Document:

Exhibit 10.44

AMENDMENT NO. 13 TO 

LOAN AGREEMENT

 

This Amendment No. 13 to Loan Agreement (this
“Amendment”), dated as of May 1, 2003, is entered into with reference to the
Loan Agreement (as amended, supplemented or otherwise modified from time to
time, the “Loan Agreement”) dated as of November 29, 1999 currently among Apio,
Inc., a Delaware corporation (successor by merger and name change to Bush
Acquisition Corporation, a Delaware corporation) (“Borrower”), each lender from
time to time a party thereto (each a “Lender” and collectively, the “Lenders”),
Bank of America, N.A., as Issuing Lender, and Bank of America, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”).  Capitalized terms not otherwise defined
herein shall have the meanings set forth in the Loan Agreement.  Section references herein relate to the Loan
Agreement unless otherwise stated.

The parties hereto hereby agree as follows:

1.             Section 1.1 — Amended Definitions.  The following defined terms contained in
Section 1.1 of the Loan Agreement are hereby amended and restated in full to
read as follows:

“Base Margin” means (a) for the Initial Pricing Period, one
and three-quarters percent (1.75%), and (b) for each
subsequent Pricing Period, the interest rate margin set forth below opposite
the Pricing Level for that Pricing Period:

	
   

  	
  Pricing Level

  	
   

  	
  Base Rate Margin

  	
   

  
	
   

  	
  I

  	
   

  	
  1.25%

  	
   

  
	
   

  	
  IA

  	
   

  	
  1.50%

  	
   

  
	
   

  	
  II

  	
   

  	
  2.00%

  	
   

  
	
   

  	
  IIA

  	
   

  	
  2.50%

  	
   

  
	
   

  	
  III

  	
   

  	
  3.00%

  	
   

  

 

“Commitment Fee Rate” means (a) for the Initial Pricing
Period, one-quarter of one percent (0.25%), and (b) for each Pricing
Period thereafter, the rate per annum set forth below opposite the Pricing
Level in effect during that Pricing Period:

	
   

  	
  Pricing Level

  	
   

  	
  Commitment Fee
  Rate

  	
   

  
	
   

  	
  I

  	
   

  	
  0.150%

  	
   

  
	
   

  	
  IA

  	
   

  	
  0.175%

  	
   

  
	
   

  	
  II

  	
   

  	
  0.200%

  	
   

  
	
   

  	
  IIA

  	
   

  	
  0.225%

  	
   

  
	
   

  	
  III

  	
   

  	
  0.250%

  	
   

  

 

“Overadvance Margin” means the interest rate margin set forth
below opposite the applicable Pricing Level:

 

1

 

	
   

  	
  Pricing Level

  	
   

  	
  Overadvance
  Margin

  	
   

  
	
   

  	
  I

  	
   

  	
  3.00%

  	
   

  
	
   

  	
  IA

  	
   

  	
  3.50%

  	
   

  
	
   

  	
  II

  	
   

  	
  4.25%

  	
   

  
	
   

  	
  IIA

  	
   

  	
  4.50%

  	
   

  
	
   

  	
  III

  	
   

  	
  4.75%

  	
   

  

 

“Pricing Level” means, for each Pricing Period, the level set
forth below opposite the Pricing Ratio as of the last day of the Fiscal Quarter
ending two months prior to the commencement of that Pricing Period:

	
   

  	
  Pricing
  Level

  	
   

  	
  Pricing
  Ratio

  	
   

  
	
   

  	
  I

  	
   

  	
  Greater than 1.25:1.00

  	
   

  
	
   

  	
  IA

  	
   

  	
  Less than or
  equal to 1.25:1.00, but greater

  than or equal to 1.20:1.00

  	
   

  
	
   

  	
  II

  	
   

  	
  Less than 1.20: 1.00, but greater than or equal

  to 1.15:100

  	
   

  
	
   

  	
  IIA

  	
   

  	
  Less than 1.15: 1.00, but greater than or equal

  to 1.00: 1.00

  	
   

  
	
   

  	
  III

  	
   

  	
  Less than 1.00: 1.00

  	
   

  

 

The Pricing Level shall change as of the first day of
each Pricing Period on the basis of the then most recently delivered Compliance
Certificate.  In the event that Borrower
fails to deliver a Compliance Certificate on a timely basis, the Pricing Level
shall increase to the highest level set forth above until such time as Borrower
delivers a Compliance Certificate.

