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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") dated as of December 16, 1997,
between WANDERLUST INTERACTIVE, INC., a Delaware corporation with its principal
place of business in the United States at 0000 Xxxxxxxxx Xxxxxx, Xxx Xxxxxxx,
XX 00000 (herein called the "Company") and Xxx Xxxxx III (herein called the
"Employee") residing at 000 Xxxxxx Xxxxxx, Xxx Xxxxxxx, XX 00000.
1. EMPLOYMENT. The company hereby employs Employee as the Company's
President and Chief Executive Officer reporting to the Company's Board of
Directors. Employee will be responsible for management and supervision of the
Company's operations for the term of this Agreement, and the Employee hereby
accepts such employment upon the terms and conditions hereinafter set forth.
2. TERM. The term of this Agreement shall commence as of November 1,
1997 (the "Employment Date") and shall continue in effect for a term of 36
months, unless previously terminated in accordance with the provisions of
Section 6 of this Agreement. Thereafter, this Agreement shall be automatically
renewed on a year-to-year basis unless either party shall provide the other
with notice in writing of the termination of this Agreement at least 60 days'
prior to the expiration of this Agreement at the end of its original term or
any renewal thereof. For purposes of this Agreement, the "term of this
Agreement" shall refer to the initial term and all renewal terms thereof. In
the event of termination by the Company prior to the expiration of this
Agreement at the end of its original term or any renewal thereof, the Company
shall pay the Employee severance pay and benefits required by Section 6(e) of
this Agreement unless termination by the Company is for a reason specified in
Sections 6(a), 6(b) or 6(c) hereunder.
3. COMPENSATION. For all services rendered by the Employee under this
Agreement, the Company shall pay the Employee a salary and fringe benefits as
follows;
(a) Cash Compensation: The company shall pay the Employee a base
salary during the term of this Agreement, payable monthly, at the rate
of $150,000 per year per annum. Employee will be eligible to receive
a fiscal annual performance bonus of up to 50% of base salary based
upon achievement of reasonable and achievable Company goals as
determined and approved in good faith by the Board of Directors to be
paid no later than 90 days from end of such year. Employee shall be
eligible for annual performance appraisal and merit increase. Company
may, but is not obligated to, increase Employee's salary as Company
deems appropriate.
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(b) Stock Options: The Company shall grant the Employee Stock
Options to purchase 700,000 common shares of the Company at $0.62 per
share (110% of the closing bid price of $0.5625 per share as of
December 15, 1997) which shall vest in equal quarterly increments over
a period of 12 quarters from the Employment Date as set forth in the
Stock Option Agreement.
(c) Medical, Insurance, and Other Benefits: The Employee shall at
his option be entitled to participate with other employees of the
Company in all group fringe benefit plans or other group arrangements
authorized and adopted from time to time. Employee shall also receive
such other benefits including vacation, holidays, and sick leave, as
Company generally provides to its employees holding similar positions
as that of Employee.
(d) Expenses: The Company shall either pay directly or reimburse
Employee for reasonable travel, entertainment and other business
expenses incurred by Employee in the performance of his duties
hereunder; provided that the incurring of such expenses shall be
subject to such policies as shall be established by the Board of
Directors of the Company from time to time, and Employee shall submit
to the Company such documentation to substantiate such expenses as the
Company shall reasonably request.
Nothing herein shall be deemed to preclude the Company from awarding additional
compensation or benefits to Employee during the term of this Agreement, upon
approval of Company's Board of Directors, whether in the form of raises,
bonuses, additional fringe benefits, or otherwise.
4. DUTIES. During the term of this Agreement, the Employee hereby
promises to perform and discharge faithfully the duties which may be assigned
to him from time to time by the Board of Directors in connection with the
conduct of its business so long as such duties are reasonably related to the
Employee's duties President and Chief Executive Officer of the Company.
Employee will be responsible for all domestic and foreign operations of the
Company and will have all relevant executives and their respective subordinates
report to him. Employee is employed to actively serve on a full-time basis as
an executive officer of the Company and will serve as a member of the Company's
Board of Directors.
