EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this “Agreement”) is effective as of the 1st of May, 2004
(the "Effective Date") by and between THE RICEX COMPANY, a Delaware corporation
("Employer") and Xxx X. Xxxxx ("Employee").
In
consideration of the mutual covenants and obligations herein set forth, the
parties hereto agree as follows:
1. Employment.
Employer hereby employs Employee and Employee hereby accepts employment with
Employer on the terms and conditions set forth below, which supercede in their
entirety the terms and conditions of any previous employment agreement between
Employer and Employee.
2. Position;
Scope of Employment.
Employee shall have the position of Vice President of Operations for The RiceX
Company and Chief Operating Officer for the Company’s subsidiary, Food Extrusion
Montana. Employee shall manage the operations of Employer by directing and
coordinating activities consistent with established goals, objectives and
policies. In performing the services hereunder, Employee shall follow the
direction set by the Chief Executive Officer and Board of Directors, and shall
implement such programs as he deems necessary to ensure attainment of Employer’s
business plan for growth and profit. Employee also shall provide direction
and
structure for all operating units, shall participate in developing policy and
strategic plans, and shall manage all activities associated with Employer’s
production, engineering, construction, quality assurance, logistics and research
and development.
2.1. Time
and Effort.
At
Employer’s direction, Employee shall devote a minimum of thirty (30) hours per
month to a maximum of one hundred (100) hours per calendar month to the
performance of Employee's duties under this Agreement. Any work assignments
requiring more than one hundred (100) hours per calendar month shall be
accommodated by Employee, so long as any such assignment does not exceed six
(6)
months duration in any calendar year. Employee will have the right to work
from
his home office and Employer will have the right to make reasonable travel
requests from time to time of Employee.
2.2 Other
Employment.
Employee may render services to third parties for compensation or other benefit,
so long as such other business activities in no way interfere with the
performance of Employee's duties under this Agreement.
2.3. Rules
and Regulations.
Employee
agrees to observe and comply with Employer's rules and regulations as provided
by Employer and as may be amended from time to time by Employer, and will carry
out and faithfully perform such orders, directions and policies of
Employer.
3. Term
of Employment.
Employee's term of employment pursuant to this Agreement shall commence on
the
Effective Date and shall automatically terminate on the fifth anniversary of
the
Effective Date, unless (i) terminated earlier as provided herein, or (ii)
extended pursuant to written notice from Employer to Employee, which notice
shall be given not less than six (6) months prior to the expiration of the
initial term, and operate to extended the term hereof for an additional term
of
five (5) years.
4. Compensation.
During
the term of this Agreement, Employer shall compensate Employee for his services
to Employer at a rate of $3000/month for up to thirty (30) hours of work per
month. If more than thirty (30) hours of work per month is required by Employer,
Employee shall be compensated at a rate of $100/hour for all additional hours
worked. Employee’s compensation shall be subject to an annual adjustment of five
percent (5%) upon each anniversary date of the Effective Date.
4.1. Benefits.
Employee shall be provided with medical insurance and such other benefits as
provided to Employer's other similarly situated employees and in accordance
with
Employer's policies, as modified from time to time in Employer's sole and
absolute discretion.
4.2. Reimbursement
of Expenses.
During
the term of this agreement, Employee shall be reimbursed for all standard travel
expenses as outlined in the Company Employee Manual. Office expenses including
rent and utilities will be paid by the Employer.
4.3. Vacation
and Sick Leave.
Employee shall be entitled to four weeks of vacation each calendar year.
Employee's vacation shall accrue at the rate of thirteen and one-thirds (13
1/3)
hours per month but in no event shall Employee's total accrued vacation exceed
eight (8) weeks. In lieu of vacation time off, the employee may elect to be
paid
accrued vacation time at the Employee’s existing prevailing hourly rate.
Employee shall be entitled to sick leave in accordance with Employer's sick
leave policy.
4.4. Automobile.
Employer shall make lease/purchase payments on behalf of Employee, up to a
maximum amount of eight hundred dollars ($800) per month. Employer shall also
reimburse Employee for his actual expenses incurred in the operation of one
automobile for automobile insurance, and annual registration and maintenance,
subject to receipt of documentation therefor reasonably satisfactory to
Employer.
4.5. Bonus.
Employee shall be eligible to participate in Employer’s bonus program if and
when implemented to the same extent as other similarly situated employees of
Employer. Employer intends to adopt such a program prior to the expiration
of
this Agreement, but makes no further representations as to the terms of such
program or the date on which such program may be enacted. An international
business development bonus will be paid to the employee for any international
deal structured by the employee. The bonus will be determined by the
Compensation Committee of the Board and will be consistent with similar bonuses
paid for similar activities in commercial deals.
4.6. Stock
or Stock Option Plan.
If
Employer grants stock or other equity incentives to its other similarly situated
employees during the term of this Agreement, Employer shall consider granting
stock or other equity incentives to Employee, in the amounts and upon such
terms
and conditions as Employer shall, in its sole and absolute discretion,
determine.
