Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into
effective as of the 1st day of April, 2001, by and between OPTIKA INVESTMENT
COMPANY, INC., a Nevada corporation (the "Company") and Xxxxxx X. Xxxxxx (the
"Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to have the benefit of the Executive's
efforts and services; and
WHEREAS, the Company has determined that it is appropriate and in the
best interests of the Company to provide to the Executive protection in the
event of certain terminations of the Executive's employment relationship with
the Company in accordance with the terms and conditions contained herein and the
Executive desires to have such protection.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the Company and the Executive
hereby mutually covenant and agree as follows:
1. DEFINITIONS. Whenever used in this Agreement the following terms
shall have the meanings set forth below:
(a) "Accrued Benefits" shall mean the amount payable not later than
ten (10) days following an applicable Termination Date and which shall
be equal to the sum of the following amounts:
(i) All salary earned or accrued through the Termination
Date;
(ii) Reimbursement for any and all monies advanced in
connection with the Executive's employment for reasonable and
necessary expenses incurred by the Executive through the
Termination Date;
(iii) Any and all other cash benefits previously earned through
the Termination Date and deferred at the election of the
Executive or pursuant to any deferred compensation plans then in
effect;
(iv) The full amount of any stated bonus payable to the
Executive in accordance with Section 6(b) herein with respect to
the year in which termination occurs; and
(v) All other payments and benefits to which the Executive
may be entitled under the terms of any benefit plan of the
Company.
(b) "Act" shall mean the Securities Exchange Act of 1934;
(c) "Affiliate" shall have the same meaning as given to that term
in Rule 12b-2 of Regulation 12B promulgated under the Act;
(d) "Base Period Income" shall be an amount equal to the
Executive's "annualized includable compensation" for the "base period"
as defined in Sections 280G(d)(1) and (2) of the Code and the
regulations adopted thereunder;
(e) "Beneficial Owner" shall have the same meaning as given to that
term in Rule l3d-3 of the General Xxxxxx and Regulations of the Act,
provided that any pledgee of Company voting securities shall not be
deemed to be the Beneficial Owner thereof prior to its disposition of,
or acquisition of voting rights with respect to, such securities;
(f) "Board" shall mean the Board of Directors of the Company;
(g) "Cause" shall mean any of the following:
(i) The engaging by the Executive in fraudulent conduct, as
evidenced by a determination in a binding and final judgment,
order or decree of a court or administrative agency of competent
jurisdiction, in effect after exhaustion or lapse of all rights of
appeal, in an action, suit or proceeding, whether civil, criminal,
administrative or investigative, which the Board determines, in its
sole discretion, has a significant adverse impact on the Company in
the conduct of the Company's business;
(ii) Conviction of a felony, as evidenced by a binding and
final judgment, order or decree of a court of competent
jurisdiction, in effect after exhaustion or lapse of all rights of
appeal, which the Board determines, in its sole discretion, has a
significant adverse impact on the Company in the conduct of the
Company's business;
(iii) Neglect or refusal by the Executive to perform the
Executive's duties or responsibilities (unless significantly
changed without the Executive's consent); or
(iv) A significant violation by the Executive of the
Company's established policies and procedures;
Notwithstanding the foregoing, Cause shall not exist under Sections I (g)(iii)
and (iv) herein unless the Company furnishes written notice to the Executive of
the specific offending conduct and the Executive fails to correct such offending
conduct within the thirty (30) day period commencing on the receipt of such
notice.
