EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement') dated as of November 1, 1996,
between VISTA TECHNOLOGIES INC., a Nevada corporation with its principal place
of business in the United States at 000 X. Xxx Xxxxxxx Xxxx, Xxxxx 0, Xxx
Xxxxx, XX 00000 (herein called the "Company") and Xxxxx X. Xxxxx (herein
called the "Employee") residing at 0000 Xxxxxxxxxx Xx., Xxx Xxxxxxxxx, XX
00000
1. EMPLOYMENT. The Company hereby employs Employee as the Company's
Executive Vice President and Chief Operating Officer reporting to the
Company's Chief Executive Officer. Employee will be responsible for management
and supervision of the Company's operations for the term of this Agreement,
and the Employee hereby accepts such employment upon the terms and conditions
hereinafter set forth.
2. TERM. The term of this Agreement shall commence as of November 1,
1996 (the "Employment Date") and shall continue in effect for a term of 36
months, unless previously terminated in accordance with the provisions of
Section 6 of this Agreement. Thereafter, this Agreement shall be automatically
renewed on a year-to-year basis unless either party shall provide the other
with notice in writing of the termination of this Agreement at least 60 days'
prior to the expiration of this Agreement at the end of its original term or
any renewal thereof. For purposes of this Agreement, the "term of this
Agreement" shall refer to the initial term and all renewal terms hereof. In
the event of termination by the Company prior to the expiration of this
Agreement at the end of its original term or any renewal thereof, the Company
shall pay the Employee severance pay and benefits required by Section 6(e) of
this Agreement unless termination by the Company is for a reason specified in
Sections 6(a), 6(b) or 6(c) hereunder
3. COMPENSATION. For all services rendered by the Employee under this
Agreement, the Company shall pay the Employee a salary and fringe benefits as
follows;
(a) CASH COMPENSATION: The Company shall pay the Employee a base
salary during the term of this Agreement, payable monthly, at the rate
of $175,000 per year per
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annum. In lieu of an annual bonus for the current fiscal year ending
March 31, 1997, Employee will receive a payment of $50,000 on May 1,
1997. Thereafter Employee will be eligible to receive an fiscal annual
performance bonus of up to 100% of base salary based upon achievement
of reasonable and achievable Company goals as determined and approved
in good faith by the Board of Directors to be paid no later than 90
days from the end of such year. Employee shall be eligible for annual
performance appraisal and merit increase. Company may, but is not
obligated to, increase Employee's salary as Company deems appropriate.
(b) Stock Options: The Company shall grant the Employee Incentive
Stock Options under the Vista Technologies Inc. 1994 Stock Option Plan
to purchase 500,000 common shares of the Company at $2.625 per share
which shall vest in equal quarterly increments over a period of 12
quarters from the Employment Date as set forth in the Stock Option
Agreement.
(c) MEDICAL, INSURANCE, AND OTHER BENEFITS: The Employee shall at
his option be entitled to participate with other employees of the
Company in all group fringe benefit plans or other group arrangements
authorized and adopted from time to time. Employee shall also receive
such other benefits including vacation, holidays, and sick leave, as
Company generally provides to its employees holding similar positions
as that of Employee. The Company agrees to make available to Employee
Company-paid medical and long-term disability plans, and will make the
annual payments for Employee's life insurance policy #1A22073200
provided by Pacific Mutual Insurance.
(d) CAFETERIA PLAN: The Company agrees to reimburse Employee an
amount equal to no more than seven and one half per cent (7 1/2%) of
base salary in any year for personal benefit expenses related to
Employee and his family as determined by Employee at his sole
discretion. Cafeteria Plan benefits shall not be accumulated and
carried over from one year to the next, and shall be forfeited to the
extent not used within any calendar year.
(e) EXPENSES: The Company shall either pay directly or reimburse
Employee for reasonable travel, entertainment and other business
expenses incurred by Employee in the performance of his duties
hereunder; provided that the incurring
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of such expenses shall be subject to such policies as shall be
established by the Board of Directors of the Company from time to
time, and Employee shall submit to the Company such documentation to
substantiate such expenses as the Company shall reasonably request.
(f) INITIAL EMPLOYMENT BONUS: Company will pay Employee a cash bonus
of $25,000 on or before December 15, 1996. In addition, the Company
shall grant Employee upon effective date of the Agreement 100,000
Class G Common Stock Purchase Warrants for Company common shares
exercisable at a price of $2.625 per share in exchange for $100. The
Company has the right to repurchase these warrants for $100 should
Employee be Terminated by the Company for any reason other than in
paragraphs 6(a), 6(b), and 6(d) hereof.
