EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of December ---, 1997, by and
between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ("Employee") and Agritope, Inc., a Delaware
corporation (the "Company").
1. Services.
1.1 Employment. The Company agrees to employ Employee as the Executive Vice
President and Chief Financial Officer of the Company, and Employee hereby
accepts such employment in accordance with the terms and conditions of this
Agreement. Employment shall commence on the date of this Agreement and shall
continue until terminated pursuant to the terms of this Agreement.
1.2 Duties. Employee shall have the position named in Section 1.1 with such
powers and duties appropriate to that office (a) as may be provided by the
bylaws of the Company, (b) as set forth on Schedule 1.2 to this Agreement, and
(c) as determined by the Board of Directors from time to time. Subject to the
provisions of Section 5.2.1, Employee's position and duties may be changed from
time to time during the term of this Agreement, and Employee's place of work may
be relocated, at the sole discretion of the Company's Board of Directors.
Employee shall devote his full business time, attention and best efforts to the
affairs of the Company and its subsidiaries during the term of this Agreement.
1.3 Outside Activities. Employee may engage in other activities, such as
activities involving charitable, educational, religious and similar types of
organizations (all of which are deemed to benefit Employer), speaking
engagements, and similar type activities, and may serve on the board of
directors of other corporations approved by the Board of Directors of Company,
in each case to the extent that such other activities do not materially detract
from or limit the performance of his duties under this Agreement, or inhibit or
conflict in any material way with the business of the Company and its
subsidiaries.
1.4 Direction of Services. Employee shall at all times discharge his duties
in consultation with and under the supervision and direction of the Company's
Board of Directors.
2. Compensation.
2.1 Salary. As compensation for services under this Agreement, the Company
shall pay to Employee a regular salary to be established each year by the
Compensation Committee of the
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Board of Directors, if there is such a committee, or if not, then by the Board
of Directors. Effective January 1 of each year that this Agreement is in effect,
such salary may be adjusted annually unless the Board of Directors in its
discretion determines not to do so. Payment shall be made on a monthly basis,
less all amounts required by law to be withheld or deducted, at such times as
shall be determined by the Board of Directors.
2.2 Additional Employee Benefits. Employee shall also have the right to
receive or participate in (a) any additional benefits, including, but not
limited to, vacation and sick leave policies, insurance programs, profit sharing
or pension plans, and medical reimbursement plans, which may from time to time
be made available by the Company to its employees and, (b) subject to meeting
eligibility requirements, all incentive compensation plans of the Company. The
Company shall reimburse Employee for all reasonable and necessary expenses
incurred in carrying out his duties under this Agreement, and substantiated by
Employee.
2.3 Extraordinary Compensation. Employee shall have the right, in addition
to all other compensation provided for in this Section 2, to additional
extraordinary compensation in accordance with the following terms:
2.3.1 Termination. In the event of termination of employment of
Employee pursuant to Section 5.2.1, Employee shall continue to be paid the
salary provided in Section 2.1 for 24 months in the manner and at the times at
which regular compensation was paid to Employee during the term of his
employment under the Agreement.
2.3.2 Termination after Change in Control. In the event that the
termination of the employment of Employee pursuant to Section 5.2.1 either (a)
occurs within 12 months following a change in control, within the meaning of the
Securities Exchange Act of 1934, or sale of substantially all of the assets of
the Company, or (b) is contingent upon such a change in control or sale of
assets, Employee shall continue to be paid the salary provided in Section 2.1
for 36 months, provided, however, that the present value of the stream of
payments to be made to Employee shall not exceed 295 percent of Employee's
Annualized Includable Compensation (in which event the payments shall be reduced
pro rata such that the present value thereof does not exceed such amount).
2.3.3 Definitions. The term Annualized Includable Compensation shall
mean the average annual compensation payable by the Company that was includable
in the gross income of Employee for the taxable years in the Base Period. The
term Base Period shall mean the period consisting of the most recent five
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taxable years ending before the date on which the change in ownership or control
occurs. Present value shall be determined by using a discount rate equal to 120
percent of the applicable Federal Rate (determined under Section 1274(d) of the
Internal Revenue Code of 1986, as amended) compounded semi-annually.
