EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered
into as of September 12, 2005, by and between Cadiz Inc., a
Delaware corporation (the "Company") and O'Xxxxxxx Xxxxxx,
an individual ("Iselin").
WHEREAS, the Company wishes to employ Iselin and Iselin
wishes to accept such employment on the terms and conditions
set forth herein;
NOW, THEREFORE, the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs Iselin and
Iselin accepts such employment commencing as of October 3,
2005 (the "Commencement Date").
2. DUTIES. Iselin shall be employed as the Chief
Financial Officer of the Company. Iselin's duties and
responsibilities shall relate, generally, to those
ordinarily performed by the chief financial officer of a
publicly traded corporation and shall include, without
limitation, direct responsibility for (i) the Company's
accounting systems, cash management and financial reporting;
(ii) supervision and direction of the Company's financial
staff; (iii) preparation and coordination with outside
professional advisors of all regulatory filings, including
those required by the rules and regulations of the U.S.
Securities and Exchange Commission and by the NASDAQ; (iv)
coordination of the Company's compliance with all of the
requirements of the Xxxxxxxx-Xxxxx Act of 2002; and (v) the
administrative and financial management of the Company's
real estate holdings. In addition as a member of the
Company's senior management group Iselin shall be involved
on a daily basis with discussion and analysis of the
development of the Company's water resource programs.
Iselin shall also perform such other duties as would
reasonably be performed by a senior executive of the Company
as the Board may from time to time direct. Iselin shall
report to, and take direction from, the Chief Executive
Officer of the Company. Iselin further consents to serve in
further capacities as an officer and/or director of the
Company or any subsidiary or affiliate of the Company
without any additional salary or compensation. Iselin's
base of operations shall be at the corporate headquarters
office of the Company in Los Angeles, California, unless
changed by mutual agreement. However, Iselin shall also
render services at such other sites as necessary from time
to time to properly perform his duties.
3. NECESSARY SERVICES.
a. PERFORMANCE OF DUTIES. Iselin agrees that he
will at all times faithfully, industriously and to the best
of his ability, experience and talents, perform to the
reasonable satisfaction of the Company all of the duties
that may be assigned to him hereunder and shall devote such
time to the performance of these duties as may be necessary
therefor.
b. FULL-TIME SERVICE. During the term of the
Agreement, Iselin shall be available on a full-time basis to
perform the duties assigned him in accordance with
paragraph 2 hereof; provided, however, that nothing herein
shall preclude Iselin from spending a reasonable amount of
time in the management of his personal investments or with
any charitable or civic venture with which Iselin may be
involved as of the date hereof; and provided, further, that
such involvement shall not detract from the performance of
Iselin's duties hereunder.
c. EXCLUSIVE SERVICES. Iselin agrees that
during the period of his employment, Iselin shall provide
services exclusively pursuant to this Agreement, and Iselin
will not, without the prior written consent of the Company
(which consent may not be unreasonably withheld), directly
or indirectly:
(i) engage in the business of, or own or
control any interest in (except as a passive investor owning
less than 10% of the equity securities of a publicly held
company), or act as director, officer of employee of, or
consultant to, any individual, partnership, joint venture,
corporation or other business entity, directly or indirectly
engaged anywhere in the United States, its possessions or
territories, in any business competitive with the business
then being carried on by the Company or any affiliate;
(ii) plan or organize any business activity
competitive with the business or planned business of the
Company or its affiliates, or combine, participate, or
conspire with other employees of the Company or its
affiliates or other persons or entities for the purpose of
organizing any such competitive business activity; or
(iii) divert or take away, or attempt to
divert or take away, any of the customers or potential
customers of the Company or its affiliates, either for
himself or for any other person, firm, partnership,
corporation or other business entity.
4. BASE COMPENSATION. Subject to such deductions as
the Company may from time to time be required to make
pursuant to law, governmental regulation or order, the
Company agrees to pay to Iselin a base salary of $165,000
per annum. Payments of base salary shall be made in
accordance with the normal payroll practices of the Company.
