EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 6th day of January, 1998, is by
and between XXXXXXX X. XXXX (hereinafter referred to as "Employee") and
AgriBioTech, Inc., a Nevada Corporation and Lofts Seeds, Inc. (hereinafter
collectively referred to as "Corporation").
WITNESSETH
WHEREAS, the Corporation desires to initially employ the Employee as
Director of Operations for facilities east of the Mississippi River, and for the
similar duties as Employee performed for Lofts Seeds, Inc. and affiliated
companies prior to the Agreement and Plan of reorganization (the "Reorganization
Agreement") agreement dated this 1st day of December, 1997 by and between
AgriBioTech, Inc., Lofts Seed, Inc. (including Great Western), Sunbelt Seed, and
Xxxx Seed (collectively "Lofts") and Lofts Mergerco and each shareholder of
Lofts Seeds, Inc. and Xxxx Seed, Inc., et. al., (the "Purchase Agreement"); and
WHEREAS, the Employee desires to accept such employment with the
Corporation; and
WHEREAS, the Employee and the Corporation desire to set forth their
employment relationship in a written agreement.
NOW THEREFORE, in consideration of the mutual promises and covenants herein
set forth, and for other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follow:
ARTICLE 1.00 - EMPLOYMENT
1.01 EMPLOYMENT. The Corporation hereby offers to employ the Employee as
Director of Operations, East Coast and as manager of Lofts upon the terms and
conditions hereinafter set forth and the Employee accepts such offer and agrees
to abide by the terms and conditions hereof, and the terms and conditions of the
Corporation's and its affiliated corporations Articles of Incorporation, its
Bylaws and Employment Procedures Manual.
1.02 DUTIES. Employee shall perform duties for Corporation equivalent to
duties prior to closing of the Purchase Agreement and such additional duties as
may be required to manage Corporation operations and facilities east of the
Mississippi River. Employee shall perform all services reasonably required by
the Corporation in furtherance of the Corporation's business purposes as
determined, from time to time, by the Board of Directors of the Corporation. In
addition and as part of his duties hereunder, the Employee shall, if elected to
such position, serve as an officer and/or director of the Corporation provided
that the Employee is indemnified by Corporation to the fullest extent permitted
by Nevada law. Nothing contained in this Agreement shall require the
Corporation, its shareholders or directors, to cause the election of the
Employee as an officer and/or director or the Corporation.
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ARTICLE 2.00 - TERM AND TERMINATION
2.01 TERM. Employment, under this Agreement, shall commence upon closing of
the Purchase Agreement. Such employment shall continue for five years or until
terminated per this Agreement. Employment terms after this five-year period
shall be mutually negotiated.
2.02 TERMINATION. The Corporation may, by giving zero (0) days notice to
the Employee, terminate this Agreement with cause. Cause shall be defined as the
performance of illegal acts, excluding minor traffic violations, or repeated
failure to perform the duties of employment after written documentation of
failure to perform and written notice and a reasonable opportunity to cure.
Notwithstanding the above, this Agreement shall terminate immediately upon the
death of the Employee, and shall terminate upon ten (10) working days notice by
the Corporation if, in the opinion of the Corporation, Employee becomes unable
to perform services required pursuant to this Agreement because of illness or
injury. In order to be grounds for termination, the injury or illness should be
serious enough to prevent performance for 120 consecutive days or more. Any
decision to terminate this Agreement by the Corporation shall not be voted upon
by the Employee in any capacity whatsoever. In no event shall termination of
this Agreement relieve the parties hereto of any rights or obligations which
survive the termination of this Agreement as set forth herein. The Corporation
or Employee may after the second anniversary date, by giving twelve months
notice to the other party, terminate this agreement without cause anytime after
the 36th month of employment. If Employee terminates, employee forfeits all
further option vesting and is entitled to no ongoing salary/benefits except as
permitted by law (Cobra for example).
ARTICLE 3.00 - COMPENSATION
3.01 SALARY. The Corporation covenants and agrees to pay Employee, as
consideration for his services, a salary of ONE HUNDRED TWENTY-FIVE THOUSAND
DOLLARS ($125,000.00) per year payable in equal biweekly installments, less
payroll deductions for income tax, FICA, withholding and any other deductions as
authorized by the Employee.
