EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into this 29th
day of April, 1994, by and between OMNI INTERNATIONAL RAIL PRODUCTS, INC., an
Oregon corporation and OMNI PRODUCTS, INC., its wholly owned subsidiary
(hereinafter collectively referred to as "Corporation"), and XXXXXXX X. XxXXXXX
("Employee").
RECITALS:
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A. Corporation is a corporation duly organized and existing under the laws
of the State of Oregon;
B. Employee is an employee of Corporation; and
C. Corporation desires to employ Employee, upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, it is agreed as follows:
1. Employment. Corporation hereby employs Employee as Chief Executive
Officer and Chairman of Corporation and Employee accepts employment upon the
terms and conditions herein set forth in this Agreement.
2. Duties of Employee. Employee shall perform such duties and
responsibilities as those necessarily and customarily performed by a chief
executive officer and chairman of a like business and those as may be assigned
to him from time to time by Corporation and its Board of Directors. Employee
shall perform his responsibilities and duties faithfully, intelligently, to the
best of his ability, and in the best interests of Corporation during the term of
this Agreement. Employee agrees to devote all of his productive time, attention,
and energies to the business of the Corporation.
3. Term. The term of Employee's employment under this Agreement shall
commence on the effective date of this Agreement and shall continue for a period
of sixty (60) months and thereafter shall be automatically extended for
additional one (1) year terms, (a) unless either party gives written notice to
the other party at least thirty (30) days before the expiration of the initial
term or of each one year term thereafter, as the case may be, of termination,
(b) unless terminated under Paragraph 5 hereof, or (c) unless sooner terminated
by mutual agreement of Employee and the Board of Directors of Corporation.
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4. Compensation and Other Benefits.
4.1 Base Compensation. As compensation for his or her services hereunder,
the Company shall pay Employee during the term of this Agreement a yearly salary
of One Hundred Twenty Thousand Dollars ($120,000) before all customary payroll
deductions. Such salary shall be paid in substantially equal installments at the
same intervals as other officers of the Company are paid. The salary shall be
reviewed annually on or about the anniversary date of this Agreement with such
increases as shall be awarded in the discretion of the Board of Directors taking
into account such factors as corporate and individual performance, general
business conditions and changes in the cost of living index.
4.2 Benefits. During the term of this Agreement, Employee will be entitled
to health insurance coverage and such other fringe benefit programs as shall be
provided from time to time by the Company to other officer employees.
4.3 Bonus Compensation. The Board of Directors of Corporation may elect at
any time, in its sole discretion, and without any obligation to do so, to pay
Employee such additional bonus compensation as it shall determine.
4.4 Compensation Plans. In the event the Company established any bonus,
incentive or deferred compensation plan or program applicable to other senior
executive employees of Company, Employee will participate in such plan or
program on terms which are commensurate with his position and as are otherwise
determined on the same basis as such other senior executive employees.
4.5 Expenses. The Company will pay or reimburse Employee for all reasonable
and necessary travel and out-or-pocket expenses incurred by him in the
performance of his duties under this Agreement, subject to presenting
appropriate vouchers in accordance with the Company's policies.
5. Termination.
5.1 Permitted Termination. Employee's employment pursuant to this Agreement
and the Company's obligation to pay compensation hereunder may be terminated as
follows:
(a) The Board of Directors in officei at the time of the termination
may terminate Employee's employment for cause. For purposes of this Agreement,
"cause" shall mean a good faith determination by a majority vote of the Board of
Directors in office at the time of the termination (other than Employee), that
Employee violated a state or federal law involving the commission of a crime
against the Company, a felony or moral turpitude.
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(b) The present Board of Directors, or their successors nominated by
the present Board of Directors, or their successors so nominated, may terminate
Employee's employment if a majority of those directors who have no interest in
the transaction in good faith determine that Employee (i) demonstrated willful
and continued failure or inability to substantially perform reasonably assigned
duties, policies, standards and regulations that are consistent with the duties
assigned to Employee at the time of this Agreement (other than any such failure
resulting from Employee's incapacity due to physical or mental illness) after a
written demand for substantial performance is delivered to Employee by the
Chairman of the Board or President of the Company which specifically identifies
the manner in which such executive believes that Employee has not substantially
performed such duties; (ii) breached the terms of this Agreement; (iii) engaged
in conduct which was materially injurious to the Company, including, but not
limited to, misuse of alcohol or controlled substances; misrepresentation,
deception, fraud or dishonesty; actions compromising Employee's reputation or
ability to represent the Company with the public; actions substantially
impairing the Company's business, good will or reputation or any other act of
misconduct.
(c) Employee's employment shall terminate automatically upon
Employee's death or total disability. The term "total disability" as used herein
shall mean an inability to perform the duties set forth in this Agreement
because of illness or physical or mental disability for a period or periods
aggregating 90 calendar days in any 12-month period, unless Employee is granted
a leave of absence by the Board of Directors of the Company. The parties
acknowledge that Employee's ability to perform the duties specified in this
Agreement is of the essence to this Agreement.
(d) By 30 days written notice of termination given by Employee.
5.2 Constructive Termination. If Employee voluntarily terminates employment
within 60 days of a "change in duties," the Company shall be deemed to have
terminated Employee's employment in breach of this Agreement. Change in duties
shall mean any one or more of the following:
(a) A significant change in the nature or scope of Employee's title,
responsibilities, authority or duties from those applicable as of the date of
this Agreement;
(b) A significant diminution in employee benefits, including but not
limited to medical, dental, life insurance and long-term disability plans, and
perquisites available to Employee, from the employee benefits and perquisites to
which he or she is entitled as of the date of this Agreement, provided that such
diminution is not the result of a change in the Company's employee benefit
program generally available to similarly situated employees; or
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(c) A change in the location of Employee's principal place of
employment by the Company by more than 50 miles from Portland, Oregon.
