EXHIBIT 10.11
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into
effective as of September 1, 2002 (the "Effective Date"), by and between
LIQUIDMETAL TECHNOLOGIES, a California corporation (the "Company"), and Xxxx X.
Xxxxx, Xx. (the "Employee").
RECITALS
WHEREAS, the Employee desires to be employed by the Company upon the terms
and conditions set forth in this Agreement; and
WHEREAS, the Company desires to assure itself of the Employee's continued
employment in the capacities set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and for other
good and valuable consideration, the parties hereto covenant and agree as
follows:
1. EMPLOYMENT. The Company hereby employs Employee, and the Employee hereby
accepts such employment, upon the terms and conditions set forth in this
Agreement.
2. TERM. Subject to the terms and conditions of this Agreement, including,
but not limited to, the provisions for termination set forth in Section 5
hereof, the employment of the Employee under this Agreement shall commence on
the Effective Date and shall continue through the close of business on July 31,
2006, (the "Initial Term"). Upon the expiration of the Initial Term, the
Employee's employment with the Company will continue on an "at-will" basis and
may be terminated by Employee or the Company for any reason and at any time,
provided that the terminating party shall provide at least thirty (30) days
prior written notice of the termination to the other party (unless the
termination is pursuant to clause (2), (3), or (4) of Section 5(d), in which
case the Employee's employment may be terminated immediately).
3. DUTIES. Employee will serve as the Director, Governmental Relations of
the Company. In this capacity, Employee shall perform such reasonable
government-related responsibilities and duties as may be assigned to the
Employee from time to time by the Board of Directors, Chairman of the Board,
President, or Chief Executive Officer of the Company, or their designee. The
Employee will devote such time, attention, skill, and energy to the business of
the Company as shall be necessary to perform the duties assigned to him under
this Agreement, and will use the Employee's best efforts to promote the success
of the Company's business, and will cooperate fully with the Board of Directors
in the advancement of the best interests of the Company. Furthermore, the
Employee shall assume and competently perform such reasonable responsibilities
and duties as may be assigned to the Employee from time to time by the Board of
Directors, Chairman of the Board, President, or Chief Executive Officer of the
Company. To the extent that the Company shall have any parent company,
subsidiaries, affiliated corporations, partnerships, or joint ventures
(collectively "Related Entities"), the Employee shall perform such duties to
promote these entities and their respective interests to the same extent as the
interests of the Company without additional compensation. The Employee may
engage in other business activities, provided that in doing so he does not
violate any of the provisions of this Agreement
(including Sections 6 and 7 hereof); and provided further that such other
business activities do not interfere with the performance of his duties and
obligations to the Company under this Agreement. At all times, the Employee
agrees that the Employee has read and will abide by, and prospectively will read
and abide by, any employee handbook, policy, or practice that the Company or
Related Entities has or hereafter adopts with respect to its employees
generally. Employee may perform his duties of employment from any location he
selects that is mutually agreed to by the Company.
4. COMPENSATION.
(a) Annual Base Salary. As compensation for Employee's services and in
consideration for the Employee's covenants contained in this Agreement, the
Company shall pay the Employee an annual base salary rate of One Hundred Seventy
Five Thousand and No/100 Dollars ($175,000.00) from September 1 through December
31, 2002. Effective January 1, 2003, the Company shall pay the Employee an
annual base salary rate of Eighty Seven Thousand Five Hundred and No/100 Dollars
($87,500.00) Such annual base salary shall be payable in equal installments in
accordance with the policy then prevailing for the Company's salaried employees
generally, and the annual base salary shall be subject to any tax and other
withholdings or deductions required by applicable laws and regulations. The
Employee's annual base salary will be reviewed by the Board of Directors or
Chief Executive Officer of the Company not less frequently than annually, and
the annual base salary may be adjusted upward or downward, but not to an amount
less than Eighty Seven Thousand Five Hundred and No/100 Dollars ($87,500.00), in
the sole discretion of the Board of Directors or Chief Executive Officer.
(b) Bonuses. In addition to the Employee's annual base salary, during
the term of the Employee's employment hereunder, the Employee shall be entitled
to only such bonuses as may be granted to the Employee by the Board of Directors
or Chief Executive Officer of the Company, in their sole discretion. For
purposes of clarification, Employee will not be a participant in the Company's
2002 Annual Performance Bonus Program.
(c) Other Benefits. During the term of the Employee's employment
hereunder, the Employee shall be eligible to participate in such pension, life
insurance, health insurance, disability insurance and other benefits plans, if
any, which the Company may from time to time make available to similar-level
employees.