Nothing herein shall be deemed to preclude the Company from awarding
additional compensation or benefits to Employee during the term of this
Agreement, upon approval of Company's Board of Directors, whether in the form
of raises, bonuses, additional fringe benefits, or otherwise.
4. DUTIES. During the term of this Agreement, the Employee hereby
promises to perform and discharge faithfully the duties which may be assigned
to him from time to time by the President of the Company in connection with
the conduct of its business so long as such duties are reasonably related to
the Employee's duties Executive Vice President and Chief Operating Officer of
the Company. Employee will be responsible for all domestic and foreign
operations of the Company and will have all relevant executives and their
respective subordinates report to him with the exception of the Chief
Financial Officer and his subordinates. Employee is employed to actively serve
on a full-time basis as an executive officer of the Company reporting directly
to its President.
5. EXTENT OF SERVICES; OTHER INTERESTS. During the term of this
Agreement, the Employee shall devote all of his working time, attention and
energies which is reasonably required for the performance of his duties and
the business of the Company and shall travel as reasonably required to
discharge the duties of his position with the Company as assigned by its Board
of Directors. The Employee shall not during the term of this Agreement be
engaged in any other business activities that are, or could
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potentially be, in competition with the business activities of the Company
whether or not such business activities are pursued for gain, profit or other
pecuniary advantage. Subject to the foregoing, the Employee may engage in
investment, business, professional and continuing education activities so long
as such activities do not substantially interfere with the performance of his
duties as the Executive Vice President and Chief Operating Officer of the
Company.
6. TERMINATION. Payment of severance described in this Section 6 shall
be paid no later than ten (10) days after becoming due.
(a) DEATH: In the event of Employee's death during the term hereof,
this Agreement shall terminate immediately and, except as expressly
set forth in this paragraph, the Company shall have no further
liability hereunder to Employee or his estate. The Company shall
continue to pay to Employee's estate his salary and continued stock
option vesting for a period of one (1) month from and after the date
of death during the term of this Agreement.
(b) PERMANENT DISABILITY. In the event that Employee becomes totally
disabled during the term hereof and such total disability continues
for a period in excess of ninety (90) days, whether consecutive or in
the aggregate during any 12 month period, at the end of such period of
disability the Employee shall be considered as permanently disabled
and this Agreement shall terminate immediately and, except as
expressly set forth in this paragraph, the Company shall have no
further liability hereunder to Employee. The Company shall continue to
pay to Employee his salary and continue stock option vesting for the
period of disability and a period of two (2) months from and after the
date of total disability commencing with the expiration of the first
90 day period of such disability as severance pay hereunder.
Employee shall be considered as totally disabled if, and when because
of injury, illness or physical or mental disability, he is prevented
from effectively performing the duties of his employment. The
determination of total disability shall be made by the Board of
Directors of the Company, but said decision shall not be unreasonable
or arbitrary and shall be supported by the opinion (at the Company's
expense) of at least one licensed physician unless Employee shall
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without justification fail to submit to the necessary physical or
mental examinations. It is understood that Employee's occasional
sickness of short duration shall not result in Employee being
considered totally disabled, and Employee shall continue to be
compensated hereunder during such periods of occasional sickness so
long as they shall not exceed twelve (12) days In a calendar year.
(c) INVOLUNTARY TERMINATION FOR CAUSE. The Company may terminate this
Agreement for cause. For the purposes of this Agreement, a termination
for "cause" shall mean a termination resulting from a good faith and
reasonable determination by the Company's Board of Directors that
Employee (i) has committed a felony or act of moral turpitude which
would materially injure the Company or its reputation or, (ii) has
intentionally or willfully and repeatedly breached his duties
hereunder in a material respect and, if curable, has failed to cure
the same within thirty (30) days after receiving written notice of
such breach from the Board of the Company. Such notice must be given
to Employee following each claimed breach, whether or not curable. In
the event of termination for cause, the Company shall have no further
liability hereunder to Employee from and after the date of such
termination.