5. OTHER COMPENSATION.
a. STOCK OPTIONS. As an inducement for the
acceptance by Iselin of employment with the Company, and the
execution by Iselin of this Agreement, the Company shall
grant to Iselin concurrently with the execution of this
Agreement options to purchase 40,000 shares of the Company's
common stock at an exercise price of $17.25 per share,
representing the fair market value of the Company's common
stock as of the date of this Agreement. 13,334 of such
stock options shall vest immediately upon the execution of
this Agreement. Of the remaining options, 13,333 shall vest
upon the first anniversary of Iselin's employment with the
Company and 13,333 shall vest upon the second anniversary of
Iselin's employment with the Company provided that, in each
case, Iselin is an employee of the Company as of the
respective vesting date. The grant of such options shall be
evidenced by a Stock Option Agreement in form substantially
similar to the form of Stock Option Agreement utilized by
the Company under its 2003 Management Equity Incentive Plan.
b. BONUS COMPENSATION.
i. DISCRETIONARY BONUS. Following the
conclusion of each fiscal year during the term of this
Agreement, the Board shall make a good faith evaluation of
the performance of Iselin during such year, on the basis of
which Iselin shall receive a bonus in an amount to be
determined at the discretion of the Board. In determining
the amount of such bonus, the Board shall use 25% of
Iselin's annual base salary as a target bonus.
ii. TIMING AND FORM OF BONUS PAYMENT. Any
annual bonus payments payable to Iselin hereunder shall be
paid as soon as possible following the end of the fiscal
year to which such bonus relates and the determination of
the amounts owed; provided, however, that all such payments
shall be made within 90 days of the end of the appropriate
fiscal year. Bonus payments payable to Iselin hereunder
shall be paid in cash.
c. OTHER EQUITY BASED COMPENSATION. In the
event that the Company, following the execution of this
Agreement, adopts a new compensation plan or program for
senior management (the "Compensation Plan"), then Iselin
shall be invited to participate in the Compensation Plan.
Iselin's participation in the Compensation Plan shall be
negotiated between Iselin and the Company in good faith at a
level consistent with that of a member of senior management
with comparable duties and responsibilities.
d. FRINGE BENEFITS. In addition to the
compensation set forth above, Iselin shall be entitled to
the following benefits:
i. Four (4) weeks paid annual vacation,
provided that no more than two weeks are to be taken
consecutively;
ii. Sick leave and personal leave with pay
in accordance with the prevailing policies of the Company;
iii. Medical coverage under the group medical
insurance plan of the Company (or COBRA coverage, at the
election of Iselin);
iv. Participation in any pension, profit-
sharing, 401(k), or deferred compensation plan maintained by
the Company for the general benefit of its employees;
v. An automobile allowance of $500 per
month;
vi. Participation in any other benefit plan
maintained by the Company for the general benefit of its
employees; and
vii. Any other benefits not specifically set
forth herein as may be granted by the Company in its sole
and absolute discretion.
e. DEDUCTION AND REIMBURSEMENT. Iselin hereby
agrees that the Company may deduct and withhold from the
compensation payable to Iselin hereunder any amounts of
money required to be deducted or withheld by the Company
under the provisions of any and all applicable local, state
or federal statutes or regulations or any amendments thereto
hereafter enacted requiring the withholding or deducting of
compensation.
6. TERMINATION. This Agreement continue in full
force and effect unless and until terminated as provided in
this Section.
a. TERMINATION EVENTS. This Agreement shall
terminate:
i. At the election of the Company, upon the
death or permanent disability of Iselin, "permanent
disability" being defined as any continuous loss of one-half
(1/2) or more of the time spent by Iselin in the usual daily
performance of his duties as a result of physical or mental
illness for a continuous period in excess of ninety (90)
days.
ii. At the election of the Company, upon a
Change in Control of the Company (as defined below) or at
such time, if any, as the Company ceases to conduct business
for any reason whatsoever.
iii. At the election of the Company, upon the
dismissal of Iselin by the Company for cause. For purposes
of this Agreement, "cause" shall include, but shall not be
limited to: (1) the breach by Iselin of any term or
condition of this Agreement, (2) Iselin engaging in one or
more acts constituting a felony; (3) Iselin engaging in one
or more acts involving fraud or serious moral turpitude; (4)
Iselin misappropriating Company assets or engaging in gross
misconduct materially injurious to the Company or its
affiliates or subsidiaries; (4) the making by Iselin of
material misrepresentations to the Company or its
affiliates; or (5) Iselin's willful failure to comply with
the instructions of the Company's Board of Directors or its
Chief Executive Officer.