(d) Reimbursement of Expenses. The Employee shall be reimbursed for
all reasonable and customary travel and other business expenses incurred by
Employee in the performance of Employee's duties hereunder, provided that such
reimbursement shall be subject to, and in accordance with, any expense
reimbursement policies and/or expense documentation requirements of the Company
that may be in effect from time to time, and further provided that all travel
and entertainment expenses shall be pre-approved by the Company.
(e). Stock Options. The Employee shall retain the employee stock
options that he was granted prior to the Effective Date of this Agreement under
the Company's 1996 Stock Option Plan (the "Plan"), and Employee acknowledges
that such options shall continue to be governed by and subject to the terms and
conditions of the Plan, including the termination provisions set forth in
Sections 6(f), (g), and (h) of the Plan, and that such options shall also be
subject to the terms and conditions of that certain Stock Option Agreement,
dated August 1, 2001, by and between the Company and Employee.
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5. TERMINATION.
(a) Death. The Employee's employment under this Agreement shall
terminate immediately upon Employee's death. In the event of a termination
pursuant to this Section 5(a), the Employee's estate shall be entitled to
receive any unpaid base salary owing to Employee up through and including the
date of the Employee's death.
(b) Disability. If, during the term of the Employee's employment
hereunder, the Employee becomes physically or mentally disabled in accordance
with the terms and conditions of any disability policy covering the Employee or,
if due to any physical or mental condition, the Employee becomes unable for a
period of more than sixty (60) days during any six-month period to perform
Employee's duties hereunder on substantially a full-time basis as determined by
the Company in its sole discretion, the Company may, at its option, terminate
the Employee's employment upon not less than thirty (30) days written notice. In
the event of a termination pursuant to this Section 5(b), the Employee shall be
entitled to receive any unpaid base salary owing to Employee up through and
including the effective date of Termination. The benefits of short-term and
long-term disability insurance, as may be arranged for through the Company,
would continue in accordance with the provisions of said insurance plan.
(c) Termination By Company Without Cause. In addition to the other
termination provisions of this Agreement, the Company may terminate the
Employee's employment at any time without cause (a "Termination Without Cause").
In the event of a Termination Without Cause, the Employee shall be entitled to
receive severance compensation in an aggregate total amount equal to the total
base salary paid to Employee during the 24-month period immediately preceding
the effective date of the Termination Without Cause (the "Severance Amount").
The Severance Amount shall be paid in equal installments (in accordance with the
policy then prevailing for the Company's salaried employees generally) during
the 24-month period beginning on the effective date of the Termination Without
Cause. In addition, the Company shall reimburse Employee for premiums paid for
the continuation of group health care coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1986 (COBRA) for a period of up to eighteen (18)
months following the effective date of a Termination Without Cause. Employee
agrees and acknowledges, however, that Employee will forfeit the right to
receive payments of the Severance Amount and COBRA reimbursement payments during
the Severance Period immediately upon the Employee's breach of any covenant set
forth in Section 6 of this Agreement.
(d) Termination By Company With Cause. The Company may terminate the
Employee's employment at any time with Cause. As used in this Agreement, "Cause"
shall include the following: (1) the Employee's failure or inability to perform
Employee's duties under this Agreement; (2) dishonesty, misconduct, or unlawful
acts that adversely affect the Company; (3) a material violation of the
Company's policies or practices which reasonably justifies immediate
termination; (4) pleading guilty or no contest to, or conviction of, a felony or
any crime involving moral turpitude, fraud, dishonesty, or misrepresentation;
(5) the commission by the Employee of any act which could reasonably be expected
to materially injure the reputation, business, or business relationships of the
Company or Related Entities; (6) the Employee's inability to perform an
essential function of Employee's position; or (7) any material breach by
Employee of this Agreement. The Company may
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terminate this Agreement for Cause, as defined in clauses (1), (5), (6) and (7)
above, upon thirty days prior written notice (the "Cause Notification Period")
to Employee, but such termination shall only become effective in the event of
Employee's failure to cure the applicable breach or violation, to the reasonable
satisfaction of Company, prior to the end of the Cause Notification Period. The
Company may terminate this Agreement for Cause, as defined in clauses (2), (3),
and (4) above, at any time with no notice. In the event of a termination for
Cause, the Company shall be relieved of all its obligations to the Employee
provided for by this Agreement as of the effective date of termination, and all
payments to the Employee hereunder shall immediately cease and terminate as of
such date, except that Employee shall be entitled to the annual base salary
hereunder up to and including the effective date of termination. Termination for
cause or not for cause shall not, however, invalidate any stock option grants
which are fully vested as of the date of termination.
