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EXHIBIT 10.120
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT dated as of August 17, 1998 (the
"Agreement") by and between Wilshire Technologies, Inc., a California
corporation (the "Company") and Xxxxx Xxxxxxxxx, an individual residing at
Westlake Village, California ("Executive").
The Company and Executive desire to set forth the terms and
conditions on which: (i) the Company shall employ Executive as Executive Vice
President, (ii) Executive shall render services to the Company, and (iii) the
Company shall compensate Executive for such services.
NOW, THEREFORE, in consideration of the premises and of the
mutual covenants and agreements hereinafter set forth, the parties hereto hereby
agree as follows:
1. Employment.
The Company hereby employs Executive and Executive hereby
accepts such employment to perform executive services as hereinafter provided
for the period from August 17, 1998 through August 16, 1999. Commencing August
17, 1999, the period of employment shall be automatically extended from year to
year for additional periods of one year each unless the Company or Executive at
least ninety days prior to the time the Agreement would otherwise have expired
shall give the other party written notice of intention not to extend the
employment. The original one-year period of this Agreement and any extensions
thereof are hereinafter referred to as the "Term".
2. Duties and Responsibilities.
2.1 During the Term Executive shall devote his full attention
and expend his best efforts, energies, and skills, on a full-time basis, to the
business of the Company and any corporation controlled by the Company (each a
"Subsidiary"). For purposes of this Agreement, the term the "Company" shall mean
the Company and all Subsidiaries.
2.2 During the Term Executive shall serve as the Executive
Vice President of the Company. In the performance of his responsibilities
hereunder, Executive shall be subject to all of the Company's policies, rules
and regulations applicable to its executives of comparable status, shall report
directly to the President and Chief Executive Officer of the Company (the
"President") and shall be subject to the direction and control of the President
and the Board of Directors of the Company (the "Board").
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2.3 Executive's services shall be rendered principally in or
from an office located in the Carlsbad, California, area. Nevertheless,
Executive agrees to make such trips out of the area, for limited periods, as are
reasonably incident to the performance of his duties.
2.4 Without first obtaining the written permission of the
President in each instance, Executive will not authorize or permit the Company
to engage the services of, or engage in any business activity with, or provide
any financial or other benefit to, any affiliate of Executive. The phrase
"affiliate of Executive" as used in this Section shall mean and include
Executive's family by blood or marriage (including, without limitation, parents,
spouse, siblings, children and in-laws), and any business or business entity
which is directly or indirectly owned or controlled by Executive or any member
of Executive's family or in which Executive or any member of Executive's family
has any direct or indirect financial interest whatsoever.
2.5 In order to induce the Company to enter into this
Agreement, Executive represents and warrants to the Company that (a) Executive
is not a party or subject to any employment agreement or arrangement with any
other person, firm, company, corporation or other business entity, (b) Executive
is subject to no restraint, limitation or restriction by virtue of any agreement
or arrangement, or by virtue of any law or otherwise which would impair
Executive's right or ability to remain in the employ of the Company, or to
perform fully his duties and obligations pursuant to this Agreement, and (c) to
the best of Executive's knowledge, no material litigation is pending or
threatened against any business or business entity owned or controlled or
formerly owned or controlled by Executive.
3. Compensation.
3.1 During the Term the Company shall pay Executive a salary
at an annual rate of $165,000, subject to review after six months, payable in
installments in accordance with the Company's regular practice, but not less
often than monthly.
3.2 Executive shall be entitled to reasonable periods of paid
sick leave, three weeks paid vacation per year and holidays in accordance with
the Company's regular policy.
3.3 Executive is authorized to incur reasonable expenses in
the performance of his duties hereunder. The Company shall reimburse Executive
for such expenses upon the presentation by Executive, not less frequently than
monthly, of signed, itemized accounts of such expenditures and vouchers, all in
accordance with the Company's procedures and policies as adopted and in effect
from time to time and applicable to its executives of comparable status.
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3.4 The Company shall provide Executive, at the Company's
expense, participation in group medical, dental, accident, disability and life
insurance plans of the Company and other standard benefits as may be provided by
the Company from time to time to its executives of comparable status, subject
to, and to the extent that, Executive is eligible under such benefit plans in
accordance with their respective terms.