“Revolver Termination
Date” means August 1,  2003, or such
later anniversary of such date as may be established pursuant to Section 2.6.

2.             Delivery of Operating Budget.  Section 8 of Amendment No. 12 to the Loan
Agreement, dated as of February 28, 2003 (“Amendment No. 12”) is hereby amended
such that Borrower hereby covenants and agrees that, not later than June 9,
2003, it shall deliver to the Administrative Agent, a proposed operating budget
(the “Operating Budget”) for Borrower and its Subsidiaries for the Borrower’s
Fiscal Year ending approximately May 31, 2004, which operating budget shall
include, without limitation, the Borrower’s monthly projected balance sheet,
profit and loss statement, cash flow statement and Borrowing Base.  On or prior to June 16, 2003, Borrower and
Pelton (as defined below) shall present the final Operating Budget to the
Administrative Agent. Each of the parties hereto hereby agrees that the failure
of Borrower to satisfy the provisions of this Section 2 shall constitute an
Event of Default under the Loan Agreement.

3.             Delivery of Joint Venture Agreements; Growing Plan
and Crop Strategy.  Section 11 of
Amendment No. 12 is hereby amended such that Borrower hereby covenants and
agrees that, not later than June 16, 2003, it shall deliver to the
Administrative Agent, (a) a Certificate of a Responsible Official of Borrower
certifying that (i) attached thereto as Exhibit A is a full, correct and
complete listing of each joint venture or similar arrangement to which Borrower
or any of its Subsidiaries is a party and (ii) with respect to each item listed
on Exhibit A, attached thereto as Exhibit B are true, complete and correct,
duly executed copies of the joint venture agreement (or similar documentation)
related thereto and (b) a summary of the Borrower’s growing plan and crop
sourcing strategy for the Fiscal Year ending approximately May 31, 2004, including,
without limitation, (i) a listing of all of Borrower’s growers, (iii)

 

2

 

the percentage of total supply, by division, that each
such grower represents and (iii) a description of the financial/economic
arrangements between Borrower and such grower. 
The summary required by this Section 3 shall be substantially in the
form of Annex II attached hereto, or such other form as shall be reasonably
satisfactory to the Administrative Agent. Each of the parties hereto hereby
agrees that the failure of Borrower to satisfy the provisions of this Section 3
shall constitute an Event of Default under the Loan Agreement.

4.             Consultant Engagement.  Each of the parties hereto hereby acknowledges that Borrower has
informed the Administrative Agent that Borrower has engaged John Pelton &
Associates (“Pelton”) to review and validate, among other things, the
information described in Sections 2 and 3 above. Borrower further covenants and
agrees that, (a)  promptly following receipt
thereof, Borrower shall deliver to the Administrative Agent, true, complete and
correct copies of all reports or other documentation prepared by Pelton and
delivered to Borrower and (b) Administrative Agent shall be free to communicate
with Pelton at all such times and with respect to all such matters as
Administrative Agent shall deem appropriate in its sole discretion.  Each of the parties hereto hereby agrees
that the failure of Borrower to satisfy the provisions of this Section 4 shall
constitute an Event of Default under the Loan Agreement.

5.             Summary of Affiliate Indebtedness.  Borrower hereby covenants and agrees that
not later than May 9, 2003, it shall deliver to the Administrative Agent, in
form and substance satisfactory to the Administrative Agent, a summary of all
Indebtedness (a) of Borrower due and owing to any Affiliate of Borrower and (b)
of any Affiliate of Borrower due and owing to Borrower, which summary shall
indicate whether (i) such Indebtedness constitutes a Subordinated Obligation
under the Loan Agreement and (ii) such Indebtedness constitutes an obligation
permitted to be reimbursed pursuant to the proviso contained in Section 9 of
Amendment No. 12 to the Loan Agreement (each such obligation, a “Permitted
Reimbursement Obligation”).  Each of the
parties hereto hereby agrees that the failure of Borrower to satisfy the
provisions of this Section 5 shall constitute an Event of Default under the
Loan Agreement.