6. NONCOMPETITION, NONSOLICITATION, AND NONDISCLOSURE COVENANTS.
(a) Rationale for Restrictions. Employee acknowledges that Employee's
services hereunder are of a special, unique, and extraordinary character, and
Employee's position with the Company places Employee in a position of confidence
and trust with customers, suppliers, and other persons and entities with whom
the Company and its Related Entities have a business relationship. The Employee
further acknowledges that the rendering of services under this Agreement will
likely require the disclosure to Employee of Confidential Information (as
defined below) relating to the Company and/or Related Entities. As a
consequence, the Employee agrees that it is reasonable and necessary for the
protection of the goodwill and legitimate business interests of the Company and
Related Entities that the Employee make the covenants contained in this Section
6, that such covenants are a material inducement for the Company to employ the
Employee and to enter into this Agreement, and that the covenants are given as
an integral part of and incident to this Agreement.
(b) Noncompetition and Nonsolicitation Covenants. As used herein, the
term "Restrictive Period" means the time period commencing on the Effective Date
of this Agreement and ending on the second (2nd) anniversary of the date on
which the Employee's employment by the Company (or any Related Entity) expires
or is terminated. The Employee agrees that, during the Restrictive Period, the
Employee will not utilize his or her knowledge of the business of the Company or
his or her relationships with investors, suppliers, customers, clients, or
financial institutions to compete with the Company or any of the Related
Entities in any business which is the same as, or similar to, any business
conducted by the Company or any of the Related Entities at any time during the
Restrictive Period (a "Covered Business"). Additionally, the Employee agrees
that the Employee will not engage in any of the following acts anywhere in the
world during the Restrictive Period:
(i) directly or indirectly engage or invest in; own, manage, operate,
finance, control, or participate in the ownership, management,
operation, financing, or control of; be employed by, associated
with, or in any manner connected with; lend the Employee's name
or any similar name to; lend Employee's credit to; or render
services or advice to, any business which competes with, is
engaged in, or carries on any aspect of a Covered Business;
(ii) directly or indirectly assist, promote or encourage any existing
or potential employees, customers, clients, or vendors of the
Company or any Related Entity, as well as any other parties which
have a business relationship with the
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Company or a Related Entity, to terminate, discontinue, or
reduce the extent of their relationship with the Company or a
Related Entity;
(iii) directly or indirectly solicit business of the same or similar
type as a Covered Business, from any person or entity known by
the Employee to be a customer or client of the Company, whether
or not the Employee had contact with such person or entity
during the Employee's employment with the Company;
(iv) disparage the Company, any Related Entities, and/or any
shareholder, director, officer, employee, or agent of the
Company or any Related Entity; and/or
(v) engage in any practice the purpose of which is to evade the
provisions of this Section 6 or commit any act which adversely
affects the Company, any Related Entity, or their respective
businesses.
The Employee acknowledges and agrees that, in light of the unique nature of the
Company's business, the Company will market its products on a worldwide basis
and will compete with various companies and businesses across and world.
Accordingly, the Employee agrees that the geographic scope of the above
covenants is a reasonable means of protecting the Company's (and the Related
Entities') legitimate business interests. Notwithstanding the foregoing
covenants, nothing set forth in this Agreement shall prohibit the Employee from
owning the securities of (i) corporations which are listed on a national
securities exchange or traded in the national over-the-counter market in an
amount which shall not exceed 5% of the outstanding shares of any such
corporation or (ii) any corporation, partnership, firm or other form of business
organization which does not compete with, is not engaged in, and does not carry
on any aspect of, either directly or indirectly through a subsidiary or
otherwise, any Covered Business.
(c) Disclosure of Confidential Information. The Employee acknowledges
that the inventions, innovations, software, trade secrets, business plans,
financial strategies, finances, and all other confidential or proprietary
information with respect to the business and operations of the Company and
Related Entities are valuable, special, and unique assets of the Company.
Accordingly, the Employee agrees not to, at any time whatsoever either during or
after the Employee's term of employment with the Company, disclose, directly or
indirectly, to any person or entity, or use or authorize any person or entity to
use, any confidential or proprietary information with respect to the Company or
Related Entities without the prior written consent of the Company, including,
without limitation, information as to the financial condition, results of
operations, identities of clients or prospective clients, products under
development, acquisition strategies or acquisitions under consideration, pricing
or cost information, marketing strategies or any other information relating to
the Company or any of the Related Entities which could be reasonably regarded as
confidential (collectively referred to as "Confidential Information"). However,
the term "Confidential Information" does not include any information which is or
shall become generally available to the public other than as a result of
disclosure by the Employee or by any person or entity which the Employee knows
(or which the Employee reasonably should know) has a duty of confidentiality to
the Company or a Related Entity with respect to such information. In addition to
the foregoing, Company will be fully entitled to all of the protections and
benefits afforded by the Florida Uniform Trade Secrets Act and other applicable
law.