5. EXTENT OF SERVICES; OTHER INTERESTS. During the term of this
Agreement, the Employee shall devote all of his working time, attention and
energies which is reasonably required for the performance of his duties and the
business of the Company and shall travel as reasonably required to discharge
the duties of his position with the Company as assigned by its Board of
Directors. The Employee shall not during the term of this Agreement be engaged
in any other business activities that are, or could potentially be, in
competition with the business activities of the Company whether or not such
business activities are pursued for gain, profit or other pecuniary
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advantage. Subject to the foregoing, the Employee may engage in investment,
business, professional and continuing education activities so long as such
activities do not substantially interfere with the performance of his duties as
the President and Chief Executive Officer of the Company.
6. TERMINATION. Payment of severance described in this Section 6 shall be paid
no later than ten (10) days after becoming due.
(a) Death: In the event of Employee's death during the term hereof,
this Agreement shall terminate immediately and, except as expressly
set forth in this paragraph, the Company shall have no further
liability hereunder to Employee or his estate. The Company shall
continue to pay to Employee's estate his salary and continued stock
option vesting for a period of one (1) months from and after the date
of death during the term of this Agreement.
(b) Permanent Disability. In the event that Employee becomes totally
disabled during the term hereof and such total disability continues
for a period in excess of ninety (90) days, whether consecutive or in
the aggregate during any 12 month period, at the end of such period of
disability the Employee shall be considered as permanently disabled
and this Agreement shall terminate immediately and, except as
expressly set forth in this paragraph, the Company shall have no
further liability hereunder to Employee. The company shall continue
to pay to Employee his salary and continue stock option vesting for
the period of disability and a period of two (2) months from and after
the date of total disability commencing with the expiration of the
first 90 day period of such disability as severance pay hereunder.
Employee shall be considered as totally disabled if, and when because
of injury, illness or physical or mental disability, he is prevented
from effectively performing the duties of his employment. The
determination of total disability shall be made by the Board of
Directors of the Company, but said decision shall not be unreasonable
or arbitrary and shall be supported by the opinion (at the Company's
expense) of at least one licensed physician unless Employee shall
without justification fail to submit to the necessary physical or
mental examination. It is understood that Employee's occasional
sickness of short duration shall not result in Employee being
considered totally disabled, and Employee shall continue to be
compensated hereunder during such periods of occasional sickness so
long as they shall not exceed twelve (12) days in a calendar year.
(c) Involuntary Termination for Cause. The Company may terminate this
Agreement for cause. For the purposes of this Agreement, a
termination for "cause" shall mean a termination resulting from a good
faith and reasonable determination by the Company's Board of Directors
that Employee (i) has committed a
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felony or act of moral turpitude which would materially injure the
Company or its reputation or, (ii) has intentionally or willfully and
repeatedly breached his duties hereunder in a material respect and, if
curable, has failed to cure the same within thirty (30) days after
receiving written notice of such breach from the Board of the Company.
Such notice must be given to Employee following each claimed breach,
whether or not curable. In the event of termination for cause, the
Company shall have no further liability hereunder to Employee from and
after the date of such termination.
(d) Termination Without Cause. Termination of Employee for any reason
other than in paragraphs 6(a), 6(b), and 6(c) hereof shall be
considered Termination Without Cause. In addition, Employee's
resignation from the employ of the Company shall be deemed Termination
Without Cause ("Constructive Discharge") if resulting from: 1) a
reduction of more than 25% of monthly base salary in cash compensation
(excluding performance bonuses) or other benefits other than as a
result of a decrease in compensation payable to Employee and to all
other executive officers of Company on the basis of Company's
financial performance; 2) a chance in reporting relationship t the
Company's Board of Directors or a significant reduction in the nature
or scope of Employee's responsibilities, authorities, powers,
functions or duties as a President and Chief Executive Officer of the
Company; 3) a requirement imposed by the Company that Employee
relocate to an office that is more than 25 miles from the Company's
current headquarters; 4) failure of Company materially to perform its
obligations pursuant to this Agreement. If Employee continues his
employment with the Company after a Constructive Discharge event
occurs, that continuation shall not constitute a waive of Employee's
rights to treat such event as an event of Termination Without Cause
unless (i) his employment under adjusted terms of employment after
the Constructive Discharge Event shall continue for more than 90 days
after such Constructive Discharge Event or (ii) his employment is
subsequently terminated for cause under paragraph 6(c) above.
(e) Salary and Benefit Continuation Upon Termination Without Cause.
