.

 

6.                                      In signing this General Release, I acknowledge and intend that it shall be effective as a bar to each and every one of the Claims hereinabove mentioned or implied. I expressly consent that this General Release shall be given full force and effect according to each and all of its express terms and provisions, including those relating to unknown and unsuspected Claims (notwithstanding any state or local statute that expressly limits the effectiveness of a general release of unknown, unsuspected and unanticipated Claims), if any, as well as those relating to any other Claims hereinabove mentioned or implied.  I acknowledge and agree that this waiver is an essential and material term of this General Release and that without such waiver the Company would not have agreed to the terms of the Agreement.  I further agree that in the event I should bring a Claim seeking damages against the Company, or in the event I should seek to recover against the Company in any Claim brought by a governmental agency on my behalf, this General Release shall serve as a complete defense to such Claims to the maximum extent permitted by law.  I further agree that I am not aware of any pending claim of the type described in paragraph 2 above as of the execution of this General Release.

 

7.                                      I agree that neither this General Release, nor the furnishing of the consideration for this General Release, shall be deemed or construed at any time to be an admission by the Company, any Released Party or myself of any improper or unlawful conduct.

 

B-2

 

8.                                      I agree that if I violate this General Release by suing the Company or the other Released Parties, I will pay all costs and expenses of defending against the suit incurred by the Released Parties, including reasonable attorneys’ fees.

 

9.                                      I agree that this General Release and the Agreement are confidential and agree not to disclose any information regarding the terms of this General Release or the Agreement, except to my immediate family and any tax, legal or other counsel I have consulted regarding the meaning or effect hereof or as required by law, and I will instruct each of the foregoing not to disclose the same to anyone.

 

10.                               Any non-disclosure provision in this General Release does not prohibit or restrict me (or my attorney) from responding to any inquiry about this General Release or its underlying facts and circumstances by the Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), any other self-regulatory organization or any governmental entity.

 

11.                               I hereby acknowledge that Sections 8 through 13, 17 through 20 and 22 of the Agreement shall survive my execution of this General Release.

 

12.                               I represent that I am not aware of any claim by me other than the claims that are released by this General Release.  I acknowledge that I may hereafter discover claims or facts in addition to or different than those which I now know or believe to exist with respect to the subject matter of the release set forth in paragraph 2 above and which, if known or suspected at the time of entering into this General Release, may have materially affected this General Release and my decision to enter into it.

 

13.                               Notwithstanding anything in this General Release to the contrary, this General Release shall not relinquish, diminish, or in any way affect any rights or claims arising out of any breach by the Company or by any Released Party of the Agreement after the date hereof.

 

14.                               Whenever possible, each provision of this General Release shall be interpreted in, such manner as to be effective and valid under applicable law, but if any provision of this General Release is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this General Release shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

1.                                      I HAVE READ IT CAREFULLY;

 

2.                                      I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS

 

B-3

 

AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

 

3.                                      I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

4.                                      I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION, I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;

 

5.                                      I HAVE HAD AT LEAST [21][45] DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE TO CONSIDER IT, AND THE CHANGES MADE SINCE MY RECEIPT OF THIS RELEASE ARE NOT MATERIAL OR WERE MADE AT MY REQUEST AND WILL NOT RESTART THE REQUIRED [21][45]-DAY PERIOD;

 

6.                                      I UNDERSTAND THAT I HAVE SEVEN (7) DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;

 

7.                                      I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

 

8.                                      I AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.

 

 

	
SIGNED:
    	
 
    	
 
    	
DATED:
    	
 
    

 

B-4EXHIBIT 10.8

 

CONSULTING AGREEMENT

 

This Consulting Agreement (this “Agreement”) is entered into as of the date of the last party to sign below by and between Farmland Partners Inc., a Maryland corporation (the “Company”), and Jesse J. Hough (“Consultant”), an individual. The Company desires to retain Consultant as an independent contractor to perform consulting services for the Company, and Consultant is willing to perform such services, on the terms described below. In consideration of the mutual promises contained herein, the parties agree as follows:

 

1.                                      Term. The term of this Agreement will commence on the date of the completion of the initial public offering of the Company’s common stock (the “Effective Date”) and will continue for an initial period of two years (the “Initial Term”).  Commencing with the last day of the Initial Term, and on each subsequent anniversary of such date, the term of this Agreement shall be automatically extended for successive one-year periods.  Notwithstanding the foregoing, the Services (as defined herein) may be earlier terminated in accordance with the provisions of Section 3 hereof. The period of time between the Effective Date and the termination of this Agreement shall be referred to herein as the “Consulting Term”).

