EMPLOYMENT AGREEMENT
This Employment Agreement is entered into as of December ---, 1997, by and between Matthew G. Kramer ("Employee") and Agritope, Inc., a
Delaware corporation (the "Company").
1. Services.
1.1 Employment. The Company agrees to employ Employee as the Vice President - - Product Development of the Company, and Employee hereby accepts such employment in accordance with the terms and conditions of this Agreement. Employment shall commence on the date of this Agreement and 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, (b) as set forth on Schedule 1.2 to this Agreement, and (c) as determined by the Board of Directors from time to time. Subject to the provisions of Section 5.2.1, 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. Employee shall devote his full business time, attention and best efforts to the affairs of the Company and its subsidiaries during the term of this Agreement.
1.3 Outside Activities. Employee may engage in other activities, such as activities involving charitable, educational, religious and similar types of organizations (all of which are deemed to benefit Employer), speaking engagements, and similar type activities, and may serve on the board of directors of other corporations approved by the Board of Directors of Company, in each case to the extent that such other activities do not materially detract from or limit the performance of his duties under this Agreement, or inhibit or conflict in any material way with the business of the Company and its subsidiaries.
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 Board of Directors.
2. Compensation.
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 Compensation Committee of the Board of Directors, if there is such a committee, or if not, then
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by the Board of Directors. Effective January 1 of each year that this Agreement is in effect, such salary may be adjusted annually 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 (a) any additional benefits, including, but not limited to, vacation and sick leave policies, 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 and, (b) subject to meeting eligibility requirements, all incentive compensation plans of the Company. The Company shall reimburse Employee for all reasonable and necessary expenses incurred in carrying out his duties under this Agreement, and substantiated by Employee.
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 following terms:
2.3.1 Termination. In the event of termination of employment of Employee pursuant to Section 5.2.1, 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.
2.3.2 Termination after Change in Control. In the event that the termination of the employment of Employee pursuant to Section 5.2.1 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 of 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).
2.3.3 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
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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 semi-annually.
2.3.4 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 not be subject to an excise tax thereon.
2.4 Fees.
2.4.1 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 or its subsidiaries shall belong to the Company or such subsidiary. Employee shall pay or deliver such compensation to the Company or the subsidiary promptly upon receipt.
2.4.2 For the purposes of Section 2.4, "compensation" shall include, but is not limited to, all professional and nonprofessional fees, lecture fees, expert testimony fees, publishing fees, license 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 or its subsidiaries are involved and any subject matter that is directly or indirectly researched, tested, developed, promoted or marketed by the Company or its subsidiaries.
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: any and all information of a
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proprietary or secret nature of the Company and its subsidiaries which is or may be either applicable to or related in any way to (i) their present or future businesses, (ii) their research and development or investigations, or (iii) the business of any of their licensees, licensors or customers. The term "Confidential Information" includes, without limitation, trade secrets, processes, data, know-how, improvements, inventions, techniques, marketing plans, research and development contracts and grants, strategies and information concerning customers or vendors, customer lists and customer leads, new project ideas and leads, all non-public financial information, and all information which is maintained in confidence or is designated as confidential by the Company or its subsidiaries for the protection of their businesses.
3.2 Ownership. Employee acknowledges that all Confidential Information shall continue to be the exclusive property of the Company or its subsidiaries, 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 ...