Upon the termination of Employee's employment with the Company for any
reason whatsoever prior to the expiration of the original term of any
annual renewal of the term of this Agreement, except for (i)
termination upon death as set forth in paragraph 6(a) hereof; (ii)
termination upon permanent disability as set forth in paragraph 6(b)
hereof; (iii) termination for cause pursuant to paragraph 6(c) hereof;
or (iv) Employee's voluntarily electing not to continue in the
employment of the Company under conditions other than Constructive
Discharge; then the Company within thirty (30) days after such
termination, and in lieu of all other obligations of the Company
hereunder, shall: 1) pay to Employee a lump-sum payment equal to his
then base salary for a period equal to twelve (12) months; 2) will
provide Employee, at Company's cost, with employment benefits
consisting of life, health, dental and long-term disability insurance
for a
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period of 12 months after termination; 3) enter into a
Post-termination Consulting Agreement as defined below in paragraph
6(f) hereof; and 4) will grant Employee an exclusive 120-day option to
purchase Western Technologies, Inc., a subsidiary of the Company, for
net book value. Thereafter, any continuation of benefits under the
Consolidated Omnibus Budget Reconciliation Act (COBRA) will be at
Employee's cost.
(f) Post-termination Consulting Agreement. Upon the Termination
Without Cause, Employee will hold himself available to provide
consulting services to the Company for a period terminating one year
after the Termination Date (the "Consulting Period"). Employee will
provide the consulting services only upon the request of the Company's
Chief Executive Officer and for no more than ten hours per week (any
period shorter than one week will include a proportionate number of
hours) at such times and places as are mutually convenient to Employee
and the Company. However, Employee will perform those services at
times and places that do not reasonably conflict with his
responsibilities to his then current employer. Employee will perform
services as an independent contractor with the customary and usual
independence associated therewith, and he will not be deemed an
employee or agent of the Company or have the authority to bind, or to
enter into any contact on behalf of, the Company, unless expressly
authorized in writing to do so. The Company will pay Employee a
consulting fee of $150.00 per hour for each hour actually worked at
the Company's request. The Company's Board of Directors has
determined that Employee will be providing "substantial services" to
the Company during the Consulting Period such that any option held by
Employee on the Termination Date, if not fully vested at the time,
will continue to vest during the Consulting Period according to its
terms. Any option held by Employee at the Termination Date will
remain exercisable for the current term of the option during the
Consulting Period even though the employment of Employee will
terminate on the Termination Date.
7. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Employee recognizes and
acknowledges that the Company's trade secrets and proprietary processes as they
may exist from time to time are valuable, special and unique assets of the
Company's business, access to and knowledge of which are essential to the
performance of the Employee's duties hereunder. The Employee will not during or
after the term of his employment, disclose such secrets or processes to any
perform, firm, corporation, association, or other entity for any reason or
purpose whatever, nor shall the Employee make use of any such secrets or
processes for his own purposes or for the benefit of any person, firm,
corporation, or other entity (except the Company) under any circumstances during
or after the term of his Employment; provided that after the term of his
employment these restrictions shall not apply to such secrets and processes
which are then, or from time to time thereafter, in the public domain (provided
that he was not responsible, directly or indirectly, for permitting such secrets
or processes to enter the public domain without the Company's consent).
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8. COVENANT NO TO COMPETE OR INTERFERE. With the exception of activities
associated with the purchase and subsequent operation of Western Technologies,
Inc., Employee agrees that during the term of this Agreement or for a period of
one (1) year after the date of Termination under this Agreement, whichever
occurs first; (a) Employee shall not intentionally interfere with, disrupt or
attempt to disrupt the relationship, contractual or otherwise between the
Company and any customer, supplier, lessor or employee of the Company or any of
its subsidiaries and (b) Employee shall not as a sole proprietor or otherwise
for his own account or as a partner, employee, officer, director, manager,
agent, distributor, consultant, marketing representative, associate, investor or
otherwise (except as to a less than 5% interest in a public company listed on
the NASDAQ, a national, or a regional exchange), directly or indirectly, own,
purchase, organize or take preparatory steps for the organization of, finance,
work for, provide services to, advise, acquire, lease, operate, manage or invest
in or permit his name to be used or employed in connection with any business
which engages in providing equipment and/or support services for correct eye
surgery in competition with the Company (the "Business"). Employee further
agrees that the covenants and other provisions of this paragraph shall cover his
activities in the whole of North America, Europe and Asia (the "Territory").
