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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made and entered into, at
Irvine, California, as of February 14, 2000, by and between A.I.N. Corporation,
a California corporation (the "Company"), with offices at 0000 Xxxx Xxxxxx
Xxxxx, #000, Xxx Xxxxx; xxxxxxxxx.xxx inc., a corporation duly organized under
the laws of the State of Delaware and the sole stockholder of the Company (the
"Parent"), with offices at 00000 XxxXxxxxx Xxxx., Xxxxxx, Xxxxxxxxxx 00000-0000;
and Xxxxxxx Xxxxx (hereinafter referred to as the "Executive"), who resides at
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxx, Xxxxxxxxxx 00000.
RECITALS
WHEREAS: Executive desires to be employed and the Company desires to
employ Executive, subject to the following terms and conditions.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and with reference to the above recitals, the parties hereby
agree as follows:
ARTICLE 1
TERM OF EMPLOYMENT
The Company hereby employs the Executive as President of the Company and
the Executive hereby accepts such employment by the Company for a period of
three (3) years (the "Term") commencing from the date hereof (the "Commencement
Date") and expiring upon the third anniversary of the Commencement Date, unless
extended by mutual agreement of the parties.
ARTICLE 2
DUTIES AND OBLIGATIONS
2.1 During the Term of this Agreement, the Executive shall: (i) devote
his full business time, attention and energies to the business of the Company;
(ii) shall use his best efforts to promote the interests of the Company; (iii)
shall perform all functions and services as the President of the Company,
including general management and supervision over the operations of the business
and employees of the Company; (iv) shall act in accordance with the policies and
directives of the Company, as determined from time to time by the Board of
Directors of the Company (the "Board") and by the Chief Executive Officer of the
Parent.
2.2 The Executive covenants and agrees that, while actually employed by
the Company, he shall not engage in any other business duties or pursuits
whatsoever, or directly or indirectly render any services of a business or
commercial nature to any other person or organization, including, but not
limited to,
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providing services to any business that is in competition with or similar in
nature to the Company or the Parent, whether for compensation or otherwise,
without the prior written consent of the Board. Notwithstanding anything herein
contained to the contrary, this Agreement shall not be construed to prohibit the
Executive from making passive personal investments or conducting personal
business, financial or legal affairs or other personal matters if those
activities do not materially interfere with the services required hereunder.
ARTICLE 3
COMPENSATION
3.1 As compensation for the services to be rendered by the Executive
pursuant to this Agreement, the Company will pay the Executive a base salary
equal to Two Hundred Twenty- Five Thousand Dollars ($225,000) per year during
the Term of this Agreement, which rate shall be reviewed by the Board annually
and may be increased (but not reduced) by the Board in such amounts as the
Board, in its sole discretion, deems appropriate. The base salary shall be paid
in substantially equal bimonthly installments, in accordance with the normal
payroll practices of the Company.
3.2 The Company shall provide the Executive with the opportunity to earn
an annual bonus for each fiscal year of the Company, occurring in whole or in
part during the Term. The annual bonus payable to the Executive shall be in such
amount and based on such criteria for the award as may be established by the
Board from time to time. Any bonus shall be paid as promptly as practicable
following the end of the preceding fiscal year. The Executive shall participate
in all other employee benefit plans in which other senior executives of the
Company are eligible collectively to participate from time to time.
3.3 As further consideration for the services rendered by the Executive
during the Term, the Executive shall be granted a stock option to purchase
shares of the Parent's common stock on the terms and conditions set forth in the
Stock Option Agreement attached as Exhibit A (the "Option").
3.4 The Company shall have the right to deduct or withhold from the
compensation due to the Executive hereunder any and all sums required for
federal income and employee social security taxes and all state or local income
taxes now applicable or that may be enacted and become applicable during the
Term.
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ARTICLE 4
EMPLOYEE BENEFITS
4.1 The Company agrees that the Executive shall be entitled to all
ordinary and customary perquisites afforded to executive employees of the
Company.
4.2 The Executive shall be entitled to three (3) weeks of paid vacation
for each year of his employment hereunder.