(d) TERMINATION WITHOUT CAUSE. Termination of Employee for any reason
other than in paragraphs 6(a), 6(b), and 6(c) hereof shall be
considered Termination Without Cause. In addition, Employee's
resignation from the employ of the Company shall be deemed Termination
Without Cause ("Constructive Discharge") if resulting from: 1) a
reduction of more than 25% of monthly base salary in cash compensation
(excluding performance bonuses) or other benefits other than as a
result of a decrease in compensation payable to Employee and to all
other executive officers of Company on the basis of Company's
financial performance; 2) a change in reporting relationship to the
Company President or a significant reduction in the nature or scope of
Employee's responsibilities, authorities, powers, functions or duties
as an Executive Vice President and Chief Operating Officer of the
Company; 3) a requirement imposed by Company that Employee relocate to
an office that is more than 25 miles from the Company's current
headquarters; 4) failure of Company materially to perform its
obligations pursuant to this Agreement. If Employee continues his
employment with the Company after a Constructive Discharge event
occurs, that continuation
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shall not constitute a waiver of Employee's fight to treat such event
as an event of Termination Without Cause unless (i) his employment
under adjusted terms of employment after the Constructive Discharge
Event shall continue for more than 12 months after such Constructive
Discharge Event or (ii) his employment is subsequently terminated for
cause under paragraph 6(c) above. Any waiver of a Constructive
Discharge Event as a result of continued employment for more than 12
months thereafter shall not, however, be deemed a waiver as to any
other Constructive Discharge Event which may subsequently occur.
(e) SALARY AND BENEFIT CONTINUATION UPON TERMINATION WITHOUT CAUSE.
Upon the termination of Employee's employment with the Company for any
reason whatsoever prior to the expiration of the original term or any
annual renewal of the term of this Agreement, except for (i)
termination upon death as set forth in paragraph 6(a) hereof; (ii)
termination upon permanent disability as set forth in paragraph 6(b)
hereof; (iii) termination for cause pursuant to paragraph 6(c) hereof;
or (iv) Employee's voluntarily electing not to continue in the
employment of the Company under conditions other than those set forth
in paragraph 6(d) hereof; then the Company within thirty (30) days
after such termination, and in lieu of all other obligations of the
Company hereunder, shall: 1) pay to Employee an lump-sum payment equal
to his then base salary for a period equal to twelve (12) months; 2)
will provide Employee, at Company's cost, with employment benefits
consisting of life, health, dental and long-term disability insurance
for a period of 12 months after termination; and 3) enter into a
Post-termination Consulting Agreement as defined below in paragraph
6(f) hereof. Thereafter, any continuation of benefits under the
Consolidated Omnibus Budget Reconciliation Act (COBRA) will be at
Employee's cost.
(f) POST-TERMINATION CONSULTING AGREEMENT. Upon the Termination
Without Cause, Employee will hold himself available to provide
consulting services to the Company for a period terminating one year
after the Termination Date (the "Consulting Period"). Employee will
provide the consulting services only upon the request of the Company's
Chief Executive Officer and for no more than ten hours per week (any
period shorter than one week will include a proportionate number of
hours) at such times and places as are mutually convenient to Employee
and the Company. However, Employee will perform those services at
times and places that do not reasonably conflict with his
responsibilities to his
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then current employer. Employee will perform services as an
independent contractor with the customary and usual independence
associated therewith, and he will not be deemed an employee or agent
of the Company or have the authority to bind, or to enter into any
contract on behalf of, the Company, unless expressly authorized in
writing to do so. The Company will pay Employee a consulting fee of
$150.00 per hour for each hour actually worked at the Company's
request. The Company's Board of Directors has determined that Employee
will be providing "substantial services" to the Company during the
Consulting Period such that any option held by Employee on the
Termination Date, if not fully vested at the time, will continue to
vest during the Consulting Period according to its terms. Any option
held by Employee at the Termination Date will remain exercisable for
the current term of the option during the Consulting Period even
though the employment of Employee will terminate on the Termination
Date.
7. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Employee recognizes
and acknowledges that the Company's trade secrets and proprietary processes as
they may exist from time to time are valuable, special and unique assets of
the Company's business, access to and knowledge of which are essential to the
performance of the Employee's duties hereunder. The Employee will not during
or after the term of his employment, disclose such secrets or processes to any
person, firm, corporation, association or other entity for any reason or
purpose whatsoever, nor shall the Employee make use of any such secrets or
processes for his own purposes or for the benefit of any person, firm,
corporation, or other entity (except the Company) under any circumstances
during or after the term of his employment; provided that after the term of
his employment these restrictions shall not apply to such secrets and
processes which are then, or from tine to time thereafter, in the public
domain (provided that he was not responsible, directly or indirectly, for
permitting such secrets or processes to enter the public domain without the
Company's consent).