iv. At the election of Iselin, upon a
material breach by the Company of any term or condition of
this Agreement or upon a material change in Iselin's job
title or a material reduction in Iselin's duties and
responsibilities hereunder.
v. At the election of either party, upon
one hundred eighty (180) days written notice of termination,
with or without cause for any reason whatsoever, whether
arbitrary or not.
b. PAYMENTS FOLLOWING TERMINATION. Following
termination of this Agreement, whether for any of the
reasons specifically set forth above or for any other
reason, the Company shall have no obligation to make
payments to or bestow benefits upon Iselin after the date of
termination except as may be required by law and as follows:
i. In the event of termination by the
Company pursuant to Section (a)(i) as the result of Iselin's
death or permanent disability, payment of the base
compensation otherwise payable to Iselin pursuant to Section
4 hereof shall continue to be paid to Iselin or his estate
for a period of 90 days following Iselin's death or
permanent disability. Such payment shall be in addition to,
and not in lieu of, any payments made pursuant to any
Company provided death or disability benefit plans.
ii. In the event of termination of this
Agreement by the Company following a Change in Control
pursuant to Section (a)(ii) above, which Change in Control
occurs within twenty-four (24) months of the Commencement
Date, Iselin shall be entitled to receive for a period of
twelve (12) months following the effective date of
termination, as though Iselin were continuing to provide
services to the Company under this Agreement (i) base
compensation as set forth in Section 4 above and (ii) all
fringe benefits as described in Section 5(d) above to the
extent that such benefits can then lawfully be made
available by the Company (or the Company's successor in
interest) to Iselin.
iii. In the event of termination of this
Agreement by Iselin pursuant to Section (a)(iv) above, or in
the event of termination of this Agreement by the Company
for any reason not specifically set forth above, Iselin
shall be entitled to receive for a period of one hundred
eighty (180) days following the effective date of
termination, as though Iselin were continuing to provide
services to the Company under this Agreement (i) base
compensation as set forth in Section 4 above and (ii) all
fringe benefits as described in Section 5(d) above to the
extent that such benefits can then lawfully be made
available by the Company to Iselin.
iv. The termination of this Agreement shall
not affect the right of Iselin to exercise any stock option
or other rights to purchase securities of the Company, which
may have vested in full prior to the date of termination.
c. CHANGE IN CONTROL - DEFINITION. For purposes
of this Agreement, a Change in Control shall mean the
occurrence of any of the following events:
i. when the Company has actual knowledge
that any person (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended) is
or becomes the beneficial owner (as defined in Rule 13d-3 of
the Exchange Act) directly or indirectly, of securities of
the Company representing 51% or more of the combined voting
power of the Company's then outstanding securities;
ii. upon a merger or consolidation of the
Company with or into another corporation or other legal
person, or if securities of the Company are exchanged for
securities of another corporation or legal person, and
immediately after such merger, consolidation, reorganization
or exchange less than 80% of the combined voting power of
the then-outstanding securities of such corporation or
person immediately after such transaction are held, directly
or indirectly, in the aggregate by the holders of securities
entitled to vote generally in the election of directors of
the Company immediately prior to such transaction; or
iii. upon the sale by the Company in any
transaction or series of related transactions of all or
substantially all of its assets to any other corporation or
other legal person and less than a majority of the combined
voting power of the then-outstanding securities of such
corporation or person immediately after such sale or sales
are held, directly or indirectly, in the aggregate by the
holders of securities entitled to vote generally in the
election of directors of the Company immediately prior to
such sale.
d. RETURN OF COMPANY'S PROPERTY. If this
Agreement is terminated for any reason, the Company may, at
its option, require Iselin to vacate his offices prior to
the effective date of a termination and to cease all
activities on the Company's behalf. Iselin agrees that on
the termination of this Agreement in any manner, he will
immediately deliver to the Company all notebooks, brochures,
documents, memoranda, reports, files, books, correspondence,
customer lists, or other written or graphical records, and
the like, relating to the business or work of the Company,
which are or have been in his possession or under his
control and which have not been returned to the Company.
