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EXHIBIT 10.11
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this "Agreement"), dated as of
August 16, 2000, is between Eden Bioscience Corporation, a Washington
corporation (the "Company"), and Xxxxxxxx Xxx (the "Employee").
The Board of Directors of the Company (the "Board") has determined that
it is in the best interests of the Company and its stockholders to ensure that
the Company will have the continued dedication of the Employee, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined in
Appendix A to this Agreement, which is incorporated herein by this reference) of
the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Employee arising from the personal uncertainties and risks
created by a pending or threatened Change of Control, to encourage the
Employee's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, to encourage the
Employee's willingness to serve a successor in an equivalent capacity, and to
provide the Employee with reasonable compensation and benefits arrangements in
the event that a Change of Control results in the Employee's loss of equivalent
employment.
In order to accomplish these objectives, the Board has caused the
Company to enter into this Agreement.
1. EMPLOYMENT
1.1 CERTAIN DEFINITIONS
(a) "Effective Date" shall mean the first date during the Change of
Control Period (as defined in Section 1.1(b)) on which a Change of Control
occurs.
(b) "Change of Control Period" shall mean the period commencing on
the date of this Agreement and ending on the second anniversary of the date the
Company gives notice to the Employee that the Change of Control Period shall be
terminated.
1.2 EMPLOYMENT PERIOD
The Company hereby agrees to continue the Employee in its employ or in
the employ of its affiliated companies, and the Employee hereby agrees to remain
in the employ of the Company or its affiliated companies, in accordance with the
terms and provisions of this Agreement, for the period commencing on the
Effective Date and ending on the second anniversary of such date (the
"Employment Period").
1.3 POSITION AND DUTIES
During the Employment Period, the Employee's position, authority, duties
and responsibilities shall be at least reasonably commensurate in all material
respects with the
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most significant of those held, exercised and assigned at any time during the
90-day period immediately preceding the Effective Date.
1.4 EMPLOYMENT AT WILL
The Employee and the Company acknowledge that, except as may otherwise
be expressly provided under any other written employment agreement between the
Employee and the Company, the employment of the Employee by the Company or its
affiliated companies is "at will" and may be terminated by either the Employee
or the Company or its affiliated companies at any time. Moreover, if prior to
the Effective Date the Employee's employment with the Company or its affiliated
companies terminates, then the Employee shall have no further rights under this
Agreement.
1.5 BOARD OF DIRECTORS
The Employee is either currently or at some future time may become a
member of the Board. His continuation as such shall be subject to the will of
the Company's stockholders and the Board, as provided in the Company's by-laws
and certificate of incorporation. Removal of the Employee from, or nonelection
of the Employee to, the Board by the Company's stockholders or the Board, as
provided in the Company's by-laws and articles of incorporation, shall in no
event be deemed a breach of this Agreement by the Company.
2. ATTENTION AND EFFORT
During the Employment Period, and excluding any periods of vacation and
sick leave to which the Employee is entitled, the Employee will devote all of
his professional productive time, ability, attention and effort to the business
and affairs of the Company and the discharge of the responsibilities assigned to
him hereunder, and will use his best efforts to perform faithfully and
efficiently such responsibilities.
3. COMPENSATION
During the Employment Period, the Company agrees to pay or cause to be
paid to the Employee, and the Employee agrees to accept in exchange for the
services rendered hereunder by him, the following compensation:
3.1 SALARY
The Employee shall receive an annual base salary (the "Annual Base
Salary"), at least equal to the annual salary established by the Board or the
Compensation Committee of the Board (the "Compensation Committee") prior to the
Effective Date for the fiscal year in which the Effective Date occurs. The
Annual Base Salary shall be paid in substantially equal installments and at the
same intervals as the salaries of other officers of the Company are paid.
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3.2 BONUS
Employee may be entitled to receive, in addition to the Annual Base
Salary, an annual bonus in an amount to be determined by the Board of Directors
of the Company in its sole discretion.
