EMPLOYMENT AGREEMENT
THE
RICEX
COMPANY, a Delaware corporation ("Employer"), and Xxxx X.
Xxxx
("Employee"), agree as follows, effective as of the twentieth of October, 2003
(the “Effective Date”).
1. Employment.
Employer hereby employs Employee and Employee hereby accepts employment with
Employer on the terms and conditions set forth below.
2. Position;
Scope of Employment.
Employee shall have the position Chief Financial Officer. Employee's duties
shall include development, implementation and oversight of the Employer's
financial matters, including, without limitation, budget planning and
implementation, cost and revenue forecasting, tax planning and compliance,
cash
management and supervision, and management of accounting, finance and
bookkeeping staff, and shall include such other duties and authority as
specified by Employer and as may be modified from time to time.
2.1. Entire
Time and Effort.
Employee
shall devote Employee's full working time, attention, abilities, skill, labor
and efforts to the performance of Employee's employment. Employee shall not
directly or indirectly (i) be substantially engaged in or concerned with any
other duties or pursuits, (ii) render services to any third party for
compensation or other benefit, or (iii) engage in any other business activity
that will in any way interfere with the performance of Employee's duties under
this Agreement, except with the prior written consent of Employer; provided,
however, that Employee may engage in charitable, philanthropic, educational,
religious, civic and similar such activities to the extent that such activities
do not unreasonably interfere with the performance of Employee's duties under
this Agreement.
2.2. 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 under the terms of this Agreement shall commence
on May 1, 2004 and shall terminate five years from that date, unless terminated
earlier as provided herein. At the end of the initial five-year term, this
Agreement shall automatically renew for an additional five-year term unless
either party notifies the other party in writing ninety (90) days prior to
the
expiration of the term of his or its intention not to renew this
Agreement.
4. Compensation.
Employer
shall pay Employee the base pay (“Base Salary”) of One Hundred Fifty Thousand
Dollars ($150,000) per year which is in effect on the date of this agreement.
Salary payments will be payable in periodic installments in accordance with
Employer's pay schedule, but not less than twice per month. The Base Salary
shall be reviewed at least annually, and shall be adjusted to compensate for
cost of living adjustments in the Sacramento metropolitan area.
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
discretion.
4.2. 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. Employee shall be entitled to sick leave in accordance with
Employer's sick leave policy.
4.3. Automobile.
Employer shall make lease payments on behalf of the Employee, up to a maximum
amount of eight hundred dollars ($800.00) per month. Employer shall also
reimburse Employee for his actual expenses incurred in the operation of one
automobile for automobile insurance, annual registration, and maintenance.
4.4. Bonus.
Employee shall be eligible to participate in Employer’s bonus program when
implemented to the same extent as other executive 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 such program will be enacted.
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 three months;
(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 sets forth with
reasonable specificity the deficiencies in Employee's performance and giving
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.
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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 which Employee
may
have against Employer the amount equal to Employee's monthly base salary
multiplied by the number of months remaining in the term of this Agreement,
or
payment amount equal to two years of Employee’s Base Salary, which ever is
greater. 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 which Employee may have against Employer, not including any
obligation under the Worker’s Compensation laws including its Employer's
Liability provisions.
(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 Base Salary by the new
entity, then Employee shall receive a severance payment equal to two years
of
Employee’s Base Salary or the balance remaining to be paid under the terms of
this Agreement, whichever is greater. 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 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-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-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. Unfair
Competition.
During
Employee's employment under this Agreement, Employee shall not directly or
indirectly, whether as a partner, employee, creditor, shareholder or otherwise,
promote or engage in any activity or other business which is competitive in
any
way with Employer's business, and shall not take any action or make any
agreement to establish, or become employed by, a competing
business.
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7. Proprietary
Information; Confidentiality.
7.1. 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 which
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.
7.2. 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.
7.3. Noncompetition.
Employee
shall not use any of the Confidential Information to compete with Employer
in
connection with a business or enterprise of any kind, foreign or domestic,
profit or non-profit, as an investor, partner, shareholder, LLC member,
employee, agent, consultant or independent contractor. Nothing in this
Section 7.3 shall be construed to limit the more general prohibitions
against unauthorized use or disclosure of the Confidential Information contained
in other sections of this Agreement.
7.4. 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 7 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 7 to an actual or potential
future employer of Employee.
7.5. 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.
7.6. 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.
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8. Miscellaneous.
8.1. 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.
8.2. Enforcement.
This
Agreement shall be interpreted in accordance with the laws of the State of
California and will be adjudicated in the Superior Court of California in and
for the County of El Dorado. 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.
8.3. Choice
of Law, Jurisdiction, Venue.
This
Agreement is drawn to be effective in the State of California, and shall be
construed in accordance with California law. The exclusive jurisdiction and
venue of any legal action by either party under this Agreement shall be the
County of Sacramento, California.
8.4. 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.
8.5. 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.
8.6. 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.
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8.7. 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.
8.8. 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.
8.9. 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.
8.10. Captions.
All
paragraph captions are for reference only and shall not be considered in
construing this Agreement.
DATED: October
20, 2003
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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/
Xxxx X. Xxxx
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Xxxxxx
X. XxXxxx, Xx.
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Xxxx
X. Xxxx
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Its:
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Chief
Executive Officer
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