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(d) Prevention of Premature Disclosure of Information. The Employee
agrees and acknowledges that, because the success of the Company is heavily
dependent upon maintaining the secrecy of the Company's Confidential Information
and preventing the premature public disclosure of the Company's proprietary
information and technology, the Employee agrees to use the Employee's best
efforts and his or her highest degree of care, diligence, and prudence to ensure
that no Confidential Information prematurely leaks or otherwise prematurely
makes its way into the public domain or any public forum, including, without
limitation, into any trade publications, internet chat rooms, or other similar
forums. In the event that the Employee becomes aware of any premature leak of
Confidential Information or becomes aware of any circumstances creating a risk
of such a leak, the Employee shall immediately inform the Board of Directors,
the Chief Executive Officer, or the Employee's supervisor of such leak or of
such circumstances.
(e) Removal and Return of Proprietary Items. The Employee will not
remove from the Company's premises or any other mutually agreed upon work
location (except to the extent such removal is for purposes of the performance
of the Employee's duties at home or while traveling, or except as otherwise
specifically authorized by the Company) any document, record, notebook, plan,
model, component, device, or computer software or code, whether embodied in a
disk or in any other form (collectively, the "Proprietary Items"). The Employee
recognizes that, as between the Company and the Employee, all of the Proprietary
Items, whether or not developed by the Employee, are the exclusive property of
the Company. Upon termination of Employee's employment with the Company by
either party (regardless of the reason for termination), or upon the request of
the Company during the term of employment, the Employee will return to the
Company all of the Proprietary Items in the Employee's possession or subject to
the Employee's control, and the Employee shall not retain any copies, abstracts,
sketches, or other physical embodiment of any of the Proprietary Items.
(f) Enforcement and Remedies. In the event of any breach of any of the
covenants set forth in this Section 6, the Employee recognizes that the remedies
at law will be inadequate and that in addition to any relief at law which may be
available to the Company for such violation or breach and regardless of any
other provision contained in this Agreement, the Company shall be entitled to
equitable remedies (including an injunction) and such other relief as a court
may grant after considering the intent of this Section 6. Additionally, the
period of time applicable to any covenant set forth in this Section 6 will be
extended by the duration of any violation by Employee of such covenant. In the
event a court of competent jurisdiction determines that any of the covenants set
forth in this Section 6 are excessively broad as to duration, geographic scope,
prohibited activities or otherwise, the parties agree that this covenant shall
be reduced or curtailed to the extent, but only to the extent, necessary to
render it enforceable.
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7. EMPLOYEE INVENTIONS.
(a) Definition. For purposes of this Agreement, "Employee Invention"
means any idea, invention, technique, modification, process, or improvement
(whether patentable or not), any industrial design (whether registerable or
not), any mask work, however fixed or encoded, that is suitable to be fixed,
embedded or programmed in a semiconductor product (whether recordable or not),
and any work of authorship (whether or not copyright protection may be obtained
for it) created, conceived, or developed by the Employee, either solely or in
conjunction with others, during the Employee's employment with the Company or
during the twenty four (24) month period following such employment, that relates
in any way to, or is useful in any manner in, the businesses then being
conducted or proposed to be conducted by the Company or any Related Entity.
(b) Ownership of Employee Inventions. Employee agrees and acknowledges
that all Employee Inventions will belong exclusively to the Company and that all
Employee Inventions are works made for hire and the property of the Company,
including any copyrights, patents, semiconductor mask protection, or other
intellectual property rights pertaining thereto. If it is determined that any
such works are not works made for hire, the Employee hereby assigns to the
Company all of the Company's right, title, and interest, including all rights of
copyright, patent, semiconductor mask protection, and other intellectual
property rights, to or in such Employee Inventions. The Employee covenants that
the Employee will promptly:
(i) disclose to the Company in writing any Employee Invention;
(ii) assign to the Company or to a party designated by the Company,
at the Company's request and without additional compensation,
all of the Employee's right to the Employee Invention for the
United States and all foreign jurisdictions;
(iii) execute and deliver to the Company such applications,
assignments, and other documents as the Company may request in
order to apply for and obtain patents or other registrations
with respect to any Employee Invention in the United States and
any foreign jurisdictions;
(iv) sign all other papers necessary to carry out the above
obligations; and
(v) give testimony and render any other assistance in support of the
Company's rights to any Employee Invention.