Iselin hereby expressly acknowledges that all such materials
referenced above are the property of the Company.
e. PUBLIC IDENTIFICATION. If this Agreement is
terminated for any reason, Iselin shall immediately and
forever thereafter cease to hold himself out to any person,
firm, partnership, corporation or other entity as an
employee, agent, independent contractor or representative of
the Company or of any entity owned by, or affiliated with,
the Company.
7. EXPENSES. The Company shall reimburse Iselin for
all out-of-pocket expenses incurred by Iselin in the
performance of his duties hereunder, including, but not
limited to, telephone, travel, and office expenses, all
subject to such written guidelines and/or requirements for
verification as the Company may, in its sole and absolute
discretion, establish.
8. CONFIDENTIALITY AND TRADE SECRETS. For purposes
of this Section 8, the term "Company" shall collectively
refer to the Company and any affiliate thereof.
a. CONFIDENTIAL INFORMATION. Iselin shall keep
in strictest confidence all information relating to the
business, affairs, products, customers and suppliers of the
Company (collectively hereinafter referred to as "Trade
Secrets"), which Iselin has obtained or may acquire in the
course of his employment by the Company and which is not
otherwise generally known to the public. Iselin
acknowledges that such Trade Secrets are of great value, and
have been developed and/or acquired at great expense to the
Company, and the Company would not enter into this contract
of employment and such information would not be made
available to Iselin in Iselin's fiduciary capacity unless
the Company were assured that all such information will be
used for the exclusive benefit of the Company. Accordingly,
during the term of this Agreement, and at all times
thereafter, Iselin shall not publish, communicate, divulge,
disclose or use, whether or not for his own benefit, any
such information without the prior written consent of the
Company. Further, Iselin agrees that during the period of
his employment, Iselin will not, directly or indirectly,
engage in the business of, or own or control any interest in
(except as a passive investor owning less than 10% of the
equity securities of a publicly held company), or act as a
director, officer of employee of, or consultant to, any
individual, partnership, joint venture, corporation or other
business entity, directly or indirectly engaged in any
country in which the Company conducts business (including,
without limitation, the United States, its possessions and
territories), in any business competitive with the business
then being carried on by the Company; nor will Iselin engage
in any such activity following the termination of his
employment hereunder (however and by whomever caused and
irrespective or whether or not such termination is for
cause), if the loyal and complete fulfillment by Iselin of
such activities would demand, inherently, that Iselin reveal
Trade Secrets.
b. CLIENT INFORMATION. Iselin hereby
specifically agrees that he will not utilize any information
concerning the customers, licensees or other clients,
partners or affiliates of the Company which Iselin acquires
during the term of this Agreement, whether or not the same
originated through Iselin's efforts, for any purpose
detrimental to the business of the Company. Without
limitation of the foregoing, Iselin agrees that he shall not
at any time interfere with any existing contracts of the
Company, and further agrees that he shall not engage in
business discussions with any person or entity with whom he
or the Company are in negotiations at the time he ceases to
be an employee of the Company until after such negotiations
have been concluded.
c. SOLICITATION OF EMPLOYEES. Iselin
acknowledges that important factors in the Company's
business and operations are the loyalty and good will of its
employees and its customers. Accordingly, Iselin agrees
that both during the term of this Agreement and after the
expiration or termination of this Agreement he will not
enter into, and will not participate in, any plan or
arrangement to cause any of the Company's employees to
terminate his employment with the Company or hire any of
such employees in connection with business initiated by
Iselin or any other person, firm or corporation. Iselin
further agrees that information as to the capabilities of
the Company's employees, their salaries and benefits, and
the other terms of their employment is confidential and
proprietary to the Company and constitutes its valuable
trade secrets.
d. ONGOING OBLIGATION. The provisions in this
Section 8 shall be binding during Iselin's employment and at
all times thereafter, regardless of the circumstances or
reasons for termination of this Agreement. In the event the
provisions in this Section 8 are more restrictive than
permitted by the laws of the jurisdiction in which
enforcement of this provision is sought, such provisions
shall be interpreted to extend only over the maximum period
of time, range of activities or geographic area as to which
it may be enforceable.