6.             Landec Payments to Nicholas Tompkins.   Borrower hereby represents and warrants
that (a) in January, 2003, Landec made certain payments to Nicholas Tompkins in
an approximate amount of $2,000,000 (the “January Subordinated Loan Payment”),
(b) the January Subordinated Loan Payment was made by Landec in satisfaction of
certain obligations of Borrower to Nicholas Tompkins and (c) the January
Subordinated Loan Payment was deemed a subordinated loan from Landec to
Borrower.  Each of the parties hereto
hereby agrees that (i) the January Subordinated Loan Payment shall constitute a
“Subordinated Obligation” under the Loan Agreement and the Landec Subordination
Agreement and (ii) the January Subordinated Loan Payment shall not constitute a
Permitted Reimbursement Obligation.

7.             Release. 
As a material inducement to the Lenders to enter into this Consent, the
Borrower hereby fully releases and discharges forever the Administrative Agent
and each of the Lenders, their respective subsidiaries and affiliated
companies, and their respective agents, employees, officers, directors, representatives,
attorneys, successors and assigns (hereafter referred to collectively as the
“Released Parties”), and each and all of them, from any and all liabilities,
claims, actions, causes of action, charges, complaints, obligations, costs,
losses, damages, injuries, attorneys’ fees, and other legal responsibilities,
of any form whatsoever, whether known or unknown, unforeseen, unanticipated,
unsuspected or latent, which either of them may have or hold, or have at any
time heretofore have or held, arising out of or relating to the Loan Agreement,
the Loan Documents, the transactions contemplated thereby or the relationship
of the parties hereto arising out of the Loan Agreement or the Loan Documents
prior to the effective date of this Consent.  
The Borrower hereby expressly waives all rights under Section 1542 of
the California Civil Code, which reads as follows:

 

3

 

                                                                   “Section 1542. [Certain claims not
affected by general release.] A general release does not extend to claims which
the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known to him must have materially affected his
settlement with the debtor.”

 

Borrower hereby agrees to indemnify and hold harmless
each of the Released Parties for and against any and all costs, losses or
liability, whatsoever, including reasonable attorneys’ fees arising out of the
prosecution by Borrower, or its successors or assigns, of any action, claim or
cause of actions released pursuant to this Section.

8.             Effectiveness. 
This Amendment shall become effective on such date (the “Effective
Date”) as the Administrative Agent shall have received, in form and substance
satisfactory to the Administrative Agent and the Lenders, (a) duly
executed counterparts of this Amendment , (b) a duly executed counterparts
of Annex I attached hereto, signed by each Party thereto and (c) the
Amendment Fee referred to in Section 11 hereto.

9.             Representations and Warranties.  Except (i) for representations and
warranties which expressly relate to a particular date or which are no longer
true and correct as a result of a change permitted by the Loan Agreement or the
other Loan Documents or (ii) as disclosed by Borrower and approved in
writing by the Requisite Lenders, the Borrower hereby represents and warrants
that each representation and warranty made by Borrower in Article 4 of the
Loan Agreement (other than Sections 4.6 (first sentence), 4.11, and 4.18)
are true and correct as of the date hereof as though such representations and
warranties were made on and as of the date hereof.  Without in any way limiting the foregoing, Borrower represents
and warrants to the Administrative Agent and the Lenders that no Default or
Event of Default has occurred and remains continuing or will result from the
consents, waivers, amendments or transactions set forth herein or contemplated
hereby.

10.           Fees and Expenses.  Borrower hereby agrees to reimburse the
Administrative Agent and the Lenders for the Administrative Agents and Lenders’
reasonable costs and expenses (including reasonable attorney’s fees and
expenses) incurred in connection with the negotiation and drafting of this
Amendment and the transaction contemplated hereby together with any and all
other fees and expenses currently due and owing to the Administrative Agent
and/or the Lenders.  Borrower further
agrees that, it shall satisfy its obligations under Section 11.3 of the
Loan Agreement not later than five (5) days after receipt of an invoice with
respect thereto from the Administrative Agent. 
Each of the parties hereto hereby agrees that the failure to satisfy the
requirements of this Section 9 shall constitute an Event of Default under
the Loan Agreement.

11.           Amendment Fee.  On the Effective Date, or as soon thereafter
as may be agreed upon by the Lenders, the Borrower shall pay to the
Administrative Agent, for the ratable account of the Lenders, an amendment fee
of $20,000.

12.           Confirmation.  In all respects, the terms of the Loan
Agreement and the other Loan Documents, in each case as amended hereby or by
the documents referenced herein, are hereby confirmed.

