EXHIBIT 10.2
XXXXX EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT entered into as of this 7th day of October
1997, between Bioponic International, a California corporation, located at 000
Xxxxxxx Xxxxxx, Xxxxx #0, Xxx Xxxxxx, XX 00000 (the "Company"), and Xxxxxx X.
XxXxx, Ph.D., of 00 Xxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 (the
"Executive").
WHEREAS, the Company desires to employ Executive and to ensure the
continued availability to the Company of the Executive's services, and the
Executive is willing to accept such employment and render such services, all
upon and subject to the terms and conditions contained in this Agreement;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants set forth in this Agreement, and intending to be legally bound, the
Company and the Executive agree as follows:
1. Term of Employment.
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(a) Term. The Company hereby employs the Executive, and the Executive
hereby accepts employment with the Company, for a period commencing on the date
of this Agreement and ending five years from the date hereof (the "Term").
(b) Continuing Effect. Notwithstanding any termination of this
Agreement at the end of the Term or otherwise, the provisions of Sections 6 and
7 shall remain in full force and effect and the provisions of Sections 6(a),
6(b) and 7 shall be binding upon the legal representatives, successors and
assigns of the Executive, except as otherwise provided in this Agreement.
2. Duties.
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(a) General Duties. The Executive shall serve as Vice Chairman of the
Board of Directors and Chief Science Officer for the Company with duties and
responsibilities that are customary for such executives. The Executive will also
perform services for such subsidiaries as may be necessary. The Executive will
use his best efforts to perform his duties and discharge his responsibilities
pursuant to this Agreement competently, carefully and faithfully. In determining
whether or not the Executive has used his best efforts hereunder, the Company's
delegation of authority to other employees and all surrounding circumstances
shall be taken into account and the best efforts of the Executive shall not be
judged solely on the Company's earnings or other results of the Executive's
performance.
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(b) Devotion of Time. The Executive will devote substantially full time
normal business hours (exclusive of periods of sickness and disability and of
such normal holiday and vacation periods as have been established by the
Company) to the affairs of the Company. It is expressly understood that the
Executive will not enter the employ of or serve as a consultant to, or in any
way perform any services with or without compensation to any other persons,
business or organization (other than as set forth above) without the prior
consent of the Board of Directors of the Company.
3. Compensation and Expenses.
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(a) Salary. For the services of the Executive to be rendered under this
Agreement, the Company shall pay the Executive an annual base salary of $96,000
during the Term. Said annual base salary will be increased to $120,000 per year
once the Company has either (i) raised sufficient capital, or (ii) has realized
sufficient profits, to cover such an increase without substantially impairing
the financial condition of the Company. The Company will pay the Executive his
annual salary in equal installments no less frequently than monthly.
(b) Royalty. The Company shall pay to the Executive an annual royalty
equal to 4% of the Net Profits of the Company received from the sale or
utilization of its MR3 technologies during the Company's fiscal year ending June
30 of each year. Such royalties shall be paid on or before July 31 of each year
during the Term hereof, and shall terminate once a total of $2,500,000 in
royalties has been paid to the Executive hereunder.
(c) Bonuses.
(i) The Executive will receive a bonus upon the signing of
this Agreement of 810,000 five-year warrants to purchase shares of the Company's
Common Stock, exercisable at a price of $4.00 per share at any time after 90
days from the date of this Agreement, in whole or in part.
(ii) The Executive may receive additional annual bonuses if
and when authorized by the Company's Board of Directors.
(c) Expenses. In addition to any compensation received pursuant to
Section 3(a), the Company will reimburse or advance funds to the Executive for
all reasonable travel, entertainment and miscellaneous expenses incurred in
connection with the performance of his duties under this Agreement, provided
that the Executive properly accounts for such expenses to the Company in
accordance with the Company's practices. Such reimbursement or advances will be
made in accordance with policies and procedures of the Company in effect from
time to time relating to reimbursement of or advances to executive officers.
4. Benefits.
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(a) Vacation. For each 12-month period during the Term, the Executive
will be entitled to four weeks of vacation without loss of compensation or other
benefits to which he is entitled under this Agreement, to be taken at such times
as the Executive may select and the affairs of the Company may permit.