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(h) "Change of Control" shall mean a change in ownership or
managerial control of the stock, assets or business of the Company
resulting from one or more of the following circumstances:
(i) A change of control of the Company, of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Act, or any
successor regulation of similar import, regardless of whether the
Company is subject to such reporting requirement;
(ii) A change in ownership of the Company through a
transaction or series of transactions, such that any Person or
Persons (other than any current officer of the Company or member
of the Board) is (are) or become(s), in the aggregate, the
Beneficial Owner(s), directly or indirectly, of securities of the
Company representing thirty percent (30%) or more of the
Company's then outstanding securities;
(iii) Any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or
pursuant to which shares of the common stock of the Company would
be converted into cash (other than cash attributable to
dissenters' rights), securities or other property provided by a
Person or Persons other than the Company, other than a
consolidation or merger of the Company in which the holders of
the common stock of the Company immediately prior to the
consolidation or merger have approximately the same proportionate
ownership of common stock of the surviving corporation
immediately after the consolidation or merger;
(iv) The shareholders of the Company approve a sale,
transfer, liquidation or other disposition of all or
substantially all of the assets of the Company to a Person or
Persons;
(v) During any period of two (2) consecutive years,
individuals who, at the beginning of such period, constituted the
Board of Directors of the Company cease, for any reason, to
constitute at least a majority thereof, unless the election or
nomination for election of each new director was approved by the
vote of at least two-thirds (2/3) of the directors then still in
office who were directors at the beginning of the period;
(vi) The filing of a proceeding under Chapter 7 of the
Federal Bankruptcy Code (or any successor or other statute of
similar import) for liquidation with respect to the Company; or
(vii) The filing of a proceeding under Chapter I I of the
Federal Bankruptcy Code (or any successor or other statute of
similar import) for
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reorganization with respect to the Company if in connection with
any such proceeding, this Agreement is rejected, or a plan of
reorganization is approved an element of which plan entails the
liquidation of all or substantially all the assets of the Company.
A "Change of Control" shall be deemed to occur on the actual
date on which any of the foregoing circumstances shall occur; provided,
however, that in connection with a "Change of Control" specified in
Section 1(h)(vii), a "Change of Control" shall be deemed to occur on
the date of the filing of the relevant proceeding under Chapter 11 of
the Federal Bankruptcy Code (or any successor or other statute of
similar import).
(i) "Change of Control Period" shall mean the period commencing
on the date a Change of Control occurs and ending on the second
anniversary of such Change of Control;
(j) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time;
(k) "Disability" shall mean a physical or mental condition
whereby the Executive is unable to perform a full-time basis the
customary duties of the Executive under this Agreement;
(l) "Federal Short Term-Rate" shall mean the rate defined in
Section 1274(d)(1)(C)(i) of the Code;
(m) "Good Reason" shall mean:
(i) The required relocation of the Executive, without
the Executive's consent, to an employment location which is
more than twenty-five (25) miles from the Executive's
employment location on the day preceding the date of this
Agreement;
(ii) The removal of the Executive from or any failure to
reelect the Executive to any of the positions held by the
Executive as of the date of this Agreement or any other
positions to which the Executive shall thereafter be elected
or assigned except in the event that such removal or failure
to reelect relates to the termination by the Company of the
Executive's employment for Cause or by reason of death,
Disability or voluntary retirement;
(iii) A significant adverse change, without the
Executive's written consent, in the nature or scope of the
Executive's authority, powers, functions, duties or
responsibilities, or a material reduction in the level of
support services, staff, secretarial and other assistance,
office space and accoutrements available to
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a level below that which was provided to the Executive on
the day preceding the date of this Agreement and that which
is necessary to perform any additional duties assigned to
the Executive following the date of this Agreement, which
change or reduction is not generally effective for all
executives employed by the Company (or its successor) in the
Executive's class or category; or
(iv) Breach or violation of any material provision of
this Agreement by the Company;
(n) "Gross Income" shall mean the greater of the amounts
payable pursuant to paragraph 6 or the Executive's average
compensation (base salary plus cash bonus) for the prior two (2)
taxable years, plus any other compensation payable to the Executive by
the Company for the same period, whether taxable or non-taxable;
(o) "Notice of Termination" shall mean the notice described
in Section 14 herein;
(p) "Person" shall mean any individual, partnership, joint
venture, association, trust, corporation or other entity, other than
an employee benefit plan of the Company or an entity organized,
appointed or established pursuant to the terms of any such benefit
plan;
(q) "Termination Date" shall mean, except as otherwise
provided in Section 14 herein, shall mean:
(i) The Executive's date of death;
(ii) Thirty (30) days after the delivery of the Notice
of Termination terminating the Executive's employment on
account of Disability pursuant to Section 9 herein, unless
the Executive returns on a full-time basis to the performance
of his or her duties prior to the expiration of such period;
(iii) Thirty (30) days after the delivery of the Notice
of Termination if the Executive's employment is terminated by
the Executive voluntarily; or
(iv) Thirty (30) days after the delivery of the Notice
of Termination if the Executive's employment is terminated by
the Company for any reason other than death or Disability;
(r) "Termination Payment" shall mean the payment described in
Section 13 herein;
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(s) "Total Payments" shall mean the sum of the Termination
Payment and any other "payments in the nature of compensation" (as
defined in Section 280G of the Code and the regulations adopted
thereunder) to or for the benefit of the Executive, the receipt of
which is contingent on a Change of Control and to which Section 28OG
of the Code applies.