3.3 BENEFITS
During the Employment Period, the Employee shall be entitled to
participate, subject to and in accordance with applicable eligibility
requirements, in such fringe benefit programs as shall be provided to other
employees of the Company and its affiliated companies from time to time during
the Employment Period by action of the Board (or any person or committee
appointed by the Board to determine fringe benefit programs and other
emoluments).
3.4 EXPENSES
During the Employment Period, the Employee shall be entitled to receive
prompt reimbursement for all reasonable employment expenses incurred by him in
accordance with the policies, practices and procedures of the Company and its
affiliated companies in effect for the employees of the Company and its
affiliated companies during the Employment Period or pursuant to an applicable
travel policy.
3.5 STOCK OPTIONS
Nothing contained in this Agreement shall affect the right of the
Employee to receive benefits or other shares under any option plan existing or
adopted by the Company. The Options shall be designated as incentive stock
options to the extent permitted under the Plan and applicable law.
4. TERMINATION
Employment of the Employee during the Employment Period may be
terminated as follows but, in any case, the nondisclosure and noncompetition
provisions set forth in Sections 7, 8, 9 and 10 of the Employment Agreement
shall survive the termination of this Agreement and the termination of the
Employee's employment with the Company:
4.1 BY THE COMPANY OR THE EMPLOYEE
Upon giving Notice of Termination (as defined below), the Company may
terminate the employment of the Employee with or without Cause (as defined in
the Employment Agreement), and the Employee may terminate his employment for
Good Reason (as defined below) or for any reason, at any time during the
Employment Period.
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4.2 AUTOMATIC TERMINATION
This Agreement and the Employee's employment during the Employment
Period shall terminate automatically pursuant to Section 11.2 of the Employment
Agreement upon the death or total disability of the Employee. The Employee and
the Company hereby acknowledge that the Employee's presence and ability to
perform the duties specified in Section 1.3 hereof is of the essence of this
Agreement.
4.3 NOTICE OF TERMINATION
Any termination by the Company or by the Employee during the Employment
Period shall be communicated by Notice of Termination to the other party given
within 20 working days in accordance with Section 11.6 of the Employment
Agreement. The term "Notice of Termination" shall mean a written notice which
(a) indicates the specific termination provision in this Agreement relied upon
and (b) to the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Employee's
employment under the provision so indicated. The failure by the Employee or the
Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any right of
the Employee or the Company hereunder or preclude the Employee or the Company
from asserting such fact or circumstance in enforcing the Employee's or the
Company's rights hereunder.
4.4 DATE OF TERMINATION
During the Employment Period, "Date of Termination" means (a) if the
Employee's employment is terminated by reason of death, at the end of the
calendar month in which the Employee's death occurs, (b) if the Employee's
employment is terminated by reason of total disability, immediately upon a
determination by the Company of the Employee's total disability, and (c) in all
other cases, five days after the date of personal delivery of or mailing of, as
applicable, the Notice of Termination. The Employee's employment and performance
of services will continue during such five-day period; provided, however, that
the Company may, upon notice to the Employee and without reducing the Employee's
compensation during such period, excuse the Employee from any or all of his
duties during such period.
5. TERMINATION PAYMENTS
In the event of termination of the Employee's employment during the
Employment Period, all compensation and benefits set forth in this Agreement
shall terminate except as specifically provided in this Section 5.
5.1 TERMINATION BY THE COMPANY FOR OTHER THAN CAUSE OR BY THE
EMPLOYEE FOR GOOD REASON
If the Company terminates the Employee's employment other than for Cause
or the Employee terminates his employment for Good Reason prior to the end of
the Employment Period, the Employee shall be entitled to:
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(a) receive payment of the following accrued obligations (the
"Accrued Obligations"):
(i) the Employee's Annual Base Salary through the Date of
Termination to the extent not theretofore paid;
(ii) the product of (x) the Annual Bonus payable with
respect to the fiscal year in which the Date of Termination occurs and
(y) a fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination, and the denominator
of which is 365; and
(iii) any compensation previously deferred by the Employee
(together with accrued interest or earnings thereon, if any) as such
deferred compensation becomes payable under the deferral plan, and any
accrued vacation pay, in each case to the extent not theretofore paid;
and
(b) an amount as severance pay equal to the sum of two times the
Employee's Annual Base Salary plus an amount equal to an average of the
Employee's prior three Annual Bonuses payable in the fiscal years preceding the
Date of Termination.
