EXHIBIT 10.28
EMPLOYMENT AGREEMENT
This Agreement, dated as of December 12, 1996, is between Xxxxxx and
Xxxxxxxxxx Sales, Co., a California corporation ("A&W"), and Xxxx X.
Xxxxxxxxxx ("Employee").
RECITALS
A.A&W desires to obtain the services of Employee and Employee desires to
secure employment from A&W upon the following terms and conditions.
B.A&W considers the services of Employee to be provided under this Agreement
to be unique, extraordinary, and of intellectual character.
C.A&W is a subsidiary of Epitope, Inc. ("Epitope"), an Oregon corporation.
Epitope, its direct and indirect subsidiaries (whether majority or wholly
owned by Epitope), any other entity controlling, controlled by, or under
common control with Epitope, and any joint venture in which any of the
foregoing has an interest are referred to collectively herein as the "the
Company."
D.The Company has spent significant time, effort, and money to develop
Proprietary Information (as defined below), which the Company considers vital
to its business and goodwill. Certain Proprietary Information will
necessarily be communicated to or acquired by Employee in the course of his
employment with A&W, and A&W desires to obtain the services of Employee, only
if, in doing so, it can protect the Proprietary Information and goodwill.
AGREEMENT
The parties therefore agree as follows:
1.Period of Employment. A&W employs Employee to render services to A&W as
President, with the duties and responsibilities described in Section 2, for
the period (the "Period of Employment") commencing on the date of this
Agreement and ending upon the earlier of (i) December 12, 1999 (the
"Termination Date") or (ii) the date upon which the Period of Employment is
terminated in accordance with Section 4.
2.Position and Responsibilities.
(a)Position. Employee accepts employment with A&W as President and shall
perform all services appropriate to that position, as well as such other
services as may be assigned by the Board of Directors of A&W. Employee shall
devote his best efforts and full-time attention to the performance of his
duties. Employee shall be subject to the direction of the Board of Directors
of A&W, who shall retain full control of the means and methods by which he
performs the above services and of the place(s) at which all services are
rendered. Employee shall report to the Board of Directors of A&W. Employee
shall be expected to travel if necessary or advisable in order to meet the
obligations of his position.
(b)Other Activity. Except with the prior written consent of A&W, Employee
shall not during the Period of Employment (i) accept any other employment; or
(ii) engage, directly or indirectly, in any other business, commercial, or
professional activity (whether or not pursued for pecuniary advantage) that is
or may be competitive with the business of the Company, that might create a
conflict of interest with the Company, or that otherwise might interfere with
the business of the Company.
3.Compensation and Benefits.
(a)Compensation. In consideration of the services to be rendered under this
Agreement, A&W shall pay Employee no less than one hundred eighty thousand
dollars ($180,000) per year, payable monthly during the Period of Employment
in accordance with A&W's usual payroll procedures. A&W shall review
Employee's compensation annually in accordance with A&W's usual procedure for
adjusting salaries for similarly situated employees. All amounts to be paid
to Employee under this Agreement shall be less withholdings required by law
and other customary payroll deductions.
(b)Benefits. During the Period of Employment, Employee shall be entitled to
receive substantially the same benefits that Employee received from A&W
immediately prior to the date of this Agreement; provided, however, that A&W
will not after the date of this Agreement make any further payments in
connection with the Key Man Life Insurance Policy issued in the name of
Employee. Employee may elect to pay his own premiums to continue the policy.
Upon any distribution of benefits under the policy, A&W shall be paid either
directly from the insurance company or from Employee the cash surrender value
of the policy as reflected on A&W's balance sheet as of September 30, 1996.
Employee shall have the right to participate in and to receive benefits from
all present and future benefit plans specified in A&W's policies and generally
made available to similarly situated employees of A&W. The amount and extent
of benefits to which Employee is entitled shall be governed by the specific
benefit plan. No statement concerning benefits or compensation to which
Employee is entitled shall alter in any way the term of this Agreement, any
renewal thereof, or its termination.
(c)Expenses. A&W shall reimburse Employee for reasonable travel and other
business expenses incurred by Employee in performing his duties, in accordance
with A&W's standard policies.
4.Termination of Employment.
(a)By Death. The Period of Employment shall terminate automatically upon the
death of Employee. A&W shall pay to Employee's beneficiaries or estate, as
appropriate, any compensation then due and owing. Thereafter, all obligations
of A&W under this Agreement shall cease. Nothing in this Section shall affect
any entitlement of Employee's heirs to the benefits of any life insurance plan
or other applicable benefits.
