EXECUTIVE EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made as of this 5th day of
June, 1998 by and between Photomatrix, Inc., a California corporation
("Photomatrix" or the "Company"), and Xxxxxxx X. Xxxxx, an individual ("Xx.
Xxxxx").
The parties agree as follows:
1. Position and Duties. Effective June 5, 1998, Xx. Xxxxx shall be
appointed the Chief Executive Officer of Photomatrix and a member of its Board
of Directors. During the Term, Xx. Xxxxx shall have such responsibilities,
duties and authority as are reasonably accorded to and expected of a chief
executive officer and as may from time to time be prescribed by or pursuant to
the Company's Bylaws.
2. Term of Employment. The term of Xx. Xxxxx'x employment (the "Term")
shall commence on the date set forth above and shall continue until June 5,
1999, unless further extended or sooner terminated as hereinafter provided.
3. Compensation and Benefits. During the Term, Photomatrix shall pay or
provide to Xx. Xxxxx the following compensation and benefits:
a. Salary. Photomatrix shall pay to Xx. Xxxxx a base salary
("Base Salary") of no less than $125,000 per year, payable bi-weekly.
b. Performance Review and Bonus. The Board of Directors shall
review Xx. Xxxxx'x performance as often as the Board of Directors deems
appropriate, but not less than once every twelve months. In connection with each
such annual review, the Board of Directors shall consider whether to award him
bonus compensation, in addition to the Base Salary, based on his performance
during the preceding year. Whether a bonus is awarded and the amount of any
bonus shall be in the sole discretion of the Board of Directors.
c. Stock Option. On the date of this Agreement, and on each
anniversary of such date for the remainder of the Term, Photomatrix shall grant
to Xx. Xxxxx an option to acquire such number of shares of common stock of
Photomatrix equal to the quotient of $75,000 divided by 120% of the fair market
value of the stock on the date of the grant, except with regard to the first
grant as to which the exercise price will be 120% of the fair market value of
the stock on March 16, 1998 (the date of that certain Agreement and Plan of
Merger and Reorganization by and among the Company, Photomatrix Acquisition,
Inc., and I-PAC Manufacturing, Inc.).
(1) The exercise price per share shall be twenty percent
(20%) above the fair market value of the stock on the date of the grant.
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(2) The option shall be exercisable as of the date of the
grant.
(3) The option shall have other terms and conditions the
same as those contained in agreements entered into pursuant to the Company's
1998 Stock Option Plan ("1998 Plan") and as are not inconsistent with the
foregoing provisions.
d. Automobile. An automobile allowance of $500 per month,
beginning with acquisition of the automobile, shall be provided to Xx. Xxxxx.
Expenses related to the use of such automobile, whether or not in the course of
Company business, shall be the sole responsibility of Xx. Xxxxx; provided,
however, a car phone shall be provided to Xx. Xxxxx and he shall be reimbursed
upon substantiation in accordance with Photomatrix policy for variable costs
incurred in connection with use of the car phone on Company business.
e. Vacation and Sick Leave. Xx. Xxxxx shall be entitled to
paid vacation and to all paid holidays and personal days afforded by the Company
from time to time to its executives generally.
f. Services Furnished. Photomatrix shall furnish Xx. Xxxxx
with office space, stenographic assistance and such other facilities and
administrative support as shall be necessary and suitable to Xx. Xxxxx'x
position and adequate for the performance of his duties under this Agreement.
g. Other Benefits. Xx. Xxxxx shall be entitled to participate
in all employee benefit plans and arrangements, (including the reimbursement of
expenses incurred in the course of carrying out duties as an executive or
employee) made available by the Company from time to time during the Term to the
Company's executives or employees generally, subject to and on a basis
consistent with the terms, conditions and overall administration of such plans
and arrangements.
h. Withholding. Photomatrix is authorized to withhold from any
compensation or other amounts as may be owed by Photomatrix to Xx. Xxxxx from
time to time such amounts as Photomatrix is required by law so to withhold or
which at the time payment by Photomatrix is required Xx. Xxxxx owes to
Photomatrix.
4. Termination. The Term shall cease only under the following
circumstances:
a. Death or Disability. The Term shall automatically terminate
upon the disability (unless otherwise agreed in writing by Photomatrix and Xx.
