ADVANCE DISPLAY TECHNOLOGIES, INC.
FORM 10-KSB
FOR THE FISCAL YEAR ENDED
JUNE 30, 1997
EXHIBIT 10.6
ADVANCE DISPLAY TECHNOLOGIES, INC.
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made to be effective this
17th day of September, 1997, by and between Advance Display Technologies, Inc.,
a Colorado corporation (the "Company") located at 0000 X. Xxxxx Xxxxxx, Xxxx X,
Xxxxxx, Xxxxxxxx 00000 and Xxxxxxx X. Xxxxxx (the "Executive) (individually
referred to as the "Party" and collectively as the "Parties").
RECITALS
WHEREAS, the Executive possesses certain knowledge and skills that are
beneficial to the business of the Company;
WHEREAS, the Company desires to retain the services of the Executive to act
as its President and Chief Executive Officer.
NOW THEREFORE, to execute and deliver this Agreement and for good and
valuable consideration, including Executive's continued employment with the
Company and such corresponding compensation and benefits as outlined hereunder,
the receipt and sufficiency of which are hereby acknowledged by the Parties, the
Parties hereby agrees as follows:
1. The Services. Executive shall timely perform for the Company the
services described herein and any other such other matters as determined by the
Company in connection with the Company's businesses. Executive is engaged as the
President and Chief Executive Officer of the Company. In such capacity, the
Executive shall exercise detailed supervision over the operations of the Company
subject, however, to control by the Board of Directors. The Executive shall
perform all duties incident to the title of President and Chief Executive
Officer and such other duties as from time to time may be assigned to him by the
Board of Directors.
2. Best Efforts of Executive. The Executive shall devote his full time
efforts as required by the business of the Company and to all of the duties that
may be required by the terms of this Agreement to the reasonable satisfaction of
the Board of Directors of the Company. The Executive shall at all times
faithfully, with diligence and to the best of his ability, experience and
talents, perform all the duties that may be required of and from him pursuant to
the express and implicit terms hereof to the reasonable satisfaction of the
Company. Such services shall be rendered at such place or places as the Company
shall in good faith require or as the interest, needs, business or opportunity
of the Company shall require. The Executive agrees not to engage in any
employment or consulting work or any trade or business for his account or for or
on behalf of any other person, firm or corporation during the term hereof,
unless the Executive obtains prior written consent from the Board of Directors
of the Company. Executive acknowledges and agrees that he owes a fiduciary duty
of loyalty to the Company and, is obligated to conduct himself on behalf of the
Company in a manner which reflects the best interest of the Company.
3. Working Facilities. The Executive shall be furnished with all such
facilities and services suitable to his position and adequate for the
performance of his duties.
4. Expenses. The Executive is authorized to incur reasonable and necessary
expenses for promoting the business of the Company, including his out-of-pocket
expenses for entertainment, travel and similar items. The Company shall
reimburse the Executive for all such expenses on the presentation by the
Executive, from time to time, of an itemized account of such expenditures. The
itemized account of such expenditures shall be prepared in accordance with the
guidelines set forth by the Internal Revenue Service. Reasonable travel expense
shall include business class air travel when traveling internationally and first
class upgrades not to exceed $100 per one way trip for domestic travel.
5. Employment-At-Will. In consideration of the opportunity to work for the
Company, as well as such compensation and benefits earned (as defined below),
Executive agrees and acknowledges that Company may terminate Executive at any
time, without notice and without cause, subject to the provisions for severance
set forth in Section 10 herein. Executive further agrees that the Company has
not offered, promised or implied that such employment is guaranteed for any set
period of time. In addition, Executive shall not rely on any offers, promises or
implications made or suggested by the Company, whether orally or in writing,
that would conflict with or contradict the foregoing, unless such writing amends
this Agreement according to the terms and conditions hereunder.
6. Term. The term of employment herein (the "Term") commenced on September
17, 1997 (the "Commencement Date") and shall continue for a term of three years
thereafter until September 17, 2000, unless terminated in accordance with the
terms and conditions of Section 10, herein.