 

2.                                      Services and Compensation.

 

2.1.                            Services. Consultant will consult with and advise the Company on matters and/or perform services relating to business strategies and related matters, including asset underwriting, asset acquisitions and accounting matters, as well as other matters reasonably requested of Consultant by the Company during the Consulting Term (the “Services”).

 

2.2.                            Fees. For Consultant’s performance in accordance with the terms and conditions of this Agreement, the Company agrees to pay Consultant an annual fee of $75,000 (the “Annual Fee”). The Annual Fee payable to Consultant pursuant to this Agreement shall be payable in four equal quarterly installments within thirty days after each fiscal quarter, with the exception of the first payment hereunder, which shall be pro-rated for the period commencing on the Effective Date and ending on the last day of the fiscal quarter in which the Effective Date occurs.

 

2.3.                            Equity Compensation. Consultant will be eligible to receive grants of equity awards from the Company under its 2014 Equity Incentive Plan (the “2014 Plan”) or other equity compensation plans the Company adopts in the future. Any grants of equity awards to Consultant will be at the discretion of the Board of Directors of the Company (the “Board”), the Compensation Committee of the Board (the “Compensation Committee”) or such other committee or person to whom authority to grant equity awards under the plan has been delegated (each a “Delegatee”).  The Board, Compensation Committee or Delegatee, as the case may be, shall determine (i) the type or types of equity awards (if any) to be made to Consultant; (ii) the number of shares of the Company’s common stock subject to any equity award; (iii) the terms and conditions of each equity award (including, but not limited to, the exercise price of any stock option, the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an award or the shares of the Company’s common stock subject thereto, and the treatment of an award in the event of a change in control or other transaction); (iv) prescribe the form of each award agreement

 

 

evidencing an equity award; and (v) amend, modify, or supplement the terms of any outstanding equity award.

 

3.                                      Termination. Notwithstanding any other provision of this Agreement, either the Company or Consultant may terminate this Agreement and the Services for any reason or no reason, and such termination shall be effective on the earlier of the 90th day after written notice of such termination is provided to the other party in accordance with Section 8.4, and the date the Consulting Term would have ended had no termination notice been provided; provided, however, that the Company may immediately terminate (without any prior notice) this Agreement and the Services for “Cause” under the following circumstances: (i) Consultant’s continued failure to substantially perform duties, or gross negligence or willful misconduct in connection with the performance of the Services to the Company or an affiliate of the Company; (ii) conviction or plea of guilty or nolo contendere of a felony or a misdemeanor with respect to which fraud or dishonesty is a major element; (iii) Consultant’s conviction of any other criminal offense involving an act of dishonesty intended to result in substantial personal enrichment of Consultant at the expense of the Company or an affiliate of the Company; or (iv) Consultant’s material breach of any Company policy or term of this Agreement or any other employment, consulting or other services, confidentiality, intellectual property or non-competition agreements, if any, between Consultant and the Company or an affiliate of the Company.

 

4.                                      Section 280G.

 

4.1                               Parachute Limitation.  If Consultant is a “disqualified individual,” as defined in Section 280G(c) of the Internal Revenue Code of 1986, as amended (the “Code”), then, notwithstanding any other provision of this Agreement or of any other agreement, contract, or understanding heretofore or hereafter entered into by Consultant with the Company (“Other Agreement”), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to Consultant, whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for Consultant (“Benefit Arrangement”), any right to exercise, vesting, payment or benefit to Consultant under this Agreement shall be reduced or eliminated:

 

(a)                to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for Consultant under this Agreement, all Other Agreements, and all Benefit Arrangements, would cause any exercise, vesting, payment or benefit to Consultant under this Agreement to be considered a “parachute payment” within the meaning of Code Section 280G(b)(2) as then in effect (a “Parachute Payment”); and

 

(b)                if, as a result of receiving such Parachute Payment, the aggregate after-tax amounts received by Consultant from the Company under this Agreement, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by Consultant without causing any such payment or benefit to be considered a Parachute Payment.

 

2

 

4.2                               Order of Reduction.  The Company shall accomplish such reduction by first reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting of performance awards, then by reducing or eliminating any accelerated vesting of options or stock appreciation rights, then by reducing or eliminating any accelerated vesting of restricted stock or stock units, then by reducing or eliminating any other remaining Parachute Payments.

