Document:

EXHIBIT 10.49

 

EMPLOYMENT
AGREEMENT

 

THIS AGREEMENT is entered into as of November 12,
2003, by and between GARDENBURGER, INC., an Oregon corporation
(“the Company”) and Robert T. Trebing Jr. (“Executive”).

 

In consideration of the mutual covenants and the other
terms and conditions set forth in this Agreement, the parties agree as follows:

 

1.                                      EMPLOYMENT;
POSITION

 

The Company agrees to employ Executive and Executive
agrees to serve as Senior Vice President and Chief Financial Officer of the
Company.  Executive also agrees to serve
as Secretary and Treasurer and, if elected, without separate compensation, as a
director of the Company or any subsidiary or affiliate of the Company.

 

2.                                      DUTIES

 

As Senior Vice President and Chief Financial Officer
of the Company, Executive will have such powers and duties appropriate to that
office (a) as may be provided by the articles and/or bylaws of the Company
and (b) as determined by the Board of Directors of the Company from time
to time.  Executive will at all times
discharge his duties in consultation with and under the supervision and
direction of the Chief Executive Officer (“CEO”) of the Company.  Subject to the provisions of this Agreement,
Executive’s duties may be changed from time to time, and Executive’s place of
work may be relocated at the sole discretion of the Board of Directors of the
Company.

 

3.                                      OUTSIDE
ACTIVITIES

 

During his employment by the Company under this
Agreement, Executive will devote all of his business time, attention, skill,
and efforts to the faithful performance of his duties under this
Agreement.  Executive will obtain the
consent of the CEO of the Company before he engages in any other professional
or business activities that may require an appreciable portion of Executive’s
time or effort to the detriment of the Company’s business.

 

4.                                      COMPENSATION
AND FRINGE BENEFITS

 

4.1          Base Salary.  As compensation for services under this
Agreement, the Company will pay to Executive an annual salary of $200,000
(“Base Salary”).  Executive’s Base
Salary will be payable in accordance with the usual payroll practices of the
Company.  During Executive’s employment
under this Agreement, Executive’s Base Salary will be reviewed at least
annually by the CEO, and the Board of Directors of the Company may in its sole
discretion adjust Executive’s Base Salary from time to time. 

 

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4.2          Performance Bonus.  Executive will be eligible to receive an
annual performance bonus based on achieving strategic and financial goals to be
determined for each year by the compensation committee of the Company’s Board
of Directors; provided, however, that for the 2004 fiscal year, such goals will
be determined jointly (and agreed upon in writing) by Executive and the CEO.  The target annual performance bonus for
Executive will be 40 percent of Base Salary.

 

4.3          Benefit Plans.  Executive will be entitled to receive or
participate in all such other benefits, including without limitation pension
plans, stock option plans, and health and welfare plans, as may from time to
time be made available to other senior management employees of the Company.

 

4.4          Vacation.  Executive will be entitled to three weeks
annual paid vacation.

 

4.5          Sale Bonus

 

(a)           After the completion of a “Sale
Transaction,” as defined below, the Company will pay Executive a “Sale Bonus,”
as described below, provided Executive remains as Senior Vice President and
Chief Financial Officer of the Company during the negotiation of and through
the closing of the Sale Transaction.  The
Sale Bonus will be payable to Executive after all post-closing adjustments in
connection with the Sale Transaction have been determined.

 

(b)           For purposes of this paragraph 4.5:

 

(i)            A “Sale Transaction” means a single
transaction or a series of related transactions approved by the Board of
Directors of the Company resulting in:

 

•              A
sale or other disposition by the Company of all or substantially all its
assets; 

 

•              A
sale, stock exchange, or other disposition of all or substantially all the
capital stock of the Company;

 

•              A
merger, consolidation, or other corporate transaction with a third party in
which the Company’s shareholders receive cash, stock, securities, or any other
consideration (or any combination of the foregoing) in exchange for their stock
in the Company.

