AMENDED EMPLOYMENT AND STOCK GRANT AGREEMENT
AMENDED EMPLOYMENT AND STOCK GRANT AGREEMENT (the "Amended Agreement")
dated as of April 8, 1999, between OREGON BAKING COMPANY, DBA XXXXXX BAKING, an
Oregon corporation (the "Company"), and XXXXX XXXXXXX ("Employee").
Recitals
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A. Employee is an employee of the Company. Immediately prior to the
execution of Amended Agreement, the terms of such employment relationship were
governed by an Employment and Stock Grant Agreement dated August 15, 1993,
between the Company and Employee (the "Prior Agreement").
B. The Company intends to conduct a public offering (the "Public Offering")
of its securities pursuant to a registration statement, which offering is
anticipated to close in mid-1999, but no later than December 31, 1999 (the
"Effective Date")
C. The Company and Employee wish to amend the Prior Agreement as provided
herein and supersede and replace the Prior Agreement with this Amended
Agreement.
Agreement
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In consideration of the foregoing recitals and the mutual promises and
conditions contained herein, the parties agree as follows:
1. PRIOR AGREEMENT. Upon the Effective Date, the Prior Agreement shall be
superseded by and replaced with this Amended Agreement. The Prior Agreement
shall have no further force or effect whatsoever following the Effective Date.
2. EMPLOYMENT. Subject to the terms and conditions contained herein, the
Company hereby employs Employee, and Employee hereby accepts such employment.
Employee shall occupy the position of Vice President of Product Development.
Employee shall devote her best efforts and attention to the performance of her
duties in such capacity. Employee shall not engage in any other business
activity during the term of her employment hereunder that would interfere with
her duties under this Amended Agreement or would constitute a breach of any
provision of this Amended Agreement.
3. DUTIES. As Vice President of Product Development for the Company,
Employee shall be responsible for managing all aspects of the production
operations of the Company's business, including but not limited to the
following, and shall perform such other duties for the Company as may be
established from time to time by the Company that are consistent with Employee's
Amended Employment and Stock Grant Agreement
Page 1
position: (A) engage in product development and training of key personnel; (B)
develop recipe protection, recipe costing and merchandising concepts for new
products; (C) produce training manuals and documentation for presentation of
products and product concepts for both retail and production facilities; (D)
plan sourcing of new food products, packaging, co-packers and the like for
retail and production operation; and (E) manage quality control, conduct quality
checks, and troubleshoot quality problems. Employee's objective will be to
manage an efficient, high-quality and profitable baking operation for the
Company. Employee will initially work at the Company's retail facility located
at 0000 XX Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxx. As the Company's business operations
expand to other locations, the Company and Employee will discuss Employee's
commitments at such new locations.
4. COMPENSATION.
4.1 ANNUAL SALARY. For all services rendered by Employee under this
Amended Agreement, the Company shall pay Employee a salary (the "Annual Salary")
at a mutually agreed upon rate. The Annual Salary shall be payable in regular
periodic payments in accordance with the Company's standard payroll policy less
any federal and state withholding or other employment taxes.
4.2 BONUS. In addition to the Annual Salary under Section 4.1, the
Employee may receive additional compensation as may be paid from time to time by
the Company at its sole discretion.
4.3 ANNUAL PERFORMANCE REVIEW. During each month of December during
the term of this Amended Agreement, the Company's Board of Directors and
Employee shall in good faith review the performance by, and the compensation to,
Employee for the calendar year then ending and the proposed performance by, and
compensation to, Employee for the then forthcoming calendar year. Any future
agreements between the Company and Employee regarding salary and bonus under
this Amended Agreement shall be subject to approval by the Company's Board of
Directors.
4.4 VACATION; SICK LEAVE. During the term of this Amended Agreement,
Employee will be entitled to standard paid vacation and paid sick leave in each
calendar year in accordance with the Company's policy in effect at such time.