ARTICLE 5
BUSINESS EXPENSES
5.1 The Company shall pay or reimburse the Executive for all reasonable
and authorized business expenses incurred by the Executive during the Term; such
payment or reimbursement shall not be unreasonably withheld so long as said
business expenses have been incurred for and promote the business of the Company
and are incurred in accordance with the Company's expense reimbursement
policies.
5.2 As a condition to reimbursement under this Article 5, the Executive
shall furnish to the Company adequate records and other documentary evidence
required by federal and state statutes and regulations for the substantiation of
each expenditure. The Executive acknowledges and agrees that failure to furnish
the required documentation may result in the Company denying all or part of the
expense for which reimbursement is sought.
ARTICLE 6
TERMINATION OF EMPLOYMENT
6.1 Termination for Cause. The Board may, during the Term, without
notice to the Executive, terminate this Agreement and discharge the Executive
for Cause, whereupon the respective rights and obligations of the parties
hereunder shall terminate; provided, however, that the Company shall pay the
Executive any amount due and owing pursuant to Articles 3, 4, and 5, prorated to
the date of termination. As used herein, the term "for Cause" shall refer to the
termination of the Executive's employment as a result of any one or more of the
following: (i) Executive commits any willful breach or gross neglect of his
duties under this Agreement after written notice to Executive specifying such
breach or neglect and if possible a reasonable opportunity to cure such of not
less than ten (10) days, (ii) Executive is convicted of a felony or charged with
a misdemeanor involving a moral turpitude, or (iii) Executive breaches the
covenants contained in Article 8 hereof.
6.2 Termination Without Cause. The Company in its sole and absolute
discretion may elect to terminate this Agreement without Cause or prior warning
immediately upon written notice to Executive, in which event the Company's only
obligations shall be to pay to Executive
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(i) any amount due and owing pursuant to Articles 3, 4, and 5, prorated to the
date of termination and (ii) the Executive's salary for an additional One
Hundred Eighty (180) days following the termination.
6.3 Termination for Death or Disability. The Executive's employment
shall terminate automatically upon the Executive's death during the Term. If the
Company determines in good faith that the Disability (as defined below) of the
Executive has occurred during the Term, it shall give written notice to the
Executive of its intention to terminate his employment. In such event, the
Executive's employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Executive, provided that, within the
thirty (30) days after such receipt, the Executive shall not have returned to
full-time performance of his duties.
For purposes of this Agreement, "Disability" shall mean the inability
of the Executive to perform his duties under this Agreement on account of
physical or mental illness or incapacity for a period of one hundred twenty
(120) consecutive calendar days, or for a period of one hundred eighty (180)
calendar days, whether or not consecutive, during any three hundred sixty-five
(365) day period.
6.4 Termination for Good Cause. The Executive may terminate his
employment with the Company due to the Company's relocation of the Executive's
principal business office more than 50 miles outside San Ramon, California
without his consent, in which event the Company's only obligations shall be to
pay to Executive (i) any amount due and owing pursuant to Articles 3, 4, and 5,
prorated to the date of termination and (ii) the Executive's salary for an
additional One Hundred Eighty (180) days following the termination.
ARTICLE 7
INDEMNIFICATION
7.1 If the Executive is a party or is threatened to be made a party to
any threatened, pending or completed claim, action, suit or proceeding, or
appeal therefrom, whether civil, criminal, administrative, investigative or
otherwise, because he is or was an officer or director of the Company, the
Company shall indemnify the Executive against any reasonable expenses (including
attorneys' fees and disbursements), and any judgments, fines and amounts paid in
settlement incurred by him in connection with such claim, action, suit,
proceeding or appeal therefrom to the extent such expenses, judgments, fines and
amounts paid in settlement were not advanced by the Company on his behalf
pursuant to Section 7.2 below, to the fullest extent permitted by law.
7.2 Provided that Executive shall first have agreed in writing to repay
such amounts advanced if it is determined by an arbitrator or court of competent
jurisdiction that the Executive
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was not entitled to indemnification, upon the written request of the Executive
specifying the amount of a requested advance and the intended use thereof, the
Company shall indemnify Executive for his expenses (including attorneys' fees
and disbursements), judgments, fines and amounts paid in settlement incurred by
him in connection with such claim, action, suit, proceeding or appeal whether
civil, criminal, administrative, investigative or otherwise, in advance of the
final disposition of any such claim, action, suit, proceeding or appeal
therefrom to the fullest extent permitted by law.