2.3.4 Change in Law. The parties agree that in the event Section 280G
or Section 4999 of the Internal Revenue Code is amended after the date hereof
with the effect that any of the compensation payable to Employee by the Company
pursuant to the foregoing provisions either (i) is not deductible for tax
purposes from the gross income of the Company, or (ii) subjects Employee to a
federal excise tax thereon, then, unless the parties otherwise agree, the
foregoing provisions may be modified at the discretion of the Board of Directors
in order to comply with the amended provisions of the Internal Revenue Code in
order that, to the greatest extent possible, such compensation shall be so
deductible by the Company and Employee shall not be subject to an excise tax
thereon.
2.4 Fees.
2.4.1 All compensation earned by Employee, other than pursuant to this
Agreement, as a result of services performed on behalf of the Company or as a
result of or arising out of any work done by Employee in any way related to the
scientific or business activities of the Company or its subsidiaries shall
belong to the Company or such subsidiary. Employee shall pay or deliver such
compensation to the Company or the subsidiary promptly upon receipt.
2.4.2 For the purposes of Section 2.4, "compensation" shall include,
but is not limited to, all professional and nonprofessional fees, lecture fees,
expert testimony fees, publishing fees, license fees, royalties, and any related
income, earnings or other things of value; and "scientific or business
activities of the Company" shall include, but not be limited to, any project or
projects in which the Company or its subsidiaries are involved and any subject
matter that is directly or indirectly researched, tested, developed, promoted or
marketed by the Company or its subsidiaries.
3. Confidential Information.
3.1 Access to Information. Employee acknowledges that in the course of his
employment he will have access to proprietary information, trade secrets, and
other confidential information, that such information is a valuable asset of the
Company and that its disclosure or unauthorized use will cause the Company
substantial harm. As used in this Agreement, the term
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"Confidential Information" means: any and all information of a proprietary or
secret nature of the Company and its subsidiaries which is or may be either
applicable to or related in any way to (i) their present or future businesses,
(ii) their research and development or investigations, or (iii) the business of
any of their licensees, licensors or customers. The term "Confidential
Information" includes, without limitation, trade secrets, processes, data,
know-how, improvements, inventions, techniques, marketing plans, research and
development contracts and grants, strategies and information concerning
customers or vendors, customer lists and customer leads, new project ideas and
leads, all non-public financial information, and all information which is
maintained in confidence or is designated as confidential by the Company or its
subsidiaries for the protection of their businesses.
3.2 Ownership. Employee acknowledges that all Confidential Information
shall continue to be the exclusive property of the Company or its subsidiaries,
whether or not prepared in whole or in part by Employee and whether or not
disclosed to Employee or entrusted to his custody in connection with his
employment by the Company.
3.3 Nondisclosure and Nonuse. Unless authorized or instructed in writing by
the Company, or required by legally constituted authority, Employee will not,
except as required in the course of the Company's business, during or after his
employment, disclose to others or use any Confidential Information, unless and
until, and then only to the extent that, such items become available to the
public other than by his act or failure to prevent accidental or negligent loss
or release to any unauthorized person of the Confidential Information.
3.4 Return of Confidential Information. Upon request by the Company during
or after his employment, and without request upon termination of employment
pursuant to this Agreement, Employee will deliver immediately to the Company all
Confidential Information; Employee will thereafter retain no excerpts, notes,
photographs, reproductions or copies thereof.
3.5 Work Made for Hire. Employee agrees that all creative work, including
without limitation designs, drawings, specifications, techniques, models and
processes, prepared or originated by Employee for the Company or its
subsidiaries, or during or within the scope of employment by the Company, which
may be subject to protection under federal copyright law, constitutes work made
for hire, all rights to which are owned by the Company; and, in any event,
Employee assigns to the Company all rights, title, and interest, whether by way
of copyright,
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trade secret, or otherwise, in all such work, whether or not subject to
protection by copyright or similar laws.
3.6 Duration. The obligations set forth in this Section 3 will continue
beyond the term of employment of Employee by the Company and for so long as
Employee possesses Confidential Information.