2. EMPLOYMENT. The Company hereby agrees to employ the Executive and
the Executive hereby agrees to serve the Company, on the terms and conditions
set forth herein.
3. TERM. The employment of the Executive by the Company pursuant to
the provisions of this Agreement shall commence on the date hereof and end on
March 31, 2002, unless further extended or sooner terminated as hereinafter
provided. On March 31, 2002, and on the last day of March each year thereafter,
the term of the Executive's employment shall, unless sooner terminated as
hereinafter provided, be automatically extended for an additional one year
period from the date thereof unless, at least six (6) months before such March
31, the Company shall have delivered to the Executive or the Executive shall
have delivered to the Company written notice that the term of the Executive's
employment hereunder will not be extended beyond its existing duration.
4. POSITIONS AND DUTIES. The Executive shall serve as Executive Vice
President of the Company and in such additional capacities as set forth in
Section 7 herein. In connection with the foregoing positions, the Executive
shall have such duties, responsibilities and authority as may from time to time
be assigned to the Executive by the Board. The Executive shall devote
substantially all the Executive's working time and efforts to the business and
affairs of the Company.
5. PLACE OF PERFORMANCE. In connection with the Executive's employment
by the Company, the Executive shall be based at the principal executive offices
of the Company in Salt Lake City, Utah except for required travel on Company
business.
6. COMPENSATION AND RELATED MATTERS.
(a) SALARY. The Company shall pay to the Executive $120,000, as his
annualized base salary (subject to adjustment as provided herein) in
equal installments (as nearly as practicable), in accordance with the
Company's standard payroll policy (as in effect from time to time),
which currently provides for payments to be made every two weeks, in
arrears. Such annualized base salary may be increased from time to
time in accordance with normal business practices of the Company. The
annualized base salary of the Executive shall not be decreased below
its then existing amount during the term of this Agreement.
(b) BONUS. The Executive shall be entitled to receive bonuses, when
and as declared by the Board of Directors.
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(c) EXPENSES. The Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive in
performing services hereunder, including all expenses for travel and
living expenses while away from home on business or at the request of
and in the service of the Company, provided that such expenses are
incurred and accounted for in accordance with the policies and
procedures established from time to time by the Company.
(d) OTHER BENEFITS. The Company shall provide Executive with all
other benefits normally provided to an employee of the Company
similarly situated to Executive, including being added as a named
officer on the Company's existing directors' and officers' liability
insurance policy. At a minimum, the benefits will include:
(i) Health Insurance (medical, dental vision); and
(ii) Paid vacation.
(e) VACATIONS. The Executive shall be entitled to the number of
vacation days in each calendar year, and to compensation in respect of
earned but unused vacation days, determined in accordance with the
Company's vacation plan, but in no event less than twenty (20) days.
The Executive shall also be entitled to all paid holidays given by the
Company to its executives.
(f) SERVICES FURNISHED. The Company shall furnish the Executive
with office space at his current offices and shall provide such other
facilities and services as shall be suitable to the Executive's
position and adequate for the performance of the Executive's duties as
set forth in Section 4 hereof.
7. OFFICES. The Executive agrees to serve without additional
compensation, if elected or appointed thereto, in one or more executive offices
of the Company, or any affiliate or subsidiary of the Company, or as a member of
the board of directors of any subsidiary or affiliate of the Company; provided,
however, that the Executive is indemnified for serving in any and all such
capacities on a basis no less favorable than is currently provided in the
Company's bylaws, or otherwise.
8. TERMINATION AS A RESULT OF DEATH. If the Executive shall die during
the term of this Agreement, the Executive's employment shall terminate on the
Executive's date of death and the Executive's surviving spouse, or the
Executive's estate if the Executive dies without a surviving spouse, shall be
entitled to the Executive's Accrued Benefits as of the Termination Date and any
applicable Termination Payment.