[THIS SPACE INTENTIONALLY LEFT

BLANK SIGNATURE PAGES TO FOLLOW]

 

4

 

IN WITNESS WHEREOF, Borrower, the Administrative Agent
and the Lenders have executed this Agreement as of the date first set forth
above by their duly authorized representatives.

	
   

  	
  APIO, INC., a
  Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA,
  N.A., as Administrative Agent,

  Issuing Lender and sole Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Carol Clements,
  Senior Vice President

  

 

 

 

S-1

 

ANNEX I TO AMENDMENT NO. 13

CONSENT AND REAFFIRMATION OF GUARANTOR AND PLEDGOR

Each of the undersigned guarantors and pledgors hereby
consents to the execution, delivery and performance by Borrower and the
Administrative Agent of the foregoing Amendment No. 13  to Loan Agreement (“Amendment No. 13”).  In connection therewith, each of the
undersigned expressly and knowingly reaffirms its liability under each of the
Loan Documents to which it is a Party and expressly agrees (a) to be and remain
liable under the terms of each such Loan Document, and (b) that it has no
defense, offset or counterclaim whatsoever against the Administrative Agent or
the Lenders with respect to any such Loan Document.

Each of the undersigned further agrees that each Loan
Document to which it is a Party shall remain in full force and effect and is
hereby ratified and confirmed.

Each of the undersigned further agrees that the
execution of this Consent and Reaffirmation of Guarantor and Pledgor is not
necessary for the continued validity and enforceability of any Loan Document to
which it is a Party, but is executed to induce the Administrative Agent and the
Lenders to approve of and otherwise enter into the Amendment No. 13.

IN WITNESS WHEREOF, each of the undersigned, intending
to be legally bound hereby, has caused this Consent and Reaffirmation of
Guarantor and Pledgor to be executed as of 
May 1, 2003.

	
  LANDEC
  CORPORATION, a California

  corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  CAL EX TRADING
  COMPANY,

  a California corporation

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  	
   

  

 

 

 

 

I-1

 

ANNEX II

CROP
STRATEGY 2003

Value Added

	
  

  Grower

  	
   

  	
  %

  Supply

  	
   

  	
  Joint
  Venture

  Yes/No

  	
   

  	
  Financial/Economic
  Arrangements

   

  >    
  Projected
  advance/investment ($$)          >     Repayment terms

  >    
  Uses                                                          >     Collateral

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

Export

	
  

  Grower

  	
   

  	
  %

  Supply

  	
   

  	
  Joint
  Venture

  Yes/No

  	
   

  	
  Financial/Economic
  Arrangements

   

  >    
  Projected
  advance/investment ($$)          >     Repayment terms

  >    
  Uses                                                          >     Collateral

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

 

 

 

II-1Exhibit 10.45

 

 

EXECUTIVE EMPLOYMENT AGREEMENT

This Executive Employment Agreement (this “Agreement”)
is entered into as of the last date set forth on the signature page below, by
and between Landec Corporation (the “Company) and Gary T. Steele (the “Executive”).

1.             POSITION
AND DUTIES

The Executive will continue in his present positions of President,
Chief Executive Officer (“CEO”), and Chairman of the Board (“COB”) of the
Company from the date of this Agreement and for the period of time specified in
this Agreement.  The prior sentence
notwithstanding, the Board of Directors (the “Board”) may designate another
Director as the COB, at the Board’s sole discretion, without violating this
agreement.  As President, CEO, and COB,
the Executive reports to the Board and will assist the Board in developing and
implementing the Company’s ongoing business strategy and objectives.  Executive is also responsible for the
general management and operation of the Company and may have additional powers
and duties as prescribed from time to time by the Board.

Executive agrees to devote all of his business time, skill, attention
and best efforts to the Company’s business and to discharge and fulfill the
responsibilities assigned to him by the Company during his employment under
this Agreement.  Executive further
agrees that he will not render services to any other person or entity without
the prior written consent of the Company, and that he will not engage in any
activity which conflicts or interferes with the performance of the duties and
responsibilities of his position.

2.             TERM OF
EMPLOYMENT

This Agreement covers the Executive’s employment with the Company from
the date of this Agreement through December 31, 2005, at which point it
will expire unless renewed or extended by the written consent of both parties.

3.             LOCATION

Executive will be based at the Company’s executive offices in Menlo
Park, California or elsewhere as may be designated from time to time by the
Company.  The Executive will be expected
to travel to the Company’s offices at other locations as needed for the
performance of his duties and responsibilities.