Xxxxx) and upon the death of Xx. Xxxxx. Disability shall mean a physical or
mental disability of Xx. Xxxxx which is reasonably likely to continue for a
period of at least thirty days and which would prevent him from performing his
duties under this Agreement in all substantial respects during such period.
b. Termination By Photomatrix Without Cause. Photomatrix shall
be entitled to terminate Xx. Xxxxx'x employment under this Agreement without
cause; provided, however,
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Photomatrix shall continue to pay the Base Salary and health insurance costs to
Xx. Xxxxx during the remainder of the Term. A termination of employment without
cause under this Agreement shall not constitute a termination of employment for
purposes of any stock option plan or stock option agreement in which Xx. Xxxxx
is a participant or to which he is a party; and, therefore, a termination of
employment without cause under this Agreement shall not affect in any way the
vesting or exercisability of any options which have been granted to Xx. Xxxxx,
except that, upon a termination of employment without cause, any options granted
to Xx. Xxxxx which have not vested shall immediately vest and become fully
exercisable and all of Xx. Xxxxx'x options shall remain exercisable until ninety
days following the expiration of the stated term of this Agreement.
c. Termination By Photomatrix With Cause. Photomatrix shall be
entitled to terminate Xx. Xxxxx'x employment under this Agreement for cause, in
which case neither Base Salary nor other compensation or benefits shall be
payable to Xx. Xxxxx after such termination. "Cause" means (i) gross negligence
in the performance or nonperformance of any material responsibilities to
Photomatrix; (ii) the commission of any material criminal act or fraud with
respect to the Company or which may affect adversely the reputation of the
Company; (iii) dishonesty; (iv) gross misconduct; (v) breach of the Agreement of
Confidentiality between Photomatrix and Xx. Xxxxx in the form attached hereto as
Exhibit "A"; or (vi) violation of a material condition of employment by the
Company if such violation continues for ten days after notice by Photomatrix to
Xx. Xxxxx specifying the violation. The fact Photomatrix may not terminate such
employment when it has cause shall not constitute waiver of Photomatrix's rights
to terminate Xx. Xxxxx at a later time pursuant to this Agreement.
d. Termination By Xx. Xxxxx. Xx. Xxxxx shall be entitled to
terminate his employment under this Agreement at any time upon 30 days' prior
written notice to Photomatrix, in which event Photomatrix shall have no further
obligations under this Agreement.
5. Confidentiality, Exclusivity, and Prohibition Against Solicitation
of Employees. At the time this Agreement is signed, Xx. Xxxxx also shall execute
an Agreement of Confidentiality in the form of Exhibit "A" and such other
documents and instruments as Photomatrix requires new executives and employees
generally to execute.
6. Miscellaneous.
a. Arbitration. Any dispute or controversy between the parties
hereto involving the construction or application of any terms, covenants or
conditions of this Agreement, or any claim arising out of or relating to this
Agreement, or any claim arising out of or relating to Xx. Xxxxx'x employment by
Photomatrix that is not resolved by the parties within ten (10) days of oral or
written notice of the claim or dispute by one party to the other shall be
settled by arbitration in San Diego, California in accordance with the rules of
the American Arbitration Association then in effect, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof. Photomatrix and Xx. Xxxxx agree that the arbitrators shall have no
authority to award punitive or exemplary damages. Any decision of the
arbitrators shall be final and binding upon the
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parties. Either party may request that the arbitrators submit written findings
of fact and conclusions of law.
b. Amendment. This agreement shall not be released,
discharged, changed or modified in any manner, except by an instrument signed by
the party or parties to be bound.
c. Controlling Law. This Agreement shall be controlled and
interpreted pursuant to California law (excluding choice or conflict of law
provisions).
d. Entire Agreement. This Agreement contains the entire
agreement and understanding between the parties as to the subject matter hereof,
and supersedes all contemporaneous agreements (whether written or oral) and
commitments in respect thereto.
e. Notices. Any notices required or permitted to be sent under
this Agreement shall be delivered by hand or mailed by United States registered
or certified mail, return receipt requested, and addressed as follows:
If to Photomatrix:
Photomatrix, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxx
with a copy to:
Xxxx, Forward, Xxxxxxxx & Scripps LLP
000 X. Xxxxxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx
If to Xx. Xxxxx:
Xxxxxxx X. Xxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Either party may change its address for receiving notices by giving notice to
the other party in the manner prescribed above.
f. Captions. The headings and captions to sections and paragraphs
of this Agreement are for convenience of reference only and shall not constitute
a part of the Agreement nor be used in its construction or interpretation.
