EXHIBIT 10.03
EMPLOYMENT AGREEMENT FOR
J. XXXXXXX XXXX
EMPLOYMENT AGREEMENT
This Agreement made effective as of the 25th day of August, 1997, between
Xxxx Scientific, Inc. of American Fork, Utah (hereinafter referred to as the
("Xxxx") and J. Xxxxxxx Xxxx, (hereinafter referred to as the "Xxxxx").
W I T N E S E T H:
In consideration of the mutual covenants and conditions hereinafter set
forth, and other good and valuable consideration, the receipt and adequacy of
which is hereby acknowledged, Xxxx and Xxxxx agree as follows:
1. Employment.
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Xxxx hereby employs Xxxxx, and Xxxxx hereby accepts such employment, to
perform the Services (as hereinafter defined).
2. Term of Employment:
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(a) The Initial Term of this Agreement shall begin on the date first
above written, and shall end two years thereafter. This Agreement may be
renewed, if mutually agreed upon by both parties, for three successive one
year periods.
(b) Xxxx may terminate this Agreement at any time for Cause (as
hereinafter defined) with sixty days written notice. Xxxxx xxx terminate this
Agreement at any time after two years by delivering written notice of such
termination to Xxxx 180 days prior to such termination.
(c) If Xxxxx terminates this Agreement pursuant to paragraph (b) of
this Section, Xxxx may, at its sole option and discretion waive the 180 day
notice period required in Section 2(b) above and allow Xxxxx to terminate this
employment with a notice period less than 180 days. Xxxxx shall provide the
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Services required under Section 3 during each notice period for the
compensation provided in Section 4, during which time the provision of this
Agreement shall remain in full force and effect.
(d) Should Xxxx terminate this Agreement for one or more of the
following reasons, such termination shall be deemed for purposes of this
Agreement to be "With Cause":
(i) embezzlement or conversion by Xxxxx of significant assets
of Xxxx.
(ii) indictment or conviction of Xxxxx of any felony or any
misdemeanor involving a crime of moral turpitude the result of which causes
substantial embarrassment or hindrance to Xxxx.
(iii) violation of any term of this Agreement, including, but
not limited to, violation of the trade secrets provisions contained in Section
(6) of this Agreement.
3. Services.
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Xxxxx, as President of Xxxx Scientific, shall devote essentially his full
time, attention, and energies to the affairs of Xxxx and shall perform such
duties as may be assigned to him, from time to time, by the Board of
Directors. All duties set out in this Section 3 shall be known as "Services"
for purposes of this Agreement. Xxxx shall have the power to determine not
only the specific duties which shall be performed by Xxxxx, but also the power
to determine, within reason, the means and the manner by which those duties
shall be performed.
4. Compensation:
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For all Services rendered by Xxxxx under this Agreement, base compensation
shall be paid to Xxxxx as follows:
(1) Xxxxx shall be paid a minimum salary of $226,000 per
year, payable in equal installments not less than monthly. Xxxx shall deduct
and withhold all necessary Social Security and withholding taxes and any other
similar sums required by law from Randy's salary. However, during the term of
this Agreement if Xxxx has a year in which it does not earn a profit, the
Board can reduce Randy's salary by no more than $50,000 annually, and the
Board shall fully restore Randy's salary when the company achieves a before
tax profit equal to 3% of the gross revenue of Xxxx Scientific only. The Board
of Directors can also set a higher salary for Xxxxx without causing a change
in the minimum.
(2) Xxxx will reimburse certain business expenses of Xxxxx
as the Board of Directors or Chief Executive Officer from time to time shall
specify.
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(3) Xxxxx shall be included in Xxxx'x hospitalization plan
and other benefit plans including profit sharing and incentive compensation.
(4) Xxxx shall pay premiums for up to $300,000 of life
insurance on Xxxxx each year provided such premiums do not cost more than
$1000 per year. Xxxxx must pay the annual premium and submit a receipt for
reimbursement by the Xxxx. Failure to pay the annual premium on the part of
Xxxxx shall release Xxxx from any obligation to provide life insurance to him.
In addition, Xxxx is not obligated to provide life insurance for Xxxxx should
he become uninsurable.
(5) Xxxxx shall receive 5 weeks of vacation per year. Xxxxx
can transfer, or carry over one week of vacation, for a total of 6 weeks in
any given year, from one year to the next. He shall not be entitled to be
reimbursed for unused vacation.
(7) In the event Xxxx terminates this agreement for cause,
Xxxxx shall receive three months severance pay based on his base salary at the
time of termination. If Xxxxx terminates this Agreement for any reason, he is
not entitled to any severance pay. If this Agreement is terminated by Xxxx
anytime before the end of its term, severance is 50% of the base compensation
left to be paid during its term.
(8) During the term of this Agreement if any member of
Randy's immediate family needs major medical care due to accident, injury, or
illness, Xxxxx will be allowed to take up to 4 weeks off with pay in any given
year. The Board can require Xxxxx to provide reasonable details of the family
medical problem he must attend to. Any time off beyond the 4 weeks specified
herein must be approved by the Board on a case-by-case basis.