(b)By Disability. If, by reason of any physical or mental incapacity,
Employee has been or will be prevented from properly performing his duties
under the Agreement for more than ninety (90) consecutive days, then, to the
extent permitted by law, A&W may terminate the Period of Employment upon two
(2) weeks' advance written notice. A&W shall pay Employee all compensation to
which he is entitled through the last business day of the notice period;
thereafter, all obligations of A&W under this Agreement shall cease. Nothing
in this Section shall affect Employee's rights under any applicable A&W
disability plan.
(c)By Employer For Cause. At any time, A&W may terminate Employee for Cause
(as defined below) on immediate notice. A&W shall pay Employee all
compensation then due and owing; thereafter, all A&W's obligations under this
Agreement shall cease. Termination shall be for "Cause" if Employee:
(i) acts in bad faith and to the detriment of A&W; (ii) refuses or fails to
act in accordance with any specific direction or order of A&W; (iii) exhibits
in regard to his employment unfitness or unavailability for service,
unsatisfactory performance, misconduct, dishonesty, habitual neglect, or
incompetence; (iv) is convicted of a crime involving dishonesty, breach of
trust, or physical or emotional harm to any person; (v) is selected for layoff
pursuant to a bona fide reduction-in-force; or (vi) breaches any material term
of this Agreement. If termination is due to Employee's disability, subsection
4(b) above shall control, and not this subsection on termination for cause.
(d)By Employee for Good Reason. Employee may terminate, without liability,
the Period of Employment for Good Reason (as defined below), provided Employee
gives A&W thirty (30) days' advance written notice of the reason for
termination and his intent to terminate the Agreement. During this period,
A&W shall have an opportunity to correct the condition constituting Good
Reason. If the condition is remedied within this period, Employee's notice to
terminate shall be rescinded automatically; if not remedied, termination shall
become effective upon expiration of the above notice period. In this event,
A&W shall pay Employee all compensation due and owing through the last day
actually worked; thereafter all A&W's obligations under this Agreement shall
cease. A&W shall also have the option, in its complete discretion, to make
Employee's termination effective at any time prior to the end of the notice
period, provided that A&W pays Employee all compensation due and owing through
the balance of the notice period (not to exceed thirty (30) days). Employee
shall be entitled to exercise his right to terminate the Agreement for Good
Reason only if he gives the required notice not more than forty-five (45) days
after the occurrence of the event that is the basis for the Good Reason.
(e)"Good Reason" Defined. Termination shall be for "Good Reason" if:
(i) there is a material and adverse change in Employee's position, duties,
responsibilities, or status with A&W; (ii) there is a reduction in Employee's
salary then in effect, other than a reduction comparable to reductions
generally applicable to similarly situated employees of A&W; (iii) there is a
material reduction in Employee's benefits, other than a reduction comparable
to reductions generally applicable to similarly situated employees of A&W; or
(iv) A&W materially breaches this Agreement. Employee shall not be entitled
to terminate this Agreement for Good Reason if an event occurs that would
otherwise constitute Good Reason, but results from a change in A&W's status as
defined in the next subsection.
(f)Change in Employer Status. To the extent permitted by law, A&W, in its
sole discretion, may terminate the Period of Employment (in which case all
A&W's obligations under this Agreement shall cease after payment of all
compensation due and owing) upon any formal action of A&W's management to
terminate A&W's existence or otherwise wind up its affairs, to sell all or
substantially all of its assets, or to merge with or into another entity.
(g)Termination Obligations.
(i)Employee acknowledges and agrees that all personal property,
including, without limitation, all tangible Proprietary Information (as
defined below), books, manuals, records, reports, notes, contracts, lists,
documents, computer disks (or other computer-generated files, data, or
information), materials, or copies thereof, created on any medium and
furnished to, obtained by, or prepared by Employee in the course of or
incident to his employment, and all equipment and property furnished to
Employee in the course of his employment, belong to A&W and shall be returned
promptly to A&W upon termination of the Period of Employment.
(ii)All benefits to which Employee is otherwise entitled shall cease upon
Employee's termination, unless explicitly continued either under this
Agreement, under any specific written policy or benefit plan of A&W, or as
otherwise required by law.
(iii)Upon termination of the Period of Employment, Employee shall be deemed
to have resigned from all offices and directorships then held with A&W or any
other member of the Company.
