EXHIBIT 10.41
RETENTION INCENTIVE AGREEMENT
THIS RETENTION INCENTIVE AGREEMENT, dated November 10, 1999, is made by and
between Gardenburger, Inc., an Oregon corporation (the "Company"), and Xxxx X.
Xxxxxxx ("Executive").
WHEREAS, the Board of Directors of the Company recognizes the importance to
the Company of the continuity of management; and
WHEREAS, the Board has determined that voluntary terminations by key
management employees could occur as the result of limited retention incentives;
and
WHEREAS, the Board has determined that action should be taken to reinforce
and encourage the continued attention and dedication of members of the Company's
management, including Executive, to their assigned duties;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the Company and Executive hereby agree as follows:
1. TERM OF AGREEMENT. This agreement shall commence on the date hereof and
shall continue in effect through December 31, 2000, unless sooner terminated due
to a Change in Control.
2. NATURE OF THE AGREEMENT. In order to induce the Executive to remain in the
employ of the Company, the Company agrees, under the conditions described
herein, to pay Executive a retention incentive payment in the amount of
$500,000. No amount or benefit shall be payable under this Agreement unless
Executive remains employed at the end of the Term of Agreement and the other
conditions set forth herein are satisfied, or unless a Change in Control event,
as defined in Section 3, occurs.
3. CHANGE IN CONTROL; DEFINITION. A Change in Control shall mean:
(a) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of
either (i) the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not constitute a Change
in Control: (i) any acquisition directly from the Company, (ii) any acquisition
by the Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation controlled by
the Company or (iv) any acquisition by any corporation pursuant to a
reorganization, merger or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in clauses (i), (ii) and (iii)
of subsection (c) of this Section 3 are satisfied; or
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(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a Person other than the Board; or
(c) Approval by the shareholders of the Company of a reorganization, merger
or consolidation, in each case, unless, following such reorganization, merger or
consolidation, (i) more than 75% of, respectively, the then outstanding shares
of common stock of the corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities, as
the case may be, (ii) no Person (excluding the Company, any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
reorganization, merger or consolidation and any Person beneficially owning,
immediately prior to such reorganization, merger or consolidation, directly or
indirectly, 25% or more of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be) beneficially owns, directly or
indirectly, 25% or more of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors, and (iii) at least a majority of the members of the board of
directors of the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of the execution
of the initial agreement providing for such reorganization, merger or
consolidation; or
(d) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the Company, other than to a
corporation with respect to which following such sale or other disposition, (A)
more than 75% of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportions as their ownership, immediately prior to such
sale or other disposition, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (B) no Person
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(excluding the Company and any employee benefit plan (or related trust) of the
Company or such corporation and any Person beneficially owning, immediately
prior to such sale or other disposition, directly or indirectly, 25% or more of
the Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be) beneficially owns, directly or indirectly, 25% or more of,
respectively, the then outstanding shares of common stock of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors, and (C) at
least a majority of the members of the board of directors of such corporation
were members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such sale or other disposition of
assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not be deemed to occur
in the event of a Management Change in Control. A Management Change in Control
shall mean a Change in Control pursuant to which Executive (alone or with
others) acquires or retains, directly or indirectly, the power to direct or
cause the direction of the management and policies of the Company (whether
through the ownership of voting securities, by contract, or otherwise).
4. CONDITIONS OF AWARD.
(a) Employment. Executive is currently employed by the Company and, subject
to (i), (ii), and (iii) below, generally must continue to be employed during the
Term of Agreement in order to be eligible for this award.
(i) If Executive voluntarily terminates employment before December
31, 2000, no award or prorated award will be made.
(ii) If Executive's employment is terminated for Cause before December
31, 2000, no award or prorated award will be made. For the
purpose of this Agreement, "Cause" shall be interpreted broadly
to mean (a) failure to adequately perform job duties (other than
by reason of a disability that renders him unable to perform the
essential functions of his job with or without reasonable
accommodation) after imposition of progressive disciplinary
process; (b) any act of personal dishonesty, insubordination,
breach of fiduciary duty, or willful misconduct by Executive; (c)
Executive's use of illegal drugs, or use of lawful drugs or
alcohol in a manner violative of the Company's written policies;
(d) objective evidence of Executive's wrongful discrimination
against or harassment of another person1; (e) any conduct by
Executive that may significantly disparage the integrity or
reputation of the Company; (f) Executive's diversion of any
corporate opportunity or other similarly serious conflict of
interest inuring to the Company's detriment; (g) conduct by
Executive significantly endangering the life, safety, or health
of self or others; (h) Executive's violation of any law, rule, or
regulation (other than minor traffic violations or similar minor
offenses); or (i) any act or failure to act by Executive of
similar seriousness to those listed above.
(iii) If Executive's employment is terminated without Cause (including
by reason of death or disability) before December 31, 2000, then
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1 Sworn statements shall satisfy this requirement of objective evidence.
a prorated award will be made. The award will be prorated to
reflect the number of actual days Executive was actively employed
after the complete execution of this Agreement as compared to the
number of days between the execution of this Agreement and
December 31, 2000.
(b) Change in Control. Should a Change in Control, as defined in Section 3,
be finalized and completed before December 31, 2000, then provided all other
eligibility criteria are satisfied, Executive will be entitled to payment in
full of the award on the date the Change in Control is finalized and completed
and this Agreement shall terminate.
5. PAYMENT. The payment of the $500,000 retention incentive award (or portion
thereof, if applicable) will be made within five (5) business days after
December 31, 2000, or the date that a Change in Control is finalized and
completed, whichever occurs first. Payment will be made after statutorily
required taxes and other legally authorized deductions are withheld.
6. MISCELLANEOUS.
(a) Notices. All notices, consents, and other communications if required
will be forwarded by U.S. Postal Service or express courier service:
To the Company: Gardenburger, Inc.
Xxxxx 000
0000 X.X. Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxx 00000
Fax Number: (000) 000-0000
Attn: Vice President, Human Resources
To Executive: Xxxx X. Xxxxxxx
At the last address shown on the records of the Company
(b) Assignment. This Agreement shall inure to the benefit of and shall be
binding upon the parties hereto and their respective executors, administrators,
heirs, personal representatives and successors, but, except as hereinafter
provided, neither this Agreement nor any right hereunder may be assigned or
transferred by either party hereto, or by any beneficiary or any other person,
nor be subject to alienation, anticipation, sale, pledge, encumbrance,
execution, levy or other legal process of any kind against Executive,
Executive's beneficiary or any other person. Notwithstanding the foregoing, any
person or business succeeding to all or substantially all of the business of the
Company by stock purchase, merger, consolidation, purchase of assets or
otherwise, shall be bound by and shall adopt and assume this Agreement, and the
Company shall obtain the express assumption of this Agreement by such successor.
(c) Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Oregon, except to the
extent otherwise expressly provided in this Agreement.
(d) Amendment. This Agreement may be amended only by a written instrument
signed by the parties hereto, which makes specific reference to this Agreement.
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(e) Severability. If any provision of this Agreement shall be held invalid
or unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provisions hereof.
(f) Other Benefits. Nothing in this Agreement shall limit or replace the
compensation or benefits payable to Executive, or otherwise adversely affect
Executive's rights, under any other benefit plan, program or agreement to which
Executive is a party.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on
its behalf by the chair of its board of directors, and Executive has set his
hand, as of the date first written above.
GARDENBURGER, INC.
/s/ Xxxx X. Xxxxxxx By: /s/ E. Xxx Xxxxx
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Xxxx X. Xxxxxxx E. Xxx Xxxxx
Chair of the Board of Directors
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