3.02 STOCK OPTIONS. For the purpose of causing the Employee's compensation
to equal the reasonable value of his services to the Corporation and to reflect
any outstanding contribution to the Corporation's revenue by Employee, the
Corporation will issue Employee, in addition to the salary for services
described in Section 3.01 above, stock options as follows:
Employee shall be granted options to purchase 150,000 shares of
AgriBioTech, Inc. common stock upon closing of the Purchase Agreement and
signing of this Employment Agreement. Said options shall vest and be exercisable
on the following schedule.
The 150,000 options shall vest as follows:
i) 25,000 options shall vest at closing and shall be exercisable through
the 6th anniversary of closing at a purchase price of $8.50 per share.
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ii) 25,000 options shall vest on the first anniversary of closing of the
Purchase Agreement provided Employee continues his employment with
Corporation and shall be exercisable through the 6th anniversary of
closing at a purchase price of $8.50 per share.
iii) 25,000 options shall vest on the second anniversary of closing of the
Purchase Agreement provided Employee continues his employment with
Corporation and shall be exercisable through the 6th anniversary of
closing at a purchase price of $8.50 per share.
iv) 25,000 options shall vest on the third anniversary of closing of the
Purchase Agreement provided Employee continues his employment with
Corporation and shall be exercisable through the 6th anniversary of
closing at a purchase price of $8.50 per share.
v) 25,000 options shall vest on the fourth anniversary of closing of the
Purchase Agreement provided Employee continues his employment with
Corporation and shall be exercisable through the 6th anniversary of
closing at a purchase price of $8.50 per share.
vi) 25,000 options shall vest on the fifth anniversary of closing of the
Purchase Agreement provided Employee continues his employment with
Corporation and shall be exercisable through the 6th anniversary of
closing at a purchase price of $8.50 per share.
All options shall vest in accordance with the Stock Option Agreement as
attached to Purchase Agreement Exhibit 3D if Corporation breaches this
Agreement.
3.03 BONUS. Employee and Corporation shall mutually develop a "Performance
Goal" for 1998 and 1999. For this purpose, the "Performance Goal" for each of
1998 and 1999 shall be the Net Income budget for the year for operations for
which Employee is directly responsible, as reasonably agreed by Corporation and
Employee. The determination of Net Income for each such year shall be made by
Corporation within 60 days following the close of the year in good faith in a
manner consistent with the methods used to prepare the budget for such year.
Employee shall receive a cash bonus based on the schedule in the table
below for achieving the stated level of achievement.
Percentage of Performance Goal Cash Bonus ($)
------------------------------ --------------
85% $0
------------------------------ --------------
100% $200,000
------------------------------ --------------
115% $230,000
------------------------------ --------------
In addition Employee will receive 20% of the total net savings of expenses
achieved through the consolidation of any and all ABT facilities and branches
east of the Mississippi.
3.04 NON-COMPETE COMPENSATION. In addition to Employee's pro-rata portion
of the $717,000 non-compete allocated to Employee relative to the purchase,
Employee shall be paid $50,000 per year, for 3 years, specifically for
non-compete compensation after employee ceases employment with Corporation. Such
compensation shall be paid quarterly in arrears and payment is subject to
Employee being in compliance with the non-compete terms of this agreement.
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3.05 VACATION. During the term of this Agreement, the Employee shall be
entitled to a vacation of reasonable length (by the current Corporation policy)
during which time Employee's salary shall be paid in full.
ARTICLE 4.00 - SPECIFIC OBLIGATIONS OF THE PARTIES
4.01 CORPORATION'S OBLIGATIONS. The Corporation shall provide the employee
with and pay Employee's expenses for the following:
A. Such equipment, materials, and supplies as the Employee requires for
the performance of his services.
B. Costs, including tuition, meals, lodging, and transportation incurred
by the Employee to attend meetings agreed upon by the Corporation and
Employee; and
C. Corporation shall continue the pre-closing Lofts' car policy for
Employee's use through the "useful life of the existing car",
thereafter, consistent with general policy of ABT. ABT will assign to
Employee the rights to purchase the current car once Corporation no
longer desires to lease said car for Employee's use.