 

(i)            The “Sale
Bonus” is an amount equal to the sum of 0.25 percent of the portion of the
“Total Consideration” (as defined below) and

 

(ii)           The
“Total Consideration” in connection with a Sale Transaction means:

 

•              The
amount of cash and the aggregate market value of all other consideration
received by the Company in connection with a sale or other disposition of its
assets (exclusive of any indebtedness or liabilities 

 

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of the Company to which
the assets taken are subject or which are assumed by the purchaser or other
acquirer of the Company’s assets); or 

 

•              The
aggregate amount of cash and the aggregate market value of all other
consideration received by the Company’s shareholders in any sale, share
exchange, or other disposition of the Company’s stock or any merger,
consolidation, or similar transaction.

 

4.6          Withholding and Payroll Taxes.  All amounts payable by the Company to
Executive pursuant to this Agreement, including without limitation all cash
compensation, any Sale Bonus, and any settlement of stock options, are subject
to and will be reduced by amounts the Company is required to withhold for all
applicable federal, state, and local income and payroll taxes.

 

5.                                      EXPENSES

 

The Company will reimburse Executive for all
reasonable and necessary expenses incurred by Executive in carrying out his
duties under this Agreement.  Executive
will present to the Company from time to time an itemized account of such
expenses in such form as may be required by the Company.

 

6.                                      PAYMENTS
TO EXECUTIVE UPON AN EVENT OF TERMINATION

 

6.1          Severance Payment.  Upon involuntary termination by the Company
of Executive’s employment (other than for “Cause,” or in connection with
Executive’s death or “Disability,” as those terms are defined below), the
Company will pay Executive his Base Salary through the date of termination and
will pay Executive severance pay equal to one year’s Base Salary (payable over
a 12-month period in accordance with the Company’s normal payroll
practices).  Executive agrees, as a
condition to payment and receipt of such severance pay, to execute a full and
complete release, in form and substance satisfactory to the Company, of any and
all claims of every kind and nature whatsoever against the Company.

 

6.2          Definitions.  For purposes of this Section 6:

 

(a)           “Cause” for termination of
Executive’s employment means (i) any fraud or dishonesty by Executive
involving the Company; (ii) willful misconduct or gross negligence by
Executive in connection with Executive’s performance of his duties for the
Company; (iii) Executive’s conviction for having committed a felony;
(iv) the commission by Executive of any act in direct competition with or
materially detrimental to the best interests of the Company; or
(v) willful and continued failure by Executive to substantially perform
his duties provided herein after a written demand for substantial performance
is delivered to Executive by the CEO of the Company, which demand identifies
with reasonable specificity the manner in which Executive has not substantially
performed his duties.

 

(b)           “Disability” has the meaning in the
Company’s then current disability plan or program or, if no such plan or
program is then in effect, Disability means the condition of being permanently
unable to perform Executive’s duties for the Company by reason of a 

 

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medically determinable physical or mental impairment that can be
expected to result in death or that has lasted or can be reasonably expected to
last for a continuous period of at least 12 months.

 

6.3          Nature of Employment Status.  Notwithstanding the provisions of this
Agreement, including this Section 6, Executive will be an “at will”
employee of the Company.  The provisions
of this Section 6 specify Executive’s contractual rights in the event of
termination, but are not intended to limit the Company’s right and power to
terminate Executive’s employment at any time and for any reason (or for no
reason).

 

7.                                      MATERIALS
PREPARED AND INVENTIONS MADE DURING EMPLOYMENT

 

The Company shall be the exclusive owner of all
materials, concepts, and inventions Executive prepares, develops, or makes
(whether alone or jointly with others) within the scope of his employment, and of
all related rights (including copyrights, trademarks, and patents) and
proceeds.  Without limitation,
materials, concepts, and inventions that (a) relate to the Company’s
business or actual or demonstrably anticipated research or development, or
(b) result from any work performed by Executive for the Company, shall be
considered within the scope of Executive’s employment.  Executive shall promptly disclose all such
materials, concepts, and inventions to the Company.  Executive shall take all action reasonably requested by the
Company to vest ownership of such materials, consents, and inventions in the
Company and to permit the Company to obtain copyright, trademark, patent, or
similar protection in its name.