8. COVENANT NOT TO COMPETE OR INTERFERE. The Employee agrees that during
the term of this Agreement or for a period of one ( 1 ) year after the date of
Termination under this Agreement, whichever occurs first; (a) Employee shall
not intentionally interfere with, disrupt or attempt to disrupt the
relationship, contractual or otherwise between the
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Company and any customer, supplier, lessor or employee of the Company or any
of its subsidiaries and (b) Employee shall not as a sole proprietor or
otherwise for his own account or as a partner, employee, officer, director,
manager, agent, distributor, consultant, marketing representative, associate,
investor or otherwise (except as to a less than 5% interest in a public
company listed on the Nasdaq, a national, or a regional exchange), directly or
indirectly, own, purchase, organize or take preparatory steps for the
organization of, finance, work for, provide services to, advise, acquire,
lease, operate, manage or invest in or permit his name to be used or employed
in connection with any business which engages in providing equipment and/or
support services for corrective eye surgery in competition with the Company
(the "Business"). Employee further agrees that the covenants and other
provisions of this paragraph shall cover his activities in the whole of North
America, Europe and Asia (the "Territory"). The parties hereto agree that the
covenants contained in this paragraph (b) shall be construed as if the
covenants are divided into separate and distinct covenants in respect of each
of the products and services of the Business, each capacity in which the party
is prohibited from competing, and each part of the world in which such
competition is prohibited from taking place. The territorial restrictions
contained in this paragraph (b) are properly required for the adequate
protection of the Business and in the event any covenant or other provision
contained this paragraph (b) shall be deemed to be illegal, unenforceable, or
unreasonable by a court or other tribunal of competent jurisdiction. With
respect to any part of the Territory or otherwise, such covenant or provision
shall not be affected with respect to any other part of the Territory or
otherwise, and each of the parties hereto agrees and submits to the reduction
of said territorial restriction or other provisions to such an area or
otherwise, as said court shall deem reasonable. The parties further agree that
if any provision of this Agreement is found to be unenforceable, it shall not
affect the enforceability of the remaining provisions and the court shall
enforce all remaining provisions to the extent permitted by law
9. INVENTIONS. The Employee hereby sells, transfers, and assigns to the
Company, or to any person or entity designated by the Company, at of the
entire right, title and interest of the Employee in and to all inventions,
ideas, disclosures, and improvements, whether patented or unpatented, and
copyrightable material made or conceived by the Employee, solely or jointly
during the term hereof which relate to methods, apparatus, formulae, designs,
products, processes or devices, sold, leased, used, or under consideration or
development by the Company, or which otherwise relate to or pertain to
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the business, functions, or operations of the Company. The Employee agrees to
communicate promptly and to disclose to the Company, in such form as the
Employee may be required to do so, all information, details, and data
pertaining to the aforementioned inventions, ideas, disclosures, and
improvements and to execute and deliver to the Company such formal transfers
and assignments and such other papers and documents as may be required of the
Employee to permit the Company or any person or entity designated by the
Company to file and prosecute the patent applications and, as to copyrightable
material, to obtain copyright thereof.
For the purposes of this Agreement, an invention shall be deemed to have been
made during the term of Employee's employment if, during such period, the
invention was conceived or first actually reduced to practice by the Company,
and Employee agrees that any patent application filed within one (1 ) year
after termination of this employment shall be presumed to relate to an
invention which was made during the term of Employee's employment unless
Employee can provide satisfactory evidence to the contrary.
10. INJUNCTIVE RELIEF. The parties hereto acknowledge that (a) the
covenants and restrictions set forth in Sections 8, 9 and 10 of this Agreement
are necessary, fundamental and required for the protection of the business of
the Company, (b) such covenants and restrictions are material inducements to
investors to enter into agreements to invest in the Company, and (c) a breach
of any of such covenants and restrictions by Employee will result in
irreparable harm and damages to the Company which cannot be adequately
compensated by a monetary award. Accordingly, in the event of breach or
threatened breach of such provisions by Employee, Employee expressly agrees
that the Company shall be entitled to the immediate remedy of a temporary
restraining order, preliminary injunction or such other form of injunctive or
equitable relief as may be used by any court of competent jurisdiction to
restrain or enjoin the Employee from breaching any such covenant or provision
or to specifically enforce the provisions hereof. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies for such
breach or threatened breach.
11. INSURANCE. The Company, at its election and for its benefit, may
insure the Employee against accidental loss or death and the Employee shall
submit to such
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physical examination and supply such information as may be required in
connection therewith.
12. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail to his last known residence in the case of the Employee or to
its last known principal office in the case of the Company.
13. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed by a waiver of
any subsequent breach.
14. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
15. ASSIGNMENT. The rights and obligations of the parities under this
Agreement shall inure to the benefit of and shall be binding upon the
successors of such parties.
16. ENTIRE AGREEMENT. This instrument contains the entire agreement of
the parties. It may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, modification,
extension or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
first written above.
EMPLOYEE: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
COMPANY: VISTA TECHNOLOGIES INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President & CEO
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