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4.7. Relocation
Expenses.
The
Employer will provide a one-time relocation allowance of $6,000 during the
term
of this agreement.
5. Termination
of Employment
5.1. Termination
Events.
Employee's employment shall be terminated prior to the expiration of this
Agreement (“Early Termination”) upon the occurrence of any of the following
events: (i) the mutual written agreement of Employer and Employee;
(ii) Employee's disability which shall, for the purposes of
this
Agreement, mean Employee's inability due to physical or mental impairment to
perform Employee's duties and obligations under this Agreement, despite
reasonable accommodation by Employer, for a period exceeding in the aggregate
three (3) months in any twelve (12) consecutive month period;
(iii) Employee's death; (iv) notice by Employer of termination for
cause as defined in Section 5.2 below; (iv) written notice of
termination by Employer without cause upon fourteen (14) days’ notice, subject
to the Compensation Upon Early Termination provisions of Section 5.3
below.
5.2. Termination
for Cause.
Employer reserves the right to terminate this Agreement for cause upon
(i) Employee's willful and continued failure substantially to perform his
duties and obligations under this Agreement after written demand for substantial
performance has been delivered to Employee by Employer, which demand sets forth
with reasonable specificity the deficiencies in Employee's performance and
gives
Employee not less than thirty (30) days to correct such deficiencies;
(ii) fraud or intentional material misrepresentation by Employee,
(iii) unauthorized disclosure or use of Employer's trade secrets or
Confidential Information by Employee; (iv) Employee's conviction of a
felony; (v) theft or conversion of Employer's property by Employee; or
(vi) Employee's habitual misuse of alcohol, illegal narcotics or other
intoxicant.
5.3. Compensation
Upon Early Termination.
Upon
early termination, Employer shall pay Employee compensation as
follows.
(A) If
Employee is terminated by Employer for cause, voluntarily resigns, dies, or
becomes disabled as such term is used in Section 5.1 of this Agreement, Employer
shall pay Employee, or Employee’s representative, all accrued but unpaid salary
and vacation pay accrued through the effective date of the
termination.
(B) If
Employee is terminated by Employer without cause, Employer shall pay to Employee
as liquidated damages, and in lieu of any and all other claims that Employee
may
have against Employer, the remaining term of the agreement times the average
annual Employee compensation of the previous twenty-four months (or actual
number of months worked if fewer than twenty-four), with a maximum payment
of
two hundred and fifty thousand dollars. Employer's payment pursuant to this
section shall fully and completely discharge any and all obligations of Employer
to Employee arising out of or related to this Agreement and shall constitute
liquidated damages in lieu of any and all claims that Employee may have against
Employer, not including any obligation under the Worker’s Compensation laws
including its Employer's Liability provisions.
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(C) If
Employee is terminated as the result of a Change in Control and Employee is
not
employed in the same capacity or being paid the same salary by the new entity,
then Employee shall receive a severance payment of one hundred and eighty
thousand dollars ($180,000). In addition, if Employee is terminated as the
result of a Change in Control and Employee is not employed in the same capacity
by the new entity, Employer agrees to continue Employee’s medical and dental
insurance benefits as provided during Employee’s employment with Employer for a
period of two (2) years from the effective date of the Change in Control, except
as provided below in Section 5.3(C)(1) and Section 5.3(C)(2).
(1) Employee
agrees that he shall accept any plan coverage changes that may occur during
the
two (2)-year period, which apply to all employees in the workforce.
(2) Employee
agrees that he will notify Employer (or any successor of Employer) if he becomes
employed in any capacity with another employer and becomes eligible to receive
medical and dental insurance benefits through that employment prior to the
expiration date of the two (2) year period set forth in this section. At such
time, Employer shall no longer be obligated to provide Employee with medical
and
dental insurance benefits.
6. Proprietary
Information; Confidentiality.
6.1. Confidential
Information.
Employee agrees not to disclose to any others, or take or use for Employee's
own
purposes or purposes of any others, during the term of this Agreement, any
of
Employer's Confidential Information (as defined below). Employee agrees that
these restrictions shall also apply to (1) Confidential Information belonging
to
third parties in Employer's possession and (2) Confidential Information
conceived, originated, discovered or developed by Employee during the term
of
this Agreement. "Confidential Information" means any Employer proprietary
information, technical data, trade secrets or know-how, including, but not
limited to, research, product plans, products, services, customer lists and
customers, markets, software, developments, inventions, processes, formulas,
technology, designs, drawings, engineering, marketing, finances or other
business information disclosed to Employee by Employer, either directly or
indirectly, in writing, orally or by drawings, or by observation of products.
Confidential Information does not include any of the foregoing items that has
become publicly known and made generally available through no wrongful act
of
Employee. Employee further agrees not to use improperly or disclose or bring
onto the premises of Employer any trade secrets of another person or entity
during the term of this Agreement.
6.2. Return
of Property.