 

8.                                      CONFIDENTIAL
INFORMATION

 

8.1          Defined.  “Confidential Information” is all nonpublic
information relating to the Company or its business that is disclosed to
Executive, that Executive produces, or that Executive otherwise obtains during
employment.  “Confidential Information”
also includes information received from third parties that the Company has
agreed to treat as confidential. 
Examples of Confidential Information are:

 

(a)           Marketing plans.

 

(b)           Customer lists.

 

(c)           Product design and manufacturing
information.

 

(d)           Financial information.

 

“Confidential Information” does not include
information which (a) is or becomes generally available to the public
other than as a result of a disclosure by Executive; (b) becomes available
to Executive on a nonconfidential basis from a source other than the Company or
its representatives, provided that such source is not known by Executive to be
bound by a confidentiality agreement with the Company or its representatives or
otherwise prohibited from transmitting the information to Executive by a
contractual, legal, or fiduciary obligation; (c) can be demonstrated by
written evidence or other convincing evidence to have been known by Executive
on a nonconfidential basis prior to its disclosure to Executive by the Company
or one 

 

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of its representatives; or (d) can be demonstrated by written or
other convincing evidence to have been developed by Executive in good faith and
independent of Confidential Information.

 

8.2          Access to Information.  Executive acknowledges that in the course of
his employment he will have access to 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.

 

8.3          Ownership.  Executive acknowledges that all Confidential
Information shall continue to be the exclusive property of the Company (or the
third party that disclosed it to the Company), whether or not prepared in whole
or in part by Executive and whether or not disclosed to Executive or entrusted
to his custody in connection with his employment by the Company.

 

8.4          Nondisclosure and Nonuse.  Unless authorized or instructed in writing
by the Company, or required by legally constituted authority, Executive will
not, except as required in the course of the Company’s business, during or
after his employment, disclose to others or use any Confidential Information,
unless and until, and then only to the extent that, such items become available
to the public through no fault of Executive.

 

8.5          Return of Confidential Information.  Upon request by the Company during or after
his employment, and without request upon termination of employment pursuant to
this Agreement, Executive will deliver immediately to the Company all written
or tangible materials containing Confidential Information without retaining any
excerpts or copies.

 

8.6          Duration.  The obligations set forth in this
Section 8 will continue beyond the term of employment of Executive by the
Company and for so long as Executive possesses Confidential Information.

 

9.                                      NONCOMPETITION

 

9.1          Covenants.  Executive covenants, in consideration of his
initial employment by the Company, that the Executive will not, throughout the
United States or in any other country in which the Company sells its products
or services, either individually or as a director, officer, partner, employee,
agent, representative, or consultant with any business, directly or indirectly
during the term of employment and for two years thereafter:

 

(a)           Engage or prepare to engage in any
business that sells products or services competing with those sold by the
Company as of the date of Executive’s termination of employment with the
Company;

 

(b)           Induce or attempt to induce any
person who is an employee of the Company to leave the employ of the Company; or

 

(c)           Solicit, divert, or accept orders for
products or services that are substantially competitive with the products or
services sold by the Company from any customer of the Company, or suggest,
request, or encourage any suppliers or customers of the Company to 

 

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curtail, reduce, or cancel their business done with the Company, or
otherwise solicit for himself or any other person or entity any business of the
Company.

 

9.2          Severability.  While Executive acknowledges that the
restrictions contained herein are reasonable, if any term or condition of this
Section 9 is determined to be unenforceable because of its scope,
duration, geographical area or similar factor, the court or arbitrator making
such determination will have the power to reduce or limit such scope, duration,
area, or other factor, and such covenant will then be enforceable in its
reduced or limited form.

 

10.          GENERAL
TERMS AND CONDITIONS

 

10.1        Effect on Prior Agreements.  This Agreement contains the entire
understanding between the parties concerning the subject matter of this
Agreement and supersedes any prior agreements (express or implied, oral or
written) concerning the subject matter of this Agreement.