5.2 ACCELERATION OF STOCK OPTIONS
In the event of a Change of Control, as defined in Appendix A of this
Agreement, all of Employee's stock options issued pursuant to the Eden
Bioscience Corporation 1995 Combined Incentive and Nonqualified Stock Option
Plan (the "Plan") will be treated in accordance with this Section 5.2. In the
event the option is assumed, converted or replaced in any transaction involving
a merger, consolidation, acquisition of property or stock, separation or
reorganization ("a Corporate Transaction"), the option will fully accelerate in
vesting and exercisability if Employee's employment or service relationship with
the Company subsequently terminates within three years after a Corporate
Transaction, unless Employee's employment or service relationship is terminated
for Cause or by Employee voluntarily without "Good Reason," as defined in
Section 5.6. However, acceleration will not occur if the Corporate Transaction
is a related party transaction or the acceleration would, in the opinion of the
Company's outside accountants, prevent the use of "pooling of interest"
accounting in a transaction for which it is otherwise available. Nothing
contained in this Agreement shall affect the right of the Employee to receive
benefits or other shares under any option plan existing or adopted by the
Company. The Options shall be designated as incentive stock options to the
extent permitted under the Plan and applicable law.
5.3 TERMINATION FOR CAUSE OR OTHER THAN FOR GOOD REASON
If the Employee's employment shall be terminated by the Company for
Cause as defined in the Employment Agreement or by the Employee for other than
Good Reason during the Employment Period, this Agreement shall terminate without
further obligation to the Employee other than the obligation to pay to the
Employee his Annual Base Salary through the Date of Termination plus the amount
of any compensation previously deferred by
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the Employee (as such deferred compensation becomes payable under the deferral
plan), in each case to the extent theretofore unpaid.
5.4 TERMINATION BECAUSE OF DEATH OR TOTAL DISABILITY
If the Employee's employment is terminated by reason of the Employee's
death or total disability during the Employment Period, this Agreement shall
terminate automatically without further obligations to the Employee or his legal
representatives under this Agreement, other than for payment of Accrued
Obligations (which shall be paid to the Employee's estate or beneficiary, as
applicable in the case of the Employee's death).
5.5 PAYMENT SCHEDULE
All payments under Section 5.1(a) and (b) shall be paid to the Employee
in a lump sum in cash within 30 days of the Date of Termination.
5.6 GOOD REASON
For purposes of this Agreement, "Good Reason" means any of the following
events or conditions and the failure to cure such event or condition within 20
days after receipt of written notice from Employee:
(a) The assignment to the Employee of any duties inconsistent in
any material respect with the Employee's position, authority, duties or
responsibilities as contemplated by Section 1.3 hereof or any other action by
the Company which results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated and inadvertent action
not taken in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Employee, and further excluding
reasonable changes in particular duties and reporting responsibilities which may
result from the Company becoming part of a larger business organization at some
future time provided that such changes in the aggregate do not result in a
material alteration in the Employee's position, authority, duties or
responsibilities;
(b) Any failure by the Company to comply with any of the provisions
of Section 3 hereof, other than an isolated and inadvertent failure not
occurring in bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Employee;
(c) The departure of the Company's President and Chief Executive
Officer with or without Cause or for Good Reason; or
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5.7 CAUSE
Wherever reference is made in this Agreement to termination being with
or without Cause, "Cause" shall include, without limitation, the occurrence of
one or more of the following events:
(a) Failure or refusal to carry out the lawful duties of Employee
described in Section 1.3 hereof or any directions of the Board of
Directors of the Company, which directions are reasonably consistent
with the duties herein set forth to be performed by Employee;
(b) Violation by Employee of a state or federal criminal law
involving the commission of a crime against the Company or a felony;
(c) Current use by Employee of illegal substances; deception,
fraud, misrepresentation or dishonesty by Employee; any incident
materially compromising Employee's reputation or ability to represent
the Company with the public; any act or omission by Employee which
substantially impairs the Company's business, good will or reputation;
or any other misconduct; or
(d) Any other material violation of any provision of this
Agreement.
