EXHIBIT 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into and becomes
effective as of September 3, 1997, by and between Carbite, Inc. ("Employer") and
Xxxxxxx Xxxxxxxxxxxx ("Employee").
RECITALS
A. Employer is a corporation organized under the laws of the State of
California and is authorized to do and is doing business in the State of
California.
B. Employer wishes to engage Employee as its Chairman.
AGREEMENT
IN CONSIDERATION of their respective promises and covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Employment. Employer hereby engages Employee to serve as its Chairman
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and Director of Research and Development, and Employee hereby accepts such an
engagement upon the terms and conditions set forth herein.
2. Effective Date and Term. The effective date of this Agreement shall be
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September 3, 1997. The term of this Agreement shall begin on the effective date
and continue for a period of three (3) years thereafter unless this Agreement is
terminated pursuant to Paragraph 12. Following the expiration of its initial
three year term, the term of this Agreement shall renew automatically for one
year on each annual anniversary date hereof unless either party provides the
other party with a notice of nonrenewal during the thirty (30) day period
preceding an anniversary date.
3. Duties. Employee shall perform such duties and have such
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responsibilities as are set forth in Employer's Bylaws and such duties and
responsibilities as are customarily performed by the Chairman of a corporation
and identified by Employer's Board of Directors. Employee and Employer
acknowledge and understand that Employee shall devote his full business time and
attention to the rendition of such services, subject to absences for customary
vacations and for temporary illness, and will not engage in any other gainful
occupation which requires his personal attention, with the exception that
Employee may personally trade in stock, bonds, securities, commodities or real
estate investments for his own benefit. Employee shall perform his duties
primarily in San Diego County, California.
4. Confidentiality. Other than in furtherance of the business of the
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Company, Employee shall not disclose any proprietary information of Employer to
any third party. For purposes of this Agreement, "proprietary information" shall
mean the trade secrets (including customer lists) and patent applications, if
any, of Employer.
5. Nonsolicitation Covenant. Employee agrees that, during his employment
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with Employer, and for so long as he is receiving payments under Section 13 of
this Agreement after the termination of his employment, he will not, directly or
indirectly, solicit or otherwise attempt to induce any employee to leave the
employ of Employer.
6. Patents and Inventions. All patents, designs, plans and inventions
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which Employee discovers or develops during the time he is employed by Employer,
and which are either within the scope of Employer's endeavors or developed
through the use of Employer's resources, shall be the exclusive property of
Employer. Employee shall execute any separate assignments, patent applications
and other documents deemed necessary by Employer to secure or evidence its
ownership of any such patents, designs, formulas, plans, and inventions and to
otherwise give effect to this provision. Employee shall cooperate fully with
Employer in any dispute in which Employer's ownership of any such patent,
design, formula, plan, or invention is contested or in which it is alleged that
any such patent, design, formula, plan, or invention infringes upon, or is
infringed upon by, the ownership rights of any other person. This Section 6
shall not apply to (i) any patent, design, plan, or invention if; as a
consequence of such application, this Section 6 would be unenforceable under
Section 2870 of the California Labor Code (a copy of which is attached to this
Agreement), or (ii) any patent, design, plan, or invention designed or developed
by Employee prior to the date of this Agreement. The filing of a patent
application within twelve (12) months following the termination or expiration of
this Agreement shall be deemed prima facie evidence that the invention covered
by the patent is the property of Employer.
7. Authority. Other than in the ordinary course of business, Employee
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shall not have the authority, without the approval of the Board of Directors,
to:
a. Pledge the credit of Employer,
b. Release or discharge any debt due to Employer; or
c. Sell, mortgage, transfer or otherwise dispose of any assets of the
Employer.
8. Personnel Policies and Procedures. Employer shall have the authority to
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establish from time to time personnel policies and procedures to be followed by
its employees. Employee agrees to comply with the policies and procedures of
Employer. To the extent any provision in Employer's Personnel policies and
procedures differs from the terms of this Agreement, the terms of this Agreement
shall apply.
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9. Compensation. During the term of this Agreement, Employee shall be paid
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such periodic and extraordinary compensation as is deemed appropriate by
Employer's Board of Directors, provided that Employee's periodic compensation,
which shall be exclusive of any royalty payments and which shall be paid in
equal monthly installments, shall not be less than $125,000 (U.S.) per year.