(iv)Employee's obligations under this subsection on Termination
Obligations, Section 5 on Proprietary Information, and Section 6 on Inventions
shall survive the termination of the Period of Employment and the expiration
of this Agreement.
(v)Following any termination of the Period of Employment, Employee shall fully
cooperate with A&W in all matters relating to the winding up of pending work
on behalf of A&W and the orderly transfer of work to other employees of A&W.
5.Proprietary Information.
(a)Defined. Proprietary Information is all information in any form, tangible
or intangible, pertaining in any manner to the business of the Company or the
employees, clients, consultants, or business associates of the Company, which
was produced by any employee of the Company in the course of his or her
employment or otherwise produced or acquired by or on behalf of the Company,
which derives independent economic value, actual or potential, from not being
generally known to the public who can obtain economic value from its
disclosure or use and is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy. All Proprietary Information not
generally known outside of the Company, and all Proprietary Information so
known only through improper means, is "Confidential Information." Employee
must consult and follow any A&W procedures instituted to identify and protect
certain types of Confidential Information, which are considered by A&W to be
safeguards in addition to the protection provided by this Agreement. Nothing
contained in those procedures or in this Agreement is intended to limit the
effect of the other.
(b)General Restrictions on Use. During the Period of Employment, Employee
shall use Proprietary Information, and shall disclose Confidential
Information, only for the benefit of A&W and as is necessary to carry out his
responsibilities under this Agreement. Following termination, Employee shall
neither, directly or indirectly, use any Proprietary Information nor disclose
any Confidential Information, except as expressly and specifically authorized
in writing by A&W. The publication of any Proprietary Information through
literature or speeches must be approved in advance in writing by A&W.
(c)Third Party Information. Employee acknowledges that the Company may
receive from third parties their confidential information subject to a duty to
maintain the confidentiality of such information and to use it only for
certain limited purposes. Employee agrees that he owes the Company and such
third parties, during the Period of Employment and thereafter, a duty to hold
all such confidential information in the strictest confidence and not to
disclose or use it except as necessary to perform his obligations hereunder
and as is consistent with any confidentiality agreement with such third
parties.
6.Inventions.
(a)Defined. The term "Inventions" includes any and all ideas, processes,
inventions, technology, computer hardware or software, formulas, discoveries,
patents, products, trademarks, service marks, original works of authorship,
designs, copyrights, and all improvements, know-how, rights, and claims
related to the foregoing. Any Inventions that are conceived, developed, or
reduced to practice by Employee, alone or with others, after the date of this
Agreement shall be deemed "Work-Related Inventions," except to the extent that
California Labor Code Section 2870 lawfully prohibits the assignment of rights
in such Inventions.
(b)Statutory Notice. Employee acknowledges that the definition of Work-
Related Inventions includes only those Inventions that may be lawfully
assigned pursuant to California Labor Code Section 2870, which provides:
"(a)Any provision in an employment agreement which provides that an employee
shall assign, or offer to assign, any of his or her rights in an invention to
his or her employer shall not apply to an invention that the employee
developed entirely on his or her own time without using the employer's
equipment, supplies, facilities, or trade secret information except for those
inventions that either:
"(1)Relate at the time of conception or reduction to practice of the invention
to the employer's business, or actual or demonstrably anticipated research or
development of the employer; or
"(2)Result from any work performed by the employee for the employer.
"(b)To the extent a provision in an employment agreement purports to require
an employee to assign an invention otherwise excluded from being required to
be assigned under subdivision (a), the provision is against the public policy
of this state and is unenforceable."
Nothing in this Agreement is intended to expand the scope of protection
provided Employee by Sections 2870 through 2872 of the California Labor Code.
(c)Disclosure. Employee agrees to maintain adequate and current written
records on the development of all Inventions and to disclose promptly to A&W
all Work-Related Inventions and relevant records, which records will remain
the sole property of A&W. Employee further agrees that all information and
records pertaining to any Invention that Employee does not believe to be a
Work-Related Invention, but that is conceived, developed, or reduced to
practice by Employee (alone or with others) during the Period of Employment
(or during the post-employment period set forth in Section 6(f) below), shall
be disclosed promptly to A&W (such disclosure to be received in confidence).
A&W shall examine the information disclosed to determine if in fact the
Invention is a Work-Related Invention subject to this Agreement.
