EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 30, 1998, by and between ION
LASER TECHNOLOGY, INC. (the "COMPANY"), a Utah corporation, and XXXXXXX XXXXX
(the "EMPLOYEE").
W I T N E S S E T H:
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WHEREAS, upon the terms and subject to the conditions of this
Agreement, the Company desires to employ the Employee and the Employee desires
to accept employment by the Company;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Employment. Upon the terms and subject to the conditions of this
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Agreement, the Company hereby employs the Employee and the Employee hereby
accepts employment with the Company in the capacities hereinafter set forth.
2. Term of Employment. Unless earlier terminated pursuant to
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Section 6 below, the term (the "TERM") of this Agreement shall commence on the
date hereof and shall continue in effect through May 31, 2000; provided,
however, that commencing on May 31, 2000 and each anniversary thereof the term
of this Agreement shall be extended for an additional year from May 31, 2000 or
such anniversary as the case may be unless not later than 30 days prior to such
automatic execution date the Company or the Employee shall have given notice
that such party does not want to extend the term of this Agreement in which case
the term of this Agreement shall end on May 31, 2000 or, if later, on the date
to which the term of this Agreement was last automatically extended.
3. Duties; Extent of Services.
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(a) Duties. During the Term, the Employee shall serve in such
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capacity and may be reasonably designated by the Board of Directors, initially
as President and Chief Executive Officer, and shall perform the duties,
undertake the responsibilities and exercise the authority reasonably required of
such an employee of the Company, and shall have such other powers and perform
such additional executive duties as may be assigned to him from time to time by
the Board of Directors of the Company (the "BOARD"). The Employee shall report
to and carry out the lawful directions of the Board.
(b) Extent of Services. Except for illness and permitted vacation
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periods, during the Term the Employee shall (i) devote his full time and
attention during normal business hours to the businesses of the Company and its
subsidiaries and Affiliates (as defined herein);
(ii) use his best efforts to promote the interests of the Company and its
subsidiaries and Affiliates; (iii) discharge such executive and administrative
duties not inconsistent with his position as may be assigned to him by the
Board; and (iv) serve, without additional compensation, as a director or officer
of any subsidiary of the Company if elected as such.
4. Compensation Benefits.
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(a) Salary. In consideration of the services rendered by the Employee
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hereunder and provided that the Employee has substantially performed all of his
obligations provided for herein, the Company will pay to the Employee a salary
(the "SALARY") at the rate of $250,000 per year during the Term. The Salary
shall be paid in accordance with the Company's normal payroll practice.
(b) During the Term, the Employee shall be entitled (i) to vacation
time in accordance with the Company's policy from time to time in effect; (ii)
to participate in all employee insurance and other fringe benefit programs,
including, without limitation, life, health, dental and accident insurance plans
and long term disability now or hereafter maintained by the Company for senior
executive or other salaried personnel for which the Employee is eligible; and
(iii) to participate in a pension plan with terms similar to those applicable to
executives of the Company.
5. Options. In consideration of Employee's entering into and
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performing the Agreement, Employee will be granted by the Company options to
purchase 225,000 shares of the Company's Common Stock at $1.75 per share
pursuant to a separate option agreement.
6. Termination Provisions.
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(a) Termination for Cause. The Board may terminate the Employee's
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employment hereunder for Cause, as hereinafter defined, immediately upon written
notice to the Employee. For purposes of this Agreement, "CAUSE" shall mean (i)
embezzlement, theft or other misappropriation of any property of the Company or
any Affiliate, (ii) gross or willful misconduct resulting in substantial loss to
the Company or any Affiliate or substantial damage to the reputation of the
Company or any Affiliate, (iii) any act involving moral turpitude which results
in a conviction for a felony involving moral turpitude, fraud or
misrepresentation, (iv) gross neglect of his assigned duties to the Company or
any Affiliate, (v) gross breach of his fiduciary obligations to the Company or
any Affiliate, or (vi) any chemical dependence which materially affects the
performance of his duties and responsibilities to the Company or any Affiliate;
provided that in the case of the misconduct set forth in clauses (iv) and (vi)
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above, such misconduct shall continue for a period of 30 days following written
notice thereof by the Company to the Employee. During the Term, the Employee
shall be entitled to only one such notice and right to cure for any single act
or event. If the Employee's employment is terminated for Cause, the Employee
shall be entitled to receive only the unpaid portion of the Salary then in
effect which has accrued to the date of termination and any other payments
generally available to
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departing employees of the Company (such as unused vacation and personal days).