9. REMEDY FOR BREACH. Iselin acknowledges that the
services to be rendered by him hereunder are of a special,
unique and extraordinary character, which gives this
Agreement a peculiar value to the Company, the loss of which
cannot be reasonably or adequately compensated in damages in
an action at law, and a breach by Iselin of the provisions
of this Agreement will cause the Company irreparable injury.
It is, therefore, expressly acknowledged that this Agreement
may be enforced by injunction and other equitable remedies,
without bond. Such relief shall not be exclusive, but shall
be in addition to any other rights or remedies Company may
have for such breach, and Company shall be entitled to
recover all costs and expenses, including reasonably
attorneys' fees, incurred by reason of any breach of the
covenants of this Agreement. Similarly, the provisions of
this Section 9 shall not it any way limit any rights or
remedies to which Iselin may be entitled in the event of a
breach by the Company of any obligations of the Company
arising under this Agreement.
10. LITIGATION AND ATTORNEYS FEES. In the event of
any litigation or arbitration between the parties hereto in
connection with this Agreement or to enforce any provision
or right hereunder, each party to such litigation or
arbitration shall pay its own costs and expenses.
11. BOARD ACTIONS. Any actions required to be taken
or determinations to be made by the Board under this
Agreement may, at the discretion of the Board, be taken or
made by the Compensation Committee or any other duly
authorized committee of the Board.
12. ADDITIONAL ACKNOWLEDGMENTS.
x. Xxxxxx understands that the terms of this
Agreement may be required to be disclosed in, or filed as an
exhibit to, the Company's annual proxy statement or other
reports filed publicly with the U.S. Securities and Exchange
Commission.
x. Xxxxxx acknowledges and agrees that he has
fully read and understands this Agreement, has been advised
to and has been given the opportunity to consult with his
attorney concerning this Agreement, has had any questions
regarding its effect or the meaning of its terms answered to
his satisfaction and, intending to be legally bound hereby,
has freely and voluntarily executed this Agreement.
13. GENERAL PROVISIONS.
a. The failure of the Company at any time to
enforce performance by Iselin of any provisions of this
Agreement shall in no way affect the Company's rights
thereafter to enforce the same, nor shall the waiver by the
Company of any breach of any provision hereof be held to be
a waiver of any other breach of the same or any other
provision.
b. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and the
successors and assigns of the Company; provided, however, it
is understood and agreed that the services to be rendered
and the duties to be performed by Iselin hereunder are of a
special, unique and personal nature and that it would be
difficult or impossible to replace such services; by reason
thereof, Iselin may not assign either the benefits or the
obligations of this Agreement.
x. Xxxxxx shall be considered an employee of the
Company within the meaning of all federal, state and local
laws and regulations governing unemployment insurance,
workers' compensation, industrial accident, labor and taxes.
d. This Agreement is the entire agreement
between the parties hereto with respect to the subject
matter hereof and supersedes all prior oral and written
agreements and negotiations between the parties.
e. The headings of the several paragraphs in
this Agreement are inserted solely for the convenience of
the parties and are not a part of and are not intended to
govern, limit or aid in the construction of any term or
provision hereof.
f. This Agreement may not be modified except by
a written instrument signed by all parties hereto.
g. All clauses and covenants contained in this
Agreement are severable, and in the event any of them shall
be held to be invalid by any court, such clauses or
covenants shall be limited as permitted under applicable
law, or, if the same are not susceptible to such limitation,
this Agreement shall be interpreted as if such invalid
clauses or covenants were not contained herein.
h. This Agreement is made with reference to the
laws of the State of California and shall be governed by and
construed in accordance therewith. Any litigation
concerning or to enforce the provisions of this Agreement
shall be brought in the courts of the State of California.
i. Any controversy or claim arising out of or
relating to this Agreement, or breach thereof, may, with the
prior consent of both the Company and Iselin, be settled by
binding arbitration in Los Angeles, California in accordance
with the Commercial Arbitration Rules of the American
Arbitration Association.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first above written.
ISELIN:
/s/ O'Xxxxxxx Xxxxxx
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O'Xxxxxxx Xxxxxx
THE COMPANY
Cadiz Inc.
By: /s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
Chief Executive Officer
By: /s/ Xxxxxxx Xxxxxx
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Xxxxxxx Xxxxxx
Chair, Audit Committee