(d)Assignment. Employee agrees to assign to A&W, and hereby does assign to
A&W, his entire right, title, and interest throughout the United States and in
all foreign countries, free and clear of all liens and encumbrances, in and to
each Work-Related Invention, which shall be the sole property of A&W, whether
or not patentable. In the event any Work-Related Invention shall be deemed by
A&W to be patentable or otherwise registerable, Employee shall assist A&W (at
its expense) in obtaining letters patent or other applicable registrations
thereon and shall execute all documents and do all other things necessary or
proper (including testifying at A&W's expense) to vest in A&W, or any entity
or person specified by A&W, full title or interest therein. Employee shall
also take any action necessary or advisable in connection with any
continuations, renewals, or reissues thereof or in connection with any related
proceedings or litigation. Should A&W be unable to secure Employee's
signature on any document necessary to apply for, prosecute, obtain, or
enforce any patent, copyright, or other right or protection relating to any
Work-Related Invention, whether due to Employee's mental or physical
incapacity or any other cause, Employee irrevocably designates and appoints
A&W and each of its duly authorized officers and agents as Employee's agent
and attorney in fact, to act for and in Employee's behalf and stead and to
execute and file any such document, and to do all other lawfully permitted
acts to further the prosecution, issuance, and enforcement of patents,
copyrights, or other rights or protections with the same force and effect as
if executed, delivered, and done by Employee.
(e)Exclusions. Employee represents that there are no Inventions that he
desires to exclude from the operation of this Agreement. Employee is not a
party to any existing contract in conflict with this Agreement or contract to
assign Inventions to any other party.
(f)Post-Termination Period. Because of the difficulty of establishing when
any Invention is first conceived or developed by Employee, or whether it
results from access to Confidential Information or the Company's equipment,
supplies, facilities, or data, Employee agrees that any Invention shall be
presumed to be a Work-Related Invention, if reduced to practice by Employee or
with the aid of Employee within one (1) year after termination of the Period
of Employment. Employee can rebut the above presumption if he proves that the
Invention (i) was developed entirely on Employee's own time without using the
Company's equipment, supplies, facilities, or trade secret information;
(ii) was not conceived or reduced to practice during the Period of Employment,
or, if conceived or reduced to practice during the Period of Employment, did
not, at the time of conception or reduction to practice, relate to the
Company's business or actual or demonstrably anticipated research or
development; and (iii) did not result from any work performed by Employee for
the Company.
7.Arbitration.
(a)Arbitrable Claims. All disputes between Employee (and his successors and
permitted assigns) and A&W (and the Company and the shareholders, directors,
officers, employees, agents, successors, attorneys, and assigns of each)
relating in any manner whatsoever to the employment or termination of
Employee, including without limitation, all disputes arising under this
Agreement ("Arbitrable Claims") shall be resolved by arbitration. Arbitrable
Claims shall include, but are not limited to, contract (express or implied)
and tort claims of all kinds, as well as all claims based on any federal,
state, or local law, statute, regulation, or ordinance, excepting only claims
under applicable workers' compensation law. Arbitration shall be final and
binding upon the parties and shall be the exclusive remedy for all Arbitrable
Claims, except that A&W may, at its option, seek injunctive relief and damages
in court for any breach of Section 5 or 6 of this Agreement.
(b)Procedure. Arbitration of Arbitrable Claims shall be in accordance with
the Rules and Procedures for Mediation/Arbitration of Employment Disputes of
JAMS/Endispute ("JAMS Rules"), except as provided otherwise in this Agreement.
Arbitration shall be initiated by providing written notice to the other party
with a statement of the claim(s) asserted and the facts upon which the
claim(s) are based. In any arbitration, the burden of proof shall be
allocated as provided by applicable law. Either party may bring an action in
court to compel arbitration under this Agreement and to enforce an arbitration
award.
(c)Arbitrator Selection and Authority. All disputes involving Arbitrable
Claims shall be decided by a single arbitrator. The arbitrator shall be
selected in accordance with the JAMS Rules. The arbitrator shall have the
authority to award equitable relief, damages, costs, and fees as provided by
law for the particular claim(s) asserted, except that the arbitrator shall
have no authority to award punitive damages. The fees of the arbitrator shall
be paid by the losing party, as identified by the arbitrator. The arbitrator
shall have exclusive authority to resolve all Arbitrable Claims, including,
but not limited to, any claim that all or any part of this Agreement is void
or unenforceable.
(d)Confidentiality. All proceedings in connection with any Arbitrable Claim
shall be confidential and shall not be disclosed to any person other than the
parties to the proceeding, their counsel and experts, the arbitrator, and, if
involved, the court and court staff. All documents filed with the arbitrator
or with a court shall be filed under seal. The parties shall stipulate to all
arbitration and court orders necessary to effectuate fully the provisions of
this subsection concerning confidentiality.