The Employee shall not be entitled to receive any severance payment with respect
to such termination. For the purpose of this Agreement, the term "AFFILIATE"
means, with respect to the Company, any person or entity which, directly or
indirectly, controls, is controlled by or under common control with the Company,
with "CONTROL" to be based on the ownership of 50% or more of the voting
securities (or their equivalent) of a particular entity.
(b) Termination By Reason of Permanent Disability. If at any time
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during the Term the Employee has been unable, as a result of physical or mental
illness or incapacity, to perform his duties hereunder for a period of four
consecutive months or for an aggregate of more than six months in any twelve
month period (a "PERMANENT DISABILITY"), the Employee's employment hereunder may
be terminated by the Board upon thirty days' written notice to the Employee. If
the Employee's employment is terminated by reason of Permanent Disability, the
Employee shall be entitled to receive only the unpaid portion of the Salary then
in effect which has accrued to the date of termination, plus any other payments
generally available to departing employees of the Company (such as unused
vacation and personal days), plus an amount equal to three months of Employee's
Salary. Such amount shall be paid within thirty days after such termination.
(c) Termination By Reason of Death. The Employee's employment
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hereunder shall automatically terminate on the date of his death. If the
Employee's employment is so terminated by his death, the Company shall pay to
the Employee's estate in addition to the unpaid portion of the Salary then in
effect through date of Employee's death plus an amount equal to three months of
Employee's Salary, plus any other payments generally available to departing
employees of the Company (such as unused vacation and personal days). Such
amount shall be paid within thirty days after the date of his death if a
personal representative has been appointed by the end of such thirty day period
or, if a personal representative has not been appointed by the end of such
thirty day period, promptly after a personal representative has been appointed.
(d) Termination Without Cause. The Board may terminate the Employee's
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employment hereunder at any time for any reason without Cause in which case the
Employee shall be entitled to receive an amount (the "SEVERANCE AMOUNT") equal
to six months of Employee's Salary. The Severance Amount shall be in lieu of any
other severance payment to which Employee may be otherwise entitled under any
other severance plan maintained by the Company. The Severance Amount shall be
paid within 30 days of such termination. In addition, the Employee shall be
entitled to receive any other payments generally available to departing
employees of the Company (such as unused vacation and personal days).
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7. Covenants of the Employee.
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(a) Non-Competition. Until the later of (X) the first anniversary of
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the date of the termination of the Employee's employment hereunder and (Y) the
end of the then current Term in effect on the date of such termination, the
Employee shall not, directly or indirectly, engage in any business (a
"RESTRICTED BUSINESS") which manufactures or distributes a dental product line
similar to that of the Company's or be associated with any entity engaged in a
Restricted Business, whether as a director, officer, employee, agent,
consultant, partner, owner, independent contractor or otherwise.
(b) Non-Solicitation of Employees of the Employer. Until the later of
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(X) the first anniversary of the date of the termination of the employment of
the Employee hereunder and (Y) the end of the then current Term in effect on the
date of such termination, the Employee shall not, and shall cause each business
or entity with which he shall become associated in any capacity not to, solicit
for employment or employ any person who is then, or who was at any time after
the date four months prior to the date of such termination, employed in a
professional or managerial position by the Company, its subsidiaries or
Affiliates.
(c) Confidentiality. The Employee agrees and acknowledges that the
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Confidential Information (as hereinafter defined) of the Company and its
subsidiaries and affiliates, is valuable, special and unique to their business;
that such business depends on such Confidential Information; and that the
Company wishes to protect such Confidential Information by keeping it
confidential for the use and benefit of the Company and its subsidiaries and
Affiliates. Based on the foregoing, the Employee agrees to undertake the
following obligations with respect to such Confidential Information:
(i) the Employee agrees to keep any and all Confidential
Information in trust for the use and benefit of the Company and its
subsidiaries and Affiliates;
(ii) the Employee agrees that, except as required by applicable
law or as authorized in writing by the Board, he will not at any time
during or after the termination of his employment hereunder, disclose,
directly or indirectly, any Confidential Information of the Company or
any of its subsidiaries or Affiliates;
(iii) the Employee agrees to take all reasonable steps necessary,
or reasonably requested by the Company, to ensure that all
Confidential Information is kept confidential for the use and benefit
of the Company and its subsidiaries and Affiliates; and
(iv) the Employee agrees that, upon termination of his employment
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hereunder or at any other time the Company may in writing
so request, he will promptly deliver to the Company all materials
constituting Confidential Information (including all copies thereof)
that are in his possession or under his control. The Employee further
agrees, that if requested by the Company, to return any Confidential
Information pursuant to this subparagraph (iv), he will not make or
retain any copy or extract from such materials.
