EMPLOYMENT AGREEMENT
Agreement, dated as of July 1, 1997, by and between PSI INDUSTRIES,
INC., a Florida corporation, having its principal place of business at 0000-X
Xxxxx Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000 (the "Corporation"), and XXXXXX
XXXXXX, residing at 0000 Xxxxx Xxxxxxxx Xxxxx, Xxxxxxxxx 000, Xxxxxx Xxxxx,
Xxxxxxx 00000 (the "Executive").
W I T N E S S E T H:
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WHEREAS, the Corporation desires to employ Executive as an executive
officer, and Executive is willing to accept such employment, all subject to the
terms and conditions set forth herein:
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements set forth herein, the parties hereto agree as follows:
1. EMPLOYMENT AND TERM. Subject to the terms and conditions hereof, the
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Corporation hereby employs Executive, and Executive hereby accepts employment by
the Corporation, for a period of three (3) years commencing on the date hereof.
2. DUTIES. Executive shall serve the Corporation as its Vice-President
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of Sales and, in such capacity, subject to the direction of the Corporation's
President, Chief Executive Officer and Board of Directors, he shall be
responsible for the Company's sales efforts.
3. COMPENSATION.
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(a) BASE SALARY. As base compensation for the services to be rendered
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by the Executive hereunder, the Corporation agrees to pay Executive an annual
base salary in the amount of $100,000, such salary to be paid in equal weekly
installments.
(b) SALES COMMISSIONS ON PERSONAL SALES. As additional compensation,
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the Corporation agrees to pay Executive sales commissions of 1.5% of the Net
Wholesale Selling Price on all of the Executive's "Personal Sales", which shall
mean any sales of one-time use cameras (or any other products that the
Corporation and Executive mutually agree shall be covered by this paragraph)
based on an authorized sales program, directly handled as a house account from
start to finish by Executive. "Net Wholesale Selling Price" is the price billed
to the customer less credits, claims, allowances, adjustments and freight.
(c) OVERRIDE ON SALES OF ONE-TIME USE CAMERAS. The Corporation shall
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also pay the Executive an override commission of 1% of the Net Wholesale Selling
Price (as defined in Paragraph 3(b)) on all sales of one-time use cameras or any
other products that the Corporation and Executive mutually agree shall be
covered by this paragraph, based on an authorized sales program to new accounts
generated by external Corporation sales representatives.
(d) PAYMENT OF COMMISSIONS. All commissions earned in accordance with
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the foregoing Paragraphs 3(b) and 3(c) shall be paid on a calendar quarterly
basis, with the first payment to be made within ten days after the end of the
September 30, 1997 quarter and each subsequent commission to be paid within ten
days after the end of each subsequent quarter. The commissions earned shall be
payable in cash or in equivalent stock options, at Executive's election. Any
options granted to Executive under this provision shall be immediately
exercisable from the date of grant for a period of five years at an exercise
price equivalent to 50% of the closing market price of the Corporation's common
stock as of the date of grant.
(e) PERFORMANCE BONUS. The Corporation also agrees to pay Executive
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the following performance bonus for each year (with each year ending on June 30)
of employment hereunder on all sales of one-time use cameras, or any other
products that the Corporation and Executive mutually agree shall be covered by
this paragraph. The performance bonus will be paid in the form of the
Corporation's stock options based on the following:
FOR YEAR 1:
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MINIMUM NUMBER OF
NUMBER OF UNITS SOLD OPTIONS AWARDED
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1,000,000 21,500
2,000,000 30,000
3,000,000 42,800
FOR YEAR 2:
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MINIMUM NUMBER OF
NUMBER OF UNITS SOLD OPTIONS AWARDED
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1,000,000 21,500
2,000,000 30,000
3,000,000 42,800
FOR YEAR 3:
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MINIMUM NUMBER OF
NUMBER OF UNITS SOLD OPTIONS AWARDED
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1,000,000 21,500
2,000,000 30,000
3,000,000 42,800
The option awards shall not be prorated but shall be granted when the
indicated number of minimum units are sold. Thus, for example, in Year 1, if
less than 1,000,000 units are sold, no options shall be earned and if more than
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1,000,000 but less than 2,000,000 units are sold, 21,500 options shall be
earned. Any options to be awarded under this Subparagraph shall be awarded as of
the end of the year (June 30) at an exercise price equivalent to 50% of the
closing market price of the Corporation's Common Stock as of that date and shall
be immediately exercisable from the date of grant for a period of five (5)
years.
(f) All cash compensation payable under this Paragraph 3 shall be
reduced by social security and federal withholding taxes as required by law.