(b) Employee Benefit Programs. Without limiting the compensation to
which the Executive is entitled pursuant to the provisions of Section 3 or this
Section 4, during the Term, the Executive will be entitled to participate in any
pension, insurance or other employee benefit plan that is maintained at that
time by the Company for its executive officers, including programs of medical
insurance.
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5. Termination.
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(a) Termination for Cause. The Company may terminate the Executive's
employment pursuant to the terms of this Agreement at any time for cause by
giving written notice of termination. Such termination will become effective
upon the giving of such notice, except that termination based upon clause (iii)
below shall not become effective unless the Executive shall fail to correct such
breach within 45 days of receipt of written notice. At the conclusion of such 45
day period, this alleged breach shall be deemed to have been cured unless
written notice to the contrary is given. Upon any such termination for cause,
the Executive shall have no right to compensation, bonus or reimbursement under
Section 3. "Cause" shall mean: (i) the Executive is convicted of a felony which
is related to the Executive's employment or the business of the Company; (ii)
the Executive, in carrying out his duties hereunder, has been found in a civil
action to have committed gross negligence or gross misconduct, misappropriated
Company funds, or otherwise defrauded the Company, in any case, in material harm
to the Company; and (iii) the Executive materially breaches any provision of
Section 6 or Section 7.
(b) Special Termination. In the event that (i) the Executive, with or
without change in title or formal corporate action, shall no longer exercise all
of the duties and responsibilities and shall no longer possess substantially all
the authority set forth in Section 2; or (ii) the Company materially breaches
this Agreement or the performance of its duties and obligations hereunder, the
Executive, by written notice to the Company, may elect to deem the Executive's
employment hereunder to have been terminated by the Company without cause, in
which event the Executive shall be entitled to the compensation, reimbursement
and benefits payable pursuant to Section 3 and 4 herein for two years from the
date of such notice. If the remaining term of the Agreement is less than two
years, the Executive shall receive two year's salary at his then current rate.
Alternatively, in such event, the Executive, by written notice to the Company,
may elect to refuse all further obligations of the Company under Section 3 and 4
and to release the Company with respect thereto, in which event the Company
shall release the Executive from the provision of Section 6.
(c) Continuing Effect. Notwithstanding any termination of the
Executive's employment as provided in this Section 5, the provisions of Sections
6 and 7 shall remain in full force and effect.
6. Non-Competition Agreement.
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(a) Competition with the Company. Except as provided for in Sections
2(b) and 6(b) hereof, until termination of his employment and for a period of 6
months commencing on the date of termination, the Executive, directly or
indirectly, in association with or as a stockholder, director, officer,
consultant, employee, partner, joint venturer, member or otherwise of or through
any person, firm, corporation, partnership, association or other entity, will
not compete with the Company or any of its affiliates in the offer, sale or
marketing of products or services that are competitive with the products or
services offered by the Company, within any metropolitan area in the United
States or elsewhere in which the Company is then engaged in the offer and sale
of competitive products or services. Additionally, the foregoing shall not
prevent Executive from accepting employment with an enterprise engaged in two or
more lines of business, one of which is the same or similar to the Company's
business (the "Prohibited Business") if Executive's employment is totally
unrelated to the Prohibited Business.
(b) Solicitation of Customers. During the periods in which the
provisions of Section 6(a) shall be in effect, the Executive, directly or
indirectly, will not seek Prohibited Business from any Customer (as defined
below) on behalf of any enterprise or business other than the Company, refer
Prohibited Business from any customer to any enterprise or business other than
the Company or receive commissions based on sales or otherwise relating to the
Prohibited Business form any Customer, or any enterprise or business other than
the Company. For purposes of this Section 6(b), the term "Customer" means any
person, firm, corporation, partnership, association or other entity to which the
Company or any of its affiliates sold or provided goods or services during the
12-month period prior to the time at which any determination is required to be
made as to whether any such person, firm, corporation, partnership, association
or other entity is a Customer.
(c) No Payment. The Executive acknowledges and agrees that no
separate or additional payment will be required to be made to him in
consideration of his undertakings in this Section 6.