 

5.                                      Section 409A.  The intent of the parties is that any payments and benefits under this Agreement comply with (or qualify for an exemption from) Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted accordingly.  To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to Consultant and the Company of the applicable provision without violating the provisions of Code Section 409A.  In no event whatsoever shall the Company or any affiliate be liable for any additional tax, interest or penalty that may be imposed on Consultant by Code Section 409A or damages for failing to comply with Code Section 409A.

 

6.                                      Covenants of Consultant.

 

6.1.                            Covenant Against Conflicting Obligations; Other Covenants. Consultant acknowledges that (i) the principal business of the Company (which, for purposes of this Section 6 (and any related enforcement provisions hereof), expressly includes its successors and assigns), is the ownership, acquisition and management of agricultural real estate (the “Business”); (ii) the Company is one of a limited number of entities that have developed such a business; (iii) Consultant’s work for the Company will give him access to the confidential affairs and proprietary information of the Company; (iv) the covenants and agreements of Consultant contained in this Section 6 are essential to the business and goodwill of the Company; and (v) the Company would not have entered into this Agreement but for the covenants and agreements set forth in this Section 6. Accordingly, Consultant covenants and agrees that:

 

(a)                By and in consideration of the fees and benefits to be provided by the Company hereunder and further in consideration of Consultant’s exposure to the proprietary information of the Company, Consultant covenants and agrees that, during the Consulting Term, he shall not in the United States, or, if and to the extent that the Business is Actively Conducted (as defined below) outside of the United States, in the applicable non-U.S. locations, directly or indirectly, (i) offer to any person, corporation, partnership or other entity (other than the Company or its Controlled Affiliates) the opportunity to acquire any agricultural real estate without first presenting such opportunity to the Company; (ii) render any consulting or similar services to any person, corporation, partnership or other entity (other than the Company or its Controlled Affiliates) engaged in any element of the Business if such person, corporation, partnership or other entity has assets of greater than $25,000,000.00 (a “Competing Business”); or (iii) become interested in any Competing Business as a partner, member, manager, shareholder, principal, agent, employee or trustee; provided, however, that, (i) a Competing Business shall not include any of the corporations, partnerships or other entities listed on Schedule 1 hereto; (ii) notwithstanding anything in this Section 6.1(a) to the contrary, Consultant or entities controlled

 

3

 

by him may acquire, or offer to Paul A. Pittman or entities controlled by Mr. Pittman, agricultural real estate in the townships covered by the Company’s Homestead Exemption Policy as then in effect, subject to the aggregate annual limitations set forth therein; and (iii) notwithstanding anything in this Section 6.1(a) to the contrary, Consultant may own or acquire or otherwise invest in, directly or indirectly, securities of any entity, solely for investment purposes and without participating in the business thereof, if (A) such securities are traded on any national securities exchange or in the over-the-counter market, (B) Consultant is not a controlling person of, or a member of a group which controls, such entity and (C) Consultant does not, directly or indirectly, own 5% or more of any class of securities of such entity.  For purposes of this Agreement, the term “Actively Conducted” shall mean that the Company actually owns or manages agricultural real estate in the specified location, or has entered into a binding agreement, or a letter of intent, a term sheet, an agreement in principle, or any similar non-binding agreement (which non-binding agreement has not been terminated or expired of its own terms), to purchase or manage agricultural real estate in the specified location. “Controlled Affiliates” shall mean any and all entities that the Company directly or indirectly controls; provided that, if after the date hereof there is a reorganization of the Company and a new holding company is established over, and has control of, the Company, then “Controlled Affiliates” shall also include such holding company and any affiliates that are controlled by such new parent.

 

(b)                During and after the Consulting Term, Consultant shall keep secret and retain in strictest confidence, and shall not use for his benefit or the benefit of others, except in connection with the business and affairs of the Company and its Controlled Affiliates, all confidential matters relating to the Business and the business of any of its Controlled Affiliates and to the Company and any of its Controlled Affiliates, learned by Consultant heretofore or hereafter directly or indirectly from the Company or any of its Controlled Affiliates, including, without limitation, information with respect to (i) sources and non-public methods of raising capital, (ii) non-public information related to joint ventures, institutional funds and the partners or other investors therein, and (iii) any other material, non-public information (the “Confidential Company Information”); and shall not disclose such Confidential Company Information to anyone outside of the Company except (w) with the Company’s express written consent, (x) Confidential Company Information which is at the time of receipt or thereafter becomes publicly known through no wrongful act of Consultant or is received from a third party not under an obligation to keep such information confidential and without breach of this Agreement, (y) as required by law or legal process (provided that Consultant shall give the Company reasonable prior written notice of disclosure under this clause (y)), and (z) for disclosures to counsel in the context of seeking legal advice where counsel agrees, for the benefit of the Company, to be bound by the restrictions of this sentence.