7. Executive Compensation and Benefits.
(a) Salary. The Company shall pay the Executive bi-weekly compensation
on the basis of $150,000 annual salary. The Board of Directors shall review
Executive's compensation annually during the Term hereof to determine
whether a cost of living increase is appropriate. Notwithstanding the
compensation being paid on the basis of an annual salary, the Term of the
employment of this Agreement can be terminated in accordance with Section 5
and 10 herein, and all amounts due at termination are in accordance with
Section 10, herein. All compensation payable to the Executive herein is
stated in gross amounts and shall be subject to all applicable withholding
taxes and any other amounts required by law to be withheld.
(b) Benefits. The Company shall provide the Executive regular Company
benefits, such as health insurance, that are made available to other
Company employees.
8. Vacation. The Executive shall be entitled to four (4) weeks of paid
vacation per year. The Executive shall also be entitled to all legal holidays
that the Company grants to Company employees.
9. Stock Option.
(a) The Executive shall be entitled to receive a non-qualified stock
option from the Company to purchase 1,500,000 common shares of stock of the
Company for the price of $0.1315 per share (the "Stock Option"), which
Stock Option shall vest as provided herein.
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Upon execution of this Agreement, the Executive shall have fully vested a
stock option for 437,500 common shares of stock of the Company. The
remaining options (up to 1,062,500) shall vest at the rate of 31,250 common
shares of stock of the Company on the sixteenth (16th) day of each month
that the Executive is employed by the Company, commencing October 16, 1997
and continuing until this Agreement is terminated or the Executive is fully
vested, whichever comes first.
(b) The Stock Options shall be governed in accordance with and subject
to a Non- Qualified Stock Option Agreement prepared by the Company, in form
and substance as attached Exhibit "A". The options shall be exercisable for
a period of ten (10) years from the Commencement Date, subject to
provisions on termination set forth in Stock Option Agreement. In the event
of a public offering of the Company's stock, all issued shares of stock of
the Company shall be registered. The Company in its sole discretion, can
subject the shares to reasonable and customary lock up provisions.
(c) The Stock Option shall be issued pursuant to the terms of the
Advance Display Technologies, Inc. Equity Incentive Plan ("Plan") adopted
by the Board of Directors on September 18, 1997, which shall govern the
terms of the Option except as modified by the Non-Qualified Stock Option
Agreement attached as Exhibit "A". In the event the Plan is not approved by
the Company's shareholders on or before March 31, 1998, the Stock Option
shall be deemed issued outside the Plan but shall none-the-less be governed
by those provisions, as modified by the Non- Qualified Stock Option
Agreement.
10. Termination and Severance.
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(a) Termination by the Company With Cause. The Company may terminate
this Agreement with cause at any time in accordance with the terms and
conditions herein, upon immediate notice to the Executive. For the purpose
of this section, "cause" shall be defined as meaning conduct by the
Executive which constitutes in fact or law a breach of fiduciary duty or
felonious conduct having the effect, in the opinion of the Board of
Directors, of materially adversely affecting the Company or its reputation.
In the event of termination by the Company with cause, the Executive shall
be entitled to receive compensation based upon his prorated salary, up to
the date of termination, and no severance pay or benefits of any kind.
(b) Termination by Company Without Cause. The Company may terminate
this Agreement without cause at any time, in accordance with the terms and
conditions herein, upon immediate notice to the Executive. In the event of
termination by the Company without cause, the Executive shall be entitled
to receive compensation based upon his prorated salary, up until the date
of termination, paid in accordance with the payroll schedule in existence
at the time of termination, in accordance with the terms and conditions of
Section 7 herein, plus severance pay as follows:
(i) In the event the Executive is terminated
without cause at any time during the first 12 months
following the Commencement Date, the Executive shall be
entitled to 3 months severance pay;
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(ii) In the event the Executive is terminated
without cause at any time in months 13 through 24
following the Commencement Date, the Executive shall be
entitled to 6 months severance pay; and
(iii) In the event the Executive is terminated
without cause at any time in months 25 through 36
following the Commencement Date, the Executive shall be
entitled to 9 months severance pay; and
(iv) The Executive shall be entitled to this
severance pay, paid in accordance with the payroll
schedule in existence at the time of termination, in
accordance with the terms and conditions of Section 7
herein. By receipt of this severance pay the Executive
acknowledges that he has received all compensation due
the Executive from the Company and releases the
Company, of any and all claims for compensation that
the Executive may have against the Company.
(c) The Company may deliver notification of termination to the
Executive in writing, including facsimiles, and shall be effective
immediately upon such delivery.
