EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made this 1st day of June,
1996, by and between SI DIAMOND TECHNOLOGY, INC., a corporation with principal
offices located at 00000 Xxxxxxxxxx Xxxxxxxxx, Xxxxxx, Xxxxx 00000 ("Company")
and Xxx Xxxxx, whose address is Austin, Texas 787 ("Employee").
ARTICLE I.
Employment
The Company hereby employs the Employee and the Employee hereby accepts
employment with the Company upon the terms and conditions hereinafter set
forth. The Employee is hereby employed as Executive Vice President and Chief
Operating Officer of the Company and shall perform such duties and
responsibilities commensurate with such position for the Company and
corporations and other business entities affiliated with the Company (the
"Company's Affiliates") as may be assigned him by the Board of Directors of
the Company (the "Board"). The Employee shall be invited to Company Board of
Directors meetings and will be recommended for election to the Board.
The Employee shall be a full-time employee of the Company and, subject to
the last sentence of this paragraph, shall devote his reasonable best efforts
and undivided time, attention and energy to the business of the Company and
the Company's Affiliates and shall not during the term of his employment
hereunder be engaged in any other business activity pursued for gain, profit
or other pecuniary advantage without the written consent of the Company's
Board of Directors, which shall not be arbitrarily withheld. The foregoing
limitations, however, shall not be construed as prohibiting the Employee from
making personal investments in such form or manner as will not require his
services in the operation or affairs of the companies or enterprises in which
such investments are made. The Company expressly approves the pre-existing
consulting arrangements entered into by Employee listed in that certain April
15, 1996 letter from Xxxxxx X. Xxxxxxx to Employee, for which Employee shall
devote no more than an aggregate of 10% of his working time.
The Employee agrees that he shall abide by reasonable business record-
keeping requirements uniformly imposed by the Company on its employees
generally and shall strictly adhere to and obey all uniformly enforced rules
and regulations now in effect or subsequently promulgated governing the
conduct of employees generally of the Employer.
ARTICLE II.
Compensation
In consideration of the services provided under this Agreement, the Employer
will pay the Employee a base salary of $125,000 per year of the term of this
Agreement payable in equal semi-monthly installments on the last business day
on or before the fifteenth day and the last day of each month.
Quarterly performance goals shall be mutually agreed to by the Company and
the Employee at the beginning of each quarter during the first year of this
Agreement (through June 30, 1997). Thereafter, such goals shall be determined
annually at the beginning of each year of this agreement. The goals for the
quarter ending September 30, 1996 shall be as set forth on Exhibit A.
If the Employee's goals for the four quarters ending June 30, 1997 are
reached, such salary shall be retroactively adjusted to $200,000, effective as
of June 1, 1996. If the Employee's goals for the annual period ending June 30,
1998 are reached, the Company shall pay the Employee a one-time bonus of
$100,000.
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In addition, subject to approval of the Company's shareholders, the Employee
is hereby granted 10-year options to acquire 1,000,000 shares of Company
common stock under its Employee Stock Option Plan and such grants are subject
to the terms and conditions described in the Plan, including exercisability
upon termination of employment, such that Employee shall have two years
following termination of his employment other than for cause (as hereinafter
defined) to exercise previously granted options, with vesting upon termination
and other termination issues more particularly addressed in Article IV hereof;
Employee shall have ninety (90) days following termination of his employment
for cause (as hereinafter defined) to exercise previously granted and vested
options. Such options shall vest at the rate of 200,000 shares per year as
follows: 100,000 shall be vested immediately and shall be exercisable at the
per share closing price on May 31, 1996; after the period ending December 31,
1996, another 100,000 shares shall be vested at the per share closing price on
the last trading day in December 1996, if all of the previous two (2)
quarterly goals for the Employee have then been met; additional options shall
vest at the rate of 200,000 per annual period ending on December 31, 1997,
1998, 1999 and 2000 at the end of each of such four (4) periods, assuming the
annual goals for the aforementioned periods have then been met, and shall be
exercisable at the per share closing price on the last trading day in each of
the aforementioned 4 annual periods.
Additionally, the Company shall provide the Employee with and pay for group
insurance benefits in accordance with its customary practices. Employee shall
also be entitled to participate in employee benefit programs established by
the Company, and shall be entitled to such fringe benefits and vacation as are
provided other employees of the Company of a similar level and station, all
according to standard Company policies in effect from time to time; except
that Company shall reimburse Employee for moving expenses from Bloomfield
Hills to Austin in accordance with current Company policy concerning moving
employees from Houston to Austin (attached). The Company will also provide
Employee with the use of an automobile owned by the Company and will pay
reasonable approved living expenses in Austin, Texas, for a period of up to
one (1) year following the date hereof.