 

10.2        Successors and Assigns.  This Agreement will inure to the benefit of
any successors or assigns of the Company.

 

10.3        Modification and Waiver.

 

(a)           This Agreement may be modified or
amended only by a written instrument signed by both parties.

 

(b)           No term or condition of this
Agreement will be deemed to have been waived, nor will there be any estoppel
against the enforcement of any provision of this Agreement, except by a written
instrument signed by the party charged with such waiver or estoppel.  No such written waiver will be deemed a
continuing waiver unless specifically stated therein, and each such waiver will
operate only as to the specific term or condition waived and will not
constitute a waiver of such term or condition for the future as to any act other
than that specifically waived.

 

10.4        Severability.  If, for any reason, any provision of this
Agreement, or any part of any provision, is held invalid, such invalidity will
not affect any other provision of this Agreement or any part of such provision
not held so invalid, and each such other provision and part thereof will to the
full extent consistent with law continue in full force and effect.

 

10.5        Headings for Reference Only.  The headings of sections herein are included
solely for convenience of reference and will not control the meaning or
interpretation of any of the provisions of this Agreement.

 

10.6        Governing Law.  This Agreement will be governed by the laws
of the state of California.

 

10.7        Arbitration

 

(a)           All claims, disputes, or controversies,
except for those excluded by Section 10.7(b), whether or not arising out
of Executive’s employment (or its termination), that the Company may have
against the Executive or that Executive may have against the Company 

 

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or against its officers, directors, employees or agents, in their
capacity as such or otherwise, shall be resolved by mandatory arbitration in
accordance with the then effective arbitration rules of American Arbitration
Association, whichever organization is selected by the party that first
initiates arbitration by filing a claim in accordance with the filing rules of
the organization selected, and any judgment upon the award rendered pursuant to
such arbitration may be entered in any court having jurisdiction thereof.  Unless otherwise agreed, arbitration shall
be conducted in Orange County, California, before a single arbitrator.

 

(b)           Claims arising out of Sections 8
and 9 of this Agreement or relating to workers’ compensation or unemployment
compensation benefits are excluded from mandatory arbitration under
Section 10.7(a).  Such excluded
claims may include but are not limited to claims by the Company for injunctive
and/or other equitable relief for unfair competition and/or the use and/or
unauthorized disclosure of trade secrets or Confidential Information, as to
which Executive understands and agrees that the Company may seek and obtain
relief from a court of competent jurisdiction.

 

10.8        Attorney Fees.  In the event of any suit or action or
arbitration proceeding to enforce or interpret any provision of this Agreement
(or which is based on this Agreement), the prevailing party will be entitled to
recover, in addition to other costs, the reasonable attorney fees incurred by
the prevailing party in connection with such suit, action, or arbitration, and
in any appeal therefrom.  The
determination of who is the prevailing party and the amount of reasonable
attorney fees to be paid to the prevailing party will be decided by the
arbitrator or arbitrators (with respect to attorney fees incurred prior to and
during the arbitration proceedings) and by the court or courts, including any
appellate courts, in which the matter is tried, heard, or decided, including
the court which hears any exceptions made to an arbitration award submitted to
it for confirmation as a judgment (with respect to attorney fees incurred in
such confirmation proceedings).

 

10.9        Initial Employment.  Executive acknowledges that he signed this
agreement upon his initial employment with the Company.

 

The parties have executed this Employment Agreement as
of the date stated above.

 

 

	
   

  	
   

  	
   

  	
  GARDENBURGER, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ROBERT T. TREBING, JR.

  	
   

  	
  By:

  	
  /s/SCOTT C. WALLACE

  	
   

  
	
   

  	
  Robert T. Trebing Jr.