5. TERM AND TERMINATION.
5.1 TERM. Subject to Section 9, the term of employment of Employee
under this Amended Agreement shall commence as of the Effective Date and shall
terminate on December 31, 1999 unless sooner terminated under Section 5.2 below.
After the initial term of Employee's employment, such employment shall be
extended for successive one-year periods upon approval of the Company's Board of
Directors, unless sooner terminated under Section 5.2 below.
Amended Employment and Stock Grant Agreement
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5.2 TERMINATION. Each party shall have the right to terminate this
Amended Agreement and Employee's employment hereunder upon at least thirty (30)
days' prior written notice to the other party. Notwithstanding the first
sentence of this Section 5.2, the Company shall have the right to terminate this
Amended Agreement and Employee's employment hereunder immediately in the event
(i) Employee is convicted of (from which no appeal may be, or is timely, taken),
or pleads guilty to, (A) any crime involving the Company or its business, or (B)
any act of fraud, misappropriation or embezzlement, or any felony; (ii) Employee
engages in an act or series of acts of willful misconduct which has or have a
material adverse impact upon the business or financial condition of the Company;
or (iii) Employee breaches or fails to perform any provision of this Amended
Agreement. In addition, this Amended Agreement and Employee's employment
hereunder shall terminate immediately if (x) Employee dies; or (y) Employee is
permanently disabled (as defined in Section 22(e) of the Internal Revenue Code
of 1986, as amended (the "Code")).
5.3 SURVIVAL. Upon termination of this Amended Agreement under Section
5.2, all rights and obligations under this Amended Agreement shall cease except
(i) the rights and obligations under Section 4.1 of this Amended Agreement to
the extent Employee has not been compensated for services performed prior to
termination (the amount to be pro rated for the portion of the pay period prior
to termination), and (ii) the rights and obligations imposed upon Employee under
Sections 6, 7, and 8 which shall remain operative and in full force and effect
after the termination of this Amended Agreement. A termination of this Amended
Agreement shall constitute a termination of Employee's employment with the
Company for all purposes of this Amended Agreement.
5.4 REPLACEMENT. In the event either party elects to terminate this
Amended Agreement under Section 5.2, Employee shall, at the request of the
Company, during the 30-day notice period specified in Section 5.2, diligently
and in good faith assist the Company in locating and training a suitable
replacement for Employee.
6. RESTRICTIVE COVENANTS.
6.1 DEFINITIONS. For purposes of Amended Agreement:
6.1.1 "Area" means the State of Oregon and the State of
Washington.
6.1.2 "Competing Business" means any Entity that is engaged at
any location or locations within the Area in the retail and/or wholesale baking
business; provided that, a restaurant or hotel that operates a baking business
incidental to its primary restaurant or hotel business shall not be considered a
Competing Business.
6.1.3 "Entity" means any individual, corporation, partnership,
firm, joint venture, joint enterprise, association, joint-stock company, trust,
unincorporated organization, governmental or regulatory body or other similar
entity.
Amended Employment and Stock Grant Agreement
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6.1.4 "Employee Group" means (A) Employee, (B) any and all
Entities that are now or hereafter, directly or indirectly through one or more
intermediaries, controlled by, in control of, or under common control with
Employee, (C) the officers, directors, executives, employees, attorneys,
accountants and other agents or representatives (in whatsoever capacity) of
Employee, or any of the Entities identified in the previous clause (B). For
purposes of Amended Agreement, each of the foregoing is a "member of the
Employee Group."
6.1.5 "Management" means the members of the Company's present
management (namely, Xxxxxxx Xxxxxxxxx, Xxxxxxx Xxxxxxxx and Xxxxxx Xxxxxxxxxx).
6.1.6 The term "Xxxxxx Group" means (A) the Company, (B) any and
all Entities that are now or hereafter, directly or indirectly through one or
more intermediaries, controlled by, in control of, or under common control with
the Company, and (C) the officers, directors, executives, employees, attorneys,
accountants and other agents or representatives (in whatsoever capacity) of the
Company or any of the Entities identified in the previous clause (B). For
purposes of Amended Agreement, each of the foregoing is a "member of the Xxxxxx
Group."