The compensation and benefits described in this article are the only
compensation the Employee shall be entitled to receive for his services under
this contract.
ARTICLE III.
Reimbursement of Expenses Incurred
By Employee
The Employee is authorized to incur reasonable business expenses for
promoting the business of the Employer, including expenditures for
entertainment and travel consistent with Company policy and budgets. The
Employer will reimburse the Employee for all such expenses by the last
business day of the month following the month in which the expenses were
incurred.
ARTICLE IV.
Term; Termination
Termination by Either Party
This Agreement may be terminated by either party, with or without cause, by
giving thirty (30) days written notice of termination to the other party. Such
termination shall not prejudice any remedy that the terminating party may have
at law or in equity. This Agreement may be terminated by the Company for
cause, effective immediately upon notice of termination to the Employee.
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Effect of Termination on Compensation and Employee Benefits
In the event of the termination of this Agreement by either party prior to
the completion of the term of employment specified herein, other than by the
Company for cause, Employee shall be entitled to his compensation earned prior
to the effective date of termination, computed pro rata up to and including
that date. In the event of termination by Company other than for cause,
Employee shall also be entitled to continue to receive his then current base
salary for nine (9) months following the effective date of termination as
severance pay and shall also be entitled to be vested in options that would
have vested during the next twelve (12) months following such termination (in
addition to then currently vested options). In the event of the termination of
this Agreement by Company prior to the completion of the term of employment
specified herein for "cause", Employee shall be entitled only to the base
salary and stock options earned prior to termination.
For purposes of this Agreement, "cause" is defined to mean the following
circumstances:
(i) conviction of Employee of crime involving moral turpitude;
(ii) commission, or attempted commission, by Employee of act of fraud on
Company;
(iii) misappropriation, or attempted misappropriation, by Employee of any
funds or property of the Company;
(iv) Employee's breach or non-observance of a material term hereof, if
such breach, etc. continues beyond a period of 10 days after notice by
Company;
(v) any action by Employee involving willful and deliberate malfeasance
in the performance of Employee's duties:
(vi) any action by Employee involving gross negligence in the performance
of Employee's duties, if such action continues for a period of 5 days after
notice by Company;
(vii) death of Employee;
(viii) disability causing Employee's inability to perform duties
hereunder for thirty consecutive days; and
(ix) breach of Employee's fiduciary duty of loyalty to the Company.
Effective with the termination hereof, Employee shall no longer be an
employee of the Company.
ARTICLE V.
Confidential and Proprietary Information
The Company and the Employee acknowledge and agree that ancillary to the
execution of this Agreement, Employee has executed an Agreement for Use and
Non-Disclosure of Confidential and Proprietary Information ("Confidentiality
Agreement") substantially in the form of document attached hereto as Exhibit B.
Such agreement shall be incorporated herein and made a part hereof as if copied
herein verbatim. The Company and the Employee further acknowledge and agree
that the intent of the non-complete portion of the Confidentiality Agreement is
to place a reasonable restriction upon the Employee against directly or
indirectly engaging in or obtaining an interest (other than strictly as a non-
controlling passive investor) in any business in the Field as defined in the
Confidentiality Agreement and certain other businesses described therein. The
Company and Employee acknowledge and agree that the Confidentiality Agreement
is to be interpreted in accordance with the expressions of intent contained in
this Agreement.
ARTICLE VI.
Business Papers
Upon termination of this Agreement for any reason whatsoever, the Employee
agrees immediately to turn over to the Company all business correspondence,
letters, papers, reports, customer lists and each and every
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writing or record in the possession or control of the Employee and pertaining
to the Business of the Company or the Company's Affiliates.
ARTICLE VII.
General
It is understood that this Agreement or any rights accruing hereunder shall
not be assigned by the Employee, in whole or in part, without the prior
written consent of the Company.
ARTICLE VIII.
Subject to the provisions regarding assignment, this Agreement shall be
binding on the heirs, executors, administrators, legal representatives,
successors, and assigns of the respective parties.
ARTICLE IX.
This Agreement shall become valid when executed and accepted by the Company
in Xxxxxx, Xxxxxx County, Texas; it shall be deemed made and entered into in
the State of Texas and shall be governed by the laws of the State of Texas,
both as to interpretation and performance.
ARTICLE X.
Any notices to be given hereunder by either party to the other may be
effected either by personal delivery in writing or by mail, registered or
certified, postage prepaid, with return receipt requested. Notice to the
respective parties hereto shall be sufficient if addressed to the persons or
entities at the locations indicated below. Notices delivered personally shall
be deemed communicated as of the date of actual receipt; mailed notices shall
be deemed communicated as of five (5) days after mailing. Each party may
change the address for notice to the other party by giving notice of such
change in accordance with the provisions of this paragraph:
Xxxxxx X. Xxxxxxx Xxx Xxxxx
SI Diamond Technology, Inc.