4. INITIAL GRANT OF OPTIONS. As a signing bonus, the Corporation shall
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grant to Executive as of the date hereof and pursuant to a separate Stock Option
Agreement, 15,000 stock options. The options shall be immediately exercisable
for a period of three years from the date hereof at an exercise price of $.15
per share.
5. EXPENSE REIMBURSEMENT. Executive shall be entitled, on a basis
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consistent with the Corporation's policy applicable to its executives, to
reimbursement for all normal and reasonable travel, entertainment and other
expenses necessarily incurred by him in the performance of his obligations
hereunder. The Corporation shall reimburse Executive for such expenses upon
presentation to the Corporation, within a reasonable time after such expenses
are incurred, of an itemized account of such expenses, together with such
vouchers or receipts for individual expense items as the Corporation may from
time to time require under its established policies and procedures.
6. OTHER BENEFITS.
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(a) CAR ALLOWANCE. The Corporation shall also pay the executive an
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allowance to cover the cost of leasing an automobile of his choice, with such
allowance not to exceed $600 per month, and shall also pay for the cost of
automobile insurance.
(b) PARTICIPATION IN BENEFIT PLANS. Executive shall be entitled to
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participate in or benefit from, in accordance with the eligibility and other
provisions thereof, any such medical insurance, pension, retirement, life
insurance, bonus, profit-sharing, or other fringe benefit plans or policies as
the Corporation may make available to, or have in effect for, its executive
personnel from time to time, including, without limitation, those plans set
forth on Schedule "A". Plans and benefits may be modified or eliminated by the
Corporation from time to time as it determines in its sole discretion.
(c) VACATION. Executive shall be entitled to a minimum of three (3)
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weeks of paid vacation each calendar year.
7. TERMINATION ON DISABILITY OR DEATH.
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(a) In the event that Executive is unable to perform his services to
the Corporation by reason of physical or mental disability or incapacity for a
period of more than three successive months, the Corporation may terminate this
Agreement. Periods of disability shall not be counted as successive if Executive
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has returned to work for at least one month between such periods of disability.
To the extent that the Corporation maintains disability insurance for the
benefit of Executive, any compensation paid to Executive by the Corporation
during the term of Executive's disability shall be repaid to the Corporation to
the extent that the Executive receives disability benefits for the same time
period. Once disability benefits have begun, any compensation due under this
Agreement shall be reduced by the same amount received by Executive. Executive's
employment shall terminate immediately upon his death.
(b) Upon termination of Executive's employment by reason of his death
or disability as aforesaid, Executive, or in the case of Executive's death,
Executive's personal representatives, shall be entitled to receive all base
compensation earned or accrued to the date of such termination and not
theretofore paid.
8. TERMINATION FOR CERTAIN CAUSES. In the event of (i) the conviction of
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the Executive of any felony under federal or state law, or (ii) willful gross
misconduct of Executive in the performance of his duties hereunder; (iii) a
material breach of any of the provisions of this Agreement, where such breach
has not been cured by Executive within a period of ten days of receipt of
written notice from the Corporation of proposed termination specifying the
particular breach; (iv) Executive's abuse of alcohol or illegal drugs, unless,
in the sole discretion of the Corporation, the Executive shall successfully
complete a qualified rehabilitation program; (v) any act of theft or fraud by
the Executive against the Corporation.
9. DISCLOSURE AND ASSIGNMENT OF DISCOVERIES.
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(a) Executive hereby covenants and agrees to disclose promptly and
fully, in writing, whenever possible, to the Corporation and its attorneys and
designated representatives, without additional compensation, all ideas,
formulae, programs, systems, devices, inventions, processes, business concepts,
discoveries, improvements, developments, works of authorship, product marks and
designations, technical information and know-how, whether or not patentable,
copyrightable or otherwise protectable relating to the business and products of
the Corporation (together, the "Developments"), which he may conceive, develop,
reduce to practice, acquire or make, along or jointly with others:
(i) during the term of his employment with the Corporation,
whether during or outside of the usual hours of work;
(ii) within a period of two years after termination of his
employment with the Corporation; and
(iii) at any time after termination of his employment with the
Corporation, if such Developments arise out of any work done or concepts
developed by Executive, alone or with others, during his employment by the
Corporation.
Executive hereby agrees that all of his right, title, and interest in and to
such Developments shall be deemed as held by him in a fiduciary capacity solely
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for the benefit of the Corporation, shall be the sole and exclusive property of
the Corporation and shall be subject to the confidentiality provisions of
Paragraph 11 as confidential information of the Corporation.