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g. Severability. The provisions of this Agreement are
severable. Should any provision or application of this Agreement be held
invalid, the invalidity shall not affect other provisions or applications which
can be given effect without the invalid provision or application.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
PHOTOMATRIX, INC.,
a California corporation
By: Xxxxx X. Xxxxx, President
Its: President
Xxxxxxx X. Xxxxx
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EXHIBIT "A"
AGREEMENT Of CONFIDENTIALITY
This Agreement of Confidentiality ("Agreement") is made this 5th day of June,
1998, between Photomatrix, Inc. ("Photomatrix"), a California corporation, and
Xxxxxxx Xxxxx ("Employee").
RECITALS OF FACT
A. Photomatrix, a California corporation in good standing, is engaged
in the business of manufacturing and selling high quality printers and scanners.
B. Employee is currently employed by Photomatrix.
C. Photomatrix and Employee desire that Employee's relationship with
Photomatrix be based upon the terms and conditions set forth in this Agreement.
D. Employee acknowledges the existence of a confidential relationship
between Employee and Photomatrix.
THE PARTIES AGREE AS FOLLOWS
In consideration of Employee's continued employment with Photomatrix:
1. Employee shall deal fairly and in good faith with Photomatrix.
2. Employee shall not at any time, whether during or subsequent to the
termination of his employment, unless in the loyal performance of his employment
responsibilities to Photomatrix or specifically consented to in writing by
Photomatrix, use, divulge, take, remove, convert, appropriate, reproduce, or
disclose, communicate or transfer to any person or entity, confidential
information or material concerning any matters affecting or relating to the
business of Photomatrix, including, without limitation: the names, buying
habits, needs or practices of any of its customers; Photomatrix's marketing
methods and related data; the prices at which Photomatrix sells, has sold,
offers or has offered, its products or services; Photomatrix's manufacturing and
sales costs; Photomatrix's products or services; Photomatrix's designs or
technology; Photomatrix's manufacturing process; Photomatrix's research or
development; documents, lists or other records used in Photomatrix's business;
or any other confidential information or material relating to the business of
Photomatrix, its manner of operation, or other confidential data of any nature.
The parties agree that as between them, the confidential information or material
described in this paragraph is
EXHIBIT "A"
p. 1
important, material, and a confidential trade secret, which affects the
successful conduct of Photomatrix's business and its goodwill.
3. For the purposes of this Agreement, the terms "confidential
information," "material(s)" and "trade secret(s)" include, without limitation:
documents, documentation, data, papers, specifications, computer printouts,
designs, forms, lists, proposals, bids, orders, agreements, contracts,
correspondence, schedules, books, guidelines, manuals, diaries, calendars,
reports, notes, memoranda, minutes, computer software, computer hardware, codes,
computer programs, procedures, processes, discs, tapes, recordings, film,
photographs, negatives, slides, transparencies, components, subcomponents,
devices, inventory, parts, stock, models, partial or complete prototypes,
research, technology, equipment, tools, credit cards or identification cards,
identification or access numbers, keys, other physical objects, and copies,
reproductions, abridgements or summaries of any of the above.
4. All confidential information and material relating to the business
of Photomatrix, which Employee shall prepare, use, observe, possess, or control,
shall be and remain Photomatrix's sole property.
5. In the event Employee is terminated, resigns, or breaches this or
any other agreement with Photomatrix, Employee shall deliver promptly to
Photomatrix all confidential information or materials relating to Photomatrix's
business, and copies or summaries thereof, which are or have been in Employee's
possession or under his control.
6. During the term of his employment with Photomatrix, Employee shall
not own an interest in, operate, conduct, join, control, incorporate, form or
participate in, or be connected as an officer, employee, agent, independent
contractor, partner, shareholder, or principal of any business entity producing,
designing, providing, soliciting orders for, selling, distributing, or marketing
products, goods, equipment, and/or services which compete with Photomatrix's
products or services.
