EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement') dated as of January 31, 1996,
between VISTA TECHNOLOGIES INC., a Nevada corporation with its principal place
of business in the United States at 000 X. 00xx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
XX 00000 (herein called the "Company") and XXXXXX X. XXXXXXX (herein called
the "Employee") residing at 000 Xxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx, 00000.
1. EMPLOYMENT. The Company hereby employs Employee initially as a non-officer
employee of the Company for a period no longer than 30 days from the
Employment Date as defined in Section 2, and thereafter as the Company's
President and Chief Executive Officer reporting to the Company's Board of
Directors, responsible for management and supervision of the Company's
business and financial affairs for the term of this Agreement. Upon the
signing of this Agreement, the Company agrees to elect Employee to its Board
of Directors and thereafter will use its best efforts to assure the
continuation of Employee's membership on the Board. 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 January 15, 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
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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;
CASH COMPENSATION: The Company shall pay the Employee a base salary
during the term of this Agreement, payable monthly, at the rate of
$150,000 per year per annum. Employee will be eligible to receive an
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 adopt an incentive stock option
plan and shall grant the Employee incentive stock options under that
plan to purchase 300,000 common shares of the Company at $2.50 per
share; 150,000 options shall vest in equal monthly increments over a
period of 36 months from the Employment Date and the remaining 150,000
shares shall vest upon achievement of Company stock price goal, 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. For the initial 12 months of the term of this Agreement, the
Company agrees to pay the premiums of Employee's personal long-term
disability insurance (Provident Life & Accident Policy #777182), and
life insurance policies (Northwestern Mutual Policy #8496834 and
#10873969) as well as pay the Employee a monthly cash payment of $780 to
cover out-of-pocket and other medical expenses. After the initial 12
months
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of this Agreement, the Company may discontinue these payments to the
extent that it has established and made available to Employee
Company-paid medical, life insurance and long-term disability plans of
substantially equivalent value.
(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 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
$75,000 upon filing of a Form SB-2 with the Securities and Exchange
Commission ("SEC") of Vista Laser Centers of the Southwest, Inc. ("Vista
Southwest") on or before February 22, 1996, otherwise bonus payment will
be paid upon the Form SB-2 (or other substantially equivalent form)
filing of the second of two Vista initial public offerings (one of which
may be the Vista Southwest).
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 Board of Directors of the Company in connection with the
conduct of its
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business so long as such duties are reasonably related to the Employee's
duties as the President and Chief Executive Officer of the Company. Employee
is employed to actively serve on a full-time basis as an executive officer of
the Company reporting directly to its Board of Directors and to serve as a
member of the Company's Board of Directors.
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 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 interfere with the
performance of his duties as the President and Chief Executive 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
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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 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 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
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Company shall be deemed Termination Without Cause ("Constructive
Discharge") if resulting from: 1) a material reduction 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 relationships or a
significant change in the nature or scope of Employee's
responsibilities, authorities, powers, functions or duties as
President and Chief Executive; 3) a requirement imposed by Company that
Employee relocate to an office that is more than 25 miles from his
current residence; 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 shall not constitute a waiver of Employee's right to
treat such event as an event of Termination Without Cause thereafter.
(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) continue vesting of
outstanding Employee stock options for twelve (12) months from
termination date (which provision shall be added to Employee's option(s)
at the date(s) of grant from the beginning); 3) 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. Thereafter, any continuation of benefits under the
Consolidated Omnibus Budget Reconciliation Act (COBRA) will be at
Employee's cost.
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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 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
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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 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.
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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 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.
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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 and supercedes the Consulting Agreement between Employee and Company
dated December 12, 1995. 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/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX
COMPANY: VISTA TECHNOLOGIES INC.
By: /s/ Jac. X. Xxx
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Jac. X. Xxx, President
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