3.5 The Company hereby grants Executive a Non-Qualified Stock
Option under the Company's 1995 Stock Option Plan to purchase 500,000 shares of
the common stock of the Company at the option exercise price of $0.56 per share.
The option shall vest on August 17, 1999 as to 125,000 shares, and shall vest on
August 17 of the years 2000, 2001, and 2002 as to an additional 125,000 shares
on each such date. The option expires on August 17, 2008, and has the other
terms and conditions set forth in the Non-Qualified Stock Option Agreement
attached to this Agreement as Attachment A, and incorporated herein by
reference.
3.6 Executive shall receive a bonus in accordance with the
terms of the Bonus Plan attached to this Agreement as Attachment B and
incorporated herein by this reference.
3.7 During the Term, Employer shall pay Executive a
non-accountable car allowance of $600 per month. Executive shall be responsible
for the payment of any income taxes owed on such amount because of his personal
use of the car.
4. Relocation
4.1 The Company will reimburse the Executive for the monthly
cost of a reasonably priced furnished apartment in the Carlsbad area for a
period of up to one (1) year.
4.2 The Company will reimburse the Executive for reasonable
moving expenses incurred to move to the Carlsbad area. The moving expenses will
include all packing and shipping expenses and utility hook-up expenses.
4.3 If the Executive sells his residence in Westlake Village
and purchases a residence in the Carlsbad area, the Company will reimburse the
Executive for reasonable closing costs associated with the purchase of the
Carlsbad-area residence, including escrow fees, loan origination fees, and loan
interest points prevailing in the area. In addition, if the prevailing mortgage
interest rates are higher than 7.625% per year for a 30-year fixed rate mortgage
in the amount of $320,000, the Company will reimburse the Executive for the
amount of loan interest points paid to reduce the mortgage interest rate to
7.625% for a 30-year fixed rate mortgage in the amount of $320,000.
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5. Termination.
5.1 The Company may terminate Executive's employment under
this Agreement at any time for Cause. "Cause" shall exist for such termination
if Executive (i) is adjudicated guilty of illegal activities by a court of
competent jurisdiction, (ii) commits any act of fraud or intentional
misrepresentation, (iii) has, in the reasonable judgment of the CEO or the
Board, engaged in serious misconduct, which misconduct has or would, if
generally known, materially adversely affect the good will or reputation of the
Company and which misconduct Executive has not cured or altered to the
satisfaction of the CEO or the Board within ten days following notice by the CEO
or the Board to Executive regarding such misconduct, (iv) refused to follow any
lawful directive of the CEO or the Board to Executive concerning material aspect
of the Company's business, (v) has made any misrepresentation to the Company
under Section 2.5 hereof, or (vi) has been incapable to perform his duties under
this Agreement for at least three consecutive months.
5.2 The Company may terminate Executive's employment under
this Agreement at any time without Cause.
5.3 If the Company terminates Executive's employment pursuant
to the provisions of Section 5.2 hereof, or if the Company does not agree to
extend Executive's employment pursuant to the provisions of Paragraph 1 hereof,
Executive shall receive as his severance an amount equal to nine months of
Executive's then salary, payable in nine equal monthly installments. The first
payment shall be made on Executive's regular pay day immediately following the
date of termination.
5.4 If Executive does not agree to extend his employment
pursuant to the provisions of Paragraph 1 hereof, Executive shall receive no
severance pay.
5.5 Death of Executive. In the event Executive shall die at
any time during the Term, this Agreement shall terminate. In such event the
estate of Executive shall forthwith receive any salary accrued or unpaid to the
date of his death.