D. Corporation shall provide Employee other benefits, such as insurance
and 401(K), consistent with the Corporation's policies.
4.02 EMPLOYEE'S OBLIGATIONS. The Employee agrees that during the term of
this Agreement, he shall:
A. Faithfully and to the best of his ability and skill serve the
Corporation and perform his duties pursuant to this Agreement;
B. Maintain records in the manner established by the Corporation; and
C. Keep current all records, reports, insurance records and clerical work
required by Corporation.
ARTICLE 5.00 - COVENANTS ON NON-COMPETE/PROTECTION OF PROPRIETARY PROPERTY.
In the course of its business, Corporation, including its subsidiaries and
affiliates, develops and possesses valuable proprietary material and information
which may be created by or made available to its employees, and company and its
employees have a common interest in protecting.
Therefore, in consideration of Employee's employment with Corporation and
for such additional compensation as may be specified herein, Employee hereby
agrees as follows:
5.01 COVENANT NOT TO COMPETE RELATIVE TO CORPORATION'S PURCHASE OF Lofts
Seeds, Inc. Pursuant to the Purchase Agreement, Employee agrees not to compete
with the Corporation from the date hereof through March 31, 2002 or for a period
of three (3) years following the date Employee ceases to be an employee of the
Corporation and/or Lofts, whichever is longer. During this non-compete period,
Employee shall not sell or solicit any products or services which comprise 5% or
more of Corporation sales to any current customers of the Corporation.
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Employee acknowledges that breach or threatened violation of any of the
restrictive covenants contained in this Section 5.01 may cause irreparable
damage to Corporation for which remedies at law would be inadequate. Employee
further acknowledges that the restrictive covenants set forth herein are
essential terms and conditions of the Purchase Agreement and this Agreement.
Corporation shall be entitled to a decree or order by any court of competent
jurisdiction enjoining such threatened or actual violation of any of such
covenants. Such decree or order, to the extent appropriate, shall specifically
enforce the full performance of any such covenant by Employee, and Employee and
Corporation hereby consent to the jurisdiction of any such court of competent
jurisdiction. This remedy shall be in addition to all other remedies available
to Corporation at law or equity. If any portion of this Section 5.01 is
adjudicated to be invalid or unenforceable, this Section 5.01 shall be deemed
amended to delete therefrom the portion so adjudicated, such deletion to apply
only with respect to the operation of this Section 5.01 in the jurisdiction in
which such adjudication is made.
The Corporation agrees to pay Employee cash for specific non-compete
compensation, as consideration for the non-compete provision of Section 5.01 of
this Employment Agreement. Said cash compensation is defined in section 3.04.
5.02 TRADE SECRETS. Except as explicitly required in the performance of
Employee's duties for the Company, Employee will not use voluntarily (subpoenaed
by Court) or disclose in any manner, during or at any time after his employment
with the Corporation, any Trade Secrets of the Corporation. "Trade Secrets"
shall mean any secret, confidential or proprietary information, knowledge or
data, including Inventions, germplasm, and know how of the Corporation or of
third parties obtained or created by or made available to Employee during his
employment, which is:
a) of a technical nature, including methods, formulas, compositions,
processes, products, germplasm, computer software, apparatus, and
similar items; or
b) of a business nature, including costs, purchasing, profits, markets,
sales, customer lists, and similar items; or
c) related to research and development, including marketing,
manufacturing, procedures, planning, engineering, breeding techniques
and similar matters.
Upon termination of Employee's employment with Corporation, or at any other
time at the Corporation's request, Employee will deliver promptly, and will not
retain without Corporation's prior written consent, all writings, drawings,
software or owner records in any form, and all copies thereof, relating to any
of the Trade Secrets as defined herein.