10. Benefits.
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a. Vacation. Employee shall be entitled to four week paid vacation
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each year.
b. Health and Disability Insurance. Employer shall provide group
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health and disability insurance to Employee.
c. Other Benefits. Employee shall be entitled to participate in or
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receive any other benefits made generally available by Employer to its
employees.
11. Expenses. Employer shall reimburse Employee for reasonable and
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necessary expenses incurred by Employee in the ordinary course of business on
behalf of Employer.
12. Termination. This Agreement and the employment of Employee shall
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terminate under the following conditions:
a. The death of Employee;
b. The permanent disability of Employee (permanent disability shall
exist when Employee suffers from a condition of mind or body that indefinitely
prevents him from further performance of his duties); or
c. Employee engages in conduct constituting grounds for the
termination of employment as set forth in Section 2924 of the California Labor
Code.
13. Severance. In the event of a termination of this Agreement pursuant to
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Section 12 or the issuance of a notice of non-renewal by Employer under Section
2, Employee or Employee's estate shall continue to receive the compensation
provided for by this Agreement for a period of six (6) months following such
termination. In the event of a termination of this Agreement by Employer other
than pursuant to Section 12, Employer shall continue to pay Employee the
compensation provided for by this Agreement for the remainder of the term hereof
(determined as if the termination had not Occurred). A material change in the
duties and responsibilities of Employee, or a breach of this Agreement by
Employer, which is unacceptable to Employee and results in his resignation shall
be deemed to be a termination of this Agreement by Employer.
14. Arbitration/Sole Remedy for Breach of Agreement. In the event of any
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dispute between Employer and Employee concerning any aspect of their employment
relationship, including any disputes upon termination, all such disputes shall
be resolved by binding arbitration before a single
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neutral arbitrator. The arbitration shall be governed by the Commercial
Arbitration Rules of the American Arbitration Association. The arbitrator may
apportion the costs of the arbitration, including arbitrator's fees, among the
parties, but shall have no power to award attorneys' fees. Each party shall be
responsible for its own attorneys' fees. In the event that any lawsuit is filed
concerning any such dispute concurrently with the arbitration of such dispute,
each of the parties hereto waives any right to provisional remedies such as
attachments, temporary restraining orders, and preliminary injunctions, to which
they otherwise might be entitled in such litigation.
15. Successors and Assigns. The rights and obligations of Employer under
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this Agreement shall inure to the benefit of and shall be binding upon the
successors and assigns of Employer. Employee shall not be entitled to assign any
of his rights or obligations under this Agreement.
16. Survival. The enforceability of Sections 4, 5, 6, 13, and 14 hereof
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shall survive the termination or expiration of this Agreement.
17. Governing Law. This Agreement shall be interpreted, construed,
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governed and enforced in accordance to the laws of the State of California.
18. Amendments. No amendment, modification, or waiver of the terms or
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conditions of this Agreement shall be valid unless in writing and signed by the
parties hereto.
19. Separate Terms. Each term, condition, covenant or provision of this
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Agreement shall be viewed as separate and distinct; and, in the event that any
such term, covenant or provision shall be held by a court of competent
jurisdiction to be invalid, the remaining provisions hereof shall continue in
full force and effect.
20. Waiver. A waiver by either party of a breach of any provision of this
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Agreement shall not constitute a general waiver or prejudice that party's right
otherwise to demand strict compliance with that provision or any other provision
in this Agreement.
21. Notices. Any notice required or permitted to be given under this
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Agreement shall be sufficient if it is in writing and sent by mail, or hand
delivered, to his residence, in the case of Employee, or to its principal office
in the case of the Employer.
22. Entire Agreement. This Agreement constitutes the entire Agreement
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between Employee and Employer concerning the subject matter hereof and
supersedes any previous oral or written communications, representations,
understandings or agreements concerning such subject matter between them.
Employee understands that no representative of the Employer has been
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authorized to enter into any agreement or commitment with Employee which is
inconsistent in any way with the terms of this Agreement.
WITNESS HEREOF, the parties have executed this Agreement as of the date
set forth above.
Employer:
Carbite, Inc.
By:
Employee:
Xxxxxxx Xxxxxxxxxxxx
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