AGREEMENT
THIS AGREEMENT, as of , 1998 and effective as provided below, by
and between LUMEN TECHNOLOGIES, INC., a Delaware corporation (the "Company"),
and XXXXXXX X. XXXXX, a resident of Texas ("Xxxxx").
W I T N E S S E T H :
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WHEREAS, Xxxxx currently is the Chief Operating Officer and President of
ILC Technology, Inc., a California corporation (referred to hereinafter "ILC")
and Xxxxx and ILC are parties to various agreements relating to Xxxxx'x
employment by ILC (the "Employment Contract");
WHEREAS, ILC and the Company previously have entered into an agreement
regarding the merger of a subsidiary of the Company into ILC whereby the
shareholders of ILC acquire common stock of the Company in exchange for their
ILC common stock ("Combination");
WHEREAS, the Company and ILC desire to terminate the Employment Contract
and hire Xxxxx as an employee, pursuant to the terms and conditions set forth
herein in the event that the Combination is closed;
WHEREAS, Xxxxx is willing to accept employment, on the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the Company and Xxxxx agree as follows:
1. COMMENCEMENT. This Agreement shall be expressly conditioned upon the
closing of the Combination between the Company and ILC. If the Combination does
not close, this Agreement shall terminate with no further obligations between
the parties. If the Combination does close, this Agreement shall become fully
effective on such closing date and such closing date shall be the "Effective
Date" of this Agreement.
2. EMPLOYMENT. Upon the Effective Date, the Company shall employ Xxxxx
as its Chief Executive Officer. Xxxxx agrees to accept such employment on the
terms and conditions set forth in this Agreement. Xxxxx shall remain an
employee of the Company until February 28, 1999 (the "Employment Term"), unless
otherwise terminated as provided below.
a. DUTIES. During his term as an employee, Xxxxx shall serve as the
Company's Chief Executive Officer and shall perform all duties commensurate
with his position and as may be reasonably assigned to him by the Company's
Board of Directors consistent with such position. Xxxxx shall devote
substantially all of his professional time and energies to the
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business and affairs of the Company and shall use his best efforts, skills and
abilities to promote the interests of the Company as necessary to diligently
and competently perform the duties of his position.
b. EMPLOYMENT COMPENSATION AND BENEFITS. During the Employment
Term, the Company shall pay to Xxxxx, and Xxxxx shall accept from the Company,
as compensation for the performance of services as an employee under this
Agreement and Xxxxx'x observance and performance of all of the provisions
hereof, a salary at the annual rate of $250,000 per year (the "Base
Compensation"). Xxxxx acknowledges and agrees that he shall not be eligible
for any other bonus or bonuses, whether as an employee, and that he will not
participate in any of the Company's bonus programs in effect from time to time
unless otherwise approved by the board of directors. Xxxxx'x salary shall be
payable in accordance with the normal payroll practices of the Company and
shall be subject to withholding for applicable taxes and other amounts. During
the Employment Term, Xxxxx shall be entitled to participate in or benefit from,
in accordance with the eligibility and other provisions thereof, such medical,
insurance, pension, retirement, life insurance, 401-K and other fringe benefit
plans or policies as the Company may make available to, or have in effect for,
personnel with commensurate duties from time to time. The Company retains the
right to terminate or alter its plans or policies from time to time. Xxxxx
shall also be entitled to vacations, sick leave and other similar benefits in
accordance with policies of the Company from time to time in effect for
executive personnel.
3. REIMBURSEMENTS. During the Employment Term, upon submission of proper
invoices, receipts or other supporting documentation satisfactory to the
Company and in specific accordance with such guidelines as may be established
from time to time by the Company's Board of Directors, Xxxxx shall be
reimbursed by the Company for all reasonable business expenses actually and
necessarily incurred by Xxxxx on behalf of the Company in connection with the
performance of services under this Agreement.