6. Restrictive Covenants.
6.1 Executive acknowledges that (i) he has a major
responsibility for the administration, development and growth of the Company's
business, (ii) his work for the Company will bring him into close contact with
confidential information of the Company and its customers, and (iii) the
agreements and covenants contained in this Section 6 are essential to protect
the business interests of the Company and that the Company will not enter into
this Agreement but for such agreements and covenants. Accordingly, Executive
covenants and agrees as follows:
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6.1.a Except as otherwise provided for in this
Agreement, during the Term Executive shall not, directly or indirectly, within
any state, province or other political subdivision of the United States or any
other country in which the Company is conducting business, compete with respect
to any services or products of the Company which are either offered or are being
developed by the Company (the "Company's Business"), or, without limiting the
generality of the foregoing, be or become, or agree to be or become, interested
in or associated with, in any capacity (whether as partner, shareholder, owner,
officer, director, employee, principal, agent, creditor, trustee, consultant,
co-venturer or otherwise), any individual, corporation, firm, association,
partnership, joint venture or other business entity, which competes with the
Company's Business; provided, however, that Executive may own, solely as an
investment, not more than one (1%) percent of any class of securities of any
publicly owned corporation.
6.1.b During, and for one year after, the Term,
Executive shall not, directly or indirectly, (i) induce or attempt to influence
any employee of the Company to leave its employ, (ii) aid or agree to aid any
competitor, customer or suppliers of the Company in any attempt to hire any
person who shall have been employed by the Company within the one year period
preceding such requested aid, or (iii) induce or attempt to influence any person
or business entity who was a customer or supplier of the Company during any
portion of said period to transact business with a competitor of the Company.
6.1.c During the Term and thereafter, Executive
shall not disclose to anyone any information about the affairs of the Company,
including, without limitation, trade secrets, trade "know-how", inventions,
customer lists, business plans, operational methods, pricing policies, marketing
plans, sales plans, identity of suppliers or customers, sales, profits or other
financial information, which is confidential to the Company or is not generally
known in the relevant trade, nor shall Executive make use of any such
information for his own benefit.
6.2 Executive acknowledges and agrees that in the event of a
violation or threatened violation of any of the provisions of Section 6.1 (the
"Restrictive Covenants") the Company shall have no adequate remedy at law and
shall therefore be entitled to enforce each such provision by temporary or
permanent injunctive or mandatory relief obtained in any court of competent
jurisdiction without the necessity of proving damages or posting any bond or
other security, and without prejudice to any other rights and remedies which may
be available at law or in equity.
6.3 If any of the Restrictive Covenants, or any part thereof,
is held to be invalid or unenforceable, the same shall not affect the remainder
of the covenant or covenants, which shall be given full effect, without regard
to the invalid or unenforceable portions. Without limiting the generality of the
foregoing, if any of the Restrictive Covenants, or any part thereof, is held to
be unenforceable because of the duration of such provision or the area covered
thereby, the parties hereto agree that the court making
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such determination shall have the power to reduce the duration and/or scope
and/or area of such provision and, in its reduced form, such provision shall
then be enforceable.
6.4 The parties hereto intend to and hereby confer
jurisdiction to enforce the Restrictive Covenants upon the courts of any
jurisdiction within the geographical scope of such Restrictive Covenants. In the
event that the courts of any one or more of such jurisdictions shall hold such
Restrictive Covenants wholly unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the parties hereto that such
determination not bar or in any way affect the Company's right to the relief
provided above in the courts of any other jurisdictions, within the geographical
scope of such Restrictive Covenants, as to breaches of such covenants in such
other respective jurisdictions, the above covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.
7. Insurance.
The Company may, from time to time, apply for and take out, in
its own name and at its own expense, life, health, accident, disability or other
insurance upon Executive in any sum or sums that it may deem necessary to
protect its interests, and Executive agrees to aid and cooperate in all
reasonable respects with the Company in procuring any and all such insurance,
including without limitation, submitting to the usual and customary medical
examinations, and by filling out, executing and delivering such applications and
other instruments in writing as may be reasonably required by an insurance
company or companies to which an application or applications for such insurance
may be made by or for the Company. In order to induce the Company to enter into
this Agreement, Executive represents and warrants to the Company that to the
best of his knowledge Executive is insurable at standard (non-rated) premiums.
8. Amendment.
The Company and Executive contemplate that Executive may
become the Company's President at some time during the Term. The parties agree
that, while this is the mutual desire, neither party is legally obligated to
enter into the new relationship. However, if Executive is promoted to the
position of President, the parties agree that concurrently with such promotion
the Agreement shall automatically and without further action by either party be
deemed amended prospectively from the date of such promotion, as follows:
(a) "Executive Vice President" in the second paragraph on page
1 shall become "President".