9. TERMINATION FOR DISABILITY. If, as a result of the Executive's
Disability, the Executive shall have been unable to perform the Executive's
duties hereunder on a full-time
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basis for four (4) consecutive months and within thirty (30) days after the
Company provides the Executive with a Termination Notice, the Executive shall
not have returned to the performance of the Executive's duties on a full-time
basis, the Company may terminate the Executive's employment, subject to Section
14 herein. During the term of the Executive's Disability prior to termination,
the Executive shall continue to receive all salary and benefits payable under
Section 6 herein, including participation in all employee benefit plans,
programs and arrangements in which the Executive was entitled to participate
immediately prior to the Disability; provided, however, that the Executive's
continued participation is permitted under the terms and provisions of such
plans, programs and arrangements. In the event that the Executive's
participation in any such plan, program or arrangement is barred as the result
of such Disability, the Executive shall be entitled to receive an amount equal
to the contributions, payments, credits or allocations which would have been
paid by the Company to the Executive, to the Executive's account or on the
Executive's behalf under such plans, programs and arrangements. In the event the
Executive's employment is terminated on account of the Executive's Disability in
accordance with this Section 9, the Executive shall receive the Executive's
Accrued Benefits as of the Termination Date and shall remain eligible for all
benefits provided by any long-term disability programs of the Company in effect
at the time of such termination. The Executive shall also be entitled to the
Termination Payment described in Section 13(a).
10. TERMINATION FOR CAUSE. If the Executive's employment with the
Company is terminated by the Company for Cause, subject to the procedures set
forth in Section 14 herein, the Executive shall be entitled to receive the
Executive's Accrued Benefits as of the Termination Date. The Executive shall not
be entitled to receipt of any Termination Payment.
11. OTHER TERMINATION BY COMPANY. If the Executive's employment with
the Company is terminated by the Company other than by reason of death,
Disability or Cause, or as described in paragraph 13(f) below, subject to the
procedures set forth in Section 14 herein, the Executive (or in the event of the
Executive's death following the Termination Date, the Executive's surviving
spouse or the Executive's estate if the Executive dies without a surviving
spouse) shall receive the applicable Termination Payment. The Executive shall
not, in connection with any consideration receivable in accordance with this
Section 11, be required to mitigate the amount of such consideration by securing
other employment or otherwise and such consideration shall not be reduced by
reason of the Executive securing other employment or for any other reason.
12. VOLUNTARY TERMINATION BY EXECUTIVE. Provided that the Executive
furnishes thirty (30) days prior written notice to the Company, the Executive
shall have the right to voluntarily terminate this Agreement at any time. If the
Executive's voluntary termination is without Good Reason, the Executive shall
receive the Executive's Accrued Benefits as of the Termination Date and shall
not be entitled to any Termination Payment. If the Executive's voluntary
termination (other than a termination described in paragraph 13(f) below) is for
Good Reason, the Executive (or in the event of the Executive's death following
the Termination Date, the Executive's surviving spouse or the Executive's estate
if the Executive dies without a
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surviving spouse) shall receive the applicable Termination Payment. The
Executive shall not, in connection with any consideration receivable in
accordance with this Section 12, be required to mitigate the amount of such
consideration by securing other employment or otherwise and such consideration
shall not be reduced by reason of the Executive securing other employment or for
any other reason.
13. TERMINATION PAYMENT.
(a) If the Executive's employment is terminated as a result of
death or disability, the lump sum Termination Payment payable to the
Executive shall be equal to the greater of Executive's Gross Income
for the year preceding the Termination Date, or the amount set forth
in paragraph 6 on an annualized basis.
(b) If the Executive's employment is terminated by the Executive
for Good Reason or by the Company for any reason other than death,
disability or Cause, the Termination Payment payable to the Executive
by the Company or an affiliate of the Company shall be equal to two
(2) times the Executive's Gross Income for the year preceding the
Termination Date, or the amount set forth in paragraph 6 on an
annualized basis.
(c) If, during a Change of Control Period, the Executive's
employment is terminated by the Executive for Good Reason or by the
Company for any reason other than death, Disability, or Cause, the
Termination Payment payable to the Executive by the Company or an
affiliate of the Company shall be 2.99 times the Executive's Gross
Income for the year preceding the Termination Date, or the amount set
forth in paragraph 6 on an annualized basis.