(d) Termination by Executive. Executive shall provide the Company with
at least fourteen (14) days written notice of his election to resign and
terminate this Agreement. In the event of termination by the Executive, the
Executive shall be entitled to receive compensation based upon his prorated
salary, paid in accordance with the payroll schedule in existence at the
time of termination, up to the date of termination, and no severance pay or
benefits, except as provided in (e) below.
(e) Benefits Upon Termination. Effective immediately upon termination
of the Executive, by either party with or without cause, all benefits
programs then in place shall cease and terminate immediately except as
required by applicable law, and all unvested stock options shall become
null and void in accordance with the provisions herein.
(f) Return of Company Records and Material. Immediately upon
termination, the Executive shall return any and all records, material and
tangible things to the Company.
11. Records. Executive agrees to maintain accurate records concerning all
business, strategic and marketing plans, designs, information and data
concerning the Company or the Company's products, subsystems and processes
(collectively, the "Proprietary Information") developed by Executive during the
Term of this Agreement. Executive agrees to make all Proprietary Information
available to the Company and its affiliated entities, agents, contractors and
representatives (as requested by the Company) during the Term of this Agreement.
Executive expressly acknowledges and agrees that all such Proprietary
Information is the property of the Company and/or the appropriate affiliated
entity (as designated by the Company) and will immediately deliver to the
Company all Proprietary Information, in whatever form, including, but not
limited to all intellectual property, such as patents and trademarks pending
and/or granted throughout the world, upon the termination of this Agreement by
either Party.
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12. Confidentiality. Executive agrees that:
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(a) All Proprietary Information which is furnished or disclosed by or
on behalf of the Company to the Executive (whether orally or in writing)
shall be maintained in strict confidence and not disclosed to any third
parties, directly or indirectly, by the Executive without Company's prior
written consent, nor used by the Executive except for the purposes for
which it is disclosed or received;
(b) All Proprietary Information and technology acquired or developed
by or on behalf of Executive hereunder shall be and remain the sole
property of the Company. Any information acquired or developed by the
Executive hereunder shall be returned to the Company upon request, or at
the termination of this Agreement;
(c) In the event that the Executive receives a request or is required
(by deposition, interrogatory, request for documents, subpoena, civil
investigative demand or similar process) to disclose all or any part of the
Proprietary Information, Executive agrees to notify the Company of the
existence of and the terms and circumstances surrounding such a request or
requirement so that the Company may seek a protective order or other
appropriate remedy. In the event that such protective order or other remedy
is not obtained or that the Company waives compliance with the provisions
hereof, (i) Executive may disclose to any tribunal only that portion of the
Proprietary Information which Executive, as advised by counsel, is legally
required to disclose and shall seek assurance that confidential treatment
shall be accorded such Proprietary Information, and (ii) Executive shall
not be liable for such disclosure unless disclosure to any such tribunal
was caused or resulted from a previous disclosure by Executive not
permitted by this Agreement; and
(d) The terms of this Section shall survive termination of this
Agreement without regard to the cause of termination.
13. Covenant Not To Compete. In consideration of the Company hiring the
Executive for the services described herein and in acknowledgment of the
confidential nature of the Company's business interests, Executive agrees to
execute the "Covenant Not To Compete", attached as Exhibit "B", as a condition
of employment. The Restrictive Period of the Covenant Not To Compete shall last
only so long as the Executive is receiving severance pay as provided in Section
10, herein.
14. Modification; Waiver; Construction. No modification to, addition to or
waiver of any of the provisions of this Agreement shall be binding upon either
Party unless in writing signed by the Executive and an authorized representative
of the Company. No waiver by either Party of any breach by the other Party of
any the provisions of this Agreement shall be construed as a waiver of any
subsequent breach, whether of the same or of a different provision in this
Agreement. Further, no presumption shall be deemed to exist in favor or against
either Party hereto as a result of the preparation, drafting and/or negotiation
of this Agreement.
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15. Opportunity to Consult Counsel. The Parties hereto represent and agree
that, prior to executing this Agreement, each has had the opportunity to consult
with independent counsel concerning the terms of this Agreement.