ARTICLE 8
RESTRICTIVE COVENANTS
8.1 Covenant Not to Disclose Confidential Information. During the Term
and following termination of this Agreement, the Executive agrees that, without
the Company's prior written consent authorized by the Board, he will not use or
disclose to any person, firm, association, partnership, entity or corporation,
any confidential information concerning: (i) the business operations or internal
structure of the Company, the Parent or any of their subsidiaries, joint
ventures, other operations, affiliates or investments (collectively, the
Business") ; (ii) the customers of the Business; (iii) the financial condition
of the Business; and (iv) other confidential information pertaining to the
Business, including without limitation, trade secrets, technical data, marketing
analyses and studies, operating procedures, customer and/or inventor lists, or
the existence or nature of any of the agreements concerning the Business;
provided, however, that the Executive shall be entitled to disclose such
information: (i) to the extent the same shall have otherwise become publicly
available (unless made publicly available by the Executive); (ii) during the
course of or in connection with any actual or potential litigation, arbitration,
or other proceeding based upon or in connection with the subject matter of this
Agreement; (iii) as may be necessary or appropriate to conduct his duties
hereunder, provided the Executive is acting in good faith and in the best
interest of the Company; or (iv) as may be required by law or judicial process.
8.2 Covenant Not to Compete. The Executive acknowledges that he has
established and will continue to establish favorable relations with the
customers, clients and accounts of the Business and will have access to trade
secrets concerning the Business. Therefore, in consideration of such relations
and to further protect trade secrets, directly or indirectly, of the Company and
the Parent, the Executive agrees that during the Term, the Executive will not,
directly or indirectly, without the express written consent of the Board own or
have any interest in or act as an officer, director, partner, principal,
employee, agent, representative, consultant or independent contractor of, or in
any way assist in, any business which is engaged, directly or indirectly, in any
business competitive with the Business in the United States at any time during
the Term, or become associated with or render services to any person, firm,
corporation or other entity so engaged ("Competitive Businesses"); provided,
however; that the Executive may own without the express written consent of the
Company not more than one percent (1%) of the issued and outstanding securities
of any company or enterprise whose securities are listed on a
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national securities exchange or actively traded in the over-the-counter market.
Notwithstanding the foregoing, if any court determines that the covenant not to
compete, or any part thereof, is unenforceable because of the duration of such
provision or the geographic area or scope covered thereby, such court shall have
the power to reduce the duration, area or scope of such provision to the extent
necessary to make the provision enforceable and, in its reduced form, such
provision shall then be enforceable and shall be enforced;
8.3 Nonsolicitation. The Executive acknowledges that he has established
and will continue to establish favorable relations with the customers, clients
and accounts of the Business and will have access to trade secrets concerning
the Business. Therefore, in consideration of such relations and to further
protect trade secrets, directly or indirectly, of the Company and the Parent,
the Executive agrees that during the Term and two (2) years thereafter, the
Executive will not, directly or indirectly, without the express written consent
of the Board
(i) solicit clients, customers or accounts of the Company for,
on behalf of or otherwise related to the Business or any products or
services related thereto for any other person or entity; or
(ii) solicit any person who is or shall be in the employ or
service of the Business (or within 12 months of any such solicitation
was in the employ or service of the Business) to leave such employ or
service to become employed with any other business.
8.4 Specific Performance. Recognizing that irreparable damage will
result to the Company and the Parent in the event of the breach or threatened
breach of any of the foregoing covenants and assurances by the Executive
contained in this Article 8, and that the Company's and Parent's remedies at law
for any such breach or threatened breach may be inadequate, the Company and the
Parent and their successors and assigns, in addition to such other remedies
which may be available to them, shall be entitled to an injunction to be issued
by any court of competent jurisdiction ordering compliance with this Agreement
or enjoining and restraining the Executive, and each and every person, firm or
company acting in concert or participation with him, from the continuation of
such breach. The obligations of the Executive and rights of the Company and the
Parent pursuant to this Article 8 shall survive the termination of this
Agreement. The covenants and obligations of the Executive set forth in this
Article 8 are in addition to and not in lieu of or exclusive of any other
obligations and duties the Executive owes to the Company, whether expressed or
implied in fact or law.
