EXHIBIT 10.21
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of August 17, 1992,
between Xxxxxxx X. Xxxxxxxx ("Employee") and Agritope, Inc., an Oregon
corporation (the "Company").
1. Services.
1.1 Employment. The Company agrees to employ Employee as a
Senior Vice President of the Company, and Employee hereby accepts such
employment in accordance with the terms and conditions of this Agreement.
Employment shall continue until terminated pursuant to the terms of this
Agreement.
1.2 Duties. Employee shall have the position named in
Section 1.1 with such powers and duties appropriate to that office (a) as may
be provided by the bylaws of the Company and (b) as determined by the
president of the Company from time to time. Employee's position and duties
may be changed from time to time during the term of this Agreement, and
Employee's place of work may be relocated, at the sole discretion of the
Company's board of directors.
1.3 Outside Activities. Employee shall obtain the consent
of the board of directors before he engages, either directly or indirectly, in
any other professional or business activities that would require an
appreciable portion of Employee's time and effort to the detriment of the
Company's business. Such consent will not be unreasonably withheld.
1.4 Direction of Services. Employee shall at all times
discharge his duties in consultation with and under the supervision and
direction of the Company's president and board of directors.
2. Compensation and Expenses.
2.1 Salary. As compensation for services under this
Agreement, the Company shall pay to Employee a regular salary to be
established each year by the board of directors. Effective January 1 of each
year that this Agreement is in effect, such salary may be adjusted unless the
board of directors in its discretion determines not to do so. Payment shall
be made on a monthly basis, less all amounts required by law to be withheld or
deducted, at such times as shall be determined by the board of directors.
2.2 Additional Employee Benefits. Employee shall also have
the right to receive or participate in any additional benefits, including, but
not limited to, insurance programs, profit sharing or pension plans, and
medical reimbursement plans, which may from time to time be made available by
the Company to its employees.
2.3 Extraordinary Compensation. Employee shall have the
right, in addition to all other compensation provided for in this Section 2,
to additional extraordinary compensation in accordance with the terms set
forth in Schedule 2.3 attached to this Agreement.
2.4 Fees. All compensation earned by Employee, other than
pursuant to this Agreement, as a result of services performed on behalf of the
Company or as a result of or arising out of any work done by Employee in any
way related to the scientific or business activities of the company shall
belong to the Company. employee shall pay or deliver such compensation to the
Company promptly upon receipt. For the purposes of this provision,
"compensation" shall include, but is not limited to, all professional and
nonprofessional fees, lecture fees, expert testimony fees, publishing fees,
royalties, and any related income, earnings, or other things of value; and
"scientific or business activities of the Company" shall include, but not be
limited to, any project or projects in which the Company is involved and any
subject matter that is directly or indirectly researched, tested, developed,
promoted, or marketed by the Company.
2.5 Expenses. The Company shall reimburse Employee for all
reasonable and necessary expenses incurred in carrying out his duties under
this Agreement. Employee shall present to the Company from time to time an
itemized account of such expenses in such form required by the Company.
3. Confidential Information.
3.1 Access to Information. Employee acknowledges that in
the course of his employment he will have access to proprietary information,
trade secrets, and other confidential information, that such information is a
valuable asset of the Company, and that its disclosure or unauthorized use
will cause the Company substantial harm. As used in this Agreement, the term
"Confidential Information" means: (a) proprietary information of the Company
and (b) information designated by the Company as confidential or which
Employee knows or should know is confidential.
3.2 Ownership. Employee acknowledges that all Confidential
Information shall continue to be the exclusive property of the Company,
whether or not prepared in whole or in part by Employee and whether or not
disclosed to Employee or entrusted to his custody in connection with his
employment by the Company.
3.3 Nondisclosure and Nonuse. Unless authorized or
instructed in writing by the Company, or required by legally constituted
authority, Employee will not, except as required in the course of the
Company's business, during or after his employment, disclose to others or use
any Confidential Information, unless and until, and then only to the extent
that, such items become available to the public, other than by his act or
failure to prevent accidental or negligent loss or release to any unauthorized
person of the Confidential Information.
3.4 Return of Confidential Information. Upon request by
the Company during or after his employment, and without request upon
termination of employment pursuant to this Agreement, Employee will deliver
immediately to the Company all Confidential Information; Employee will
thereafter retain no excerpts, notes, photographs, reproductions, or copies
thereof.
3.5 Work Made for Hire. Employee agrees that all creative
work, including without limitation designs, drawings, specifications,
techniques, models, and processes, prepared or originated by Employee for the
Company, or during or within the scope of employment by the Company, whether
or not subject to protection under federal copyright or other law, constitutes
work made for hire, all rights to which are owned by the Company; and, in any
event, Employee assigns to the Company all rights, title, and interest,
whether by way of copyright, trade secret, or otherwise, in all such work,
whether or not subject to protection by copyright or other law.