(d) It is the intention of the Company and the Executive that no
portion of the Termination Payment and any other "payments in the
nature of compensation" (as defined in Section 28OG of the Code and
the regulations adopted thereunder) to or for the benefit of the
Executive under this Agreement, or under any other agreement, plan or
arrangement, be deemed to be an "excess parachute payment" as defined
in Section 280G of the Code. It is agreed that the present value of
the Total Payments shall not exceed an amount equal to two and
ninety-nine hundredths (2.99) times the Executive's Base Period
Income, which is the maximum amount which the Executive may receive
without becoming subject to the tax imposed by Section 4999 of the
Code or which the Company may pay without loss of deduction under
Section 28OG(a) of the Code. Present value for purposes of this
Agreement shalt be calculated in accordance with the regulations
issued under Section 28OG of the Code. Within sixty (60) days
following delivery of the Notice of Termination or notice by the
Company to the Executive of its belief that there is a payment or
benefit due the Executive which will result in an excess parachute
payment as defined in Section 28OG of the Code, the Executive and the
Company shall, at the Company's expense, obtain such opinions as more
fully described hereafter, which need
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not be unqualified, of legal counsel and certified public accountants
or a firm of recognized executive compensation consultants. The
Executive shall select said legal counsel, certified public
accountants and executive compensation consultants; provided, however,
that if the Company does not accept one (1) or more of the parties
selected by the Executive, the Company shall provide the Executive
with the names of such legal counsel, certified public accountants
and/or executive compensation consultants as the Company may select;
provided, further, however, that if the Executive does not accept the
party or parties selected by the Company, the legal counsel, certified
public accountants and/or executive compensation consultants selected
by the Executive and the Company, respectively, shall select the legal
counsel, certified public accountants and/or executive compensation
consultants, whichever is applicable, who shall provide the opinions
required by this Section 13(d). The opinions required hereunder shall
set forth (a) the amount of the Base Period Income of the Executive,
(b) the present value of Total Payments and (c) the amount and present
value of any excess parachute payments. In the event that such
opinions determine that there would be an excess parachute payment,
the Termination Payment or any other payment determined by such
counsel to be includable in Total Payments shall be reduced or
eliminated as specified by the Executive in writing delivered to the
Company within thirty (30) days of his or her receipt of such opinions
or, if the Executive fails to so notify the Company, then as the
Company shall reasonably determine, so that under the bases of
calculation set forth in such opinions there will be no excess
parachute payment. Ile provisions of this Section 13(d), including the
calculations, notices and opinions provided for herein shall be based
upon the conclusive presumption that the compensation and other
benefits, including but not limited to the Accrued Benefits, earned on
or after the date of Change of Control by the Executive pursuant to
the Company's compensation programs if such payments would have been
made in the future in any event, even though the timing of such
payment is triggered by the Change of Control, are reasonable
compensation for services rendered prior to the Change of Control;
provided, however, that in the event legal counsel so requests in
connection with the opinion required by this Section 13(d), a firm of
recognized executive compensation consultants, selected by the
Executive and the Company pursuant to the procedures set forth above,
shall provide an opinion, upon which such legal counsel may rely, as
to the reasonableness of any item of compensation as reasonable
compensation for services rendered prior to the Change of Control by
the Executive. In the event that the provisions of Sections 280G and
4999 of the Code are repealed without succession, this Section 13(d)
shall be of no further force or effect.
(e) The Termination Payment shall be payable in a lump sum not
later than ten (10) days following the Executive's Termination Date.
Such lump sum payment shall not be reduced by any present value or
similar factor. Further, the Executive shall not be required to
mitigate the amount of such payment by securing other employment or
otherwise and such payment shall not be reduced by reason of the
Executive securing other employment or for any other reason.
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(f) Notwithstanding anything to the contrary herein, in no event
will a termination of Executive's employment with the Company be
deemed to trigger a right to receive a Termination Payment if the
termination is effected by the mutual agreement of the Company and
Executive to accommodate a reassignment of Executive to an entity
created or acquired by the Company, or to which the Company has
contributed rights to technology, assets or business plans, if at the
time of such termination the Company owns or is acquiring a minimum of
a 19% equity interest in such entity. In the event of any such
termination, the Executive shall only be entitled to receive the
Executive's Accrued Benefits as of the Termination Date.