00000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx, Xxxxx 00000
ARTICLE XI.
The waiver by the Company in whole or in part of a breach of any provision
of this Agreement by the Employee shall not operate or be construed as a
waiver of any subsequent breach.
ARTICLE XII.
The provisions hereof shall be deemed independent and severable, and the
invalidity or partial invalidity or unenforceability of any one provision or
portion thereof shall not affect the validity or enforceability of any other
provision hereof. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating or rendering unenforceable the remaining provisions hereof. Any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
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ARTICLE XIII.
This Agreement may be amended at any time, but only by the mutual Agreement
of the parties hereto in a writing to be attached to and incorporated into
this Agreement.
ARTICLE XIV.
Any controversy or claim arising out of or relating to this Agreement or a
breach hereof, shall be settled by arbitration in Austin, Texas, in accordance
with the rules of the American Arbitration Association, and judgment upon the
award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof.
EXECUTED in duplicate originals at Xxxxxx, Xxxxxx County, Texas, and
effective for all purposes on the day and year first written above.
SI DIAMOND TECHNOLOGY, INC.
/s/ Xxxxxx X. Xxxxxxx
By: _________________________________
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
/s/ Xxx Xxxxx
_____________________________________
Xx. Xxx Xxxxx
_____________________________________
Employee
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AMENDED AND RESTATED AGREEMENT FOR USE AND NON-DISCLOSURE OF CONFIDENTIAL AND
PROPRIETARY IFORMATION
Between
SI Diamond Technology, Inc.
and
Xxx Xxxxx
THIS AMENDED AND RESTATED AGREEMENT FOR USE AND NON-DISCLOSURE OF
CONFIDENTIAL AND PROPRIETARY INFORMATION entered into to be effective June 1,
1996 (hereafter "Effective Date"), between SI Diamond Technology, Inc. (herein
"Company") and Xxx Xxxxx (herein "Employee") to assure the protection and
preservation of the confidential and/or proprietary nature of information to
be disclosed or made available by Company, during the course of employment or
engagement as a consultant. For purposes of this Agreement, "Company" shall
include Company and all its subsidiary corporations.
(a) For purposes of this Agreement, "Proprietary Information" shall mean
all information, ideas, concepts, improvements, copyrightable material,
patentable material, discoveries and inventions (including those relating
to research, development, financial and sales data, pricing or trading
terms, evaluations, opinions, interpretations, the identity of Company
customers or of their requirements or of key contacts within such
customer's organizations, and marketing and merchandising techniques) (i)
possessed, acquired, developed or reduced to practice by Company at any
time, irrespective of the subject or nature of these, or (ii) conceived,
made, developed, acquired or reduced to practice by Employee or disclosed
or made known to Employee, individually or jointly with others, that relate
or pertain to the business of Company or any Company actual or demonstrably
anticipated research or development and whether or not conceived, made,
developed, acquired or reduced to practice during regular working hours,
but excluding any information, ideas, concepts, improvements, copyrightable
material, patentable material, discoveries and inventions possessed,
acquired, developed or reduced to practice by Employee which are excluded
under Paragraph (c). The terms shall include without limitation all test
data, documents, memoranda, notes, records, files, correspondence,
drawings, manuals, models, specifications, designs, computer programs, maps
and all other writings or materials of any type embodying any of such
Proprietary Information.
(b) All Proprietary Information shall be the sole and exclusive property
of Company. Employee agrees that he or she shall promptly and completely
inform and disclose to Company all Proprietary Information. Employee shall
transfer to Company all Proprietary Information conceived, made, developed,
acquired or reduced to practice by Employee as a result of Employee's work
on behalf of Company, and Employee agrees to execute any additional
documents that Company may reasonably request to evidence such transfer of
rights in connection with the development in every proper way in obtaining,
at its expense, protection for all such inventions and copyrightable
materials, and will execute any and all lawful documents desired or
required by Company to achieve that end. Employee agrees to assign to
Company, his or her entire right, title and interest in and to all such
copyrightable or patentable materials, discoveries, inventions,
improvements, and developments, as well as any applications for patent or
copyright registration thereon, during and subsequent to his or her
employment.
(c) Employee shall not be obligated under or bound by Paragraph (a) or
(b) above for any copyrightable or patentable material, discovery,
invention, improvement, or development for which no equipment, supplies,
facility, or trade secret information of Company was used and which was
developed entirely on his or her own time, and which neither (1) relates
directly or indirectly to any one or more of the following fields: (i)
field emission materials and devices, (ii) diamond materials and devices,
(ii) diamond materials and devices, (iii) open discharge lamps or (iv) high
density packaging and/or interconnect technology (collectively, the
"Field"), nor (2) results from any work performed by him or her for
Company, including without limitation any information covered by the
definition of Proprietary Information in Paragraph (a) concerning the
proposed vacuum fluorescent display, light emitting diode or plasma display
business relations that the Company is endeavoring to establish relating to
the former Soviet Union. The burden of proof whether items are covered by
this Paragraph (c) shall rest with Employee.
