XXXXXXXXX LONG TERM EMPLOYMENT AGREEMENT
CALIFORNIA MOLECULAR ELECTRONICS CORP. ~ CALMEC
1. INTRODUCTION. This Agreement, effective as of May 1, 1997, is made and
entered into by and between California Molecular Electronics Corp., an
Arizona Corporation ("CALMEC") and Xxxxxx X. Xxxxxxxxx ("Employee").
2. UNDERSTANDING OF STARTUP NATURE OF COMPANY. Employee understands that
CALMEC is a startup company currently operating without funds, and that
while the completion of fund raising and the commencement of its operations
is scheduled for April 1, 1998, the Actual Startup Date (as such date is
defined in Section 16 below), may be earlier or later than April 1, 1998
depending upon fund raising success, and it is even possible that fund
raising will fail and CALMEC will not start up at all.
3. EMPLOYMENT. CALMEC employs Employee and Employee accepts employment,
subject to and in accordance with the terms and conditions of this
Agreement.
4. TERM OF EMPLOYMENT. Employee's term of employment ("Term of Employment")
will begin on May 1, 1997 and will continue for five years (until April 30,
2002) unless sooner terminated by CALMEC in accordance with Section 10
below.
5. SALARY. Beginning on the Actual Startup Date, but no later than May 1,
1999, CALMEC will pay Employee a salary of $120,000 per year in the form of
regular paychecks which will be issued on a weekly, bi-weekly,
semi-monthly, or monthly basis in accordance with the CALMEC payroll
procedures in effect at that time. Employee's compensation shall include
fringe benefits, the value of which will be approximately 24% of Employee's
salary. Prior to the Actual Startup Date, or May 1, 1999, whichever date is
sooner, Employee will perform without pay or fringe benefits, such duties
as needed to assist the startup of CALMEC.
6. ADDITIONAL COMPENSATION. As additional compensation, upon execution of the
agreements in paragraph 3 above, Employee will be issued one million shares
of CALMEC Common Stock. In addition, Employee will be provided with a seven
year stock option to acquire one million additional shares of CALMEC Common
Stock at an exercise price of one mil ($.001) per share, vesting at 200,000
shares per year of completed employment. As further compensation, CALMEC
will provide Employee with a life insurance policy that begins soon after
the Actual Startup Date, and that provides that if Employee dies while
employed by CALMEC, but before the expiration of the five year Term of
Employment, Employee's beneficiary will be paid an amount at least equal to
the remaining balance of Employee's salary under the five year Term of
Employment.
7. EMPLOYEE'S TITLE AND DUTIES. Employee shall hold the position of Executive
Vice President in charge of Research and Development, reporting to the CEO.
In this capacity, Employee shall be responsible for the development of
CALMEC's product-focused technology, and for such other duties as may be
from time to time assigned him by the CEO.
8. EMPLOYEE TO DEVOTE FULL TIME TO CALMEC'S BUSINESS. Employee will devote
full time attention and energies to the business of CALMEC during his
employment.
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9. EMPLOYEE'S LONG-TERM ILLNESS OR INCAPACITY. If Employee is unable to
perform his obligations under this Agreement because of illness or
incapacity for a period of more than six months in any year, CALMEC may
terminate this Agreement for cause.
10. TERMINATION OF EMPLOYMENT. Without cause, CALMEC may terminate this
Agreement at anytime upon ten days' written notice to Employee. If CALMEC
requests, Employee will continue to perform his duties and be paid his
regular salary up to the date of termination. If Employee is terminated
without cause, CALMEC will pay Employee on the date of termination the
remaining balance of Employee's salary under the five year Term of
Employment, less taxes and social security required to be withheld.
11. EMPLOYEE'S DEATH. If Employee dies during the term of his employment,
Corporation will pay to Employee's estate any compensation due him up to
the end of the month in which Employee dies.
12. ASSIGNMENT. This Agreement shall not be assignable except upon written
consent of all parties hereto.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of The State of Arizona.
14. ENTIRE AGREEMENT. This instrument is the entire employment agreement
between Company and Employee. Oral changes will have no effect. It may be
altered only by a written agreement.
15. WAIVER. A waiver of any breach of any provision of this Agreement shall not
be construed as a continuing waiver of other breaches of the same or other
provisions of this Agreement.