(b) Executive, when required to do so, either during or after the
term of his employment with the Corporation, shall:
(i) assign and convey to the Corporation his entire right, title
and interest in and to the Developments to the extent not owned by the
Corporation as a matter of law from the time of their creation and execute,
acknowledge and deliver all such further instruments and documents, in form and
substance satisfactory to the Corporation, as it shall deem reasonably necessary
or advisable to evidence the vesting in the Corporation of all right, title and
interest of Executive in and to the Developments;
(ii) assist the Corporation and its agents in preparing patent
applications, domestic and foreign, covering the Developments;
(iii) sign and deliver all such applications and assignments of
the same to the Corporation; and
(iv) generally give all information and testimony, sign all
papers and do all things which may be needed or requested by the Corporation to
the end that the Corporation may obtain, extend, reissue, maintain and enforce
United States and foreign patents covering the Developments.
(c) Executive hereby irrevocably nominates and appoints the
Corporation his attorney-in-fact to sign and deliver all such papers, and
perform all such acts, mentioned in Paragraph 9(b), in the event of Executive's
absence, unavailability, refusal, or death, such nomination and appoint hereby
being granted with full authority in the premises, and such authority to be
deemed coupled with an interest vested in the Corporation.
(d) The Corporation agrees to bear all expenses which it causes to be
incurred in obtaining, extending, issuing, maintaining and enforcing such
patents and in investing and perfecting title thereto in the Corporation, and
agrees further to pay Executive for any time which it may require of him
therefore, and for any services that may be required of him pursuant to
Paragraph 9(b), subsequent to the termination of his employment with the
Corporation, such payment to be at an hourly rate equivalent to that at which
Executive is paid at the time of the termination of his employment by the
Corporation.
(e) In the event of the unenforceability of all or part of the
foregoing provisions in this Paragraph 9, as determined by a court of competent
jurisdiction, Executive hereby transfers and assigns to the Corporation such
lesser interests in the Developments, including without limitation, any and all
United States and foreign patent rights therein and renewals thereof, as may be
determined by such a court to be a reasonable grant of interests under the
circumstances, but, in any event, and without limitation, Executive shall be
deemed to have granted to the Corporation not less than an irrevocable,
non-exclusive license, with the right to sublicense others, to manufacture, use,
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lease and sell the Developments which have not been assigned to the Corporation
under the provisions of Paragraph 9(b), without payment of any royalty.
10. CONFIDENTIALITY.
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(a) Executive understands and hereby acknowledges that as a result of
his employment with the Corporation, he will necessarily become informed of, and
have access to, certain valuable and confidential information of the Corporation
and any of its subsidiaries, joint ventures and affiliates, including, without
limitation, inventions, trade secrets, technical information, know-how, plans,
specifications, identity of customers and suppliers, and that such information,
even though it may be developed or otherwise acquired by Executive, is the
exclusive property of the Corporation to be held by Executive in trust and
solely for the Corporation's benefit. Accordingly, Executive hereby agrees that
he shall not, at any time, either during or subsequent to his employment
hereunder, use, reveal, report, publish, transfer or otherwise disclose to any
person, corporation or other entity, any of the Corporation's confidential
information without the prior written consent of the Corporation, except to
responsible officers and employees of the Corporation and other responsible
persons who are in contractual or fiduciary relationship with the Corporation or
who have a need for such information for purposes in the interest of the
Corporation, and except for such information for purposes in the interest of the
Corporation, and except for such information which legally and legitimately is
or becomes of general public knowledge from authorized sources other than
Executive.
(b) Upon the termination of his employment with the Corporation for
any reason whatsoever, Executive shall promptly deliver to the Corporation all
drawings, manuals, letters, notes, notebooks, reports and copies thereof, and
all other materials, including, without limitation, those of a secret and
confidential nature, relating to the Corporation's business which are in
Executive's possession or control.
11. NON-COMPETITION. Executive agrees that, during the term of this
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Agreement and for a period of one year after the expiration or termination of
his employment with the Corporation, he shall not, anywhere in the United States
of America or elsewhere in the world (or in such small area or for such lesser
period as may be determined by a court of competent jurisdiction to be a
reasonable limitation on the competitive activity of Executive), directly or
indirectly:
(i) engage in a competitive line of business to the business
carried on by the Corporation, either for his own account or with or for anyone
else;
(ii) solicit or attempt to solicit business of any customers of
the Corporation for products or services the same or similar to those offered,
sold, produced or under development by the Corporation;
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(iii) otherwise divert or attempt to divert from the Corporation
any business whatsoever;
(iv) solicit or attempt to solicit for any business endeavor any
employee of the Corporation;
(v) interfere with any business relationship between the
Corporation and any other person; or
(vi) render any services as an officer, director, employee,
partner, consultant or otherwise to, or have any interest as a partner, lender
or otherwise in, any person which is so engaged.