5.8 EXCESS PARACHUTE LIMITATION
If either the Company or the Employee receives confirmation from the
Company's independent tax counsel or its certified public accounting firm, or
such other accounting firm retained as independent certified public accountants
for the Company (the "Tax Advisor"), that any payment by the Company to the
Employee under this Agreement or otherwise would be considered to be an "excess
parachute payment" within the meaning of Section 280G of the Internal Revenue
Code of 1986, as amended, or any successor statute then in effect (the "Code"),
then the aggregate payments by the Company pursuant to this Agreement shall be
reduced to the highest amount that may be paid to the Employee by the Company
under this Agreement without having any portion of any amount payable to the
Employee by the Company or a related entity under this Agreement or otherwise
treated as such an "excess parachute payment", and, if permitted by applicable
law and without adverse tax consequence, such reduction shall be made to the
last payment due hereunder. Any payments made by the Company to the Employee
under this Agreement which are later confirmed by the Tax Advisor to be "excess
parachute payments" shall be considered by all parties to have been a loan by
the Company to the Employee, which loan shall be repaid by the Employee upon
demand together with interest calculated at the lowest interest rate authorized
for such loans under the Code without a requirement that further interest be
imputed.
6. NOTICE AND CURE OF BREACH
Whenever a breach of this Agreement by either party is relied upon as
justification for any action taken by the other party pursuant to any provision
of this Agreement, other than
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pursuant to the definition of "Cause" set forth in Section 5.7 hereof, before
such action is taken, the party asserting the breach of this Agreement shall
give the other party at least twenty (20) working days' prior written notice of
the existence and the nature of such breach before taking further action
hereunder and shall give the party purportedly in breach of this Agreement the
opportunity to correct such breach during the 20-day period.
7. FORM OF NOTICE
All notices given hereunder shall be given in writing, shall
specifically refer to this Agreement and shall be personally delivered or sent
by telecopy or other electronic facsimile transmission or by registered or
certified mail, return receipt requested, at the address set forth below or at
such other address as may hereafter be designated by notice given in compliance
with the terms hereof:
If to Employee: Xxxxxxxx Xxx
0000 XX 000xx Xxxxx
Xxxxxxxx, XX 00000
If to the Company: Eden Bioscience Corporation
00000 Xxxxx Xxxxx Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Copy to: Xxxxx X. Xxxxxxxxx
Xxxxxxx Coie
0000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000-0000
If notice is mailed, such notice shall be effective upon mailing, or if notice
is personally delivered or sent by telecopy or other electronic facsimile
transmission, it shall be effective upon receipt.
8. NONCOMPETITION
Employee agrees that during the Employment Period and for a period of
eighteen (18) months thereafter, he will not, except in furtherance of his
employment with the Company, without the prior written consent of the Company,
either directly or indirectly operate, control, advise, be engaged by, perform
any consulting services for, invest in (other than less than one percent of the
outstanding stock in a publicly held corporation which is listed on the NASDAQ
national market or traded over-the-counter or on a recognized securities
exchange) or otherwise become associated in any capacity with, any business,
company, partnership, organization, proprietorship, or other entity who or which
manufactures products or traits which use organisms or other byproducts or which
is developing products or traits, to (i) treat soil or foliar diseases of plants
or (ii) enhance growth or insect tolerance of plants (the "Company Products") in
competition with the Company in those geographical areas in which the Company
conducts or has conducted such business, or intends to conduct business,
consistent with the Company's current, written business plans, during Employee's
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employment. If employee is released from strict compliance with his non-compete
obligations in order to return to an "academic" position, he will be required to
forego working on any project that is either funded by or for the benefit of a
for-profit company.