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(b) Section 2.2 shall read in its entirety as follows:
"2.2 During the Term Executive shall serve as the
President of the Company. In the performance of his
responsibilities hereunder, Executive shall be
subject to all of the Company's policies, rules and
regulations applicable to its executives of
comparable status, shall report directly to the Board
of Directors of the Company (the "Board") and shall
be subject to the direction and control of the
Board."
(c) "President" in the first sentence of Section 2.4 shall
become "the Board of Directors";
(d) "$165,000" in Section 3.1 shall become "$185,000";
(e) "Nine" wherever it appears in Section 5.3 shall become
"twelve".
9. Miscellaneous.
9.1 This Agreement is a personal contract, and the rights and
interests of Executive hereunder may not be sold, transferred, assigned, pledged
or hypothecated except as otherwise expressly permitted by the provisions of
this Agreement. Executive shall not under any circumstances have any option or
right to require payment hereunder otherwise than in accordance with the terms
hereof. Except as otherwise expressly provided herein, Executive shall not have
any power of anticipation, alienation or assignment of payments contemplated
hereunder, and all rights and benefits of Executive shall be for the sole
personal benefit of Executive, and no other person shall acquire any right,
title or interest hereunder by reason of any sale, assignment, transfer, claim
or judgment or bankruptcy proceedings against Executive, provided, however, that
in the event of Executive's death, Executive's estate, legal representatives or
beneficiaries (as the case may be) shall have the right to receive all of the
benefits that accrued to Executive pursuant to, and in accordance with, the
terms of this Agreement.
9.2 The Company shall have the right to assign this Agreement
to any successor of substantially all of its business or assets which assumes
the Company's obligations hereunder.
9.3 Any notice required or permitted to be given pursuant to
this Agreement shall be in writing and shall be delivered personally, sent by
facsimile transmission, receipt requested, by nationally recognized overnight
courier for next business day delivery, or sent by registered or certified mail,
return receipt requested, postage prepaid, addressed to such party at the
address set forth below, or at such other addresses as such party shall
designate by notice to the other in the manner provided herein for giving
notice.
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If to the Company: Wilshire Technologies, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
If to the Executive: Xxxxx Xxxxxxxxx
00000 Xxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000
9.4 This Agreement may not be changed, amended, terminated or
superseded except by an agreement in writing, nor may any of the provisions
hereof be waived except by an instrument in writing, in any such case signed by
the party against whom enforcement of any change, amendment, termination,
waiver, modification, extension or discharge is sought.
9.5 Except as otherwise provided herein, this Agreement shall
be governed by and construed and enforced in accordance with the laws of the
State of California, without giving any effect to the principles of conflicts of
laws.
9.6 All descriptive headings of the several sections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.
9.7 If any provision of this Agreement, or part thereof, is
held to be unenforceable, the remainder of this Agreement or provision, as the
case may be, shall nevertheless remain in full force and effect.
9.8 Each of the parties hereto shall at any time and from time
to time hereafter, upon the reasonable request of the other, take such further
action and execute, acknowledge and deliver all such instruments of further
assurance as may be necessary to carry out the provisions of this Agreement.
9.9 This Agreement contains the entire agreement and
understanding between the Company and Executive with respect to the subject
matter hereof. No representations or warranties of any kind or nature relating
to the Company or its affiliates or their respective businesses, assets,
liabilities, operations, future plans or prospects have been made by or on
behalf of Company to Executive; nor have any representations or warranties of
any kind or nature been made by Executive to the Company, except as expressly
set forth in this Agreement.
10. Authorization by Board of Directors.
The execution and delivery of this Agreement by and on behalf
of the Company has been authorized by the Company's Board of Directors at a
meeting duly held on August 11, 1998.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date hereinabove written.
WILSHIRE TECHNOLOGIES, INC.
By: /s/ Xxxx Xxx Xxxxxx
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Xxxx Xxx Xxxxxx
Title: President and Chief
Executive Officer
EXECUTIVE
/s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx
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