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7. Proprietary Information and Inventions.
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(a) The Executive acknowledges that the Company is engaged in a
continuous program of research, development and production respecting its
business, present and future, including fields generally related to its business
and that the Company possesses and will continue to possess information that has
been created by, discovered or developed by, or made known to the Executive
during the period of or arising out of his employment by the Company and/or in
which property rights have been assigned or otherwise conveyed to the Company,
which information has commercial value in the business in which the Company is
engaged. All of the aforementioned information is hereinafter called
"Proprietary Information." By the way of illustration, but not limitation,
Proprietary Information includes trade secrets, processes, formulas, data,
know-how, software programs, improvements, inventions, techniques, marketing
plans, strategies, forecasts, computer programs, copyrightable material, and
customer lists.
(b) All Proprietary Information shall be the sole property of the
Company and its assignees, and the Company and its assigns shall be the sole
owner of all patents and other rights in connection therewith.
The Executive hereby assigns to the Company any rights he may have or
acquire in such Proprietary Information, as well as any rights he may have to
the patents and patents "pending" listed in the attached Exhibit "A." At all
times, both during his employment by the Company and after its termination, the
Executive will keep in confidence and trust all Proprietary Information, and
will not use or disclose any Proprietary Information or anything relating to it
without the written consent of the Company, except as may be necessary in the
ordinary course of performing his duties to the Company.
(c) All documents, records, apparatus, equipment and other physical
property, whether or not pertaining to Proprietary Information, furnished to the
Executive by the Company or produced by the Executive or others in connection
with his employment shall be and remain the sole property to the Company and
shall be returned to it immediately as and when requested by the Company. Even
if the Company does not so request, the Executive shall return and deliver all
such property upon termination of his employment for any reason and the
Executive will not take with him any such property or any reproduction of such
property upon such termination.
(d) The Executive will promptly disclose to the Company, or any persons
designated by it, all improvements, inventions, formulas, ideas, processes,
techniques, know-how and data, whether or not patentable, made or conceived of
reduced to practice or learned by the Executive, either alone or jointly with
others, during the term of his employment (all said improvements, inventions,
formulas, ideas, processes, techniques, know-how and data shall be hereinafter
collectively called "Inventions").
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(e) The Executive agrees that all Inventions which he developed (in
whole or in part, either alone or jointly with others) and (I) used the
equipment, supplies, facilities or trade secret information of the Company, or
(II) used the hours for which he was compensated by the Company, or (III) which
relates to the business of the Company or its actual or demonstrably anticipated
research and development or (IV) which results, in whole or in part, from work
performed by him for the Company, shall be the sole property of the Company and
its assigns, and the Company and its assigns shall be the sole owner of all
patents and other rights in connection therewith. The Executive hereby assigns
to the Company any rights he may have or acquires in such Inventions. The
Executive further agrees as to all such Inventions to assist the Company in
every proper way, but at the Company's expense; to obtain and from time-to-time
enforce patents on said Inventions in any and all countries, and to that end,
the Executive will execute all documents for use in applying for and obtaining
such patents and copyrights thereon and enforcing same, as the Company may
desire, together with any assignments thereof to the Company or persons
designated by it. The Executive's obligation to assist the Company in obtaining
and enforcing patents for such Inventions in any and all countries shall
continue beyond the termination of his employment, but the Company shall
compensate the Executive at a reasonable and mutually agreed upon rate after
such termination for time actually spent by the Executive at the Company's
request on such assistance. In the event that the Company is unable for any
reason whatsoever to secure the Executive's signature to any lawful and
necessary document required to apply for or execute any patent applications with
respect to such an Invention (including renewals, extensions, continuations,
divisions or continuations in part thereof), the Executive irrevocably
designates and appoints the Company and its duly authorized officers and agents,
as his agents and attorneys-in-fact to act for and in his behalf and instead of
him, to execute and file any such application to do all other lawfully permitted
acts to further the prosecution and issuance of patents thereon with the same
legal force and effect as if executed by the Executive.