9. NONDISCLOSURE
Employee agrees at all times to hold as secret and confidential (unless
disclosure is required by the Company or would be in furtherance of Employee's
employment with the Company or is required pursuant to court order, subpoena in
a governmental proceeding, arbitration or pursuant to other process or
requirement of law) any and all knowledge, information, developments,
manufacturing and trade secrets, know-how and confidences of the Company or its
business of which he has knowledge during the Employment Period, to the extent
such matters have not previously been made public, are not thereafter made
public, or do not otherwise become available to Employee from a third party not,
to Employee's best knowledge, bound by any confidentiality agreement with the
Company ("Confidential Information"). The phrase "made public" as used in this
Agreement shall apply to matters within the domain of (a) the general public or
(b) the Company's industry. Employee agrees not to use such knowledge for his
own benefit or for the benefit of others or, except as provided above, disclose
any of such Confidential Information without the prior written consent of the
Company, which consent shall make express reference to this Agreement.
10. NONINTERFERENCE
Employee agrees that during the Employment Period and for a period of
eighteen (18) months thereafter, he will not, except in furtherance of his
employment with the Company or as a part of his duties as an officer of the
Company, without the prior written consent of the Company, directly or
indirectly solicit, induce or attempt to solicit or induce any employee, agent
or other representative or associate of the Company to terminate its
relationship with the Company or in any way interfere with such a relationship
or a relationship between the Company and any of its suppliers or distributors.
11. DISCLOSURE OF PROPRIETARY INTELLECTUAL PROPERTY
11.1 Employee agrees that he will promptly disclose to the Company any
and all improvements, discoveries, ideas, developments or inventions composing
proprietary intellectual property which may be material to the operations and
business of the Company (the "Improvements") which Improvements are made or
conceived by Employee, acting alone or in conjunction with others, (a) during
the Employment Period, or (b) to the extent the Improvements are specifically
and directly related to the Company Products within three (3) years after the
Employment Period, if such Improvement results from or was suggested by such
employment. Employee shall not disclose any such Improvement to any person,
except the Company and shall use all reasonable efforts to provide the Company
written disclosure of such Improvements. Each such Improvement shall be the sole
and exclusive property of and is hereby assigned to the Company. Employee agrees
that, at the request of the Company, Employee will execute such applications,
statements, assignments or other documents, furnish such information and data
and take all such other action (including
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without limitation the giving of testimony) as the Company may from time to time
reasonably request in order to obtain for the Company a registration or patent
in the United States or any foreign country covering or pertaining to any such
Improvement. The Company and Employee hereby acknowledge and agree that the
obligations set forth in this Section 10 do not apply to an Improvement for
which no equipment, supplies, facility, copyright, patent or patent application,
registration, information, or other intellectual property or trade secret
information of the Company was used and which was developed entirely on
Employee's own time, unless (a) the Improvement relates (i) directly to the
business of the Company, or (ii) to the Company's actual or demonstrably
anticipated research or development, or (b) the Improvement results from any
work performed by Employee for the Company.
11.2 Employee agrees to execute and be bound by the terms of the
Company's Employee Confidentiality and Disclosure Agreement.
12. REPRESENTATIONS, WARRANTIES AND OTHER CONDITIONS
In order to induce the Company to enter into this Agreement, the
Employee represents and warrants to the Company as follows:
12.1 HEALTH
The Employee is in good health and knows of no physical or mental
disability which, with or without any accommodation which may be required by law
and which places no undue burden on the Company, would prevent him from
fulfilling his obligations hereunder. The Employee agrees, if the Company
requests, to submit to periodic medical examinations by a physician or
physicians designated by, paid for and arranged by the Company. The Employee
agrees that the examination's medical report shall be provided to the Company.