16. STARTUP DATE. The Actual Startup Date shall be that date, as determined by
the Board of Directors, that CALMEC shall have attained capital sufficient
for its operations. In the event that the Actual Startup Date is delayed
beyond May 1, 1999, CALMEC will begin payment of Xxxxxxxxx'x salary as
specified in paragraphs 4 and 5 of this agreement and will continue payment
without break for the Term of Employment. Failure of CALMEC to perform in
any respect under this paragraph shall constitute the immediate invocation
of the Backlicense that is defined in that certain Exclusive Patent License
and Assignment Agreement between CALMEC and Employee, which agreement is by
reference made a part a part hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
CALMEC:
By: ________________________________
Xx. Xxx X. Xxxxxxx, Its Chairman
Employee: __________________________
Xx. Xxxxxx X. Xxxxxxxxx
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LONG-TERM EMPLOYMENT AGREEMENT
CALIFORNIA MOLECULAR ELECTRONICS CORP. ~ CALMEC
1. INTRODUCTION. This Agreement, dated as of September 1, 1997, is made and
entered into by and between California Molecular Electronics Corp., an
Arizona Corporation ("CALMEC" or the "Company"), and Xxxxx X. Xxxxx, Xx. of
0000 Xxxxxx Xxxx Xxxx., #000, Xxxxxxxxxx, XX ("Employee").
2. UNDERSTANDING OF STARTUP NATURE OF COMPANY. Employee understands that
CALMEC is a startup company currently operating without funds, and that
while the completion of fund raising and the commencement of its operations
is scheduled for April 1, 1998, the Actual Startup Date (as such date is
defined in Section 17 below), may be earlier or later than April 1, 1998
depending upon fund raising success, and it is even possible that fund
raising will fail and CALMEC will not start up at all.
3. EMPLOYMENT. Upon execution of this Agreement simultaneously with the
execution of the following two agreements: 1.) Confidentiality, Invention
Assignment and Noncompete Agreement, and 2.) Acceptance of Appointment as
Director, which two agreements are incorporated herein by reference, CALMEC
employs Employee and Employee accepts employment, subject to and in
accordance with the terms and conditions of this Agreement.
4. TERM OF EMPLOYMENT. Employee's term of employment ("Term of Employment")
will begin on September 1, 1997 and will continue for four years (until
August 31, 2001) unless sooner terminated by CALMEC in accordance with
Section 10 below.
5. SALARY. Beginning on the Actual Startup Date, CALMEC will pay Employee a
salary of $110,000 per year in the form of regular paychecks which will be
issued on a weekly, bi-weekly, semi-monthly, or monthly basis in accordance
with the CALMEC payroll procedures in effect at that time. Employee's
compensation shall include usual fringe benefits. Prior to the Actual
Startup Date, Employee will perform without pay or fringe benefits, such
duties as needed to assist the startup of CALMEC.
6. ADDITIONAL COMPENSATION. As additional compensation, upon execution of the
agreements in Section 3 above, 1,000,000 shares of CALMEC Common Stock will
be issued as a "Stock Grant" for Employee. As further compensation,
Employee will be provided a seven year stock option for an additional
1,000,000 shares of CALMEC Common Stock at an exercise price of 2 mils
($.002) per share (which the Board of Directors of CALMEC has determined is
100% of the current fair market vale of the Company's common stock),
vesting at 200,000 shares per year of completed employment.
7. EMPLOYEE'S TITLE AND DUTIES. Employee shall hold the position of President
and CEO. In this capacity, Employee shall have full responsibility for the
development and operation of CALMEC.
8. EMPLOYEE TO DEVOTE FULL TIME TO CALMEC'S BUSINESS. Employee will devote
full time attention and energies to the business of CALMEC during his
employment.
9. EMPLOYEE'S LONG-TERM ILLNESS OR INCAPACITY. If Employee is unable to
perform his obligations under this Agreement because of illness or
incapacity for a period of more than nine months in any year, CALMEC may
terminate this Agreement for cause.
10. TERMINATION OF EMPLOYMENT. Without cause, CALMEC may terminate this
Agreement at anytime upon ten days' written notice to Employee. If CALMEC
requests, Employee will continue to perform his duties and be paid his
regular salary up to the date of termination. If after Actual Startup Date
Employee is terminated without cause, CALMEC will pay Employee on the date
of termination a nine month's severance, less taxes and social security
required to be withheld.
11. EMPLOYEE'S DEATH. If Employee dies during the term of his employment,
CALMEC will pay to Employee's estate any compensation due him up to the end
of the month in which Employee dies.