  	
   

  	
   

  	
  Scott C. Wallace

  
	
   

  	
   

  	
   

  	
   

  	
  Chair of the Board of Directors

  

 

7EXHIBIT 10.1

                            [STEARNS BANK LETTERHEAD]

December 22, 2003

The Board of Directors
Husker Ag, LLC
510 W. Locust Street
PO Box 10
Plainview, NE  68769

RE:      USDA Permanent loan financing for a 20 Million Gallon Ethanol Plant
         Plainview, Nebraska

Gentlemen:

Stearns Bank is pleased to extend the following financing proposal with regards
to the above-referenced project:

BORROWER:               Husker Ag, LLC

EXTENSION:              30 day extension of the $20,000,000 construction loan.

COVENANTS:              Maintain the following covenants:

                        a) No distributions without prior lender approval and
                        issuance of the USDA Loan Note Guaranty.

                        b) Minimum 40% balance sheet tangible net worth must be
                        maintained.

                        c) Debt Service Coverage Ratio of at least 1.20x after
                        distributions.

PREPAYMENT PENALTY:     3% prepayment penalty

THE USDA APPROVED A CONDITIONAL COMMITMENT FOR A 70% LOAN NOTE GUARANTY BASED ON
THE FOLLOWING TERMS:

LOAN AMOUNT:            LOAN A - $8,837,300 - 70% USDA Guaranty loan-amortized
                        over seven (7) years and three (3) months.

                        LOAN B - $8,837,300 conventional loan - amortized over
                        seven (7) years and three (3) months

                        LOAN C - $1,505,900 conventional loan - amortized over
                        48 months (requires a principal reduction of $819,500)

INTEREST RATE:          Prime plus 1.25%, adjusted quarterly

CLOSING COSTS:          Conversion Fee ($116,277.80), 2% USDA Fee ($123,722.20)

<PAGE>

COLLATERAL:             Collateral on Loan A & B will be as follows on a pari
                        passu basis with USDA:

                        o A first real estate mortgage on the proposed real
                        estate project located in Plainview, Nebraska (legal to
                        govern).

                        o A Security Agreement/Financing Statement covering
                        accounts receivable, inventory, equipment and fixtures,
                        along with personal property and general intangibles.
                        (Account receivable and inventory will be subordinate to
                        the Working Capital Line of Credit.) Loan C will have a
                        second position on the above collateral.

GUARANTEE:              Permanent loan A is subject to a 70% USDA Guaranteed
                        Loan

PREPAYMENT PREMIUM:     5% of balance in year one, 4% of balance in year two, 3%
                        of balance in year three, 2% of balance in year four,
                        and 1% of balance in year five.

ESCROWS:                An escrow account must be maintained with Lender from
                        which real estate taxes will be paid.

EQUITY:                 A minimum of 40% tangible balance sheet equity must be
                        maintained.

COVENANTS:              See USDA Conditional Commitment dated 12-19-03

FINANCIAL INFORMATION:  The following financial information will be required:

                        a) Fiscal year-end audited statement prepared by an
                        independent CPA firm, within 90 days of FYE;

                        b) Annual tax returns, including all supporting
                        schedules;

                        c) Monthly interim financial statements prepared
                        internally or by a CPA firm, within 30 days of month end

The Lender's conditional commitment is subject to the negotiation and execution
of definitive credit, security and related loan documents (the "Credit
Documents") satisfactory to the Lender. The Credit Documents will embody the
structure, pricing and other terms described in the summary of terms and
conditions. They will also include provisions viewed by the Lender and its
counsel as appropriate for this transaction and for transactions of this type.
Accordingly, it should be recognized that this letter is indicative, but not
exhaustive, as to the terms and conditions, which shall govern this facility.

This conditional commitment letter supercedes and replaces any and all
conditional commitment letter issued by the Lender to the Borrower.

Sincerely,

/s/ Norm Skalicky
    -----------------------------------
Norm Skalicky
CEO

<PAGE>

I hereby accept the terms and conditions of the above-described proposal to
provide financing.

Husker Ag Processing, LLC

By:      /s/ Gary Kuester
   ------------------------------------
    Chairman of the Board and President         Date: December 22, 2003

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