Employee agrees that upon termination of employment with Employer, Employee
will
deliver to Employer all devices, records, data, disks, computer files, notes,
reports, proposals, lists, correspondence, specifications, drawings, blueprints,
sketches, materials, equipment, other documents or property, or reproductions
of
any aforementioned items developed by Employee pursuant to employment with
Employer or otherwise belonging to Employer, its successors or
assigns.
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6.3. Notification
of New Employer.
Employer shall have the right to notify any actual or potential future employer
of Employee of Employee's rights and obligations under this Section 6 of
the Agreement. Employee expressly authorizes such disclosure and waives any
claims Employee may have against Employer resulting from the disclosure of
Employee's obligations under this Section 6 to an actual or potential
future employer of Employee.
6.4. Other
Agreements.
Employee represents that the performance of all the terms of this Agreement
will
not breach any agreement to keep in confidence proprietary information acquired
by Employee in confidence or in trust prior to employment with Employer.
Employee has not and shall not enter into any oral or written agreement in
conflict with this Agreement.
6.5. Equitable
Remedies.
Employee agrees that it would be impossible or inadequate to measure and
calculate Employer's damages from any breach of the covenants set forth in
this
Section 7 of the Agreement. Accordingly, Employer shall have available, in
addition to any other right or remedy available under law or equity, the right
to obtain any injunction from a court of competent jurisdiction restraining
such
breach or threatened breach and to specific performance of any such provision
of
this Section 7. Employee further agrees that no bond or other security
shall be required in obtaining such equitable relief and consents to the
issuance of such injunction and to the ordering of specific
performance.
7. Miscellaneous.
7.1. Notices.
Any
notice under this Agreement shall be in writing, and any written notice or
other
document shall be deemed to have been duly given (i) on the date of personal
service on the parties, (ii) on the third business day after mailing, if the
document is mailed by registered or certified mail, (iii) one day after being
sent by professional or overnight courier or messenger service guaranteeing
one-day delivery, with receipt confirmed by the courier, or (iv) on the date
of
transmission if sent by telegram, telex, telecopy or other means of electronic
transmission resulting in written copies, with receipt confirmed. Any such
notice shall be delivered or addressed to the parties at the addresses set
forth
below or at the most recent address specified by the addressee through written
notice under this provision. Failure to give notice in accordance with any
of
the foregoing methods shall not defeat the effectiveness of notice actually
received by the addressee.
7.2. Enforcement. In
the
event of any dispute concerning any aspect of the obligations of the Company
under this Agreement, the Company or its successor shall reimburse Employee
all
attorney fees and costs incurred by Employee in connection with adjudication
of
such matters.
7.3. Choice
of Law, Jurisdiction, Venue.
This
Agreement shall be interpreted in accordance with the laws of the State of
California. The exclusive jurisdiction and venue of any legal action by either
party under this Agreement shall be the Superior Court of California in and
for
the County of El Dorado..
7.4. Amendment.
The
provisions of this Agreement may be modified at any time by agreement of the
parties. Any such agreement hereafter made shall be ineffective to modify this
Agreement in any respect unless in writing and signed by the parties against
whom enforcement of the modification or discharge is sought.
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7.5. Waiver.
Any of
the terms or conditions of this Agreement may be waived at any time by the
party
entitled to the benefit thereof, but no such waiver shall affect or impair
the
right of the waiving party to require observance, performance or satisfaction
either of that term or condition as it applies on a subsequent occasion or
of
any other term or condition.
7.6. Assignment.
The
parties agree that Employee's rights and obligations under this Agreement are
personal and not assignable. This Agreement contains the entire agreement
between the parties to it and shall be binding on and inure to the benefit
of
the heirs, personal representatives, successors and assigns of
Employer.
7.7. Independent
Covenants.
All
provisions herein concerning unfair competition and confidentiality shall be
deemed independent covenants and shall be enforceable without regard to any
breach by Employer unless such breach by Employer is willful and
reckless.
7.8. Entire
Agreement.
This
document constitutes the entire agreement between the parties, all oral
agreements being merged herein, and supersedes all prior representations and
written agreements. There are no representations, agreements, arrangements,
or
understandings, oral or written, between or among the parties relating to the
subject matter of this Agreement that are not fully expressed
herein.
7.9. Severability.
If any
provision of this Agreement is held by a court of competent jurisdiction to
be
invalid or unenforceable, the remainder of the Agreement which can be given
effect without the invalid provision shall continue in full force and effect
and
shall in no way be impaired or invalidated.
7.10.
Captions.
All
paragraph captions are for reference only and shall not be considered in
construing this Agreement.
DATED: March
30,
2004
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THE
RICEX COMPANY
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EMPLOYEE
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By:
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/s/
Xxxxxx X. XxXxxx, Xx.
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/s/
Xxx X. Xxxxx
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Xxxxxx
X. XxXxxx, Xx.
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Xxx
X. Xxxxx
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Its:
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Chief
Executive Officer
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