(f) The Executive represents to the best of his knowledge that his
performance of all the terms of this Agreement will not breach any agreement to
keep in confidence proprietary information acquired by him in confidence or in
trust prior to his employment by the Company. The Executive has not entered
into, and agrees he will not enter into, any agreement either written or oral in
conflict herewith.
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8. Assignability.
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With the written consent of the Executive, the rights and
obligations of the Company under this Agreement shall inure to the benefit of
and be binding upon the successors or assigns of the Company, provided that such
successor or assign shall acquire all or substantially all of the assets and
business of the Company. The Executive's obligations hereunder may not be
assigned or alienated and any attempt to do so by the Executive will be void.
9. Severability.
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(a) The Executive expressly agrees that the character, duration and
geographical scope of the provisions set forth in this Agreement are reasonable
in light of the circumstances as they exist on the date hereof. Should a
decision, however, be made at a later date by a court or legal proceeding that
the character, duration or geographical scope of such provisions is
unreasonable, then it is the intention of the agreement of the Executive and the
Company that this Agreement shall be construed by the court or tribunal in such
a manner as to impose only those restrictions on the Executive's conduct that
are reasonable in the light of the circumstances and as are necessary to assure
to the Company the benefits of this Agreement. If in a legal proceeding, a court
shall refuse to enforce all of the separate covenants deemed included herein
because taken together they are more extensive than necessary to assure to the
Company the intended benefits of this Agreement, it is expressly understood and
agreed by the parties hereto that the provisions of this Agreement that, if
eliminated, would permit the remaining separate provisions to be enforced in
such proceeding shall be deemed eliminated, for the purposes of such proceeding,
from this Agreement.
(b) If any provision of this Agreement otherwise is deemed to be
invalid or unenforceable or is prohibited by the laws of the state or
jurisdiction where it is to be performed, this Agreement shall be considered
divisible as to such provision and such provision shall be inoperative in such
state or jurisdiction and shall not be part of the consideration moving from
either of the parties to the other. The remaining provisions of this Agreement
shall be valid and binding and of like effect as though such provision were not
included.
10. Notices and Addresses.
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All notices, offers, acceptance and any other acts under this Agreement
(except payment) shall be in writing, and shall be sufficiently given if
delivered to the addressees in person, by Federal Express or similar receipted
delivery, by facsimile delivery or, if mailed, postage prepaid, by certified
mail, return receipt requested to the respective addresses first above written,
or to such other address as either of them, by notice to the other, may
designate from time to time. The transmission confirmation receipt from the
sender's facsimile machine shall be conclusive evidence of successful facsimile
delivery. Time shall be counted to, or from, as the case may be, the delivery in
person or by mailing.
11. Counterparts.
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This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument. The execution of this Agreement may be by actual or
facsimile signature.
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12. Attorneys' Fees.
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In the event that there is any controversy or claim arising out of or
relating to this Agreement, or to the interpretation, breach or enforcement
thereof, and any action or proceeding including that in arbitration as provided
for in Section 12 of this Agreement, is commenced to enforce the provisions of
this Agreement, the prevailing party shall be entitled to an award by the court
or arbitrator, as appropriate, of reasonable attorney's fee, costs and expenses.
13. Governing Law.
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This Agreement and any dispute, disagreement, or issue of construction
or interpretation arising hereunder whether relating to its execution, its
validity, the obligations provided therein or performance shall be governed or
interpreted according to the internal laws of the State of California without
regard to choice of law considerations.
14. Entire Agreement.
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This Agreement constitutes the entire Agreement between the parties and
supersedes all prior oral and written agreements between the parties hereto with
respect to the subject matter hereof. This Agreement may not be changed, waived,
discharged or terminate orally, except by a statement in writing signed by the
party or parties against which enforcement of the change, waiver, discharge or
termination is sought.
15. Section and Paragraph Headings.
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The section and paragraph headings in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
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IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written.
BIOPONIC INTERNATIONAL EXECUTIVE
By: /s/ Xxxxxxx X. Xxxx By: /s/ Xxxxxx X. XxXxx
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Xxxxxxx X. Xxxx, Chairman Xxxxxx X. XxXxx, Ph.D.
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