EXHIBIT 10.16
ASSIGNMENT, ASSUMPTION AND AMENDMENT OF EMPLOYMENT AGREEMENT
BY AND AMONG HIENERGY TECHNOLOGIES, INC.,
HIENERGY MICRODEVICES, INC. AND XXXXXX XXXX
THIS ASSIGNMENT, ASSUMPTION AND AMENDMENT AGREEMENT (the "Agreement") is
entered into as of the 17th day of September, 2002, by and among HiEnergy
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Technologies, Inc. (the "Parent" or the "Company"), a Washington corporation,
HiEnergy Microdevices, Inc. (the "Subsidiary"), a Delaware corporation, and
Xxxxxx Xxxx ("Levy"), individually (together, the "parties").
RECITALS
WHEREAS, a letter employment agreement (the "Subsidiary Employment
Agreement") was entered into by and between the Subsidiary and Levy on February
28, 2002; and
WHEREAS, a letter employment agreement (the "Parent Employment Agreement")
was entered into by and between the Parent and Levy on May 28, 2002; and
WHEREAS, the Subsidiary Employment Agreement contains a provision granting
Levy 1,000 shares of the Subsidiary's Class A common stock (the "Shares") and an
option to purchase 4,000 shares of the Subsidiary's Class A common stock (the
"Option"), which grant was approved by resolution of the Board of Subsidiary at
a meeting held on March 11, 2002; and
WHEREAS, the Option was converted into 4,000 shares of Class A common stock
subject to payment of a promissory note in the amount of $3.50 per share or
$14,000; and
WHEREAS, the Subsidiary desires to assign to the Parent and the Parent
desires to assume from the Subsidiary the Subsidiary Employment Agreement,
rescind the Parent Employment Agreement and amend the Subsidiary Employment
Agreement;
NOW THEREFORE, in consideration of the promises and mutual covenants set forth
in this Agreement, the parties hereby agree as follows:
1. AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
a. Definitions; References. All capitalized terms used in this Agreement
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not defined herein shall have the meanings given them in the Subsidiary
Employment Agreement. References in this Agreement to the Subsidiary Employment
Agreement shall mean the Subsidiary Employment Agreement as modified by this
Agreement.
b. Unwind of the Parent Employment Agreement. The Parent and Levy hereby
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agree to rescind the Parent Employment Agreement and treat it as if it had never
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been executed. Levy agrees to release and forever discharge the Parent, its
principals, partners, agents and employees from all claims, costs and expenses
incurred by Levy arising from or related to the actions and conduct of the
Parent and/or its officers, directors, employees, or agents in connection with
the execution and subsequent rescission of the Parent Employment Agreement.
c. Effect of Amendments to the Subsidiary Employment Agreement. This
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Agreement modifies the Subsidiary Employment Agreement. The Subsidiary
Employment Agreement, as amended by this Agreement, is in full force and effect,
and the parties hereby ratify and affirm the same. In the event of any conflict
between the provisions of the Employment Agreement and this Amendment No. 1, the
provisions of this Amendment No. 1 shall control.
d. Amendment of Subsidiary Employment Agreement. The Subsidiary Employment
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Agreement is hereby amended as follows:
(1) Instead of "the position of Vice President / Corporate Secretary for
HiEnergy Microdevices, Inc.," the Subsidiary Employment Agreement shall
read "the position of Vice President / Corporate Secretary of HiEnergy
Technologies, Inc."
(2) Instead of "the position will be part-time, averaging 2.5 days per week,"
the Subsidiary Employment Agreement shall read "the position shall be
full-time, averaging at least 40 hours per week."
(3) All language pertaining to compensation in the Subsidiary Employment
Agreement is hereby superseded and replaced by the following:
- Gross Salary: $1,750.00 per week; and
- Car Allowance: $100 per week; and
- Stock Option: a non-qualified stock option to purchase 89,410 shares
of HiEnergy Technologies, Inc. common stock at $0.157 per share
vesting immediately; and
- Stock: up to 22,356 shares of HiEnergy Technologies, Inc. common stock
to be issued to you at the rate of 5,589 shares per three-month period
commencing on February 24, 2002 (to be paid at the end of each
three-month period that you remain an employee of HiEnergy
Technologies, Inc.).