4.             COMPENSATION,
BENEFITS AND PERQUISITES

(a)           Salary

In consideration of services to be rendered, Executive will be paid a
salary of not less than $330,000 per year, to be earned and paid in equal
semi-monthly installments, less any deductions required by law, pursuant to the
procedures regularly established by the Company.  Executive will be eligible for periodic increases in base salary
under the Company’s normal policies and procedures for executive salary
increases, which currently provide for review of the chief 

 

 

executive officer’s salary every three (3) years.  Executive’s salary will not be reduced below
its current level of $330,000 without both the Company’s and the Executive’s
prior written consent.

(b)           Annual
Incentive Compensation

The Executive will continue to participate in the Company’s annual
incentive plan as it may be modified from time to time (the “Incentive
Plan”).  Under the terms of the current
Incentive Plan, the Executive’s annual bonus is based upon the attainment of
pre-determined goals mutually established by the Company and the
Executive.  Actual bonus(es) payable
will be determined by the terms of the Incentive Plan.  The Company reserves the right to modify,
amend, or discontinue the Incentive Plan at any time.

(c)           Long
Term Incentive Compensation

The Executive will be eligible to receive grants of stock options under
the Company’s 1996 Stock Option Plan and such other long-term incentive plans
applicable to executives of the Company (the “Equity Plans”) as the Company may
adopt.  The 1996 Stock Option Plan
currently provides for possible grants of stock purchase rights, incentive
stock options, and non-statutory stock options.  Any awards of stock options or other long-term incentives are at
the discretion of the Board, and are subject to the terms of the plan.  The Company reserves the right to modify,
amend, or discontinue the Equity Plans at any time.

(d)           Benefits

The Executive will participate in the Company’s standard medical, life,
accident, disability and retirement plans provided to its eligible employees.

(e)           Vacation

The Executive will receive Company paid vacation time off in accordance
with the Company’s policies and procedures, as may be amended from time to time
and which currently provide for four weeks vacation per year.

(f)            Expenses

The Company will reimburse Executive for travel, lodging,
entertainment, and other reasonable business expenses incurred by him in the performance
of his duties in accordance with the Company’s general policies, as may be
amended from time to time.

5.             TERMINATION
OF EMPLOYMENT

(a)           By
Death or Disability

Executive’s employment will terminate automatically upon the death of
Executive or when Executive begins to receive benefits under the Company’s Long
Term Disability Plan.  In such cases,
the Company will pay the Executive (in the case of long term disability) or his
estate or a person who acquired the right to receive such payments by bequest
or inheritance (in the case of death):

 

2

 

(i)            the salary to which he is entitled
through the date of termination; and

(ii)           a pro rata portion of the Executive’s
annual incentive award, if any, to which he is entitled under the Incentive
Plan through the date of termination.

Upon payment of such amounts, the Company’s obligations under this
Agreement will then cease.

(b)           By
Company for Cause

The Company may terminate, without liability, Executive’s employment
for Cause (as defined below) at any time and without notice.  The Company will pay the Executive the
salary to which he is entitled through the date of termination and thereafter
the Company’s obligations under this Agreement will then cease.  The Executive will not be entitled to any
annual incentive award under the Incentive Plan for the year in which
termination occurs.

Termination shall be for Cause if the Executive:

(i)            willfully breaches significant and
material duties he is required to perform;

(ii)           commits a material act of fraud,
dishonesty, misrepresentation, or other act of moral turpitude;

(iii)          is convicted of a felony or another
crime which is materially injurious to the reputation of the Company;

(iv)          exhibits gross negligence in the course
of his employment;

(v)           is ordered removed by a regulatory or
other governmental agency pursuant to applicable law; or

(vi)          fails to obey a lawful direction from
the Board.

(c)           By
Company Without Cause

The Company may terminate the Executive’s employment and this
Agreement, at any time, for any reason, without Cause and without liability.

If employment is terminated by the Company as described in the
preceding paragraph, the Company will pay to Executive the salary to which he
is entitled and will continue to cover Executive in the Company’s benefit
programs for a period of one year beginning on the date of such termination
(the “Severance Period”).  In addition,
such number of shares subject to any unvested stock options and such number of
shares of restricted stock as would have vested at the end of the Severance
Period shall vest as of the date of termination.  Executive will receive a pro-rata portion of the annual incentive
award, if any, to which he is entitled under the Incentive Plan through the date
of termination.  After payment of
termination benefits, the Company’s obligations under this Agreement will
cease.