4. TERMINATION OF EMPLOYMENT CONTRACT; COMPENSATION. The parties
acknowledge that Xxxxx and ILC are parties to the existing Employment Contract.
Upon the Effective Date and in consideration of the mutual covenants and
agreements contained herein, the Employment Contract shall terminate and
neither ILC nor the Company shall have any obligations thereunder, other than
in respect of salary accrued through and unpaid as of such Date. In
consideration for such termination and Xxxxx'x acceptance thereof, the Company
shall pay Xxxxx or his estate, and Xxxxx shall accept from the Company, as
consideration and in full satisfaction for termination of the Employment
Contract and Xxxxx'x full observance and performance of all of the provisions
hereof, the amount of $980,000, payable as follows:
A. $500,000 on the Effective Date of;
B. $80,000 on or before January 4, 1999; and
C. $100,000 on each of the second, third, fourth and fifth
anniversary dates of the Effective Date.
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Xxxxxxxxxxx acknowledges and agrees that he shall not be eligible for any
other payments whatsoever, whether as an employee or otherwise, and that he
will not participate in any of the Company's bonus or benefit programs in
effect from time to time.
5. REPRESENTATION OF EMPLOYEE. Xxxxx represents and warrants that he
is not party to, or bound by, any agreement or commitment, or subject to any
restriction, including but not limited to agreements related to previous
employment containing confidentiality or non-compete covenants, which in the
future may have a possibility of adversely affecting the business of the
Company or the performance by Xxxxx of his material duties under this
Agreement.
6. CONFIDENTIALITY. For purposes of this Section 6, all references to
the Company shall be deemed to include the Company's subsidiary corporations
and affiliates, including (without limitation) ILC.
A. CONFIDENTIAL INFORMATION. Xxxxx acknowledges that he has and
will continue to have knowledge of, and access to, proprietary and
confidential information of the Company and its affiliates, including (without
limitation) ILC, including (without limitation) inventions, trade secrets,
technical information, know-how, plans, specifications, methods of operations,
financial and marketing information and the identity of customers and
suppliers (collectively, the "Confidential Information"), and that such
information, even though it may be contributed, developed or acquired by Xxxxx
after August 1, 1996, constitutes valuable, special and unique assets of the
Company developed at great expense which are the exclusive property of the
Company. Accordingly, Xxxxx shall not, at any time during the five (5) year
period commencing on the effective date use, reveal, report, publish, transfer
or otherwise disclose to any person, corporation or other entity, any of the
Confidential Information without the prior written consent of the Company,
except to responsible officers and employees of the Company, as appropriate,
and other responsible persons who are in a contractual or fiduciary
relationship with the Company, and who have a need for such information for
purposes in the best interests of the Company, and except for such information
which is or becomes of general public knowledge in the industry from authorized
sources other than Xxxxx or is required to be disclosed pursuant to order of
any court or regulatory agency of competent jurisdiction. Xxxxx acknowledges
that the Company would not enter into this Agreement without the assurance that
all such confidential and proprietary information will be used for the
exclusive benefit of the Company.
B. RETURN OF CONFIDENTIAL INFORMATION. Upon the termination of
Xxxxx'x employment with the Company, Xxxxx shall promptly deliver to the
Company all drawings, manuals, letters, notes, notebooks, reports and copies
thereof and all other materials relating to the Company's business.