12. ASSIGNMENT. This Agreement shall not be assignable except upon written
consent of all parties hereto.
13. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of The State of Arizona.
14. ENTIRE AGREEMENT. This instrument is the entire employment agreement
between Company and Employee. Oral changes will have no effect. It may be
altered only by a written agreement.
15. WAIVER. A waiver of any breach of any provision of this Agreement shall not
be construed as a continuing waiver of other breaches of the same or other
provisions of this Agreement.
16. STARTUP DATE AND STARTUP DELAY. The Actual Startup Date shall be that date,
as determined by the Board of Directors, that CALMEC shall have attained
capital sufficient for its operations. In the event that the Actual Startup
Date is delayed past April 1, 1998, either party shall have the option to
declare this Agreement to be null and void ("Employment Agreement
Nullification Option"). So long as neither party exercises Employment
Agreement Nullification Option, this Agreement shall continue in force. If
Actual Startup Date occurs after April 1, 1998, and if neither party has
exercised Employment Agreement Nullification Option prior to such
occurrence of Actual Startup Date, then Employment Agreement Nullification
Option shall forever terminate.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
CALMEC: Employee:
By: _________________________________ By: _________________________________
Xxx X. Xxxxxxx, its Chairman Xxxxx X. Xxxxx, Xx.
EXCLUSIVE PATENT LICENSE AND ASSIGNMENT AGREEMENT
THIS AGREEMENT is made and entered into as of May 1, 1997 by and between Xxxxxx
X. Xxxxxxxxx ("Xxxxxxxxx"), residing at 00000 Xxxxxx Xxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000 and California Molecular Electronics Corp. ("Calmec"), an
Arizona corporation with an office at 00000 X. Xxxxx Xxxx Xxxxx, Xxxxxx, Xxxxxxx
00000.
WHEREAS Xxxxxxxxx represents and warrants that:
1.) He is the owner of the entire rights, title and interest in and to United
States Patent number 5,237,067 issued 17 August 1993 ("Patent"),
2.) Patent is directed to a class of optoelectronic materials (such class of
materials hereinafter referred to as "Chiropticene" materials or the
"Chiropticenes").
3.) He has the sole right to grant for the United States, its territories and
possessions licenses under Patent, reissues and extensions, of the scope
hereinafter granted ("Patent Rights"), and
4.) He has not been granted patents corresponding to Patent in any foreign
country ("Foreign Patent"), and is not now pursuing a Foreign Patent in any
foreign country, and,
WHEREAS Calmec is a startup company which has been organized to commercially
exploit the technology areas related to the Patent, and
WHEREAS Xxxxxxxxx is an officer and a major stockholder of Calmec, and
WHEREAS it is the intention of the officers of Calmec to derive Calmec's startup
funding through an ongoing sale of Calmec capital stock, thereby producing
a viable stream of funds ("Funding Stream") to finance Calmec's activities,
and
WHEREAS Xxxxxxxxx owns certain confidential information and trade secrets,
including engineering and technical knowledge and data, manufacturing
knowledge and data, designs, skills, methods, procedures and information
(collectively "Knowhow") related to manufacturing and exploiting
Chiropticene material, and
WHEREAS it is the intention of both Calmec and Xxxxxxxxx to continually develop
new technology based on the Chiropticenes, by developing new patents, new
patent applications and new Knowhow (collectively "Ongoing New
Developments"), and
WHEREAS Calmec desires to make, have made, use and sell (collectively "Exploit")
any and all products (such products referred to hereinafter as "Embodying
Products") embodying the inventions covered by Patent Rights, Ongoing New
Developments, and Knowhow (Patent Rights, Ongoing New Developments, and
Knowhow are hereinafter collectively referred to as "Chiropticene
Technology"), and
WHEREAS Calmec desires to acquire the exclusive right and license ("License") to
Chiropticene Technology , and
WHEREAS Xxxxxxxxx wishes to grant License and to be instrumental in the
development of Chiropticene Technology, and
WHEREAS upon the date 1 May 1999, Calmec and Xxxxxxxxx desire that all of
Xxxxxxxxx'x rights in Chiropticene Technology shall permanently be assigned
to Calmec,
NOW THEREFORE in consideration of the foregoing, and of the mutual covenants,
terms and considerations hereinafter expressed, the parties hereto agree as
follows:
1.) GRANT OF LICENSE
Xxxxxxxxx hereby grants License to Calmec, an exclusive, irrevocable
license to make, have made, use and sell Embodying Products.
