EXHIBIT 10.24
EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of August 31, 1993,
between Xxxxxxx X. Xxxxxxxx ("Employee") and Epitope, Inc., an Oregon
corporation ("Epitope").
1. Services.
1.1 Employment. Epitope agrees to employ Employee as
the President and Chief Executive Officer of Agrimax, Inc., a Minnesota
corporation ("Agrimax") and a subsidiary of Epitope, 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 Agrimax, (b) as otherwise set forth on
Schedule 1.2 attached to this Agreement (the absence of which shall
indicate that no additional specific duties are so provided for), and (c)
as determined by the board of directors of Agrimax from time to time.
Subject to the provisions of Section 5.2.1 hereof, Employee's position
and duties may be changed from time to time during the term of this
Agreement at the sole discretion of Agrimax's board of directors. Except
while on temporary assignment to other locations, Employee's principal
place of business shall be Beaverton, Oregon.
1.3 Outside Activities. Employee shall obtain the
consent of the board of directors of Agrimax 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 Agrimax'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 board of directors of Agrimax.
2. Compensation and Expenses.
2.1 Salary. As compensation for services under this
Agreement, Epitope shall pay to Employee a regular salary of $105,000 per
year. Effective January 1 of each year that this Agreement is in effect,
such salary may be adjusted unless the board of directors of Epitope in
its discretion determines not to do so. Payment shall be made on a
bi-weekly basis, less all amounts required by law to be withheld or
deducted, at such times as shall be determined by the board of directors
of Epitope.
2.2 Additional Employee Benefits. Employee shall also
have the right to receive or participate in (a) 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 Epitope to its employees, and (b) any
additional benefits set forth in Schedule 2.2 attached to this Agreement
(the absence of which shall indicate that no additional specific benefits
are so provided for).
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 (the
absence of which shall indicate that no additional extraordinary
compensation is so provided for).
2.4 Fees. All compensation earned by Employee, other
than pursuant to this Agreement, as a result of services performed on
behalf of Agrimax 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
Agrimax, Epitope, or Epitope's other subsidiaries (collectively, the
"Companies") shall belong to Epitope. Employee shall pay or deliver such
compensation to Epitope 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
Companies" shall include, but not be limited to, any project or projects
in which the Companies are involved and any subject matter that is
directly or indirectly researched, tested, developed, promoted, or
marketed by the Companies.
2.5 Expenses. Epitope shall reimburse Employee for all
reasonable and necessary expenses incurred in carrying out his duties
under this Agreement. Employee shall present to Epitope from time to
time an itemized account of such expenses in such form required by
Epitope.
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 Companies, and that its disclosure
or unauthorized use will cause the Companies substantial harm. As used
in this Agreement, the term "Confidential Information" means: (a)
proprietary information of the Companies and (b) information designated
by the Companies 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 Companies, 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.
3.3 Nondisclosure and Nonuse. Unless authorized or
instructed in writing by Epitope, or required by legally constituted
authority, Employee will not, except as required in the course of the
Companies' 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
Epitope during or after his employment, and without request upon
termination of employment pursuant to this Agreement, Employee will
deliver immediately to the Companies all Confidential Information
thereof; 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 during or within the scope of employment, whether or not
subject to protection under federal copyright or other law, constitutes
work made for hire, all rights to which are owned by Epitope; and, in any
event, Employee assigns to Epitope 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 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 Companies;
4.1.2 Induce or attempt to induce any
person who is an employee of the Companies during the
term of this covenant to leave the employ of the
Companies; 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
Companies from any customer of the Companies.
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 Epitope. 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 Epitope. For
example, if such waiver is delivered to Epitope 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 Epitope any amounts in excess of
such pro rata share with the delivery of the waiver notice to Epitope.
5. Termination.
5.1 Voluntary Resignation. Employee may terminate his
employment under this Agreement by 90 days' written notice to Epitope.
5.2 Termination by Epitope.
5.2.1 Epitope may terminate Employee's
employment under this Agreement without cause by 90
days' written notice to Employee.
5.2.2 Epitope may terminate Employee's
employment under this Agreement by 90 days' written
notice given at any time within six months after Epitope
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
Epitope, (b) has willfully and continuously failed or
refused to comply with the policies, standards, and
regulations of Epitope, (c) has been guilty of fraud,
dishonesty, or other acts of misconduct in rendering
services on behalf of Epitope, 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 of Epitope shall determine that Employee has
become physically or mentally disabled such that
Employee shall be unable to render services to the same
nature and extent as such services were rendered
immediately prior to the disability, the board of
directors of Epitope 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 Epitope 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 Epitope 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 Epitope 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 Epitope at any time to require
performance of any provision of this Agreement shall not limit the right
of Epitope 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 Epitope, 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 Epitope. 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.
EPITOPE, INC.
Xxxxxxx X. Xxxxxxxx By: Xxxxxx X. Xxxxx, Ph.D.
Xxxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxx, Ph.D.,
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 Epitope or Agrimax, 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 Epitope 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 Epitope pursuant to the foregoing provisions
either (i) is not deductible for tax purposes from the gross income of
Epitope, 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 Epitope and Employee shall not be subject to an excise tax thereon.