3.6 Duration. The obligations set forth in this Section 3
will continue beyond the term of employment of Employee by the Company and for
so long as Employee possesses Confidential Information.
4. Noncompetition.
4.1 Covenant. Subject to the provisions of Section 4.3,
Employee covenants that Employee will not, throughout the United States,
either individually or as a director, officer, partner, employee, agent,
representative, or consultant with any business, directly or indirectly during
the term of employment and for one year thereafter:
4.1.1 Engage or prepare to engage in any
business that competes with the Company;
4.1.2 Induce or attempt to induce any
person who is an employee of the Company during the term
of this covenant to leave the employ of the Company; or
4.1.3 Solicit, divert, or accept orders for
products or services that are substantially competitive
with the products or services sold by the Company from
any customer of the Company.
4.2 Enforcement. Employee acknowledges and agrees that the
time, scope, and other provisions of this Section 4 have been specifically
negotiated by sophisticated parties with the advice and consultation of
counsel and specifically hereby agrees that such time, scope, and other
provisions are reasonable under the circumstances. Employee further agrees
that if, at any time, despite the express agreement of the parties hereto, a
court of competent jurisdiction holds that any portion of this Section 4 is
unenforceable for any reason, the maximum restrictions reasonable under the
circumstances, as determined by such court, will be substituted for any such
restrictions held unenforceable.
4.3 Release from Obligation. In the event that Employee
shall be entitled to extraordinary compensation pursuant to the provisions of
Section 2.3, Employee may elect to waive all rights to receive such
compensation from and after the date of such waiver in exchange for the
release of Employee from the obligations of Sections 4.1.1 and 4.1.3. Such
waiver shall be in writing, shall state that it is in consideration for the
release of Employee from the obligations of Sections 4.1.1 and 4.1.3 of this
Agreement, and shall be effective when delivered to the Company. In the event
of such a waiver, the amounts payable pursuant to the provisions of Section
2.3 shall be prorated through the period commencing on the date of termination
of employment and ending on the date of delivery of the written notice of
waiver to the Company. For example, if such waiver is delivered to the
Company six months after the commencement of the 12-month period set forth in
paragraph 1 of Schedule 2.3, Employee shall be paid one-half of the amounts
otherwise payable pursuant to the provisions of Section 2.3; in the event that
Employee shall have received more than such pro rata share of such
compensation, it shall be a condition of Employee's rights under this Section
that he shall have returned to the Company any amounts in excess of such pro
rata share with the delivery of the waiver notice to the Company.
5. Termination.
5.1 Voluntary Resignation. Employee may terminate his
employment under this Agreement by 90 days' written notice to the Company.
5.2 Termination by the Company.
5.2.1 The Company may terminate Employee's
employment under this Agreement without cause by 90
days' written notice to Employee. If the Company shall
substantially diminish Employee's salary, duties, or
title, or shall relocate the principal place where
Employee's duties are performed to a place outside of
the Portland metropolitan area, then Employee may elect
(but shall not required) to treat such event as a
termination without cause.
5.2.2 The Company may terminate Employee's
employment under this Agreement by 90 days' written
notice given at any time within six months after the
Company determines that Employee (a) has committed a
material breach of his obligations under this Agreement,
and failed to cure such breach promptly after receipt of
written notice thereof from the board of directors of
the Company, (b) has willfully and continuously failed
or refused to comply with the policies, standards, and
regulations of the Company, (c) has been guilty of
fraud, dishonesty, or other acts of misconduct in
rendering services on behalf of the Company or (d) has
failed to otherwise comply with the standards of
behavior that an employer has the right to expect of an
employee.
5.2.3 In the event that the board of
directors shall determine that Employee has become
physically or mentally disabled such that Employee shall
be unable to render services to the Company to the same
nature and extent as such services were rendered
immediately prior to the disability, the board of
directors may terminate Employee's employment under this
Agreement by 15 days' written notice effective any time
after the date 13 weeks following the determination of
disability.
5.3 Compensation Upon Termination.
5.3.1 In the event of a termination
under Section 5.1 or 5.2.2, Employee shall not be
entitled to receive any compensation otherwise payable
pursuant to Sections 2.2 or 2.3 of this Agreement, and
Employee's regular compensation pursuant to Section 2.1
shall be prorated and payable until the date of
termination, except to the extent expressly provided to
the contrary in writing in any insurance policy covering
Employee or any employee benefit plan in which Employee
participates.
5.3.2 In the event of a termination under
Section 5.2.1, Employee shall be entitled to receive
compensation payable pursuant to Section 2.3, if
applicable, and Employee's compensation pursuant to
Section 2.1 or 2.2 shall be prorated and payable until
the date of termination, except to the extent expressly
provided to the contrary in writing in any insurance
policy covering Employee or any employee benefit plan in
which Employee participates.