2.) TERM OF LICENSE, LICENSE FEE, AND PAYMENT OF LICENSE FEE
License shall begin on the date first above written and shall terminate on
1 May 1999, the date at which rights to Chiropticene Technology shall be
assigned to Calmec in accordance with paragraph 2 below. Calmec shall pay
Xxxxxxxxx a fee of $25,000 for the License ("License Fee"). The License Fee
shall be due 1 April 1998. Calmec and Xxxxxxxxx agree that at Calmec's
option, the License Fee may be paid by paying Xxxxxxxxx 5% of the Funding
Stream until the $25,000 License fee is paid.
3.) ASSIGNMENT OF CHIROPTICENE TECHNOLOGY
All of Xxxxxxxxx'x rights to Chiropticene Technology shall be assigned to
Calmec on 1 May 1999 (the "Assignment") by the execution of a patent
assignment agreement of the form shown in Attachment A hereto, and by the
execution by Xxxxxxxxx of such other documents as shall be required of him
by Calmec to effect this paragraph.
4.) PROVISION OF EXCLUSIVE BACKLICENSE OF CHIROPTICENE TECHNOLOGY BACK TO
XXXXXXXXX UNDER CERTAIN CONDITIONS OF CALMEC INACTION
The parties to this agreement recognize the importance of developing
Chiropticene Technology and agree that Xxxxxxxxx shall be granted by Calmec
an exclusive and irrevocable license back ("Backlicense") to the
Chiropticene Technology under any one or more of the following conditions:
a.) Calmec neglects to pursue Chiropticene Technology.
b.) Calmec breeches its obligations under Xxxxxxxxx'x Amended Long Term
Employment Agreement (which agreement is by reference made a part
hereof).
c.) Calmec fails to pay the License Fee prior to 1 May 1999.
Written concurrence by Calmec of the occurrence of any one or more of these
conditions shall provide sufficiency for the immediate invocation of the
Backlicense. Any dispute between the parties as to the occurrence of any of
these conditions shall be settled by arbitration in accordance with
paragraph 18 below, and the settlement in Xxxxxxxxx'x favor on any of the
above three conditions shall provide the sufficiency for the immediate
invocation of the Backlicense. The parties agree that this Backlicense, if
invoked, will provide to Xxxxxxxxx all the rights that this License
currently provides to Calmec.
5.) ROYALTIES
No royalties shall be paid under this Agreement.
6.) EXTENSION OF TERM
The term of this License is not extendible.
7.) WARRANTY OF RIGHT TO ENTER INTO AGREEMENT
Xxxxxxxxx represents and warrants that he has the right to enter into this
Agreement, and that there are no outstanding assignments, grants, licenses,
encumbrances, obligations or agreements, either written, oral or implied,
inconsistent with this agreement.
Page 2
8.) SUBLICENSING
Calmec may grant coterminating sublicenses under this License on any terms
and conditions it deems advisable.
9.) ACKNOWLEDGMENT OF VALIDITY
During term of License, Calmec shall not dispute or object to the validity
of Patent or of the scope of any claim or claims therein.
10.) CALMEC'S RIGHT TO DEFEND PATENT
During the term of License, on discovery of any suspected infringement,
Calmec at its own expense may take all necessary proceedings for
effectively protecting and defending Patent. In such event Xxxxxxxxx agrees
to render to Calmec every assistance in his power, except financial
assistance, to help Calmec protect and defend Patent.
11.) CLAIM OF INFRINGEMENT AGAINST CALMEC
In the event of litigation against Calmec on account of any claim of
infringement arising out of Exploiting Embodying Products, Xxxxxxxxx agrees
to furnish to Calmec at Calmec's request all evidence and information in
his possession relating to the defense of such litigation.
12.) KNOWHOW
Xxxxxxxxx agrees to disclose to Calmec during the term of his agreement any
and all Knowhow, that might be of use to Exploit Embodying Products, that
was in his possession prior to this agreement or that comes into his
possession during the term of License and to use his best efforts to assist
Calmec in the use of this Knowhow to Exploit Embodying Products.
13.) IMPROVEMENTS BY XXXXXXXXX
Xxxxxxxxx agrees that all inventions, patents and applications therefor
which are acquired by him during the term of License, and which constitute
improvements on Embodying Products, shall automatically become part of
Chiropticene Technology covered by License and Assignment.