16. Notice. Unless specified otherwise, all notices required or permitted
by this Agreement shall be in writing and shall be hand-delivered, sent by
courier or certified mail, return receipt requested, postage prepaid, addressed
as set forth below (except that either Party may from time to time give notice
changing its address for that purpose) and shall be effective when personally
delivered, one day following delivery to a recognized courier service, or if
mailed, on the third day after mailing.
If to the Company: Xxxx X. Xxxxxxxxx, Chairman
c/o United International Holdings, Inc.
0000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxx X. Xxxxxxx, Esq.
Xxxxxxx, Xxxxxxx & Xxxxx, P.C.
0000 Xxxx Xxxxxxxxx Xxx., Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
If to the Executive: Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxxx Xxxx, Esq.
0000 Xxxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
17. Survival. Notwithstanding the termination of this Agreement, any duty
or obligation which has been incurred and which has not been fully observed,
performed, or discharged, and any right, unconditional or conditional, which has
been created and has not been fully enjoyed, enforced, observed, performed or
satisfied (including, but not limited to the duties, obligations and rights with
respect to Confidentiality and/or the Covenant Not To Compete) shall survive
such expiration or termination until such duty or obligation has been fully
observed, performed, or discharged and such right has been enforced, enjoyed or
satisfied.
18. Severability. If any provision or Attachment of this Agreement shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect
by any court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision or Attachment of this
Agreement, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision or Attachment had never been contained herein.
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19. Waiver. All the rights and remedies of either party under this
Agreement are cumulative and not exclusive of any other rights and remedies
provided by law. No delay or failure on the part of either party in the exercise
of any right or remedy arising from a breach of this Agreement shall operate as
a waiver of any subsequent right or remedy arising from a subsequent breach of
this Agreement. The consent of any party where required hereunder to any act of
occurrence shall not be deemed to be a consent to any other act of occurrence.
20. Remedies. Executive acknowledges that compliance with all provisions
herein is necessary to protect the business and good will of the Company and
that a breach of any provision can irreparably and continuously damage the
Company, for which money damages may not be adequate. Consequently, the
Executive agrees that, in the event the Executive breaches any provision of this
Agreement or the Covenant Not To Compete, the Company shall be entitled to
preliminarily or permanently enjoin the Executive from violating this Agreement
or the Covenant Not To Compete, in order to prevent the continuation of such
harm, and take any other legal or equitable actions available to the Company.
21. Alternative Dispute Resolution. Any dispute between the parties with
respect to this Agreement with the exception of the Covenant not to Compete,
shall be submitted to binding arbitration in Denver, Colorado before and
pursuant to the rules of the American Arbitration Association. Each party shall
be responsible to pay its own attorneys fees, costs and expenses, however the
prevailing party shall be entitled to an award of reasonable attorneys fees,
costs and expenses. The arbitrators shall have the power to award any legal or
equitable remedies that would be available in proceedings conducted before a
state or federal court of competent jurisdiction in Denver, Colorado. Judgment
on the award of the arbitrators may be entered in any court of competent
jurisdiction. All arbitration proceedings and the results thereof shall be
confidential, except to the extent that any party is required to make disclosure
concerning such proceedings under applicable law.
22. Attorney Fees. In the event of any dispute, arbitration, litigation
between the Parties or proceeding before any court of competent jurisdiction,
the prevailing party shall be entitled to reasonable attorney fees, costs and
expenses.
23. Governing Law. The validity, interpretation, and enforcement of this
Agreement shall be governed by the laws of the State of Colorado.
24. Entire Agreement. This Agreement sets forth the full and complete
understanding of the Parties hereto as of the date hereof relating to the
subject matter hereof and supersedes any and all prior negotiations and
dealings.
25. Binding Upon Successors. This contract may not be assigned by the
Executive without the Company's consent. Executive agrees that this Agreement
shall be binding upon and shall inure to the benefit of the Company's
successors, and assigns.
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[SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Parties have executed this Agreement effective as
of the Commencement Date of employment.
COMPANY:
ADVANCE DISPLAY TECHNOLOGIES, INC.
By:
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Xxxx X. Xxxxxxxxx, Chairman
EXECUTIVE:
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Xxxxxxx X. Xxxxxx
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EXHIBIT "A"
NON-QUALIFIED STOCK OPTION AGREEMENT
This Non-Qualified Stock Option Agreement (the "Agreement") is made
effective as of the 17th day of September, 1997, between Advance Display
Technologies, Inc., a Colorado corporation (the "Company"), and Xxxxxxx X.