12.2 NO VIOLATION OF OTHER AGREEMENTS
The Employee represents that neither the execution nor the performance
of this Agreement by the Employee will violate or conflict in any way with any
other agreement by which the Employee may be bound.
12.3 REAFFIRMATION OF OBLIGATIONS
The Employee hereby reaffirms the Employee Confidentiality and
Disclosure Agreement previously executed by Employee.
13. INTEGRATION
This Agreement constitutes the entire agreement between Employee and the
Company relating in any way to the employment of Employee by the Company, and
supersedes all prior discussions, understandings and agreements between them
with respect thereto.
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14. INVALID PROVISION
The invalidity or unenforceability of any particular provision of this
Agreement shall not affect any other provision hereof, and the Agreement shall
be construed in all other respect as if such invalid or unenforceable provisions
were omitted. However, if any court should determine that the duration or any
other feature of any restriction contained in Section 8 of this Agreement is
unenforceable, it is the intention of the parties that the provisions of such
Section as set forth herein shall not thereby be terminated, but shall be deemed
amended to the extent required to render them valid and enforceable.
15. ATTORNEYS' FEES
In the event of a dispute arising out of the interpretation or
enforcement of this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and costs.
16. BINDING EFFECT
This Agreement shall be binding upon and shall inure to the benefit of
the respective parties hereto, their heirs, executors, successors and assigns.
17. GOVERNING LAW
This Agreement and the parties' performance hereunder shall be governed
by and interpreted under the laws of the State of Washington. Employee agrees to
submit to the jurisdiction of the courts of the State of Washington, and that
venue for any action arising out of this Agreement or the parties' performance
hereunder may be laid in King County, Washington.
18. AMENDMENTS
Any term of this Agreement may be amended and the observance of any term
may be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the parties.
19. ASSIGNMENT
This Agreement is personal to Employee and shall not be assignable by
Employee. The Company may assign its rights hereunder to (a) any corporation
resulting from any merger, consolidation or other reorganization to which the
Company is a party or (b) any corporation, partnership, association or other
person to which the Company may transfer all or substantially all of the assets
and business of the Company existing at such time. All of the terms and
provisions of this Agreement shall be binding upon and shall inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and permitted assigns.
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20. CONSENTS AND WAIVERS
No consent or waiver, express or implied, by any party hereto to or of
any breach or default by any other party in the performance by the others of
their obligations hereunder shall be valid unless in writing, and no such
consent or waiver shall be deemed or construed to be a consent or waiver to or
of any other breach or default in the performance by such other party of the
same or any other obligations of such party hereunder. Failure on the part of
any party to complain of any act or failure to act of any other party or to
declare the other parties in default, irrespective of how long such failure
continues, shall not constitute a waiver by such party of its rights hereunder.
The granting of any consent or approval in any one instance by or on behalf of
the Company shall not be construed to waive or limit the need for such consent
or approval in any other subsequent instance.
21. CONSTRUCTION
This Agreement has been submitted to the scrutiny of, and has been
negotiated by, all parties hereto and their counsel, and shall be given a fair
and reasonable interpretation in accordance with the terms hereof, without
consideration or weight being given to its having been drafted by any party
hereto or its counsel.
22. HEADINGS
Titles or captions of sections contained in this Agreement are inserted
only as a matter of convenience and for reference, and in no way define, limit,
extend or describe the scope of this Agreement or the intent of any provisions
hereof.
23. REMEDIES IN EQUITY
The rights and remedies of the parties hereunder shall not be mutually
exclusive, i.e., the exercise of one or more of the provisions hereof shall not
preclude the exercise of any other provisions hereof. The parties confirm that
damages at law will be an inadequate remedy for a breach or threatened breach of
this Agreement and agree that their respective rights and obligations hereunder
shall be enforceable by specific performance, injunction or other equitable
remedy as well as at law or otherwise.