6.1.7 "Proprietary Information" means all items of confidential
information or trade secrets regarding the baking business conducted by the
Company. Without limiting the generality of the foregoing, Proprietary
Information includes the following:
(A) Customer lists, price lists, and other confidential
information relating to the marketing and distribution of the Company's baking
goods and merchandise;
(B) Recipes and information relating to formulations, processes,
technology, and know-how used or held for use in the Company's baking business;
(C) Programs, plans and projections relating to present or future
development, expansion, promotion, marketing and distribution of any products or
services in the baking business conducted by the Company; and
(D) All notes, memoranda, correspondence, processes, systems, and
documents, and all computer programs, databases and software relating to any of
the foregoing.
"Proprietary Information" does not include:
(X) Information which is now or later becomes generally available
to the public (or to the segment thereof that is engaged in the food
manufacturing or distribution businesses) through no fault of any member of the
Employee Group, as long as the disclosure of such information, if any, by a
member of the Employee Group takes place after the information has become
generally available to the public (or to the segment thereof that is engaged in
the food manufacturing or distribution businesses);
Amended Employment and Stock Grant Agreement
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(Y) Information which is publicly disclosed pursuant to the
requirement of a government agency or is disclosed as required by law or
judicial process, after proper notice to the Company; and
(Z) Those recipes owned by Employee prior to the commencement of
her employment with the Company (the "Prior Recipes"), as further described in
Section 7 below.
6.2 COVENANTS. Subject to Section 6.3:
6.2.1 NONCOMPETITION. Employee will not, directly or indirectly,
engage in any Competing Business on Employee's own behalf, or provide product
development, marketing, managerial, supervisory or consulting services or
assistance to, or lend money to or purchase any debt instrument of, or own any
equity interest in any Competing Business. Employee will not make any statement
or do any act which causes any existing or potential customer of the Company to
curtail or terminate its purchase of products offered by the Company, or which
will in any way divert, diminish or prejudice the business or goodwill of
Company.
6.2.2 NONSOLICITATION. Employee will not solicit, divert or hire
away (or attempt to solicit, divert or hire away) to or for Employee or any
Entity, any employee of the Company, whether or not such employee is a full-time
or temporary employee, whether or not such employment is pursuant to a written
agreement and whether or not such employment is for a determined period or is at
will.
6.2.3 NONDISCLOSURE OF PROPRIETARY INFORMATION. Employee will
not, without the prior written consent of the Company, cause or permit any
member of the Employee Group to disclose, divulge, communicate or otherwise make
known, directly or indirectly, to any person not a member of the Xxxxxx Group
any Proprietary Information.
6.2.4 NONUSE OF PROPRIETARY INFORMATION. Employee will not,
without the prior written consent of the Company, cause or permit any member of
the Employee Group to make any use of the Proprietary Information for the
benefit of Employee or any Entity.
6.2.5 APPLICATION. Each of the covenants of Employee in this
Section 6.2 shall be applicable to all actions and statements of Employee,
whether made or taken directly or indirectly, in an individual capacity or as an
officer, director, partner, executive, employee, manager, consultant,
independent contractor, agent, representative or otherwise of any Entity, alone
or in conjunction with any Entity, or in any other manner whatsoever.
6.3 TERM AND APPLICATION OF NONCOMPETITION AND NONSOLICITATION
COVENANTS.
6.3.1 GENERAL. Each of the covenants of Employee in Sections
6.2.1 and 6.2.2 (collectively, the "Noncompetition/Nonsolicitation Covenants")
shall commence on the date hereof and shall expire two (2) years after the
termination of Employee's employment with the Company if the employment is
Amended Employment and Stock Grant Agreement
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terminated voluntarily by Employee or if the employment is terminated by the
Company for "cause" (as defined below). For purposes of this Section 6.3.1 and
Section 6.3.2, termination of Employee's employment by the Company shall be
deemed a termination for "cause" if the termination is for one or more of the
following reasons: (i) Employee is convicted of (form which no appeal may be, or
is timely, taken), or pleads guilty to, (A) any crime involving the Company or
its business, or (B) any act of fraud, embezzlement, or any felony; (ii)
Employee engages in an act or series of acts of willful misconduct which has or
have a material adverse impact upon the business or financial condition of the
Company; (iii) Employee breaches or fails to perform any provision of Amended
Agreement; or (iv) a good faith determination by a majority of the Board of
Directors of the Company that Employee has unsatisfactorily performed her duties
as an officer of the Company.