5. Best Efforts Of Xxxxx:
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Xxxxx agrees that he will at all times, faithfully, industriously, and to the
best of his ability, experience, and talents perform all duties that may be
required of and from him pursuant to the express and implicit terms hereof, to
the reasonable satisfaction of Xxxx.
6. Trade Secrets:
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(a) Xxxxx recognizes that during his employment he will receive,
develop, or otherwise acquire information which is of a secret or confidential
nature. Except as authorized in writing by Xxxx, any information of Xxxx he
obtained during the course of his employment relating to inventions,
procedures, machinery, apparatus, ideas, technical data, marketing
information, customer lists or other business or technical information which
is of a secret or confidential nature, whether or not acquired or developed by
Xxxxx, he shall use his best efforts to keep confidential during the term of
his employment and for ten years thereafter.
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(b) Xxxxx will communicate to Xxxx promptly and fully all
discoveries, improvements, and inventions (hereinafter called ("Inventions")
made or conceived by Xxxxx, either solely or jointly with others, during his
employment and for six months thereafter, which are specifically related to
actual or anticipated business, work, or investigations of Xxxx in the field
of metrology and calibration science; and such Inventions, except as provided
below, shall be and remain the sole and exclusive property of Xxxx or its
nominees. Any product, substance or process for which a United States patent
has been granted and which product, substance or process is developed directly
by Xxxxx during the term of this Agreement, shall be owned one-half by Xxxx
and one-half by such Xxxxx. Xxxx shall have an exclusive worldwide license to
make, use and sell products, substances and processes covered by patents
obtained. Xxxx shall have sole authority to determine when an application for
a patent shall be pursued for any product, substance or process. If Xxxx
elects to apply for a patent, all expenses incurred in pursuing any patent
shall be borne entirely by Xxxx. If Xxxx elects not to apply for a patent,
the person who should become vested with an interest in the patent, may pursue
a patent application at his sole expense.
(c) Xxxxx will keep and maintain adequate and current written
records of all such Inventions, in the form of notes, sketches, drawings, and
reports relating thereto, which records shall be the property of and available
to Xxxx at all times. All such records shall remain on the premises of Xxxx
at all times and shall be deemed to be secret and confidential.
(d) Xxxxx will, during and after his employment, without charge to
Xxxx, but at his request and expense, assist Xxxx and its nominees in every
proper way to obtain and vest in it or them title to patents on such
inventions in all countries by executing all necessary documents, including
applications for patents and assignments thereof.
7. Covenant Not To Compete:
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After termination of this Agreement Xxxxx will not divert or attempt to divert
away business from Xxxx by influencing or attempting to influence any
customers of Xxxx with whom he may have been dealing; provided, however, that
the restrictions contained in this sentence shall apply only for a maximum
period of two years and to such capacities, functions, operations and areas as
shall be reasonably necessary for the protection of Xxxx and shall be
construed to be thus divisible and enforceable provided that Xxxx has paid
Xxxxx all compensation due under the terms and conditions of this Agreement.
If Xxxx has not paid the compensation defined herein to him for any reason,
this covenant not to compete shall be null and void.
8. Successors:
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Xxxx will require any successor ( whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the
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business or assets of Xxxx, by agreement in form and substance reasonably
satisfactory to Xxxxx, to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that Xxxx would be required to
perform it if no such succession had taken place. Failure of Xxxx to obtain
agreement prior to the effectiveness of any succession shall be a breach of
this Agreement and shall entitle Xxxxx to receive immediate payment in full of
all as yet to be paid compensation. It is an additional severance and does not
replace any other type of compensation Xxxxx would be entitled to under the
terms and conditions of this Agreement.
9. Governing Law:
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This Agreement shall be subject to and governed by the laws of the State of
Utah.
10. Binding Effect:
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This Agreement shall be binding upon and inure to the benefit of Xxxx and
Xxxxx and their respective heirs, legal representatives, personal
representatives, successors, and assigns.
11. Entire Agreement:
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This writing contains the entire agreement concerning the employment
arrangements between the parties and shall, as of the date hereof, supersede
all other arrangements between the parties. No waiver or modification of this
Agreement nor of any of the conditions contained herein shall be valid unless
in writing and duly signed by the party to be charged therewith.
12. Illegal Provisions:
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If any provision of this Agreement is or becomes or is deemed invalid, illegal
or unenforceable in any jurisdiction, each provision shall be deemed amended
to conform to applicable laws so as to be valid and enforceable or if it
cannot be so amended without materially altering the intention of the parties,
it shall be stricken and the remainder of this Agreement shall remain in full
force and effect.
13. Section Headings:
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Section headings contained in this Agreement are included for convenience only
and form no part of the agreement between the parties.
14. Written Consent:
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Neither the Agreement nor any right or obligation arising hereunder may be
assigned by Xxxxx without the prior written consent of Xxxx.
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15. Warranties:
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All representations, warranties, indemnifications, obligations of
confidentiality, rights of confidentiality, proprietary rights and
indemnifications shall survive the termination of this Agreement.
Xxxx Scientific, Inc. J. Xxxxxxx Xxxx
By:XXXXX X. XXXXXXXX J. XXXXXXX XXXX
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