24. ARBITRATION
Any controversies or claims arising out of or relating to this Agreement
or to employee's employment with the company shall be fully and finally settled
by arbitration in the City of Seattle, Washington under Washington law and in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect (the AAA Rules),
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conducted by one arbitrator either mutually agreed upon by the company and the
employee or chosen in accordance with the AAA rules.
IN WITNESS WHEREOF, the parties have executed and entered into this
Agreement on the date set forth above.
EMPLOYEE
/s/ Xxxxxxxx Xxx
-----------------------------------------
EDEN BIOSCIENCE CORPORATION
By /s/ Xxxxx X. Xxxxxx
---------------------------------------
Its President
-----------------------------------
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APPENDIX A TO
CHANGE OF CONTROL AGREEMENT
For purposes of this Agreement, a "Change of Control" shall mean:
(a) A "Board Change" which, for purposes of this Agreement, shall have
occurred if a majority (excluding vacant seats w) of the seats on the Company's
Board are occupied by individuals who were neither (i) nominated by a majority
of the Incumbent Directors nor (ii) appointed by directors so nominated. An
"Incumbent Director" is a member of the Board who has been either (i) nominated
by a majority of the directors of the Company then in office or (ii) appointed
by directors so nominated, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person (as hereinafter defined) other than the
Board; or
(b) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of (i) 20% or more of either (A) the then outstanding shares of
Common Stock of the Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"), in the case of either (A) or (B) of this clause
(i), which acquisition is not approved in advance by a majority of the Incumbent
Directors, or (ii) 33% or more of either (A) the Outstanding Company Common
Stock or (B) the Outstanding Company Voting Securities, in the case of either
(A) or (B) of this clause (ii), which acquisition is approved in advance by a
majority of the Incumbent Directors; provided, however, that the following
acquisitions shall not constitute a Change of Control: (w) any acquisition
directly from the Company or in connection with an initial public offering of
the Company pursuant to a registration statement filed with and declared
effective by the Securities and Exchange Commission, (x) any acquisition by the
Company, (y) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company or (z) any acquisition by any corporation pursuant to a reorganization,
merger or consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (i), (ii) and (iii) of
subsection (c) of this Appendix A are satisfied; or
(c) Consummation of a reorganization, merger or consolidation approved
by the shareholders of the Company, in each case, unless, immediately following
such reorganization, merger or consolidation, (i) more than 60% of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all the individuals and
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entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities immediately
prior to such reorganization, merger or consolidation in substantially the same
proportion as their ownership immediately prior to such reorganization, merger
or consolidation of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities, as the case may be, (ii) no Person (excluding the
Company, any employee benefit plan (or related trust) of the Company or such
corporation resulting from such reorganization, merger or consolidation and any
Person beneficially owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 33% or more of the Outstanding Company
Common Stock or the Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 33% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors, and (iii) at least a majority of the members of the
board of directors of the corporation resulting from such reorganization, merger
or consolidation were the Incumbent Directors at the time of the execution of
the initial agreement providing for such reorganization, merger or
consolidation; or
(d) Consummation of the following events approved by the shareholders of
the Company (i) a complete liquidation or dissolution of the Company or (ii) the
sale or other disposition of all or substantially all the assets of the Company,
other than to a corporation with respect to which immediately following such
sale or other disposition, (A) more than 60% of, respectively, the then
outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the Outstanding Company Voting Securities immediately prior to such sale or
other disposition in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding the Company, any employee benefit plan (or related
trust) of the Company or such corporation and any Person beneficially owning,
immediately prior to such sale or other disposition, directly or indirectly, 33%
or more of the Outstanding Company Common Stock or the Outstanding Company
Voting Securities, as the case may be) beneficially owns, directly or
indirectly, 33% or more of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors and (C) at least a majority of the members of the board of
directors of such corporation were approved by a majority of the Incumbent
Directors at the time of the execution of the initial agreement or action of the
Board providing for such sale or other disposition of assets of the Company.
Notwithstanding the foregoing, there shall not be a Change of Control
if, in advance of such event, the Employee agrees in writing that such event
shall not constitute a Change of Control.
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