4. Noncompetition.
4.1 Covenant. Subject to the provisions of Section 4.3, Employee covenants
that Employee will not, throughout the United States, either individually or as
a director, officer, partner, employee, agent, representative, or consultant
with any business, directly or indirectly during the term of employment and for
one year thereafter:
4.1.1 Engage or prepare to engage in any business which competes with
the Company or its subsidiaries;
4.1.2 Induce or attempt to induce any person who is an employee of the
Company or its subsidiaries during the term of this covenant to leave the employ
of the Company or its subsidiaries; or
4.1.3 Solicit, divert or accept orders for products or services that
are substantially competitive with the products or services sold by the Company
or its subsidiaries from any customer of the Company or its subsidiaries.
4.2 Enforcement. Employee acknowledges and agrees that the time, scope and
other provisions of this Section 4 have been specifically negotiated by
sophisticated parties with the advice and consultation of counsel and
specifically hereby agrees that such time, scope and other provisions are
reasonable under the circumstances. Employee further agrees that if, at any
time, despite the express agreement of the parties hereto, a court of competent
jurisdiction holds that any portion of this Section 4 is unenforceable for any
reason, the maximum restrictions reasonable under the circumstances, as
determined by such court, will be substituted for any restrictions held
unenforceable.
4.3 Release from Obligation. In the event that Employee shall be entitled
to extraordinary compensation pursuant to the provisions of Section 2.3,
Employee may elect to waive all rights to receive such compensation from and
after the date of such waiver in exchange for the release of Employee from the
obligations of Sections 4.1.1 and 4.1.3. Such waiver shall be in writing, shall
state that it is in consideration for the release of Employee from the
obligations of Sections 4.1.1 and 4.1.3, and
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shall be effective when delivered to the Company. In the event of such a waiver,
the amounts payable pursuant to the provisions of Section 2.3 shall be prorated
through the period commencing on the date of termination of employment and
ending on the date of delivery of the written notice of waiver to the Company.
For example, if such waiver is delivered to the Company six months after the
commencement of the one year period set forth in this Section, Employee shall be
paid one-half of the amounts otherwise payable pursuant to the provisions of
Section 2.3; in the event that the Employee shall have received more than such
prorata share of such compensation, it shall be a condition of the Employee's
rights under this Section that he shall have returned to the Company any amounts
in excess of such prorata share with the delivery of the waiver notice to the
Company.
5. Termination.
5.1 Voluntary Resignation. Employee may terminate his employment under this
Agreement by 90 days' written notice to the Company.
5.2 Termination by the Company.
5.2.1 The Company may terminate Employee's employment under this
Agreement without cause by 90 days' written notice to the Employee. If the
Company shall substantially diminish Employee's salary, duties or title, or
shall relocate the principal place where Employee's duties are performed to a
place outside of the Portland metropolitan area, then Employee may elect (but
shall not be required to do so) to treat such event as a termination without
cause.
5.2.2 The Company may terminate Employee's employment under this
Agreement by 30 days' written notice given at any time within six months after
the Company determines that Employee (a) has committed a material breach of his
obligations under this Agreement, and failed to cure such breach promptly after
receipt of written notice thereof from the Board of Directors of the Company,
(b) has willfully and continuously failed or refused to comply with the material
policies, standards and regulations of the Company, (c) has been guilty of
fraud, dishonesty or other acts of misconduct in rendering services on behalf of
the Company, or (d) has failed to otherwise comply with the standards of
behavior which an employer reasonably has the right to expect of an employee.
5.2.3 In the event that the Board of Directors shall reasonably
determine that Employee has become physically or mentally disabled such that
Employee shall be unable to render services to the Company to the same nature
and extent as such
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services were rendered immediately prior to the disability, the Board of
Directors may terminate Employee's employment under this Agreement by 60 days'
written notice effective any time after the date 13 weeks following the
determination of disability.