 

(c)                 During the Consulting Term, Consultant shall not, without the Company’s prior written consent, directly or indirectly (i) solicit or encourage to leave the employment or other service of the Company, or any of its Controlled Affiliates, any employee or independent contractor of the Company, or (ii) publish any statement or make any statement under circumstances reasonably likely to become public that is critical of the Company or any of its Controlled Affiliates, or in any way adversely affecting or otherwise maligning the Business or the reputation of the Company or any of its Controlled Affiliates (provided that nothing in this sentence is intended to prevent Consultant from including in his pleadings or from his testimony

 

4

 

any truthful matter to the extent necessary to defend against any claim by the Company or a third party against Consultant, or to prosecute any claim against the Company for a breach of this Agreement).

 

(d)                All memoranda, notes, lists, records, property and any other tangible product and documents (and all copies thereof), whether visually perceptible, machine-readable or otherwise, made, produced or compiled by Consultant or made available to Consultant concerning the business of the Company or its Controlled Affiliates, (i) shall at all times be the property of the Company (and, as applicable, any Controlled Affiliates) and shall be delivered to the Company at any time upon its request, and (ii) upon the termination of this Agreement, shall be immediately returned to the Company.

 

6.2.                            Rights and Remedies upon Breach. Consultant acknowledges and agrees that any breach by him of any of the provisions of Section 6.1 (the “Restrictive Covenants”) would result in irreparable injury and damage for which money damages would not provide an adequate remedy. Therefore, if Consultant breaches, or threatens to commit a breach of, any of the provisions of Section 6.1, the Company and its Controlled Affiliates shall have, in addition to, and not in lieu of, any other rights and remedies available to the Company and its Controlled Affiliates under law or in equity (including, without limitation, the recovery of damages), the right and remedy to have the Restrictive Covenants specifically enforced (without posting bond and without the need to prove damages), including, without limitation, the right to restraining orders and injunctions (preliminary, mandatory, temporary and permanent) against violations, threatened or actual, and whether or not then continuing, of such covenants.

 

7.                                      Independent Contractor; Benefits.

 

7.1.                            Independent Contractor. It is the express intention of the Company and Consultant that Consultant perform the Services as an independent contractor to the Company. Nothing in this Agreement shall in any way be construed to constitute Consultant as, nor shall Consultant as a result of this Agreement be deemed to be, an agent, employee or representative of the Company. Without limiting the generality of the foregoing, Consultant is not authorized to bind the Company to any liability or obligation or to represent that Consultant has any such authority. Consultant acknowledges and agrees that Consultant is obligated to report as income all compensation received by Consultant pursuant to this Agreement. Consultant agrees to and acknowledges the obligation to pay all self-employment and other taxes on such income.

 

7.2.                            Benefits. The Company and Consultant agree that Consultant will receive no Company-sponsored benefits from the Company, other than those benefits noted in Section 2.3. If Consultant is reclassified by a state or federal agency or court as Company’s employee, Consultant will become an employee and will receive no benefits from the Company, other than those benefits noted in Section 2.3 and except those mandated by state or federal law, even if by the terms of benefit plans or programs of the Company in effect at the time of such reclassification, Consultant would otherwise be eligible for such benefits.

 

5

 

8.                                      Other Provisions.

 

8.1.                            Severability. Consultant acknowledges and agrees that (i) he has had an opportunity to seek advice of counsel in connection with this Agreement and (ii) the Restrictive Covenants are reasonable in geographical and temporal scope and in all other respects. If it is determined that any of the provisions of this Agreement, including, without limitation, any of the Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the provisions of this Agreement shall not thereby be affected and shall be given full effect, without regard to the portions determined to be invalid or unenforceable.

 

8.2.                            Scope of Covenants. If any court or other decision-maker of competent jurisdiction determines that any of Consultant’s covenants contained in this Agreement, including, without limitation, any of the Restrictive Covenants, or any part thereof, is unenforceable because of the geographical scope of such provision, then, after such determination has become final and unappealable, the scope of such provision, as the case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form, such provision shall then be enforceable and shall be enforced.