For purposes of paragraph (c) of this Section 7, "CONFIDENTIAL
INFORMATION" means any and all information developed by or for the Company or
any of its subsidiaries or Affiliates of which the Employee gains or has
acquired knowledge during or prior to the Term by reason of his employment with
the Company that is (A) not generally known in any industry in which the Company
or any of its subsidiaries or Affiliates is or may become engaged or (B) not
publicly available. Confidential Information includes, but is not limited to,
any and all information developed by or for the Company or any of its
subsidiaries or Affiliates concerning plans, marketing and sales methods,
customer lists, materials, processes, business forms, procedures, devices, plans
for development of products, services or expansion into new areas or markets,
internal operations, and any trade secrets and proprietary information of any
type owned by the Company or any of its subsidiaries or Affiliates, together
with all written, graphic and other materials relating to all or any part of the
same.
8. Improvements and Inventions.
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(a) Disclosure of All Improvements and Inventions. All designs,
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discoveries, ideas and inventions, whether or not patentable, copyrightable or
protectable as trade secrets, and all innovations, improvements, variations,
modifications, and substitutions in each case to the extent relating to the
dental business, including the process of cleaning or treating human teeth with
a light source or relating to "curing" materials used in the treatment of human
teeth, whether or not patentable, copyrightable or protectable as trade secrets,
including all patent and patent application rights and copyright and copyright
application rights relating thereto which the Employee may make or conceive
jointly or commonly with others during the Term in the course of performing his
duties for the Company based, in whole or in part, upon the Confidential
Information, or resulting, in whole or in part, from any other resources,
supplies, facilities or equipment or business, technical or financial
information or materials provided by the Company are hereafter collectively
referred to as "INVENTIONS". The Employee shall promptly disclose
all Inventions to the Company.
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(b) Assignment of Inventions.
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(i) In consideration of the compensation payable to the Employee
under Section 4 hereof, the Employee agrees that all Inventions described in
paragraph (a) above shall be the sole and exclusive property of the Company and
available to the Company at all times. At the request of the Company, the
Employee agrees to sell, assign, transfer and set over to the Company, or its
nominee, without royalty or any additional consideration, his entire right,
title and interest in, to and under any and all Inventions.
(ii) The Employee agrees to execute, both during and after the
Term, such documents as the Company shall deem necessary or desirable for the
transfer of such rights, titles and interests described in clause (i) above to
it or its designee and for the preparation, filing, prosecution and procuring of
trademark, copyright and/or patent applications and/or trademarks, copyrights
and letters patent in any country of the world and for the transfer of interests
therein, including the execution of original, divisional, continuing and reissue
applications, preliminary statements, affidavits, and concessions.
(iii) The Employee further agrees that if it is legally or
otherwise impossible for the Company or its designees or assignees to apply for
any such trademark, copyright or letters patent, or if any court or other body
with appropriate jurisdiction finds the transfer of trademark, copyright or
patent rights and/or other rights in any Invention to the Company hereunder to
be unenforceable for any reason, then, in any such case, the Employee in lieu of
the Company shall pursue such trademark, copyright or letter patent in his own
name and shall grant the Company the first option to an exclusive license, at a
de minimis royalty to be negotiated in good faith based on the respective
parties' contributions and relevant industry standards, to utilize the trademark
or copyright or to manufacture, utilize and/or sell Inventions which constitute
and/or contain such patent, trade secret, know-how and/or other proprietary
information. If such a license is not created, then the Company shall be able to
use such Invention or substance on a non-exclusive, royalty-free basis.
(iv) The Employee agrees to give testimony in any court action or
administrative proceeding with respect to any matters mentioned above.
9. Reimbursement for Assignment of Inventions. The Company shall
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reimburse the Employee for all reasonable and properly documented out-of-pocket
expenses actually incurred by him in the performance of any of the terms of
Section 8 hereof, including the preparation of documents, drawings, models and
plans, the transfer and assignment of Inventions and any travel required to
fulfill any obligation thereunder.