6.3.2 VOID. Each of the Noncompetition/Nonsolicitation Covenants
shall become null and void upon the occurrence of any of the following events:
(A) The Employee's employment is terminated by the Company
without "cause."
(B) Prior to the termination of Employee's employment (whether
the termination is by the Employee voluntarily or by the Company with or without
cause), the Company and/or the Management sell or dispose of all or
substantially all of the assets or outstanding capital stock of the Company by
means of a sale, merger, reorganization or liquidation.
6.4 TERM AND APPLICATION OF NONDISCLOSURE AND NONUSE COVENANTS. Each
of the covenants of Employee in Section 6.2.3 and 6.2.4 shall commence on the
date hereof and shall continue as long as the Proprietary Information remains
confidential to the Company and does not become information of the type
described in clauses (X) and (Y) of Section 6.1.6.
7. PRIOR RECIPES; DEVELOPMENTS; TANGIBLE PROPERTY; COOKBOOK.
7.1 PRIOR RECIPES. The Company and Employee agree that each of them
shall keep a true and accurate copy of the Prior Recipes in a secure location
for purposes of identifying the Prior Recipes. The Company acknowledges that
Employee is the owner of such Prior Recipes. Employee hereby grants to the
Company an exclusive, irrevocable, perpetual and royalty-free license to use the
Prior Recipes; PROVIDED, HOWEVER, that as the owner of the Prior Recipes,
Employee shall have the right to use the Prior Recipes after the termination of
her employment with the Company provided that such use does not violate any
other provision of Amended Agreement.
7.2 DEVELOPMENTS. If at any time or times during the term of
Employee's employment hereunder, Employee (either alone or with others) makes,
conceives, discovers, authors, creates, enhances, compiles or reduces to
practice any recipe, formulation, process, technology, invention, technique,
know-how, secret, work of authorship as that term is interpreted in the U.S.
Copyright Act, as amended, or any idea protectable by any intellectual property
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rights whatsoever or any interest therein (whether or not patentable or
registrable under copyright or similar statutes or subject to analogous
protection) (each hereinafter referred to as a "Development") that (a) relates
to the baking business of the Company or any customer of or a supplier to the
Company or any of the baking products being developed or sold by the Company or
which may be used in relation therewith, (b) results from tasks assigned to
Employee by the Company or (c) results from the use of premises or personal
property (whether tangible or intangible) owned, leased or contracted for by the
Company, each such Development and the benefits thereof shall immediately become
the sole and absolute property of the Company and its assigns. Employee will
promptly disclose to the Company (or any persons designated by it) each such
Development and hereby assigns to the Company and its assigns without further
compensation any right, title and interest Employee may have or acquire in each
such Development and all benefits and/or rights resulting therefrom and Employee
will communicate to the Company, without cost or delay, and without publishing
the same, all available information relating thereto (with all necessary plans
and models). Employee agrees to execute any instruments and to do all other
things reasonably requested by the Company (both during and after the
termination of Amended Agreement) in order to vest more fully in the Company all
ownership rights in those items hereby transferred from Employee to the Company.
7.3 TANGIBLE PROPERTY. All documents (including without limitation,
recipes), records, drawings and other tangible property furnished to Employee by
the Company or produced by her or others in connection with her employment shall
be and remain the sole property of the Company and shall be delivered to the
Company immediately when requested by the Company or upon the termination of the
Employee's employment with the Company. Employee will not take with her any such
property or any reproduction of such property upon such termination.
