EXHIBIT 10.2
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT
AGREEMENT (the "Agreement") is entered into as of May
22, 2009, by and between Cadiz Inc., a Delaware corporation
(the "Company") and Timothy J. Shaheen, an individual
("Shaheen").
WHEREAS,
Shaheen has served as the Company's Chief Financial Officer
effective as of November 19, 2008; and
WHEREAS, the
Company and Shaheen desire to enter into this Agreement in order to
set forth all of the terms and conditions pursuant to which Shaheen
shall continue to provide services to the Company;
NOW, THEREFORE,
the parties agree as follows:
1.
TERM OF EMPLOYMENT . The terms and conditions of
Shaheen's employment under this Agreement shall be effective as of
the date hereof and shall continue until terminated in accordance
with the termination provisions of Section 6 below.
2.
DUTIES . Shaheen shall be employed as the Chief
Financial Officer of the Company. Shaheen'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 Sarbanes-Oxley 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 Shaheen shall be involved
on a daily basis with discussion and analysis of the development of
the Company’s water resource programs. Shaheen
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. Shaheen shall report to, and
take direction from, the Chief Executive Officer of the
Company. Shaheen 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. Shaheen's base of operations
shall be at the corporate headquarters office of the Company in Los
Angeles, California, unless changed by mutual
agreement. However, Shaheen shall also render services
at such other sites as necessary from time to time to properly
perform his duties.
a.
Performance of Duties . Shaheen 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, Shaheen 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
Shaheen from spending a reasonable amount of time in the management
of his personal investments or with any charitable or civic venture
with which Shaheen may be involved as of the date hereof; and
provided, further, that such involvement shall not detract from the
performance of Shaheen's duties hereunder.
c.
Exclusive Services . Shaheen agrees that during
the period of his employment, Shaheen shall provide services
exclusively pursuant to this Agreement, and Shaheen 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
Shaheen a base salary of $300,000 per annum. Payments of
base salary shall be made in accordance with the normal payroll
practices of the Company.
a.
Equity Incentive Grant . The Company shall grant
to Shaheen concurrently with the execution of this Agreement 30,000
shares of common stock pursuant to the Company's 2007 Management
Equity Incentive Plan (the "2007 Plan") which shares shall, for
purposes of the 2007 Plan, be deemed to be Deferred Stock (as
defined in the 2007 Plan) subject to immediate vesting upon
execution of this Agreement.
b.
Discretionary Annual 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
Shaheen during such year, on the basis of which Shaheen shall
receive a bonus in an amount and upon such other terms and
conditions as shall be determined at the discretion of the
Board.
c.
Participation in Long Term Transaction Incentive Plan
. The Company shall grant to Shaheen concurrently with
the execution of this Agreement the right to participate in the
total incentive pool made available to Company management under the
Company's Long Term Transaction Incentive Plan ( Plan Summary
Attached ). The participation percentage will be determined
prior to June 30, 2009.
d.
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 Shaheen shall be invited to
participate in the Compensation Plan. Shaheen’s
participation in the Compensation Plan shall be negotiated between
Shaheen and the Company in good faith at a level consistent with
that of a member of senior management with comparable duties and
responsibilities.
e.
Fringe Benefits . In addition to the compensation
set forth above, Shaheen 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 Shaheen);
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 $700 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.
f.
Deduction and Reimbursement . Shaheen hereby
agrees that the Company may deduct and withhold from the
compensation payable to Shaheen 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 Shaheen, "permanent disability" being defined as any continuous
loss of one-half (½) or more of the time spent by Shaheen 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 Shaheen by the
Company for cause. For purposes of this Agreement,
"cause" shall include, but shall not be limited to: (1) the breach
by Shaheen of any term or condition of this Agreement, (2) Shaheen
engaging in one or more acts constituting a felony; (3) Shaheen
engaging in one or more acts involving fraud or serious moral
turpitude; (4) Shaheen misappropriating Company assets or engaging
in gross misconduct materially injurious to the Company or its
affiliates or subsidiaries; (4) the making by Shaheen of material
misrepresentations to the Company or its affiliates; or (5)
Shaheen’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 Shaheen, upon a material breach by the Company of
any term or condition of this Agreement or upon a material change
in Shaheen’s job title or a material reduction in
Shaheen’s duties and responsibilities hereunder.
v. At
the election of either party, without cause.
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 Shaheen after the date of termination except as may be
required by law and as follows, and references under this Agreement
to Shaheen’s termination of employment or the termination of
this Agreement shall be deemed to refer to the date upon which
Shaheen has experienced a “separation from service”
within the meaning of Code Section 409A, as defined
below:
i. In
the event of termination by the Company pursuant to Section (a)(i)
as the result of Shaheen’s death or permanent disability,
payment of the base compensation otherwise payable to Shaheen
pursuant to Section 4 hereof shall continue to be paid to Shaheen
or his estate for a period of 180 days following Shaheen’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, Shaheen
shall be entitled to receive for a period of twelve (12) months
following the effective date of termination, as though Shaheen 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(e) above to the extent
that such benefits can then lawfully be made available by the
Company (or the Company’s successor in interest) to
Shaheen.
iii. In
the event of termination of this Agreement by the Company for cause
pursuant to Section (a)(iii) above, or in the event of termination
of this Agreement by Shaheen without cause pursuant to Section a(v)
above, the Company shall have no further liability or obligation to
Shaheen under this Agreement other than the Company's obligation to
pay base compensation as set forth in Section 4 above and fringe
benefits as described in Section 5(e) above to the extent that such
base compensation and fringe benefits are accrued but unpaid as of
the effective date of termination.