 

3

 

(d)           Voluntary
Termination

The Executive may terminate his employment at any time by giving the
Company three (3) months’ advance written notice of such termination.  In this event, the Company will pay the
salary to which the Executive is entitled through the end of the notice period,
and the Company’s obligations under this Agreement will then cease.  The Executive will not be entitled to any
annual incentive award under the Incentive Plan for the year in which he
terminates his employment.

(e)           Termination
for “Good Reason”

The Executive may also terminate his employment for “Good Reason”.  For purposes of this Agreement, “Good
Reason” shall mean:

(i)            any assignment to the Executive of
duties other than those contemplated by this Agreement or typically assumed by
a President and CEO or which represent a material reduction in the scope and authority
of Executive’s position, except that the designation of another Director as
Chairman of the Board shall not constitute “Good Reason”;

(ii)           a Company required relocation of
Executive’s principal place of work which is not agreed to by Executive and
which requires an increase in Executive’s normal commute of more than 35 miles,
unless such relocation results from the relocation of the Company’s executive
offices; or,

(iii)          any reduction in salary below $330,000
per year which is not agreed to by Executive.

If Executive terminates employment for “Good Reason”, Company shall
continue to pay to Executive at the then current rate (or the rate prior to a
reduction referred to in clause (iii) above) the salary to which he is entitled
and will continue to cover Executive in the Company’s benefit program for one
year following the date of termination of employment for “Good Reason” (the
“Severance Period”).  In addition, such
number of shares subject to any unvested stock options and such number of
shares of restricted stock as would have vested at the end of the Severance
Period shall vest as of the date of termination.  Executive will receive a pro-rata portion of the annual incentive
award, if any, to which he is entitled under the Incentive Plan through the
date of termination.  Thereafter, the
Company’s obligations under this agreement shall cease.

(f)            Termination
Obligations

Executive acknowledges and agrees that all personal property and
equipment furnished to or prepared by the Executive in the course of or
incident to his employment belong to the Company and shall be promptly returned
to the Company upon termination of employment. 
Executive further acknowledges and agrees that all confidential
materials and documents, whether written or contained in computer files,
diskettes or any other media, remain the property of the Company and shall be
promptly returned to the Company upon termination of employment.

 

4

 

6.             ACCELERATED
VESTING UPON CHANGE OF CONTROL

A “Change of Control” is defined as the occurrence of one or more of
the following events:

(i)            a report on Schedule 13D is
filed with the Securities and Exchange Commission pursuant to
Section 13(d) of the Securities Exchange Act of 1934 disclosing that any
person other than the Company, a subsidiary of the Company, or any employee
benefits plan sponsored by the Company, is the beneficial owner of 50% or more
of the combined voting power of the then-outstanding securities of the Company;

(ii)           any person purchases securities
pursuant to a tender or exchange offer, which, upon the consummation thereof,
results in beneficial ownership of 50% or more of the voting power of the
then-outstanding securities of the Company;

(iii)          the stockholders of the Company approve
a consolidation or merger of the Company in which the Company is not the
surviving corporation, or the Company’s shares are converted to cash,
securities or other property, or all or substantially all of the assets of the
Company are sold, leased, exchanged or transferred; or,

(iv)          a majority of the members of the
Company’s Board of Directors change within a 24 month period unless the
election or nomination for election of such Directors shall have been approved
by a majority of the Directors still in office who were also Directors at the
beginning of the 24 month period.

If, within a period of two (2) years subsequent to a Change of Control
(as defined above), the Executive is involuntarily terminated without Cause as
described in Section 5(c) or terminates for “Good Reason” as described in
Section 5(e), then all unvested stock options and shares of restricted
stock granted under any Equity Plans shall immediately vest and become
exercisable.

The preceding paragraph notwithstanding, aggregate amounts payable to
the Executive will be limited by the amount necessary to ensure that no
payments to Executive will result in excise taxes under Section 4999 of
the Internal Revenue Code (the “Code”) and that the Company will not be subject
to the loss of tax deductions under Section 280G of the Code.  The Executive shall have the right to elect
which items of compensation he waives in this event.