(e)Continuing Obligations. The rights and obligations of Employee and A&W set
forth in this Section 7 shall survive the termination of Employee's employment
and the expiration of this Agreement.
8.Notices. All notices under this agreement shall be in writing and shall be
deemed given when delivered personally, when sent by fax (with prompt
confirmation by mail), four business days after mailed by certified mail
(return receipt requested), or one business day after being sent by a
recognized overnight courier, to the parties at the following addresses (or at
such other address for a party as shall be specified by like notice):
If to A&W, to:
Xxxxxx and Xxxxxxxxxx Sales, Co.
c/o Epitope, Inc.
0000 X.X. Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Ph.D.
If to Employee, to:
Xxxx X. Xxxxxxxxxx
Xxxxxx and Xxxxxxxxxx Sales, Co.
0000 Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
9.Action by A&W. All actions required or permitted to be taken under this
Agreement by A&W, including without limitation, exercise of discretion,
consents, waivers, and amendments to this Agreement, shall be made and
authorized only by the Chairman of the Board of Directors or by his or her
representative specifically authorized to act under this Agreement, unless
Employee holds that position, in which case an officer designated by the Board
of Directors shall have such authority.
10.Entire Agreement. This Agreement is intended to be the final, complete,
and exclusive statement of the terms of Employee's employment by A&W. This
Agreement may not be contradicted by evidence of any prior or contemporaneous
agreement. To the extent that policies and procedures of A&W apply to
Employee and are inconsistent with the terms of this Agreement, the provisions
of this Agreement shall control.
11.Amendments; Waivers. This Agreement may not be modified or amended except
by an instrument in writing, signed by Employee and by A&W. No failure to
exercise and no delay in exercising any right, remedy, or power under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, or power under this Agreement preclude any
other or further exercise thereof, or the exercise of any other right, remedy,
or power provided herein or by law or in equity.
12.Assignment; Successors and Assigns. Employee may not assign any rights or
delegate any obligations under this Agreement. Any purported assignment or
delegation shall be null and void. Nothing in this Agreement shall prevent
the consolidation of A&W with, or its merger into, any other entity, or the
sale by A&W of all or substantially all of its assets, or the otherwise lawful
assignment by A&W of any rights or obligations under this Agreement. Subject
to the foregoing, this Agreement shall be binding upon and shall inure to the
benefit of the parties and their respective heirs, legal representatives,
successors, and permitted assigns, and shall not benefit any person or entity
other than those enumerated above.
13.Severability; Enforcement. It is the intention of the parties that the
covenants contained in Section 5 on Proprietary Information and Section 6 on
Inventions shall be enforced to the greatest extent in time, area, and degree
of participation that is permitted by the law of the jurisdiction whose law is
found to be applicable to any acts allegedly in breach of these covenants.
Notwithstanding any governing law provision in this Agreement, the parties
intend that the foregoing covenants shall be governed by and construed
according to the law of the jurisdiction (from among those jurisdictions
arguably applicable to this Agreement and those in which a breach of this
Agreement is alleged to have occurred or to be threatened) which best gives
them effect. If any provision of this Agreement, or the application thereof
to any person, place, or circumstance, shall be held by an arbitrator or a
court of competent jurisdiction to be invalid, unenforceable, or void, such
provision shall be enforced to the greatest extent permitted by law, and the
remainder of this Agreement and such provisions as applied to other persons,
places, and circumstances shall remain in full force and effect.
14.Attorneys' Fees and Costs. In any legal action, arbitration, or other
proceeding brought to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to recover reasonable attorney fees and
costs.
15.Governing Law. This Agreement shall be governed by and construed in
accordance with the law of the State of California.
16.Employee Acknowledgment. Employee acknowledges that he has had the
opportunity to consult legal counsel in regard to this Agreement, that he has
read and understands the Agreement, that he is fully aware of its legal effect
(including notice of his statutory rights under Section 2870 of the California
Labor Code, as set forth in Section 6 on Inventions), and that he has entered
into it freely and voluntarily and based on his own judgment and not based on
any representations or promises other than those contained in this Agreement.
The parties have duly executed this Agreement as of the date first written
above.
Xxxxxx and Xxxxxxxxxx Sales, Co.
By:
Xxxx X. Xxxxxxxxxx Xxxxxxx X. Xxxxxx
Executive Vice President