Xxxxxx (the "Optionee"). For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Option Grant. Pursuant to the Executive Employment Agreement dated
September 17, 1997 between the Company and the Optionee (the "Employment
Agreement") and subject to the terms and conditions of this Agreement, the
Company grants to the Optionee the right and option (the "Option") to purchase
up to an aggregate of 1,500,000 shares (the "Optioned Shares") of its common
stock, $.001 par value ("Common Stock"). Of that amount, options to acquire
437,500 shares of Common Stock shall be vested immediately; the remaining
options (up to 1,062,500) shall vest at the rate of 31,250 shares on the
sixteenth (16th) day of each month that the Optionee is employed by the Company,
commencing October 16, 1997 and continuing until the Employment Agreement with
Optionee is terminated or the Optionee is fully vested, whichever first occurs.
2. Stock Option Price. The purchase price of the Optioned Shares is $0.1315
per share (the "Stock Option Price").
3. Exercisability. The Option shall be exercisable beginning with the date
of vesting and until 5:00 p.m., Mountain Daylight Time, September 17, 2007. The
foregoing provisions regarding exercisability are expressly subject to the
provisions of Paragraph 8 regarding termination of Optionee's employment with
the Company.
4. Manner of Exercise. The Option is exercisable by written notice to the
Company, signed by the Optionee or other authorized person, in the form attached
to this Option. Such notice must be accompanied by payment in full of the Stock
Option Price of the Optioned Shares being purchased. Such notice and payment
must either be actually delivered to the Company or sent by certified mail to
the Company at 0000 Xxxxx Xxxxx, Xxxxx X, Xxxxxx, Xxxxxxxx 00000 (or at such
other address as the Company may direct). Within a reasonable time after receipt
of such notice and payment, the Company shall deliver to the Optionee
certificates representing the Optioned Shares purchased, registered in the name
of the Optionee (or such other name as the Optionee may designate in such
notice), free and clear of any liens, claims, encumbrances or restrictions. Upon
such exercise, the Optioned shall be deemed the record owner of the Optioned
Shares purchased upon such exercise without regard to the date on which the
related certificate is issued.
5. Payment of Stock Option Prices. The Stock Option Price of any Optioned
Shares purchased hereunder may be paid in any of the following ways:
(a) by check;
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(b) by delivery of certificates representing a number of shares of
outstanding Common Shock having a fair market value (based on the closing
price or, if the closing price is not reported, the average of the bid and
asked prices of the Common Stock on the last trading day before the date
said notice is sent by the Optionee) equal to the Stock Option Price, duly
endorsed for transfer to the Company and free and clear of any lien, claim,
encumbrance or restriction;
(c) any combination of the foregoing.
At the request of the Optionee, the Company shall cooperate in arranging a
so-called "broker- assisted cashless exercise" of the Option, including entering
into any agreement reasonably requested by a broker agreeing to forward the
certificate representing the Optioned Shares directly to the broker.
6. Securities Law Matters. The Company shall include the Option Shares on
the first registration statement filed subsequent to the date hereof, which
registration statement is an appropriate form for registration of the Option
Shares. If the Option is exercised prior to effective date of such registration,
at the time of exercise Optionee shall execute and deliver to the Company an
investment letter containing such representations ad warranties as the Company
may reasonably request to establish the availability of exemptions from the
registration requirements of federal and applicable state securities laws, and
the certificates representing the Optioned Shares shall bear an appropriate
legend. The Optionee understands that until the registration statement is
effective, the Option Shares received upon exercise of this Option shall be
"restricted" within the meaning of Rule 144 of the 1933 Act.
7. Nonassignable Option. Neither the Option nor any other rights acquired
by the Optionee under this Agreement are assignable or transferable by the
Optionee. Any sale, assignment, transfer, pledge or other disposition of any
Option contrary to the provisions of this Agreement, and any levy or any
attachment or similar process upon any Option, will be null and void. The Option
may be exercised only by the Optionee during the Employee's lifetime, except as
otherwise specifically provided in Section 8.