10. Notices. All notices and other communications hereunder shall be
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in
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writing and shall be deemed to have been given when delivered by hand, mailed
by first-class registered or certified mail, postage prepaid and return receipt
requested, or facsimilied or delivered by overnight courier addressed as
follows:
(i) If to the Company:
ION Laser Technology, Inc.
0000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: President
with a copy to:
Durham, Evans, Xxxxx & Xxxxxxx, P.C.
Key Bank Towers, Suite 850
00 Xxxxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
and to:
Xxxxxxxx & X'Xxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx, Esq.
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
(ii) If to the Employee:
000 Xxxxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxxxxx 00000
Telephone No.: 000-000-0000
Facsimile No.:
or, in each case, at such other address as may from time to time be specified to
the other party in
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a notice similarly given.
11. Governing Law; Jurisdiction. The validity, interpretation,
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construction and performance of this Agreement shall be governed by the laws of
the State of New York applicable to contracts executed and to be performed
entirely within said State. Any judicial proceeding brought against any of the
parties to this Agreement or any dispute arising out of this Agreement or any
matter related hereto may be brought in the courts of the State of New York or
in the United States District Court for the Southern District of New York, and,
by execution and delivery of this Agreement, each of the parties to this
Agreement accepts the jurisdiction of said courts, and irrevocably agrees to be
bound by any judgment rendered thereby in connection with this Agreement. The
foregoing consent to jurisdiction shall not be deemed to confer rights on any
person other than the respective parties to this Agreement.
12. Expenses. If a dispute arises out of or related to this
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Agreement, if either party to the Agreement brings legal action to enforce the
terms of the Agreement, the party who prevails in such legal action, whether
plaintiff or defendant, in addition to the remedy or relief obtained in such
legal action, shall be entitled to recover his or its expenses incurred in such
legal action, including without limitation, court costs and attorneys fees. A
party shall be deemed to have prevailed in such a legal action if such action is
concluded pursuant to a court order or final judgment in favor of such party
which is not subject to appeal, a settlement agreement or dismissal of the
principal claims.
13. Entire Agreement. This Agreement contains the entire agreement
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of the parties and their Affiliates relating to the subject matter hereof and
supersedes all prior agreements, representations, warranties and understandings,
written or oral, with respect thereto.
14. Severability. If any term or provision of this Agreement or the
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application thereof to any person, property or circumstance shall to any extent
be invalid or unenforceable, the remainder of this Agreement, or the application
of such term or provision to persons, property or circumstances other than those
as to which it is invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall remain valid and enforceable to
the fullest extent permitted by law.
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15. Remedies.
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(a) Injunctive Relief. The Employee acknowledges and agrees that
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the covenants and obligations of the Employee contained in subsections (a), (b)
and (c) of Section 7 hereof relate to special, unique and extraordinary matters
and are reasonable and necessary to protect the legitimate interests of the
Company and its subsidiaries and Affiliates and that a breach of any of the
terms of such covenants and obligations will cause the Company irreparable
injury for which adequate remedies at law are not available. Therefore the
Employee agrees that the Company shall be entitled to an injunction, restraining
order, or other equitable relief from any court of competent jurisdiction,
restraining the Employee from any such breach.
(b) Remedies Cumulative. The Company's rights and remedies under
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this Section 15 are cumulative and are in addition to any other rights and
remedies the Company may have at law or in equity.
16. Withholding Taxes. The Company may deduct any federal, state or
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local withholding or other taxes from any payments to be made by the Company
hereunder in such amounts which the Company reasonably determine are required to
deduct under applicable law.
17. Amendments, Miscellaneous, etc. Neither this Agreement nor any
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term hereof may be changed, waived, discharged or terminated except by an
instrument in writing signed by the party against which such change, waiver,
discharge or termination is sought to be enforced. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original,
and all of which together shall constitute one and the same instrument. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this Agreement.
18. Survival. The covenants set forth in Sections 7, 8 and 9 of this
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Agreement shall survive and shall continue to be binding upon the parties
notwithstanding the termination of this Agreement for any reason whatsoever.
The covenants set forth in Sections 7 and 8 of this Agreement shall be deemed
and construed as separate agreements independent of any other provision of this
Agreement. The existence of any claim or cause of action by the Employee
against Company, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Company of any or all covenants.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first written above.
ION LASER TECHNOLOGY, INC.
By:_______________________________
Name:
Title:
__________________________________
XXXXXXX XXXXX
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