ARTICLE 9
GENERAL PROVISIONS
9.1 This Agreement and any attached schedules or exhibits (which are
incorporated herein and shall be treated as a part of this Agreement) are
intended to be the final, complete and
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exclusive agreement between the parties relating to the employment of the
Executive by the Company and all prior or contemporaneous understandings,
representations and statements, oral or written, are merged herein. No
modification waiver, amendment, discharge or change of this Agreement shall be
valid unless the same is in writing and signed by the party against which the
enforcement thereof is or may be sought.
9.2 No waiver, by conduct or otherwise, by any party of any term,
provision, or condition of this Agreement, shall be deemed or construed as a
further or continuing waiver of any such term, provision, or condition nor as a
waiver of a similar or dissimilar condition or provision at the same time or at
any prior or subsequent time.
9.3 The rights under this Agreement, or by law or equity, shall be
cumulative and may be exercised at any time and from time to time. No failure by
any party to exercise, and no delay in exercising, any rights shall be construed
or deemed to be a waiver thereof, nor shall any single or partial exercise by
any party preclude any other or future exercise thereof or the exercise of any
other right.
9.4 Except as otherwise provided in this Agreement, any notice,
approval, consent, waiver or other communication required or permitted to be
given or to be served upon any person in connection with this Agreement shall be
in writing. Such notice shall be personally served, sent by telegram, tested
telex, fax or cable, or sent prepaid by either registered or certified mail with
return receipt requested or Federal Express and shall be deemed given (i) if
personally served or by Federal Express, when delivered to the person to whom
such notice is addressed, (ii) if given by telegram, telex, fax or cable, when
sent, or (ii) if given by mail, two (2) business days following deposit in the
United States mail. Any notice given by telegram, telex, fax or cable shall be
confirmed in writing by overnight mail or Federal Express within forty-eight
(48) hours after being sent. Such notices shall be addressed to the party to
whom such notice is to be given at the party's address set forth below or as
such party shall otherwise direct.
If to the Parent or: xxxxxxxxx.xxx inc.
the Company 00000 XxxXxxxxx Xxxx., Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Attn: General Counsel
Facsimile: (000) 000-0000
With a copy to: Xxxxxx Xxxxxxx, Esq.
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
If to the Executive: Xxxxxxx Xxxxx
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
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With a copy to: Xxxx Lion, Esq.
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
9.5 The terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the successors and assigns of the parties hereto.
9.6 This Agreement shall be construed and enforced in accordance with
the laws of the State of California, without giving effect to the principles of
conflict of laws thereof.
9.7 This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which shall constitute one
instrument.
9.8 The provisions of this Agreement are agreed to be severable, and if
any provision, or application thereof, is held invalid or unenforceable, then
such holding shall not effect any other provision or application.
9.9 As used herein, and as the circumstances require, the plural term
shall include the singular, the singular shall include the plural, the neuter
term shall include the masculine and feminine genders, and the masculine term
shall include the neuter and the feminine genders.
9.10 Any controversy or claim arising out of, or related to, this
Agreement, or the breach thereof, shall be settled by binding arbitration in the
City of Irvine, California, in accordance with the rules then in effect of the
American Arbitration Association, and the arbitrator's decision shall be binding
and final, and judgment upon the award rendered may be entered in any court
having jurisdiction thereof. Each party hereto shall pay its or their own
expenses incident to the negotiation, preparation and resolution of any
controversy or claim arising out of, or related to, this Agreement, or the
breach thereof, provided, however, the Company shall pay and be solely
responsible for any attorneys' fees and expenses and court or arbitration costs
incurred by the Executive as a result of a claim that the Company has breached
or otherwise failed to perform this Agreement or any provision hereof to be
performed by the Company if the Executive prevails in the contest in whole or in
part.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
AIN CORPORATION
By: /s/ Xxxxxxx Xxxxx
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Name: Xxxxxxx Xxxxx
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Title: President and Secretary
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XXXXXXXXX.XXX INC.
By /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
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Title: Vice-President and General Cousnel
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/s/ Xxxxxxx Xxxxx
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XXXXXXX XXXXX
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