For purposes of subparagraph 11(i) and (ii) it shall not be deemed a violation
of these subparagraphs if after the expiration or termination of this Agreement,
Executive, either for his own account or with or for anyone else engages in the
sale, manufacture, distribution or marketing of products or services that are
not at that time sold, manufactured distributed or marketed by the Corporation.
12. REMEDIES. Because the Corporation does not have an adequate remedy
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at law to protect its business from Executive's competition or to protect its
interests in its trade secrets, privileged, proprietary or confidential
information and similar commercial assets, the Corporation shall be entitled to
injunctive relief, in addition to such other remedies and relief that would, in
the event of a breach of the provisions of Paragraphs 9, 10, and 11, be
available to the Corporation. In the event of such a breach, in addition to any
other remedies, the Corporation shall be entitled to receive from Executive
payment of, or reimbursement for, its reasonable attorneys' fees and
disbursements incurred in enforcing any such provision.
13. SURVIVAL. The provisions of Paragraphs 9, 10, and 11 shall survive
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termination of this Agreement for any reason.
14. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding
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of the parties and merges and supersedes any prior or contemporaneous agreements
between the parties pertaining to the subject matter hereof. This Agreement may
not be changed or terminated orally, and no change, termination or attempted
waiver of any of the provisions hereof shall be binding unless in writing and
signed by the party against whom the same is sought to be enforced; PROVIDED,
HOWEVER, that Executive's compensation may be increased at any time by the
Corporation without in any way affecting any of the other terms and conditions
of this Agreement, which in all other respects shall remain in full force and
effect. Failure of a party to enforce one or more of the provisions of this
Agreement or to require at any time performance of any of the obligations hereof
shall not be construed to be a waiver of such provisions by such party nor to in
any way affect the validity of this Agreement of such party's right thereafter
to enforce any provision of this Agreement, nor to preclude such party from
taking any other action at any time which it would legally be entitled to take.
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15. SUCCESSORS AND ASSIGNS. Neither party shall have the right to assign
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this personal Agreement, or any rights or obligations hereunder, without the
consent of the other party; PROVIDED, HOWEVER, that upon the sale of all or
substantially all of the assets, business and goodwill of the Corporation to
another corporation, or upon the merger or consolidation of the Corporation with
another corporation, this Agreement shall inure to the benefit of, and be
binding upon, both Executive and the corporation purchasing such assets,
business and goodwill, or surviving such merger or consolidation, as the case
may be, in the same manner and to the same extent as though such other
corporation were the Corporation. Subject to the foregoing, this Agreement shall
inure to the benefit of, and bind, the parties hereto and their legal
representatives, heirs, successors and assigns.
16. ADDITIONAL ACTS. Executive and the Corporation each agrees that he
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or it shall, as often as requested to do so, execute, acknowledge and deliver
and file, or cause to be executed, acknowledged and delivered and filed, any and
all further instruments, agreements or documents as may be necessary or
expedient in order to consummate the transactions provided for in this Agreement
and do any and all further acts and things as may be necessary or expedient in
order to carry out the purpose and intent of this Agreement.
17. COMMUNICATIONS. All notices, requests, demands and other
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communications under this Agreement shall be in writing and shall be deemed to
have been given at the time when mailed in any United States post office
enclosed in a registered or certified postage prepaid envelope and addressed to
the addresses set forth at the beginning of this Agreement, or to such other
address as any party may specify by notice to the other party; PROVIDED,
HOWEVER, that any notice of change of address shall be effective only upon
receipt.
18. CONSTRUCTION. The headings of the paragraphs of this Agreement have
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been inserted for convenience of reference only and shall in no way restrict or
otherwise affect the construction of the terms or provisions hereof. References
in this Agreement to Paragraphs are to the paragraphs of this Agreement.
19. COUNTERPARTS. This Agreement may be executed in multiple
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counterparts, each of which shall be deemed to be an original and all of which
together shall be deemed to be one and the same instrument.
20. SEVERABILITY. If any provision of this Agreement is held to be
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invalid or unenforceable by a court or tribunal of competent jurisdiction, such
invalidity or unenforceability shall not affect the validity and enforceability
of the other provisions of this Agreement and the provision held to be invalid
or unenforceable shall be carried out as nearly as possible according to its
original terms and intent to eliminate such invalidity or unenforceability.
21. GOVERNING LAW. This Agreement is made and executed and shall be
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governed by the laws of the State of Florida (excluding rules relating to
conflict of laws).
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first set forth above.
PSI INDUSTRIES, INC.
_____________________________ By:_______________________________
XXXXXX XXXXXX, Executive XXX XXXXX, President
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SCHEDULE A
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1. Deferred Compensation Plan
2. Major Medical and Dental Insurance Plan
3. 401(k) Plan, if and when implemented.
4. 1996 Stock Option Plan.