8. ESSENTIAL AND INDEPENDENT COVENANTS. The Employee's covenants in
Sections 6 and 7 of this Agreement are independent covenants, and the existence
of any claim by the Employee against the Company under this Agreement or
otherwise will not excuse the Employee's breach of any covenant in Section 6 or
7.
9. REPRESENTATIONS AND WARRANTIES BY THE EMPLOYEE. The Employee represents
and warrants to the Company that the execution and delivery by the Employee of
this Agreement do not, and the performance by the Employee of the Employee's
obligations hereunder will not, with or without the giving of notice or the
passage of time, or both: (a) violate any judgment, writ, injunction, or order
of any court, arbitrator, or governmental agency applicable to the Employee, or
(b) conflict
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with, result in the breach of any provisions of or the termination of, or
constitute a default under, any agreement to which the Employee is a party or by
which the Employee is or may be bound, including, without limitation, any
noncompetition agreement or similar agreement.
10. NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when hand-delivered, sent by facsimile transmission (as
long as receipt is acknowledged), or mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed to the
address or facsimile number for each party set forth on the signature page
hereto, or to such other address or facsimile number as either party may have
furnished to the other in writing in accordance herewith, except that a notice
of change of address shall be effective only upon receipt.
11. MISCELLANEOUS. No provision of this Agreement may be modified or waived
unless such waiver or modification is agreed to in writing signed by both of the
parties hereto. No waiver by any party hereto of any breach by any other party
hereto shall be deemed a waiver of any similar or dissimilar term or condition
at the same or at any prior or subsequent time. This Agreement is the entire
agreement between the parties hereto with respect to the Employee's employment
by the Company, and there are no agreements or representations, oral or
otherwise, expressed or implied, with respect to or related to the employment of
the Employee which are not set forth in this Agreement. This Agreement shall be
binding upon, and inure to the benefit of, the Company, its respective
successors and assigns, and the Employee and Employee's heirs, executors,
administrators and legal representatives. The duties and covenants of the
Employee under this Agreement, being personal, may not be delegated or assigned
by the Employee without the prior written consent of the Company, and any
attempted delegation or assignment without such prior written consent shall be
null and void and without legal effect. The parties agree that if any provision
of this Agreement shall under any circumstances be deemed invalid or
inoperative, the Agreement shall be construed with the invalid or inoperative
provision deleted and the rights and obligations of the parties shall be
construed and enforced accordingly.
12. GOVERNING LAW; RESOLUTION OF DISPUTES. The validity, interpretation,
construction, and performance of this Agreement shall be governed by the laws of
the State of Florida without regard to principles of choice of law or conflicts
of law thereunder. Any action or proceeding seeking to enforce any provision of,
or based on any right arising out of, this Agreement may be brought against
either of the parties in the courts of the State of Florida, County of
Hillsborough, or, if it has or can acquire jurisdiction, in the United States
District Court located in Hillsborough County, Florida, and each of the parties
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein. Process in any action or proceeding referred to in the preceding
sentence may be served on either party anywhere in the world. THE PARTIES HEREBY
WAIVE A JURY TRIAL IN ANY LITIGATION ARISING UNDER OR RELATING TO THIS
AGREEMENT.
13. COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may
be effective upon the execution and delivery by any party hereto of facsimile
copies of signature pages hereto duly executed by such party; provided, however,
that any party delivering a facsimile signature page covenants and agrees to
deliver promptly after the date hereof two (2) original copies to the other
party hereto.
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14. TERMINATION OF PRIOR EMPLOYMENT AGREEMENT. The Employee and the Company
agree and acknowledge that this Employment Agreement supercedes and replaces
that certain Employment Agreement, dated August 1, 2001, between the Employee
and the Company (the "Prior Employment Agreement"). Accordingly, the Employee
and the Company agree and acknowledge that the Prior Employment Agreement is
terminated as of the Effective Date and that neither Employee neither the
Company shall have any further rights, obligations, or duties thereunder as of
the Effective Date. Employee further agrees and acknowledges that he has
received all salary, bonus, and other amounts or compensation due or payable to
Employee under the Prior Employment Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
LIQUIDMETAL TECHNOLOGIES
By: /s/ Xxxx Xxxx
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Xxxx Xxxx, President and CEO
Liquidmetal Technologies
000 X. Xxxxx Xxxxxx Xxxxx 0000
Xxxxx, XX 00000
Facsimile Number: [000-000-0000]
EMPLOYEE
By: /s/ Xxxx X. Xxxxx, Xx.
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Printed Name: Xxxx X. Xxxxx, Xx.
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Address and Facsimile Number:
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