8. Employment Termination. If the Optionee's employment with the Company is
terminated prior to the expiration or exercise in full of the Option:
(a) If such termination is by the Company for cause (as defined in the
Employment Agreement), the Option may be exercised by the Optionee for a
period of ninety (90) days following termination to the extent that it was
exercisable on the date of termination, but otherwise shall expire.
(b) If such termination results from the Optionee's death or
disability (defined as Optionee's inability, by virtue of illness or
physical or mental incapacity or disability from any cause or causes
whatsoever, to perform Optionee's essential functions under the Employment
Agreement, whether with or without reasonable accommodation, for a period
exceeding 180 days), or is by the Optionee the Option may be exercised by
the Optionee or his representative for a period of one (1) year following
said termination to the extent that it was exercisable on the date of
termination, but otherwise shall expire.
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(c) If such termination is by the Company for any other reason other
than cause, or for no reason, the Option shall become or continue to be
exercisable as to all of the Optioned Shares from and after the date of
such termination and through and including the expiration date stated in
Section 3.
9. Adjustments in Certain Events.
(a) Stock Splits. In the event of a stock dividend, stock split or
other transaction as a result of which the outstanding shares of Common
Stock are divided into a larger number of shares or combined into a small
number of shares, the number of Optioned Shares and the Stock Option Price
shall be proportionately adjusted.
(b) Merger, Etc. In the event of a merger, consolidation, sale of all
or substantially all of the property of the Company, or reclassification,
recapitalization or reorganization of the Common Stock or of the Company,
in each case which results in the holders of the Company's Common Stock
receiving, in exchange for or upon conversion of or in addition to their
shares of Common Stock, securities, cash or other property, the Optionee
shall be entitled to receive, upon any exercise of the Option after the
effective date of such transaction, the securities (including Common
Stock), cash or other property he would have owned or been entitled to
receive had he exercised the Option immediately prior to the effective date
of such transaction. If the transaction is a merger or consolidation, as a
condition to the transaction, the Company shall cause the surviving or
resulting entity to agree in writing for the benefit of the Optionee to
deliver such securities, cash or other property upon exercise of the
Option.
10. Fractional Shares. No fractional shares shall be issued upon exercise
of this Option. In lieu of any fractional shares otherwise issuable, the Company
shall pay the Optionee the fair market value thereof.
11. Withholding. When compensation income is recognized by the Optionee
with respect to the Option, the Company may require (as a condition of Option
exercise) the Optionee to make a withholding tax payment to the Company. The
amount of such payment shall equal the amount of federal and state income tax
that the Company is required to withhold with respect to the issuance of such
stock. To the extent the required withholding tax payment is not timely made by
the Optionee, the Company may either withhold such payment from the Optionee's
cash compensation or make such other arrangements as the Board determined.
12. General Provisions.
(a) Delivery. Delivery of any notice or document shall occur upon
actual delivery to the recipient (including receipt of telecopy or
facsimile transmission), and shall be deemed delivered the third day
following mailing by U.S. certified mail, postage prepaid, return receipt
required, addressed to the recipient's then current mailing address. Any
corporate officer or other authorized agent may receipt for any notice or
document on behalf of the Company.
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(b) Equity Incentive Plan. To the extent not inconsistent with the
provisions hereof, this Agreement shall be governed by the provisions of
the Advance Display Technologies, Inc. Equity Incentive Plan adopted by the
Board of Directors on September 18, 1997..
(c) Amendment. This Agreement may be amended only in a written
instrument signed by both parties.
(d) Binding Effect. This Agreement is binding upon, and inures to the
benefit of, the parties and their respective heirs, legal representatives
and permitted successors and assigns.
(e) Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to its subject matter, and it supersedes
all prior written and oral agreement.
(f) No Waiver. No waiver of any default under this Agreement will be
considered valid unless in writing, and no such waiver will be deemed as a
waiver of any subsequent default of the same or similar nature.
(g) Governing Law. This Agreement will be construed and enforced in
accordance with the laws of the State of Colorado.
COMPANY:
ADVANCE DISPLAY TECHNOLOGIES, INC.