7. During the term of his employment with Photomatrix, Employee shall
not, directly or indirectly, for himself or for any other person or entity,
induce, influence or solicit any customer or prospective customer of Photomatrix
to: terminate its relationship with Photomatrix; modify its relationship with
Photomatrix to Photomatrix's detriment; or give its business to a competitor of
Photomatrix.
8. For two years following the termination of Employee's employment
with Photomatrix, Employee shall not (i) induce or solicit customers of
Photomatrix; or (ii) use or disclose Photomatrix's technological processes,
trade secrets or Confidential Information, including revealing, making judgments
on or otherwise using, any confidential information, material or trade secrets
of Photomatrix's business to which Employee had access by reason of Employee's
employment by Photomatrix or his confidential relationship with Photomatrix.
EXHIBIT "A"
p. 1
9. Employee shall not, directly or indirectly, for himself/herself or
for any other person or entity, whether during or subsequent to the termination
of this Agreement, induce, influence or solicit any person who is an employee,
representative, independent contractor, officer, director or shareholder of
Photomatrix to terminate such relationship with Photomatrix or to modify such
relationship in a manner detrimental to Photomatrix.
10. All provisions of this Agreement are material. Any breach of this
Agreement is a material breach.
11. In the event of a breach of this Agreement, Photomatrix may, at its
option, terminate Employee's employment and/or exercise any right or remedy
provided by law or equity.
12. Photomatrix's waiver of any breach of any provision of this
Agreement shall not be deemed a waiver of any subsequent breach of this
Agreement.
13. If any provision of this Agreement is determined to be invalid or
unenforceable by an arbitrator or court of competent jurisdiction, then it shall
be severed from this Agreement and the remainder of this Agreement shall be
enforced without regard to the severed portion.
14. The covenants contained in this paragraph are separate covenants
covering their subject matter in each of the separate foreign country, or
political subdivision thereof, in which Photomatrix transacts business; if any
covenant shall be void, voidable or judicially unenforceable in any one or more
of such counties, states, foreign countries, or political subdivision thereof,
such covenant shall not be affected with respect to each other county, state and
foreign country or political subdivision thereof, each covenant with respect to
each county, state and foreign country, or political subdivision thereof, being
severable and independent.
15. This Agreement shall be governed by and construed in accordance
with the laws of the State of California. Any litigation arising out of the
subject matter of this Agreement shall be brought in San Diego, California.
16. This Agreement can only be amended by a writing signed by
Photomatrix and Employee.
17. Any dispute or controversy between the parties hereto involving the
construction or application of any terms, covenants or conditions of this
Agreement, or any claim arising out of or relating to this Agreement, that is
not resolved by the parties within ten (10) days of oral or written notice of
the claim or dispute by one party to the other shall be settled by arbitration
in San Diego, California in accordance with the rules of the American
Arbitration Association then in effect, and judgment upon the award rendered by
the arbitrators may be entered in any court having jurisdiction thereof.
Photomatrix and Xx. Xxxxx agree that the arbitrators shall have no authority to
award punitive or exemplary damages. Any decision of the arbitrators shall be
final and binding upon the
EXHIBIT "A"
p. 1
parties. Either party may request that the arbitrators submit written findings
of fact and conclusions of law.
18. If either party incurs attorneys' fees or costs in connection with
this Agreement or to enforce or interpret any provision of this Agreement, and
such party through negotiation, agreement, settlement, litigation, arbitration
or other agreement, settlement, litigation, arbitration or otherwise, prevails,
then such party is entitled to recover its attorneys' fees and costs from the
other party.
19. In this Agreement, words of the masculine gender shall be construed
to include the correlative words of the feminine and neuter genders. Unless the
context otherwise indicates, words importing the singular number shall include
the plural number and vice versa, and words importing persons shall include
corporations, partnerships, and associations as well as natural persons.
20. This Agreement constitutes the entire agreement of confidentiality
between Photomatrix and Employee and supersedes all negotiations, discussions
and any previous agreements of confidentiality between them.
Photomatrix, Inc.
__________________________ By: __________________________
Xxxxxxx X. Xxxxx Xxxxx X. Xxxxx, President
EXHIBIT "A"
p. 1