8. MISCELLANEOUS.
8.1 OREGON LAW. This Agreement and all amendments, modifications,
authorizations or supplements hereto, and the rights of the parties hereunder
shall be construed under and governed by the laws of the State of Oregon.
8.2 ASSIGNS. The rights and obligations of the parties under Amended
Agreement shall inure to the benefit of and shall be binding upon their
respective heirs, successors and assigns. Employee's rights and obligations, or
any particular right or obligation, under Amended Agreement constitute a
personal employment contract that may not be sold, assigned, transferred or
pledged as collateral by Employee.
8.3 WAIVER. The waiver by either party hereto of a breach of any of
the provisions of Amended Agreement by the other party hereto shall not be
construed to be a waiver of any subsequent breach of the other party hereto.
8.4 ENTIRE AGREEMENT. Subject to Section 9, this Agreement constitutes
and expresses the whole agreement of the parties and supersedes all prior
agreements (including the Prior Agreement), understandings (oral or written) and
memoranda with respect to the subject matter hereof. No amendment, modification,
Amended Employment and Stock Grant Agreement
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waiver or attempted waiver of Amended Agreement or any part hereof shall be
valid or binding unless made in writing and signed by the party to be bound.
8.5 NOTICES. Any notice or other communication required or permitted
to be given pursuant to Amended Agreement shall be sufficiently given when
delivered by hand, by overnight courier or by certified mail, return receipt
requested, postage prepaid:
To Employee: Xxxxx Xxxxxxx
0000 XX Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxxx 00000
With a copy to: Xxxxxx X. Xxxx, Esq.
000 X.X. Xxxxxxxx Xx.
Xxxxxxxx, Xxxxxx 00000
To the Company: Oregon Baking Company
dba Xxxxxx Baking
0000 XX Xxxxxxxxxx
Xxxxxxxx, Xxxxxx 00000
With a copy to: Xxxxxxx X. XxXxxxxxx, Esq.
Xxxxxx Xxxx LLP
1600 Pioneer Tower
000 XX Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
or at such other address as the parties hereto shall have last designated by
notice to the other party. Any notice given by personal delivery, overnight
courier or certified mail, return receipt requested, shall be deemed to have
been delivered on the date of receipt of such delivery at the address set forth
above (or at such other address designated pursuant hereto).
8.6 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
8.7 SEVERABILITY. If any clause or any other portion of Amended
Agreement is determined to be void or unenforceable for any reason, such
determination shall not effect the validity or enforceability of any other
clause or portion of Amended Agreement, all of which shall remain in full force
and effect.
8.8 ATTORNEYS' FEES. If suit or action is filed by any party to
enforce the provisions of Amended Agreement, or otherwise with respect to the
subject matter of Amended Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees, as fixed by the trial court, and if any
Amended Employment and Stock Grant Agreement
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appeal is taken from the decision of the trial court, reasonable attorneys' fees
as fixed by the appellate court.
8.9 REMEDIES. Employee acknowledges that the Company will suffer
immediate and irreparable injury in the event of a breach by Employee of any
covenant contained in Amended Agreement. Accordingly, in the event of a breach
or threatened breach by Employee of any provision of Amended Agreement, the
Company shall be entitled to an injunction restraining Employee from committing
such breach or threatened breach. Such remedy shall be in addition to any other
remedies to which the Company may be entitled at law or in equity.
9. CONDITION. Notwithstanding any of the foregoing provisions, in the event
the Company fails to close the Public Offering before December 31, 1999, this
Amended Agreement shall be null and void and of no effect whatsoever.
The parties hereto have caused Amended Agreement to be executed as of
the date first above written.
COMPANY: OREGON BAKING COMPANY
(DBA XXXXXX BAKING),
AN OREGON CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
President and Chief Executive Officer
/s/ Xxxxx Xxxxxxx
EMPLOYEE: ----------------------------------------
Xxxxx Xxxxxxx
Amended Employment and Stock Grant Agreement
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