By:
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Xxxx X. Xxxxxxxxx, Chairman
OPTIONEE:
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Xxxxxxx X. Xxxxxx
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NOTICE OF EXERCISE OF NON-QUALIFIED STOCK OPTION
The undersigned ("Optionee") hereby elects to exercise the Option (as
defined in the Non-Qualified Stock Option Agreement effective September 17,
1997) as to __________ shares of the Common Stock, $.001 par value ("Common
Stock"), of Advance Display Technologies, Inc. (the "Company"), at a price of
$0.1315 per share. The undersigned is enclosing with this Notice payment in full
of the purchase price in the following form:
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The certificate for the shares issuable as a result of this exercise shall
be registered in the name of the Optionee (unless otherwise indicated in a
writing accompanying this Notice) and delivered to the following address:
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The Optionee will pay the Company any amount that the Company is required
to withhold as a result of this exercise.
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Xxxxxxx X. Xxxxxx
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Social Security Number
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Date
EXHIBIT "B"
COVENANT NOT TO COMPETE
In consideration of the employment, compensation, and any and all
additional compensation and benefits paid to Xxxxxxx X. Xxxxxx (the "Executive")
by Advance Display Technologies, Inc., a Colorado corporation (the "Company"),
the Executive understands and specifically covenants the following:
A. Statutory Authorization.
1. The Company is primarily engaged in the design, production,
development, manufacture, market and sale of fiber optic display screen products
for a wide variety of commercial and consumer applications in the worldwide
marketplace.
2. Employment by the Company and the compensation paid to Executive by
it are at least in part dependent upon the earnings or profits which accrue to
the Company through its ownership of assets relating to "know how", trade
secrets, inventions, patents, trademarks and copyrights.
3. This Covenant Not To Compete ("Covenant") is necessary because
Executive shall be in a position whereby he will be privy to valuable trade
secrets and proprietary information owned by the Company.
4. Executive acknowledges that he has read and understands the
following Colorado Law (C.R.S. Section 8-2-113) and he agrees that this Covenant
pertains to sub-sections (2)(b) and (2)(d) thereof, to wit:
(2) Any covenant not to compete which restricts the right of
any person to receive compensation for performance of
skilled or unskilled labor for any employer shall be void,
but this sub-section (2) shall not apply to:
(b)...Any contract for the protection of trade
secrets, and
(d)...Executive and management personnel and
officers and employees who constitute professional
staff to executive and management personnel.
B. Term. The term of this Covenant Not to Compete shall commence on the
Commencement Date of the Employment Agreement by and Between the Executive and
the Company, dated September 17, 1997 (the "Employment Agreement") and shall
terminate upon the final payment of any severance pay due under the Employment
Agreement (the "Term"). During Term the Executive agrees not to compete with the
Company in the State of Colorado (the "Restricted Area").
C. Restrictions. Executive understands and agrees that:
1. He will not, directly or indirectly, own, operate, join, control,
or mange, or be a director, shareholder, employee, or consultant for any
business, firm, corporation, or entity which is conducting or developing
any business which competes with the business of the Company in the design,
construction, manufacturing, production, marketing or selling of fiber
optic display screens and its related line for a wide variety of consumer
and commercial applications (the "Product") if that business is located in
the Restricted Area, with the exception that the Executive may be a less
than 5% shareholder in a public company.
2. Executive will not, directly or indirectly, under any
circumstances, solicit, notify, or come in initial contact with any
employee or customer of Employer during the term of this Covenant for the
purposes of soliciting business or personnel away from the Company and/or
its Affiliate(s).
3. This covenant is necessary to provide the Company and its
Affiliates with protection for its aforesaid valuable trade secrets which
it now has or may acquire during the Executive's term of employment.
D. Damages. The Employment Agreement regarding Remedies shall control in
the event that Executive breaches the obligations agreed upon in this
attachment.
E. Modification of Terms. In the event that a court of competent
jurisdiction finds the terms of this Covenant to be unreasonable, unlawful or
unenforceable, the Parties expressly agree that any such term shall be modified
by the court to the extent necessary in order that such term shall be legally
enforceable to the fullest extent of the law.
F. Attorney Fees. In the event of a dispute, arbitration or litigation
between the parties, the prevailing party shall be entitled to reasonable
attorney fees, costs and expenses.
IN WITNESS WHEREOF, the Parties have executed this Agreement effective as
of September 17, 1997.
COMPANY:
ADVANCE DISPLAY TECHNOLOGIES, INC.
By:
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Xxxx X. Xxxxxxxxx, Chairman
EXECUTIVE:
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Xxxxxxx X. Xxxxxx