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Employee agrees that any improvements made to inventions or revisions of
copyrightable materials, authored, conceived, developed or reduced to
practice during his or her employment or engagement as a consultant by
Company shall be the property of Company if otherwise covered by the
definition of Proprietary Information in Paragraph (a) and not otherwise
excluded under Paragraph (c), irrespective of whether original inventions,
prior improvements or prior copyrightable materials are excluded under
Paragraph (c). Any information covered by the definition of Proprietary
Information in Paragraph (a) and not excluded under Paragraph (c) that is
possessed, acquired, developed or reduced to practice by Employee within
one (1) year following termination of Employee's employment or engagement
as a consultant with Company shall be presumed to be Proprietary
Information.
(d) Employee recognizes and acknowledges that the protection of the
Proprietary Information of Company against unauthorized disclosure and use
is of critical importance to Company, and therefore Employee agrees to use
his or her best efforts and exercise utmost diligence to protect and
safeguard the Proprietary Information of Company and its affiliates, if
any, and, except as may be expressly required by Company in connection with
Employee's performance of his or her obligations to Company. Employee shall
not, either during the term of his or her employment or engagement as a
consultant with Company or for a period of five (5) years thereafter,
directly or indirectly, use for his own benefit or for the benefit of
another, or disclose to another, any of such Proprietary Information.
(e) Upon termination of employment, or at any time prior to the
expiration of five (5) years thereafter, upon request of Company, Employee
shall immediately deliver to Company all originals and all copies of any
documents (including computer files) embodying any Proprietary Information,
including all test data.
(f) The Employee represents that his employment by Company will not
conflict with any obligations which he has to any other person, firm or
entity. The Employee specifically represents that he has not brought to
Company (during the period before the signing of this Agreement) and he
will not bring to Company any materials or documents of a former or present
employer, or any confidential information or property of any other person,
firm, or entity.
(g) During the course of employment, the Employee will promptly disclose
to the directors of Company, in accordance with Company's policies, full
information concerning any interests, direct or indirect, he holds (whether
as a principal, stockholder, lender, employee, director, officer, partner,
venturer, consultant or otherwise) in any business which, as reasonably
known to the Employee, purchases or provides services or products to,
Company or any of its subsidiaries.
(h) During the course of employment or engagement as a consultant with
the Company, the Employee shall not, without disclosure to and approval of
the Company's board of directors, directly or indirectly, engage or be
interested (whether as a principal, stockholder or other owner [other than
strictly in accordance with Article I of the Employment Agreement dated to
be effective June 1, 1996 by and between Company and Employee], lender,
employee, officer, director, partner, venturer, consultant or otherwise) in
any business that is engaged directly or indirectly in the Field or in any
other business (i) in which Employee is not presently engaged and (ii) in
which Company engages during the term hereof. Such activities may be
further restricted by other agreements between the parties, including the
aforementioned Employment Agreement.
(i) For a period of two years after termination of employment or the
engagement as a consultant with the Company, the Employee shall not,
without disclosure to and approval of the Company's Board of Directors,
directly or indirectly, (i) engage or be interested (whether as a
principal, stockholder or other owner [strictly in accordance with Article
I of the Employment Agreement dated to be effective June 1, 1996 by and
between Company and Employee], lender, employee, officer, director,
partners, venturer, consultant or otherwise) in any business that is
engaged directly or indirectly in the Field or (ii) contact for any reason
any customers, vendors, suppliers or employees of the Company.
(j) If any of the provisions of this Agreement is held to be
unenforceable because of the scope, duration, or area of its applicability,
the court making such determination shall have the power to modify such
scope, duration, or area or all of them, and such provision shall then be
applicable in such modified form.
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(k) This Agreement shall not be considered to be an agreement by Company to
employ Employee.
Specific Performance: Since Company will be irreparably damaged if the
provisions of this agreement are not specifically enforced, Company shall be
entitled to an injunction restraining any violation of this agreement by the
Employee (without any bond or other security being required), or any other
appropriate decree of specific performance. Such remedies shall not be
exclusive and shall be in addition to any other remedy which Company may have.
SI DIAMOND TECHNOLOGY, INC.
/s/ Xxxxxx X. Xxxxxxx
By: _________________________________
Xxxxxx X. Xxxxxxx
Chief Executive Officer
/s/ Xxx Xxxxx
_____________________________________
Xxx Xxxxx
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