 

8.3.                            Controversies and Claims. Any controversy or claim arising out of or relating to this Agreement or the breach of this Agreement that is not resolved by Consultant and the Company (or its Controlled Affiliates, where applicable) shall be brought and resolved in the state or federal courts located in Colorado, and the parties hereby consent to the jurisdiction and venue of such courts for such purpose. Notwithstanding the foregoing, any judgment of any such court may be enforced in any court of competent jurisdiction.

 

8.4.                            Notices. Any notice or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile transmission or sent by certified, registered or express mail, postage prepaid. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission or, if mailed, five days after the date of deposit in the United States mails as follows:

 

 

	
If   to the Company, to:
    	
Farmland   Partners Inc. 

8670   Wolff Court, Suite 240 

Westminster,   CO 80031 

Attention:   Chief Executive Officer 

Facsimile:   (720) 398-3238
    	
 
    
	
 
    	
 
    	
 
    
	
with   a copy to:
    	
Morrison &   Foerster LLP 

2000   Pennsylvania Avenue, NW, Suite 6000 

Washington,   DC 20006 

Attention:   Justin R. Salon 

Facsimile:   (202) 887-0763
    	
 
    

 

6

 

	
If   to Consultant, to:
    	
Jesse   J. Hough
   8670 Wolff Court, Suite 240 
   Westminster, CO 80031 
   Facsimile: (720) 398-3238
    	
 
    
	
 
    	
 
    	
 
    

 

Any such person may by notice given in accordance with this Section 8.4 to the other parties hereto designate another address or person for receipt by such person of notices hereunder.

 

8.5.                            Entire Agreement. This Agreement contains the entire agreement of the parties regarding the subject matter hereof and supersedes all prior agreements, understandings and negotiations regarding the same.

 

8.6.                            Waivers and Amendments. This Agreement may be amended, superseded, canceled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any such right, power or privilege nor any single or partial exercise of any such right, power or privilege, preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

 

8.7.                            GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF COLORADO WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAW WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF COLORADO.

 

8.8.                            Assignment. This Agreement, and Consultant’s rights and obligations hereunder, may not be assigned by Consultant; any purported assignment by Consultant in violation hereof shall be null and void. This Agreement, and the Company’s rights and obligations hereunder, may not be assigned by the Company; any purported assignment by the Company in violation hereof shall be null and void. Notwithstanding the foregoing, (i) in the event of any sale, transfer or other disposition of all or substantially all of the Company’s assets or business, whether by merger, consolidation or otherwise, the Company may assign this Agreement and its rights hereunder, and (ii) the Company may assign this Agreement to its Controlled Affiliates.

 

8.9.                            Withholding. The Company shall be entitled to withhold from any payments or deemed payments any amount of tax withholding it determines to be required by law.

 

8.10.                     Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, permitted assigns, heirs, executors and legal representatives.

 

8.11.                     Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original but all such counterparts together shall constitute one and the same instrument. Each counterpart may consist of two copies hereof each signed by one of the parties hereto.

 

7

 

8.12.                     Survival. Anything contained in this Agreement to the contrary notwithstanding, the provisions of Sections 3, 4, 5, 6.1(b), 6.2 and 8 (to the extent necessary to effectuate the survival of Sections 3, 4, 5, 6.1(b) and 6.2) of this Agreement shall survive termination of this Agreement and any termination of the Services hereunder.

 

8.13.                     Existing Agreements. Consultant represents to the Company that he is not subject or a party to any employment or consulting agreement, non-competition covenant or other agreement, covenant or understanding which might prohibit him from executing this Agreement or limit his ability to fulfill his responsibilities hereunder.

 

8.14.                     Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

 

[Signature Page Follows]

 

8

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement.

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
FARMLAND PARTNERS INC.
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name: Paul A. Pittman
    
	
 
    	
 
    	
Title:
    	
Executive Chairman, President and
   Chief Executive Officer
    
	
 
    	
 
    	
Date:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CONSULTANT:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
Jesse J. Hough
    
	
 
    	
Date:
    	
 
    
					

 

[Signature Page to Consulting Agreement]

 

 

Schedule 1

 

American Agriculture Corporation

Pittman Hough Farms, LLC

PH Land, LLC

Cottonwood Valley Farms, LLC

Hough Farms

Astoria Farms

Pine Ridge Holdings, Inc.

Little Pine Ridge Feed Yard, Inc.

South Fulton Livestock, LLC

Hough Cattle Feeding, LLC

Schuyler Livestock, Inc.

PHS Farms, LLC

BPH Farms, LLC

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00228-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00228-of-00352.parquet"}]]