5.3 Compensation Upon Termination.
5.3.1 In the event of a termination under Section 5.1 or 5.2.2,
Employee shall not be entitled to receive any compensation otherwise payable
pursuant to Sections 2.2 or 2.3. Employee will be entitled to receive only: (i)
salary payable under Section 2.1 through the day on which Employee's employment
is terminated, together with salary, compensation or benefits which have been
earned or become payable as of the date of termination but which have not yet
been paid to Employee; and (ii) such other benefits, if any, as shall be
determined to be applicable under the circumstances and in accordance with the
Company's plans and practices in effect on the date of termination.
5.3.2 In the event of a termination under Section 5.2.1, Employee
shall be entitled to receive extraordinary compensation payable pursuant to
Section 2.3, if applicable. Employee will also be entitled to receive: (i)
salary payable under Section 2.1 through the end of the month on which
Employee's employment is terminated, together with salary, compensation or
benefits which have been earned or become payable as of the date of termination
but which have not yet been paid to Employee; (ii) maintenance in effect for the
continued benefit of Employee and his dependents, at the expense of the Company,
of all insured and self-insured medical and dental benefit plans in which
Employee was participating immediately prior to termination, provided continued
participation is possible under the general terms and conditions of such plans,
until the earlier of the end of the salary period provided for in Section 2.3.2
or the date on which Employee obtains comparable insurance coverage from a new
employer; and (iii) such other benefits, if any, as shall be determined to be
applicable under the circumstances and in accordance with the Company's plans
and practices in effect on the date of termination.
5.3.3 In the event of a termination under Section 5.2.3, or as a
result of Employee's retirement or death, Employee (or Employee's estate) will
be entitled to receive: (i) salary payable under Section 2.1 through the end of
the month on which Employee's employment is terminated, together with salary,
compensation or benefits which have been earned or become payable as of the date
of termination but which have not yet been paid to Employee; (ii) such other
benefits, if any, as shall be determined to be applicable under the
circumstances and in
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accordance with the Company's plans and practices in effect on the date of
termination; and (iii) such other awards or bonuses as the Board of Directors in
its sole discretion may determine.
6. Remedies.
The respective rights and duties of the Company and Employee under this
Agreement are in addition to, and not in lieu of, those rights and duties
afforded to and imposed upon them by law or at equity. Employee acknowledges
that breach of this Agreement will cause irreparable harm to the Company and
agrees to the entry of a temporary restraining order and preliminary and
permanent injunctions by any court of competent jurisdiction to prevent breach
or further breach of this Agreement. Such remedy shall be in addition to any
other remedy available to the Company at law or in equity.
7. Severability of Provisions.
The provisions of this Agreement are severable, and if any provision hereof
is held or unenforceable, it shall be enforced to the maximum extent
permissible, and the remaining provisions of the Agreement shall continue in
full force and effect.
8. Attorney Fees.
In the event a suit or action is filed to enforce this Agreement or with
respect to this Agreement, the prevailing party shall be reimbursed by the other
party for all costs and expenses incurred in connection with the suit or action,
including without limitation reasonable attorney's fees at the pre-trial stage,
at trial or on appeal.
9. Nonwaiver.
Failure of the Company at any time to require performance of any provision
of this Agreement shall not limit the right of the Company to enforce the
provision. No provision of this Agreement or breach thereof may be waived by
either party except by a writing signed by that party. Any waiver of any breach
of any provision of this Agreement shall be construed narrowly and shall not be
deemed to be a waiver of any succeeding breach of that provision or a waiver of
that provision itself or of any other provision.
10. Mediation and Arbitration.
10.1 Disputes. Except as provided in Sections 3 and 4, the Company and
Employee agree to comply with the following two-step dispute resolution process
with regard to any controversy or
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claim arising out of or relating to this Agreement or their employment
relationship ("Dispute").
10.2 Mediation. In the event of a Dispute the Company and Employee agree to
submit it to mediation pursuant to the mediation services of Arbitration Service
of Portland, Inc. ("ASP"). The mediation shall be conducted in Portland, Oregon,
under the rules of ASP. The mediation will be conducted as promptly as possible,
and in no event later than 90 days from the date when one party notifies the
other of its intent to submit the Dispute to mediation or the termination of
Employee's employment, whichever is later. The Company will pay the mediator's
fees and other administrative costs of the mediation process. The parties shall
bear their own attorneys' fees and other costs.