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5.03 INVENTIONS.
a) Disclosure. Employee will promptly disclose to Corporation in writing,
except as excluded in Section 503 (c) of this Agreement, all inventions,
discoveries, and improvements in the scope of Employee's employment
("Inventions"), whether involving processes, products, germplasm, services or
any aspect of Corporation's business and whether patentable or not, which are
made, conceived, or otherwise originated by Employee, either jointly singly on
his own or on Corporation time, during the period of his employment with
Corporation and one year thereafter.
b) Assignment. All such Inventions shall belong solely and exclusive to
Corporation. To evidence and implement Employee's assignment to Corporation of
Employee's entire right, title and interest in such Inventions, Employee will,
at Corporation's reasonable request and expense, execute all instruments of
Assignment and other documents, and do all other acts and things necessary to
assist the Company in lawfully obtaining patents, copyrights or other ownership
interests and in the enforcement and protection thereof.
c) Exception. This Agreement does not apply to an Invention for which no
equipment, supplies, facility or trade secret information of Corporation was
used and which was developed entirely on Employee's own time, and:
1) does not relate: (a) directly or indirectly to the business of
Corporation; or (b) to Corporation's actual or demonstrably
anticipated research or development; or
2) does not result from any work performed by Employee for Corporation.
5.04 NOTICE OF AGREEMENT. Corporation may give notice of the existence and
terms of this Agreement to anyone else employing Employee or evidencing an
intent to employ Employee provided that Corporation uses its best efforts to
provide Employee with prior notice of its intent to contact such third party.
ARTICLE 6.00 - GENERAL MATTER.
6.01 NEVADA LAW. This Agreement shall be governed by the laws of the State
of Nevada and shall be construed in accordance therewith.
6.02 NO WAIVER. No provision of this Agreement may be waived except by an
agreement in writing signed by the waiving party. A waiver of any term or
provision shall not be construed as waiver of any other term or provision.
6.03 BINDING EFFECT. This Agreement shall be binding upon the parties,
their heirs, executors, administrators, successors or assignees. The parties
agree to do any and all things necessary to effectuate the purpose of this
Agreement.
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6.04 CONSTRUCTION. Throughout this Agreement, the singular shall include
the plural; the plural shall include the singular; and the masculine and neuter
shall include the feminine, wherever the context so requires.
6.05 TEXT TO CONTROL. The headings of articles and sections are included
solely for convenience of reference. If any conflict between any heading and the
text of this agreement exists, the text shall control.
6.06 SEVERABILITY. If any provision of this agreement is declared by an
court of competent jurisdiction to be invalid for any reason, such invalidity
shall not affect the remaining provisions. On the contrary, such remaining
provisions shall be fully severable, and this Agreement shall be construed and
enforced as if such invalid provisions never had been inserted in this
Agreement.
6.07 AMENDMENT. This Agreement may be amended, altered or revoked at any
time, in whole or in part, by filing with this Agreement a written instrument
setting forth such charges, signed by the Corporation and the Employee.
6.08 ARBITRATION. If the parties are unable to resolve a controversy within
thirty (30) days after commencement of meditation thereof, the dispute shall be
settled by binding arbitration or by either party initiating an action in a
court of competent jurisdiction. Arbitration of any dispute may be initiated by
one party by sending a written demand for arbitration to the other party. This
demand will specify the matter in dispute and request the appointment of an
arbitration panel. The arbitration panel will consist of one arbitrator named by
ABT, one arbitrator named by the Employee and a third arbitrator named by the
arbitrators so chosen. The arbitration hearing will be conducted by the American
Arbitration Association or Center for Public Resources, in accordance with the
rules and procedures of the American Arbitration Association. The situs of the
arbitration will be Chicago, IL. The arbitrators shall not be empowered to award
punitive or exemplary damages to either party.
6.09 NOTICES. All notices required to be given by this Agreement shall be
made in writing either by:
A. Personal delivery to the party requiring notice and securing a written
receipt, or
B. Mailing notice in the U.S. mails to the last known address of the
party requiring notice, which shall be the address shown on the
records of the Corporation for the Employee, by certified mail, return
receipt requested.
The effective date of the notice shall be the date of the written receipt
received upon delivery in Paragraph A above or four (4) days after the date the
notice was delivered to the U.S. mail as posted on the receipt in Paragraph B
above.
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The parties hereby execute this Employment Agreement on the day and year
first written above.
AGRIBIOTECH, INC.
/s/ Xxxxxxxx X. Xxxxxxxxx
-----------------------------------------
Xxxxxxxx X. Xxxxxxxxx, Vice President
EMPLOYEE:
/s/ Xxxxxxx X. Xxxx
-------------------
Xxxxxxx X. Xxxx
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