14. TERMINATION NOTICE AND PROCEDURE. Any termination by the Company or
the Executive of the Executive's employment during the Employment Period shall
be communicated by written Notice of Termination to the Executive, if such
Notice of Termination is delivered by the Company, and to the Company, if such
Notice of Termination is delivered by the Executive, all in accordance with the
following procedures:
(a) The Notice of Termination shall indicate the specific
termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances alleged to
provide a basis for termination;
(b) Any Notice of Termination by the Company shall be approved
by a resolution duly adopted by a majority of the directors of the
Company then in office;
(c) If the Executive shall in good faith furnish a Notice of
Termination for Good Reason and the Company notifies the Executive
that a dispute exists concerning the termination, within the fifteen
(15) day period following the Company's receipt of such notice, the
Executive shall continue the Executive's employment during such
dispute. If it is thereafter determined that (i) Good Reason did
exist, the Executive's Termination Date shall be the earlier of (A)
the date on which the dispute is finally determined, either by mutual
written agreement of the parties or pursuant to Section 19, (B) the
date of the Executive's death or (C) one day prior to the second (2nd)
anniversary of a Change of Control, and the Executives Termination
Payment, if applicable, shall reflect events occurring after the
Executive delivered the Executive's Notice of Termination; or (ii)
Good Reason did not exist, the employment of the Executive shall
continue after such determination as if the Executive had not
delivered the Notice of Termination asserting Good Reason; and
(d) If the Executive gives notice to terminate his or her
employment for Good Reason and a dispute arises as to the validity of
such dispute, and the Executive does not continue his employment
during such dispute, and it is finally determined that the reason for
termination set forth in such Notice of Termination did not exist, if
such notice was delivered by the Executive, the Executive shall be
deemed to have voluntarily terminated the Executive's employment other
than for Good Reason.
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15. NONDISCLOSURE OF PROPRIETARY INFORMATION. Recognizing that the
Company is presently engaged, and may hereafter continue to be engaged, in the
research and development of processes, the manufacturing of products or
performance of services, which involve experimental and inventive work and that
the success of its business depends upon the protection of the processes,
products and services by patent, copyright or by secrecy and that the Executive
has had, or during the course of his engagement may have, access to Proprietary
Information, as hereinafter defined, of the Company or other information and
data of a secret or proprietary nature of the Company. which the Company wishes
to keep confidential and the Executive has furnished, or during the course of
his engagement may furnish, such information to the Company, the Executive
agrees that:
(a) "Proprietary Information" shall mean any and all methods,
inventions, improvements or discoveries, whether or not patentable or
copyrightable, and any other information of a similar nature related
to the business of the Company disclosed to the Executive or otherwise
made known to him as a consequence of or through his engagement by the
Company (including infonnation originated by the Executive) in any
technological area previously developed by the Company or developed,
engaged in, or researched, by the Company during the term of the
Executive's engagement, including, but not limited to, trade secrets,
processes, products, formulae, apparatus, techniques, know-how,
marketing plans, data, improvements, strategies, forecasts, customer
lists, and technical requirements of customers, unless such
information is in the public domain to such an extent as to be readily
available to competitors;
(b) The Executive acknowledges that the Company has exclusive
property rights to all Proprietary Information and the Executive
hereby assigns all rights he might otherwise possess in any
Proprietary Information to the Company. Except as required in the
performance of his duties to the Company, the Executive will not at
any time during or after the term of his engagement, which term shall
include any time in which the Executive may be retained by the Company
as a consultant, directly or indirectly use, communicate, disclose or
disseminate any Proprietary Information or any other information of a
secret, proprietary, confidential or generally undisclosed nature
relating to the Company, its products, customers, processes and
services, including information relating to testing, research,
development, manufacturing, marketing and selling;
(c) All documents, records, notebooks, notes, memoranda and
similar repositories of, or containing, Proprietary Information or any
other information of a secret, proprietary, confidential or generally
undisclosed nature relating to the Company or its operations and
activities made or compiled by the Executive at any time or made
available to him or her prior to or during the term of his engagement
by the Company, including any and all copies thereof, shall be the
property of the Company, shall be held by him or her in trust solely
for the benefit of the Company, and shall be delivered to the Company
by him or her on the termination of his or her engagement or at any
other time
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on the request of the Company; and
(d) The Executive will not assert any rights under any inventions,
copyrights, discoveries, concepts or ideas, or improvements thereof, or
know-how related thereto, as having been made or acquired by him or her
prior to his or her being engaged by the Company or during the term of
his engagement if based on or otherwise related to Proprietary
Information.