5.3.3 In the event of a termination under
Section 5.2.3, Employee's compensation pursuant to
Sections 2.1 and 2.2 shall be prorated and payable until
the date of termination, except to the extent expressly
provided to the contrary in writing in any insurance
policy covering Employee or any employee benefit plan in
which Employee participates.
6. Remedies. The respective rights and duties of the Company
and Employee under this Agreement are in addition to, and not in lieu of,
those rights and duties afforded to and imposed upon them by law or at equity.
Employee acknowledges that breach of this Agreement will cause irreparable
harm to the Company and agrees to the entry of a temporary restraining order
and permanent injunction by any court of competent jurisdiction to prevent
breach or further breach of this Agreement. Such remedy shall be in addition
to any other remedy available to the Company at law or in equity.
7. Severability of Provisions. The provisions of this Agreement
are severable, and if any provision hereof is held invalid or unenforceable,
it shall be enforced to the maximum extent permissible, and the remaining
provisions of the Agreement shall continue in full force and effect.
8. Attorney Fees. In the event of a default under this
Agreement, the defaulting party shall reimburse the nondefaulting party for
all costs and expenses reasonably incurred by the nondefaulting party in
connection with the default, including without limitation attorney fees.
Additionally, in the event a suit or action is filed to enforce this Agreement
or with respect to this Agreement, the prevailing party shall be reimbursed by
the other party for all costs and expenses incurred in connection with the
suit or action, including without limitation reasonable attorney fees at trial
or on appeal.
9. Nonwaiver. Failure of the Company at any time to require
performance of any provision of this Agreement shall not limit the right of
the Company to enforce the provision. No provision of this Agreement or
breach thereof may be waived by either party except by a writing signed by
that party. A waiver of any breach of a provision of this Agreement shall be
construed narrowly and shall not be deemed to be a waiver of any succeeding
breach of that provision or a waiver of that provision itself or of any other
provision.
10. General Terms and Conditions. This Agreement constitutes
the entire understanding of the parties relating to the employment of Employee
by the Company, and supersedes and replaces all written and oral agreements
heretofore made or existing by and between the parties relating thereto. This
Agreement shall be construed in accordance with the laws of the state of
Oregon, without regard to any conflicts of laws rules thereof. This Agreement
shall inure to the benefit of any successors or assigns of the Company. All
captions used herein are intended solely for convenience of reference and
shall in no way limit any of the provisions of this Agreement.
IN WITNESS HEREOF, the parties have executed this Employment
Agreement as of the date first hereinabove written.
AGRITOPE, INC.
-------------------------------- By ---------------------------
Xxxxxxx X. Xxxxxxxx, Ph.D. Xxxxxx X. Xxxxx, President
Schedule 2.3 to Employment Agreement
Extraordinary Compensation
1. Termination. In the event of the termination of the employment of
Employee pursuant to Section 5.2.1 of the Agreement, Employee shall continue
to be paid the salary provided in Section 2.1 for 12 months in the manner and
at the times at which regular compensation was paid to Employee during the
term of his employment under the Agreement.
2. Termination after Change in Control. At any time after the common
stock of the Company has been registered pursuant to the terms of the
Securities Exchange Act of 1934, in the event that the termination of the
employment of Employee pursuant to Section 5.2.1 of the Agreement either (a)
occurs within 12 months following a change in control, within the meaning of
the Securities Exchange Act of 1934, or sale of substantially all the assets
of the Company, or (b) is contingent upon such a change in control or sale of
assets, Employee shall continue to be paid the salary provided in Section 2.1
for 24 months; provided, however, that the present value of the stream of
payments to be made to Employee shall not exceed 295 percent of Employee's
Annualized Includable Compensation (in which event the payments shall be
reduced pro rata such that the present value thereof does not exceed such
amount).
3. Definitions. The term Annualized Includable Compensation shall
mean the average annual compensation payable by the Company that was
includable in the gross income of Employee for the taxable years in the Base
Period. The term Base Period shall mean the period consisting of the most
recent five taxable years ending before the date on which the change in
ownership or control occurs. Present value shall be determined by using a
discount rate equal to 120 percent of the applicable Federal Rate (determined
under Section 1274(d) of the Internal Revenue Code of 1986, as amended)
compounded semiannually.
4. Change in Law. The parties agree that in the event Section 280G
or Section 4999 of the Internal Revenue Code is amended after the date hereof
with the effect that any of the compensation payable to Employee by the
Company pursuant to the foregoing provisions either (i) is not deductible for
tax purposes from the gross income of the Company, or (ii) subjects Employee
to a federal excise tax thereon, then, unless the parties otherwise agree, the
foregoing provisions may be modified at the discretion of the board of
directors in order to comply with the amended provisions of the Internal
Revenue Code in order that, to the greatest extent possible, such compensation
shall be so deductible by the Company and Employee shall be subject to an
excise tax thereon.