7. NONCOMPETITION. For purposes of this Section 7, all references to the
Company shall be deemed to include the Company, its subsidiary corporations
and affiliates, including without limitation ILC. During the full term set
forth below, Xxxxx will not utilize his special knowledge of the business of
the Company and his relationships with customers and suppliers of the Company
to compete with the Company. During the five (5) year period commencing on the
effective date, Xxxxx shall not engage, directly or indirectly or have an
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interest, directly or indirectly, anywhere in the United States of America or
any other geographic area where the Company does business or in which its
products are marketed, alone or in association with others, as principal,
officer, agent, employee, capital, lending of money or property, rendering
of services or otherwise, in any business directly competitive with that
engaged in by the Company (it being understood hereby, that the ownership by
Xxxxx of 2% or less of the stock of any company listed on a national securities
exchange shall not be deemed a violation of this Section 7). During the same
period, Xxxxx shall not, and shall not encourage or authorize any of his
employees, agents or others under his control to, directly or indirectly, on
behalf of himself or any other person, (i) call upon, accept business from
(except to the extent such business is unrelated to the business of the
Company), or solicit the business of (except to the extent such business is
unrelated to the business of the Company) any person who is, or who had been
at any time during the preceding two years, a customer of the Company or any
successor to the business of the Company, if in competition with the Company,
or otherwise divert or attempt to divert any business from the Company or any
such successor, or (ii) directly or indirectly recruit or otherwise solicit
or induce any person who is an employee of, or otherwise engaged by, the
Company or any successor to the business of the Company to terminate his or her
employment or other relationship with the Company or such successor. Xxxxx
shall not at any time, directly or indirectly, use or purport to authorize any
person to use any name, xxxx, logo, trade dress or other identifying words
or images which are the same as or substantially similar to those used at any
time by the Company in connection with any product or service, whether or not
such use would be in a business competitive with that of the Company. Xxxxx
acknowledges and agrees that the non-compete provisions of this Section 7
have been agreed in consideration of the covenants and agreements of the
Company contained herein.
8. REMEDIES. The restrictions set forth in sections 6 and 7 are
considered by the parties to be fair and reasonable. Xxxxx acknowledges that
the Company would be irreparably harmed and that monetary damages would not
provide an adequate remedy in the event of a breach of the provisions of
Section 6 or 7. Accordingly, Xxxxx agrees that, in addition to any other
remedies available to the Company, the Company shall be entitled to seek
injunctive and other equitable relief to secure the enforcement of these
provisions. If any provisions of Section 6, 7 or 8 other than those described
in the preceding sentence are adjudicated to be invalid or unenforceable, the
invalid or unenforceable provisions shall be deemed amended (with respect only
to the jurisdiction in which such adjudication is made) in such manner as to
render them enforceable and to effectuate as nearly as possible the original
intentions and agreement of the parties.
9. TERMINATION. This Agreement may be terminated prior to the expiration
of the Employment Term, upon the occurrence of any of the events set forth in,
and subject to the terms of, this Section 9.
A. CAUSE. This Agreement may be terminated at the Company's option,
immediately upon notice to Xxxxx, upon: (i) breach by Xxxxx of any material
provision of this Agreement not cured within ten (10) days after notice of such
breach is given by the Company to Xxxxx; (ii) xxxxx negligence or willful
misconduct by Xxxxx in connection with the performance of his duties under this
Agreement, (iii) fraud, criminal conduct or embezzlement
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by Xxxxx involving the Company; or (iv) Xxxxx'x misappropriation for personal
use of material assets or business opportunities of the Company.
b. WITHOUT CAUSE. This Agreement may be terminated on thirty (30)
days notice (the thirtieth day following such notice being herein sometimes
called the "Termination Date") by the Company without Cause, subject to the
following provisions. If this agreement is terminated without Cause by the
Company, Xxxxx shall receive all of the compensation outlined in sections 2
and 4 to the end of the full term of this Agreement; provided that the terms
and provisions of Sections 6 and 7 shall continue to apply to Xxxxx while he
is receiving such compensation.
10. MISCELLANEOUS.
A. SURVIVAL. The provisions of Sections 6, 7, and 8 shall survive
the termination of this Agreement.
B. ENTIRE AGREEMENT. This Agreement sets forth the entire
understanding of the parties and merges and supersedes any prior or
contemporaneous agreements between the parties pertaining to the subject matter
hereof.