16. ASSIGNMENT OF INVENTIONS.
(a) For purposes of this Section 16, the term "Inventions" shall
mean discoveries, concepts, and ideas, whether patentable or
copyrightable or not, including but not limited to improvements,
know-how, data, processes, methods, formulae, and techniques, as well
as improvements thereof or know-how related thereto, concerning any
past, present or prospective activities of the Company which the
Executive makes, discovers or conceives (whether or not during the
hours of his engagement or with the use of the Company's facilities,
materials or personnel), either solely or jointly with others during
his or her engagement by the Company or any affiliate and, if based on
or related to Proprietary Information, at any time after termination
of such engagement. All Inventions shall be the sole property of the
Company, and Executive agrees to perform the provisions of this
Section 16 with respect thereto without the payment by the Company of
any royalty or any consideration therefor other than the regular
compensation paid to the Executive in the capacity of an employee or
consultant.
(b) The Executive shall maintain written notebooks in which he or
she shall set forth, on a current basis, information as to all
Inventions, describing in detail the procedures employed and the
results achieved as well as information as to any studies or research
projects undertaken on the Company's behalf The written notebooks
shall at all times be the property of the Company and shall be
surrendered to the Company upon termination of his or her engagement
or, upon request of the Company, at any time prior thereto.
(c) The Executive shall apply, at the Company's request and
expense, for United States and foreign letters patent or copyrights
either in the Executive's name or otherwise as the Company shall
desire.
(d) The Executive hereby assigns to the Company all of his or her
rights to such Inventions, and to applications for United States
and/or foreign letters patent or copyrights and to United States
and/or foreign letters patent or copyrights granted upon such
Inventions.
(e) The Executive shall acknowledge and deliver promptly to the
Company, without charge to the Company, but at its expense, such
written instruments (including
13
applications and assignments) and do such other acts, such as giving
testimony in support of the Executive's inventorship, as may be
necessary in the opinion of the Company to obtain, maintain, extend,
reissue and enforce United States and/or foreign letters patent and
copyrights relating to the Inventions and to vest the entire right and
title thereto in the Company or its nominee. The Executive
acknowledges and agrees that any copyright developed or conceived of
by the Executive during the term of Executive's employment which is
related to the business of the Company shall be a "work for hire"
under the copyright law of the United States and other applicable
jurisdictions.
(f) The Executive represents that his or her performance of all
the terms of this Agreement and as an employee of or consultant to the
Company does not and will not breach any trust prior to his or her
employment by the Company. The Executive agrees not to enter into any
agreement either written or oral in conflict herewith and represents
and agrees that he or she has not brought and will not bring with him
to the Company or use in the performance of his or her
responsibilities at the Company any materials or documents of a former
employer which are not generally available to the public, unless he or
she has obtained written authorization from the former employer for
their possession and use, a copy of which has been provided to the
Company.
(g) No provisions of this Section shall be deemed to limit the
restrictions applicable to the Executive under Section 15.
(h) No provisions of this Section shall be deemed or construed to
require the Executive to assign to the Company any rights or
intellectual property with respect to any invention which (i) is
created by the Executive entirely on his own time, (ii) does not
constitute an "employment invention" as defined in the Utah Employment
Inventions Act, and (iii) is not exempted from the application of the
Utah Employment Inventions Act.
17. SHOP RIGHTS. The Company shall also have the royalty-free right to
use in its business, and to make, use and sell products, processes and/or
services derived from any inventions, discoveries, concepts and ideas, whether
or not patentable, including but not limited to processes, methods, formulas and
techniques, as well as improvements thereof or know-how related thereto, which
are not within the scope of Inventions as defined in Section 16 but which are
conceived or made by the Executive during the period he or she is engaged by the
Company or with the use or assistance of the Company's facilities, materials or
personnel.
18. NON-COMPETE. The Executive hereby agrees that during the term of
this Agreement and for the period of one year from the termination hereof, that
the Executive will not;
(a) Within any jurisdiction or marketing area in the United States
in which the Company or any subsidiary thereof is doing business, own,
manage, operate or control any business of the type and character
engaged in and competitive with the Company or
14
any subsidiary thereof. For purposes of this Section, ownership of
securities of not in excess of five percent (5%) of any class of
securities of a public company shall not be considered to be
competition with the Company or any subsidiary thereof; or
(b) Within any jurisdiction or marketing area in the United States
in which the Company or any subsidiary thereof is doing business, act
as, or become employed as, an officer, director, employee, consultant
or agent of any business of the type and character engaged in and
competitive with the Company or any of its subsidiaries; or
(c) Solicit any similar business to that of the Company's for, or
sell any products that are in competition with the Company's products
to, any company in the United States, which is, as of the date hereof,
a customer or client of the Company or any of its subsidiaries, or was
such a customer or client thereof within two years prior to the date
of this Agreement; or
(d) Solicit the employment of any full time employee employed by
the Company or its subsidiaries as of the date of termination of this
Agreement.