10.3 Arbitration. In the event the Dispute is not successfully resolved
through mediation, the parties agree that it shall be settled by arbitration
administered through the arbitration services of ASP in accordance with its
rules. Judgment on the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof.
The arbitrators shall have the authority to award such remedies or relief
that a court of the State of Oregon could order or grant in an action governed
by Oregon law, including, without limitation, specific performance of any
obligation created under this Agreement, the issuance of an injunction, or the
imposition of sanctions for abuse or frustration of the arbitration process, but
shall not be empowered to award punitive damages. The arbitration proceedings
shall be conducted in Portland, Oregon.
11. Notices.
All notices or other communications hereunder shall be deemed to have been
duly given and made if in writing and if served by personal delivery upon the
party for whom it is intended, if delivered by registered or certified mail,
return receipt requested, or by a national courier service, or if sent by
telecopier, provided that the telecopy is promptly confirmed by telephone
confirmation thereof, to the person at the address set forth below, or such
other address as may be designated in
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writing hereunder, in the same manner, by such person:
To Employee:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
To Company:
Agritope, Inc.
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
With a copy to:
Tonkon, ▇▇▇▇, ▇▇▇▇▇, Marmaduke & Booth
▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
12. Withholding.
All payments to be made to Employee under this Agreement will be subject to
required withholding taxes and other deductions.
13. Successors; Binding Agreement.
13.1 Any Successor (as hereinafter defined) to Company shall be bound by
this Agreement. At Employee's request, Company will seek to have any Successor
assent to the fulfillment by Company of its obligations under this Agreement.
For purposes of this Agreement, "Successor" shall mean any person that succeeds
to, or has the practical ability to control (either immediately or with the
passage of time), Company's business directly, by merger or consolidation, or
indirectly, by purchase of the Employer's voting securities, all or
substantially all of its assets or otherwise.
13.2 For purposes of this Agreement, "Company" shall include any
corporation or other entity which is the surviving or continuing entity in
respect of any amalgamation, merger,
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consolidation, dissolution, asset or stock acquisition or other form of business
combination.
14. Miscellaneous.
14.1 Except to the extent that the terms of this Agreement confer benefits
that are more favorable to Employee than are available under any other employee
benefit or executive compensation plan of Company in which Employee is a
participant, Employee's rights under any such employee benefit or executive
compensation plan shall be determined in accordance with the terms of such plan
(as it may be modified or added to by Company from time to time).
14.2 This Agreement constitutes the entire understanding between Company
and Employee relating to the employment of Employee by Company and its
subsidiaries and supersedes and cancels all prior agreements and understandings
with respect to the subject matter of this Agreement. Employee shall not be
entitled to any payment or benefit under this Agreement which duplicates a
payment or benefit received or receivable by Employee under such prior
agreements and understandings.
14.3 This Agreement may be amended but only by a subsequent written
agreement of the parties.
14.4 This Agreement shall be binding upon and shall inure to the benefit of
Employee, his heirs, executors, administrators and beneficiaries, and shall be
binding upon and inure to the benefit of Company and its successors and assigns.
14.5 This Agreement shall be construed in accordance with the laws of the
state of Oregon, without regard to any conflicts of laws rules thereof.
14.6 All captions used herein are intended solely for convenience of
reference and shall in no way limit any of the provisions of this Agreement.
IN WITNESS HEREOF, the parties have executed this Employment Agreement as
of the date first hereinabove written.
AGRITOPE, INC.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ President and
Chief Executive Officer
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Schedule 1.2 to Employment Agreement
Specific Duties of Employee
---------------------------
Duties of Employee as
---------------------
Executive Vice President and Chief Financial Officer
----------------------------------------------------
Responsible for the long-term financial stability of Agritope's functional
units. Responsible for review of possible acquisitions, new business
opportunities and partnering prospects.
Develops and maintains long-term relationship with investment banking
community and chosen investment banker. Assists President/CEO in communication
with investors, brokers and analysts.
Involved in significant contract, marketing, technology transfer and equity
negotiations. Responsible for financial forecasts, possible divestitures or
spin-offs.
Reports to President/CEO on financial issues and managerial aspects of
Agritope operations.