(4) The second sentence in the last paragraph on the first page of the
Subsidiary Employment Agreement is hereby superseded and replaced by the
following: "The grant of the stock option to you is contingent upon approval of
the grant by the Board of Directors."
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e. Purpose and Effect. The purpose of this Agreement is to assign the
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Subsidiary Employment Agreement from the Subsidiary to the Parent and to amend
the Subsidiary Employment Agreement as provided herein.
2. CANCELLATION OF OPTION
Levy hereby agrees to rescind the issuance of the Shares and the grant of
the Option to her by the Subsidiary through the Subsidiary Employment Agreement.
The Parties agree that the Shares and the Option are hereby cancelled. Upon
execution of this Agreement, Levy no longer holds the Option to purchase shares
of the Subsidiary's common stock pursuant to the Subsidiary Employment
Agreement. Upon receipt of the Shares and any shares underlying the Option from
Levy, along with executed blank stock powers, the Subsidiary will no longer have
any securities outstanding in the name of Levy nor will it have any obligation
to issue any of its securities to Levy.
3. ASSIGNMENT AND ASSUMPTION
The Subsidiary hereby assigns all of its right, title and interest in and
to the Subsidiary Employment Agreement to the Parent. The Parent hereby accepts
such assignment, assumes all obligations of the Subsidiary arising out of the
Employment Agreement and agrees to indemnify and hold the Subsidiary harmless
from any liabilities, claims or demands based upon or arising under the
Subsidiary Employment Agreement. Levy hereby consents to the assignment and
assumption of the Subsidiary Employment Agreement and agrees to release and
forever discharge the Subsidiary, its principals, partners, agents and employees
from all claims, costs and expenses incurred by Levy arising from or related to
the actions and conduct of the Subsidiary and/or its officers, directors,
employees or agents in connection with the assignment and assumption of the
Subsidiary Employment Agreement.
4. OTHER PROVISIONS
a. Applicable Law and Forum. This Agreement shall be construed and enforced
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according to the laws of the State of California. All legal actions arising
under this Agreement shall be instituted in, and each party consents to
jurisdiction in the County of Orange, State of California.
b. Notices. Any notice or other communication required or permitted under
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this Agreement shall be given in writing and delivered by hand or by registered
or certified mail, postage prepaid and return receipt requested, to the
following persons (or their successors pursuant to due notice):
If to the Parent: HiEnergy Technologies, Inc.
00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: President
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If to the Subsidiary: HiEnergy Microdevices, Inc.
00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Attn: President
If to Levy: Xx. Xxxxxx Xxxx
_______________________
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Such address may be changed from time to time by any party by providing written
notice to the other parties in the manner set forth above.
c. Waiver. The failure of the parties to enforce any provision of this
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Agreement shall not be construed as a waiver or limitation of that party's right
to subsequently enforce and compel strict compliance with every provision
of this Agreement.
d. Entire Agreement. This Agreement constitutes the entire agreement
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between the parties.
e. Amendments. This Agreement may be modified or amended if the amendment
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is made in writing and is signed by all parties.
f. Severability. If one or more provisions of this Agreement are held to be
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invalid or unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were excluded and shall be enforceable in
accordance with its terms.
IN WITNESS WHEREOF, and in acknowledgment that the parties hereto have read and
understood each and every provision hereof, the parties have executed this
Agreement on the date first set forth above.
HIENERGY MICRODEVICES, INC. HIENERGY TECHNOLOGIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx Xxxxx
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Xxxxxxx X. Xxxxxxx, President Xxxxx Xxxxx, President and
CEO
/s/ Xxxxxx Xxxx
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Xxxxxx Xxxx, Individually
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