The parties hereto agree that the covenants contained in this paragraph (b)
shall be construed as if the covenants are divided into separate and distinct
covenants in respect of each of the products and services of the Business, each
capacity in which the party is prohibited from competing, and each part of the
world in which such competition is prohibited from taking place. The
territorial restrictions contained in this paragraph (b) are properly required
for the adequate protection of the Business and in the event any covenant or
other provision contained in this paragraph (b) shall be deemed to be illegal,
unenforceable, or unreasonable by a court or other tribunal of competent
jurisdiction. With respect to any part of the Territory or otherwise, such
covenant or provision shall not be affected with respect to any other part of
the Territory or otherwise, and each of the parties hereto agrees and submits to
the reduction of said territorial restriction or other provisions to such an
area or otherwise, as said court shall deem reasonable. The parties further
agree that if any provision of this Agreement is found to be unenforceable, it
shall not affect the enforceability of the remaining provisions and the court
shall enforce all remaining provisions to the extent permitted by law.
9. INVENTIONS. The Employee hereby sells, transfers, and assigns to the
Company, or to any person or entity designated by the Company, at the entire
rights, title and interest of the Employee in and to all inventions, ideas,
disclosure, and improvements, whether patented or unpatented, and copyrightable
material made or conceived by the Employee, solely or jointly during the term
hereof which relate to methods, apparatus, formulae, designs, products,
processes or devices, sold, leased, used, or under consideration or development
by the Company, or which otherwise relate to or pertain to the business,
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functions, or operations of the Company. The Employee agrees to communicate
promptly and to disclose to the Company, in such form as the Employee may be
required to do so, all information, details, and data pertaining to the
aforementioned inventions, ideas, disclosure, and improvements and to execute
and deliver to the Company such formal transfers and assignments and such other
papers and documents as may be required of the Employee to permit the Company
or any person or entity designated by the Company to file and prosecute the
patent applications and, as to copyrightable material, to obtain copyright
thereof.
For the purposes of this Agreement, an invention shall be deemed to have been
made during the term of Employee's employment if, during such period, the
invention was conceived or first actually reduced to practice by the Company,
and Employee agrees that any patent application filed within one (1) year after
termination of this employment shall be presumed to relate to an invention
which was made during the term of Employee's employment unless Employee can
provide satisfactory evidence to the contrary. covenants
10. INJUNCTIVE RELIEF. The parties hereto acknowledge that (a) the covenants
and restrictions set forth in Sections 8, 9 and 10 of this Agreement are
necessary, fundamental and required for the protection of the business of the
Company, (b) such and restrictions are material inducements to investors to
enter into agreements to invest in the Company, and (c) a breach of any such
covenants and restrictions by Empo9yee will result in irreparable harm and
damages to the Company which cannot be adequate compensated by a monetary
award. Accordingly, in the event of breach or threatened breach of such
provisions by Employee, Employee expressly agrees that the Company shall be
entitled to the immediate remedy of a temporary restraining order, preliminary
injunction or such other form of injunctive or equitable relief as may be used
by any court of competent jurisdiction to restrain or enjoin the Employee from
breaching any such covenant or provisions or to specifically enforce the
provisions hereof. Nothing herein shall be construed as prohibiting the
Company from pursuing any other remedies for such breach or threatened breach.
11. INSURANCE. The Company, at its election and for its benefit, may insure
the Employee against accidental loss or death and the Employee shall submit to
such physical examination and supply such information as may be required in
connection therewith.
12. NOTICES. Any notice required or permitted to be given under this Agreement
shall be sufficient if in writing and if sent by registered or certified mail
to his last known residence in the case of the Employee or to its last known
principal office in the case of the Company.
13. WAIVER OF BREACH. The waiver by either party of a breach of any provision
of this Agreement shall not operate or be construed by a waiver of any
subsequent breach.
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14. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
15. ASSIGNMENT. The rights and obligations of the parties under this Agreement
shall insure to the benefit of and shall be binding upon the successors of such
parties.
16. ENTIRE AGREEMENT. This instrument contains the entire agreement of the
parties and supersedes all existing agreements between them. It may not be
changed orally but only by an agreement in writing signed by the party against
whom enforcement of any waiver, modification, extension or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
first written above.
EMPLOYEE: _______________________________________
Xxx Xxxxx III
COMPANY Wanderlust Interactive, Inc.
By:____________________________________
Xxxxxx X. Xxxxxxx
Chairman, Compensation Committee
of the Board