19. REMEDIES AND JURISDICTION.
(a) The Executive hereby acknowledges and agrees that a breach of
the agreements contained in this Agreement will cause irreparable harm
and damage to the Company, that the remedy at law for the breach or
threatened breach of the agreements set forth in this Agreement will
be inadequate, and that, in addition to all other remedies available
to the Company for such breach or threatened breach (including,
without limitation, the right to recover damages), the Company shall
be entitled to injunctive relief for any breach or threatened breach
of the agreements contained in this Agreement.
(b) All claims, disputes and other matters in question between the
parties arising under this Agreement, shall, unless otherwise provided
herein, be decided by arbitration in Salt Lake City, Utah, in
accordance with the Model Employment Arbitration Procedures of the
American Arbitration Association (including such procedures governing
selection of the specific arbitrator or arbitrators), unless the
parties mutually agree otherwise. The Company shall pay the costs of
any such arbitration. The award by the arbitrator or arbitrators shall
be final, and judgment may be entered upon it in accordance with
applicable law in any state or Federal court having jurisdiction
thereof
20. ATTORNEYS' FEES. In the event that either party hereunder
institutes any legal proceedings in connection with its rights or obligations
under this Agreement, the prevailing party in such proceeding shall be entitled
to recover from the other party, all costs incurred in connection with such
proceeding, including reasonable attorneys' fees, together with interest thereon
from the date of demand at the rate of twelve percent (12%) per annum.
15
21. SUCCESSORS. This Agreement and all rights of the Executive shall
inure to the benefit of and be enforceable by the Executive's personal or legal
representatives, estates, executors, administrators, heirs and beneficiaries. In
the event of the Executive's death, all amounts payable to the Executive under
this Agreement shall be paid to the Executive's surviving spouse, or the
Executive's estate if the Executive dies without a surviving spouse. This
Agreement shall inure to the benefit of, be binding upon and be enforceable by,
any successor, surviving or resulting corporation or other entity to which all
or substantially all of the business and assets of the Company shall be
transferred whether by merger, consolidation, transfer or sale.
22. ENFORCEMENT. The provisions of this Agreement shall be regarded as
divisible, and if any of said provisions or any part hereof are declared invalid
or unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder of such provisions or parts hereof and the
applicability thereof shall not be affected thereby.
23. AMENDMENT OR TERMINATION. This Agreement may not be amended or
terminated during its term, except by written instrument executed by the Company
and the Executive.
24. SURVIVABILITY. The provisions of Sections 15, 16, 17, 18, 19, and
20 shall survive termination of this Agreement.
25. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement
between the Executive and the Company with respect to the subject matter hereof,
and supersedes all prior oral or written agreements, negotiations, commitments
and understandings with respect thereto.
26. VENUE; GOVERNING LAW. This Agreement and the Executive's and
Company's respective rights and obligations hereunder shall be governed by and
construed in accordance with the laws of the State of Utah without giving effect
to the provisions, principles, or policies thereof relating to choice or
conflicts of laws.
27. NOTICE. Notices given pursuant to this Agreement shall be in
writing and shall be deemed given when received, and if mailed, shall be mailed
by United States registered or certified mail, return receipt requested,
addressee only, postage prepaid, if to the Company, to:
Company: Optika Investment Company, Inc.
0000 Xxxx Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxxx Xxxxxxx, XX 00000-0000
Facsimile: (000) 000-0000
Executive: Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Facsimile: (000) 000-0000
16
or to such other address as the Company shall have given to the Executive or, if
to the Executive, to such address as the Executive shall have given to the
Company.
28. NO WAIVER. No waiver by either party at any time of any breach by
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
29. HEADINGS. The headings herein contained are for reference only and
shall not affect the meaning or interpretation of any provision of this
Agreement.
30. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer, and the Executive has executed this
Agreement, on the date and year first above written.
"COMPANY"
OPTIKA INVESTMENT COMPANY, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------------------------
President , [Title]
-------------------
"EXECUTIVE"
/s/ Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx X. Xxxxxx
17