C. MODIFICATION. This Agreement may not be modified or terminated
orally, and no modification, termination or attempted waiver of any of the
provisions hereof shall be binding unless in writing and signed by the party
against whom the same is sought to be enforced; provided, however, that
Xxxxx'x compensation may be increased at any time by the Company without in any
way affecting any of the other terms and conditions of this Agreement, which
in all other respects shall remain in full force and effect.
D. WAIVER. Failure of a party to enforce one or more of the
provisions of this Agreement or to require at any time performance of any of
the obligations hereof shall not be construed to be a waiver of such provisions
by such party nor to in any way affect the validity of this Agreement or such
party's right thereafter to enforce any provision of this Agreement, nor to
preclude such party from taking any other action at any time which it would
legally be entitled to take.
E. SUCCESSORS AND ASSIGNS. Neither party shall have the right to
assign this Agreement, or any rights or obligations hereunder, other than in the
case of Xxxxx, by will or the laws of descent, without the consent of the other
party; provided, however, that upon the sale of all or substantially all of the
assets, business and goodwill of the Company to another company, or upon the
merger or consolidation of the Company with another company, this Agreement
shall inure to the benefit of, and be binding upon, both Xxxxx and the company
purchasing such assets, business and goodwill, or surviving such merger or
consolidation, as the case may be, in the same manner and to the same extent
as though such other company were the Company. Subject to the foregoing, this
Agreement shall inure to the benefit of, and be binding upon, the parties
hereto and their legal representatives, heirs, successors and assigns.
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F. COMMUNICATIONS. All notices, requests, demands and other
communications under this Agreement shall be in writing and shall be deemed to
have been given at the time personally delivered or when mailed in any United
States post office enclosed in a registered or certified postage prepaid
envelope and addressed to the addresses set forth below, or to such other
address as any party may specify by notice to the other party; provided,
however, that any notice of change of address shall be effective only upon
receipt.
To the Company: Lumen Technologies, Inc.
000 Xxxxxxxx Xxxxx Xxxxxx
Xxxxx X-000
Xxx, XX 00000
To Xxxxx: Xxxxxxx X. Xxxxx
0000 Xxxxxxx Xxxxx Xxxxxx
Xx Xxxx, Xxxxx 00000
G. SEVERABILITY. If any provision of this Agreement is held to be
invalid or unenforceable by a court of competent jurisdiction, such invalidity
or unenforceability shall not affect the validity and enforceability of the
other provisions of this Agreement and the provisions held to be invalid or
unenforceable shall be enforced as nearly as possible according to its original
terms and intent to eliminate such invalidity or unenforceability.
H. JURISDICTION VENUE. This Agreement shall be subject to the
exclusive jurisdiction of the courts of California. Any breach of any provisions
of this Agreement shall be deemed to be a breach occurring in the State of
California and the parties irrevocably and expressly agree to submit to the
jurisdiction of the courts of the State of California, or the Federal Courts
having concurrent geographic jurisdiction, for the purpose of resolving any
disputes among them relating to this Agreement or the transactions contemplated
by this Agreement. In the event of any dispute arising hereunder, the prevailing
party shall be entitled to recover from the other all costs and expenses,
including reasonable attorney's fees, incurred by such prevailing party in
connection therewith.
I. GOVERNING LAW. This Agreement is made and executed and shall
be governed by the laws of the State of California, without regard to the
conflicts of law principles thereof.
J. INDEMNIFICATION. The Company shall maintain or cause to be
maintained, consistent with past practice, directors' and officers' insurance
or similar coverage providing for indemnity of Xxxxx to the fullest extent of
the law for acts or omissions occurring or alleged to occur in the performance
of services for the Company or its subsidiaries, as the case may be.
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IN WITNESS WHEREOF, each of the parties hereto have duly executed this
Agreement as of the date set forth above.
LUMEN TECHNOLOGIES, INC.
By: ----------------------------------
Its: CFO
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/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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