7.             SOLICITATION OF EMPLOYEES,
CONSULTANTS AND OTHER PARTIES.

Executive agrees that during the term of this Agreement, and for a
period of two (2) years thereafter, Executive shall not either directly or
indirectly solicit, induce, recruit or encourage any of the Company’s employees
or consultants to terminate their relationship with the Company, or take away
such employees or consultants, or attempt to solicit, induce, recruit,
encourage or take away employees or consultants of the Company, either for
Executive or for any other person or entity. 
Further, for a period of two (2) years following termination of this
Agreement, Executive shall not solicit any licensor to or customer of the
Company or licensee of the Company’s products, in each case, that are known to
Executive, with respect to any business, products or services that are
competitive to the products or services offered by the Company or under
development as of the date of such termination.

 

5

 

8.             CONFIDENTIAL INFORMATION

Executive agrees that at all times during the term of this Agreement
and thereafter, to hold in strictest confidence, and not to use, except for the
benefit of the Company, or to disclose to any person, firm, corporation or
other entity without written authorization of the Board, any Confidential
Information of the Company and agrees to abide by the terms of his Confidential
Information and Invention Assignment Agreement with the Company.  Executive understands that “Confidential
Information” means any Company proprietary information, technical data, trade
secrets or know-how, including, but not limited to, research, product plans,
products, services, suppliers, customer lists and customers, prices and costs,
markets, software, developments, inventions, laboratory notebooks, processes,
formulas, technology, designs, drawings, engineering, hardware configuration
information, marketing, licenses, finances, budgets or other business
information disclosed to Executive by the Company either directly or indirectly
in writing, orally or by drawings or observation of parts or equipment or
created by Executive during the term of this Agreement.  Executive understands that “Confidential
Information” includes, but is not limited to, information pertaining to any
aspects of the Company’s business which is either information not known by
actual or potential competitors of the Company or is proprietary information of
the Company or its customers or suppliers, whether of a technical nature or
otherwise.  Executive further
understands that Confidential Information does not include any of the foregoing
items which has become publicly and widely known and made generally available
through no wrongful act of Executive or of others who were under
confidentiality obligations as to the item or items involved.

9.             ASSIGNMENT

The Executive’s rights and obligations under this Agreement may not be
assigned, and any attempted assignment shall be null and void.  The Company may assign this Agreement, but
only to a successor or affiliated organization.

10.          NOTICES

All notices referred to in this Agreement shall be in writing and
delivered to the Company at its principal address, 3603 Haven Avenue,
Menlo Park, CA 94025-1010, or to the Executive at [insert home address].

11.          ENTIRE AGREEMENT

The terms of this Agreement are intended by the parties to be the final
expression of their agreement with respect to the employment of the Executive
by the Company and may not be contradicted by evidence of any prior or
contemporaneous agreement.  The parties
further intend that this Agreement shall constitute the complete and exclusive
statement of its terms, and that no extrinsic evidence whatsoever may be
introduced in any judicial, administrative, or other legal proceeding involving
this Agreement.

12.          AMENDMENTS AND WAIVERS

This Agreement may not be modified, amended, or terminated except in
writing, signed by the Executive and by a duly authorized representative of the
Company other than the Executive.  No 

 

6

 

failure to exercise and no delay in exercising any right, remedy, or
power hereunder shall operate as a waiver thereof.

13.          SEVERABILITY AND ENFORCEMENT

If any provision of this Agreement shall be held by a court of
competent jurisdiction to be invalid, unenforceable, or void, the remainder of
this Agreement shall remain in full force and effect.

14.          GOVERNING LAW

This Agreement shall be interpreted and construed in compliance with
the laws of the state of California, unless a superseding Federal law is
applicable.

15.          ARBITRATION

In the event that any material dispute arises between the Company and
the Executive with respect to any aspect of this Agreement, the controversy
shall be submitted to binding arbitration by a disinterested arbitrator, in
accordance with the current arbitration rules of the American Arbitration
Association.

[signature page follows]

 

7

 

This Executive Employment Agreement was executed as of the last date
set forth below

	
   

  	
  COMPANY:

  
	
   

  	
   

  
	
   

  	
  LANDEC
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	 

	
   

  	
   

  	
  Richard S.
  Schneider

  
	
   

  	
   

  	
  Director and
  Member of the Compensation Committee

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  EXECUTIVE:

  
	
   

  	
   

  
	
   

  	
  GARY T. STEELE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Date:

  	
   

  
					

 

 

8

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