14.) MAINTENANCE OF PATENT
During the term of License, Xxxxxxxxx shall promptly pay all fees required
by the United States Patent and Trademark Office for maintenance of Patent.
Calmec shall reimburse Xxxxxxxxx for these fees.
15.) NONASSIGNABILITY WITHOUT XXXXXXXXX'X APPROVAL
This Agreement may not be assigned or transferred by Calmec except upon
written agreement with Xxxxxxxxx.
16.) AUTOMATIC TERMINATION OF LICENSE
This License shall terminate automatically in any one or more of the
following circumstances: a.) in the event that Calmec is ordered or
adjudged bankrupt or is placed in the hands of a receiver, or otherwise
enters into any scheme or composition with its creditors or makes an
unauthorized assignment for the benefit of creditors; b.) in the event that
the assets of Calmec are seized or attached, in conjunction with any action
against it by any third party; or c.) in the event that Calmec is
dissolved, or that a sale of all or substantially all of the assets of
Calmec is made, or that this Agreement is attempted to be assigned by
Calmec without the prior written consent of Xxxxxxxxx.
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17.) COMPLETION OF CONTRACT AFTER AUTOMATIC TERMINATION
If License is automatically terminated as described in section 15 above,
Calmec, its successors or assignees shall have the right to complete any
and all contracts that it may already have on the books, or that it may be
obligated for, and may fabricate and sell devices under such contracts
whether or not such contract completion or such device fabrication involve
the embodiment of inventions covered by Patent.
18.) INTENTION NOT TO VIOLATE LAW; SEVERABILITY
Both parties hereby expressly agree and contract that it is the intention
of neither party to violate any public policy, statutory or common laws;
that if any sentence, paragraph, clause or combination of the same is in
violation of any state or federal law, such sentences, paragraphs, clauses,
or combination of the same shall be inoperative and the remainder of this
Agreement shall remain binding upon the parties hereof. It is the intention
of both parties to make this Agreement binding only to the extent that it
may be lawfully done under existing state and federal laws.
19.) ARBITRATION
In the event of any dispute, difference or question arising between the
parties in connection with this Agreement or any clause or the construction
thereof, or the rights, duties or liabilities of either party, then and in
every such case, unless the parties concur in the appointment of a single
arbitrator, the matter of difference shall be referred to three (3)
arbitrators: one to be appointed by each party, and a third being nominated
by the two so selected by the parties, or if they cannot agree on a third,
by the American Arbitration Association. In the event that either party
within one (1) month of any notification made to it of the demand for
arbitration by the other party, shall not have appointed its arbitrator,
such arbitrator shall be nominated by the American Arbitration Association.
The arbitrators shall determine the place or places where meetings are to
be held. The arbitrators must base their decision with respect to the
difference before them on the contents of this Agreement, and the decision
of any two of the three arbitrators shall be binding on both parties.
20.) LIMITATION OF THE EFFECT OF WAIVER
A waiver of any breach of any provision of this Agreement shall not be
construed as a continuing waiver of other breaches of the same or other
provisions of this Agreement.
21.) ENTIRE AGREEMENT
This Agreement embodies the entire understanding between the parties
relating to License and there are no prior representations, warranties, or
agreements between the parties relating hereto, and this Agreement is
executed and delivered upon the basis of this understanding.
22.) GOVERNING LAW
This Agreement shall be interpreted and construed, and the legal relations
created herein shall be determined in accordance with, the laws of the
State of Arizona.
23.) GENERAL ASSURANCES
The parties agree to execute, acknowledge and deliver all such further
instruments, and to do all such acts, as may be necessary or appropriate in
order to carry out the intent and purpose of this Agreement.
Page 4
24.) NOTICES
All notices provided for in this Agreement shall be given in writing and
shall be effective when either served by personal delivery or deposited,
postage paid, in the United States Post Office, registered or certified
mail, addressed to the parties at their respective addresses hereinabove
set forth, or to such other address or addresses as either party may later
specify by written notice to the other.
IN WITNESS WHEREOF the parties hereto have caused this agreement to be signed,
sealed and delivered as of the date first above written.
_________________________________________
Xxxxxx X. Xxxxxxxxx
Witnesses:
_________________________________________
_________________________________________
CALIFORNIA MOLECULAR ELECTRONICS CORP.
by: ______________________________________
Xxx X. Xxxxxxx, its Chairman
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