5.3 Payment.
(a) In the event of permitted termination of Employee's employment
pursuant to Section 5.1 of this Agreement, Employee shall be entitled to receive
unpaid salary through the effective date of termination; provided, however, that
if the employment of Employee is automatically terminated due to death or
disability pursuant to Section 5.1(c), Employee or Employee's personal
representative shall receive termination payments in the form of Employee's
annual salary through the conclusion of the calendar month of the termination of
employment because of such death or disability. Any amounts owed by the Company
to Employee pursuant to this section may be reduced by any amount owned by
Employee to the Company.
(b) In the event the Company terminates Employee's employment under
this Agreement other than as provided in Section 5.1, it is agreed by the
parties that the actual damages which might be sustained by the Employee by
reason of such breach and termination are uncertain and would be difficult of
ascertainment, and therefore the Company shall continue to pay the Employee's
salary and benefits substantially equivalent to those described in Section 4 for
the remainder of the term of this Agreement or for three months whichever period
is longer, as and when such compensation is payable hereunder. In the event that
Employee is employed full time in another position, then the amount of
compensation to be paid to Employee hereunder from and after the date of such
employment shall be reduced by the amount of compensation paid to Employee in
respect to such employment. Nothing herein shall be construed to require
Employee to seek other employment and it is explicitly agreed that Employee is
not required to seek other employment.
6. Noncompete. Employee covenants that during the period of his or her
employment hereunder and for a period of three years after the date of this
Agreement or one year after the date of termination of Employee's employment
whichever period is longer, Employee shall not, directly or indirectly, either
as a principal, agent, employee, employer, consultant, stockholder, partner or
in any other personal or representative capacity whatsoever, be connected with
in any manner, any business whose products or services are in competition with,
or may in the future be in competition with, products then being produced or
marketed or services then being provided or marketed by the Company, or products
or services that feasibility of which the Company is actually studying, and
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shall not, directly or indirectly, divert any customer of the Company or induce
any employee or consultant of the Company to terminate his or her employment or
relationship with the Company. The covenant contained in this section is
intended to be a series of separate covenants, one set for the State of Oregon
and one set for each county, state or foreign country in which the Company shall
be engaged in any definable business in which Employee shall have been involved
on any date during the period of Employee's employment. Employee agrees that the
restraints imposed in this section are necessary for the reasonable and proper
protection of the Company and that each and every one of the restraints is
reasonable in terms of duration and geographic scope.
7. Confidential and Proprietary Information.
7.1 Confidential Relationship. Employee understand that Employee's
employment creates a relationship of confidence and trust between Employee and
the Company with respect to any information: (a) applicable to the business of
the Company; (b) applicable to the business of any supplier, consultant,
independent contractor, licensor, licensee, client, customer or affiliate of the
Company, which information may be made known to Employee by the Company or by
any supplier, consultant, independent contractor, licensor, licensee, client,
customer or affiliate of the Company, or information learned by Employee during
the period of Employee's employment.
7.2 Proprietary Information. Employee acknowledges that, during the course
of rendering the employment services to the Company he or she may acquire
Proprietary Information of the Company (as hereinafter defined). For purposes of
this Agreement "Proprietary Information" shall mean all material and information
created, discovered, owned, controlled or otherwise known by the company
(including, without limitation, information created by or discovered by Employee
during the period of or arising out of Employee's employment with 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. "Proprietary Information" includes, without limitation,
trade secrets, confidential information, data processes, designs, software
programs, formulas, test procedures and results, improvement, inventions or
techniques, customer lists, business plans, marketing plans and strategies and
pricing strategies or other subject matter pertaining to any business of the
Company or of any of its suppliers, consultants, independent contractors,
licensors, licensees, clients, customers or affiliates.
7.3 Limitation. Subject to the provisions of the Rights in Products Section
of this Agreement, the term "Proprietary Information" shall not include any
information which:
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(a) is or becomes generally known or available through no act or
failure on the part of Employee;
(b) is known by Employee at the time of receipt of such information,
as demonstrated by written documentation bearing a date prior to the date of
receipt of such information, where the source of such information legally
obtained such information and the right to disclose it to Employee;
(c) is furnished to Employee by a third party without restriction on
disclosure, where such third party legally obtained such information and the
right to disclose it to Employee; or
(d) is developed by Employee independently of any obligation to the
Company and without violation of any rights which the Company may have in such
information.
7.4 Ownership. Employee agrees that all Proprietary Information of which
Employee may acquire knowledge is the sole and exclusive property of the
Company, and that the Company shall retain all right, title and interest to the
Proprietary Information. Employee further agrees that Employee is not entitled
to use Proprietary Information for Employee's own benefit or for the benefit of
others during or after the period of Employee's employment, without the prior
written consent of the Company.
7.5 Nondisclosure. Employee agrees to keep confidential, and not disclose
or make any use of, except for the benefit of the Company, at any time either
during or subsequent to Employee's employment, any Proprietary Information of
which Employee may acquire knowledge. Employee also agrees to employ all
reasonable measures to prevent the unauthorized use of the Proprietary
Information. Employee agrees that, in the event Employee is served with a
subpoena or other compulsory judicial or administrative process calling for
production of Proprietary Information, Employee will immediately notify the
Company in order that the Company may take such action as it deems necessary to
protect its interests.
7.6 Return. Within ten (10) days following the termination of Employee's
employment with the Company for any reason whatsoever, Employee shall return and
certify in writing to the return of, any and all notes, diagrams, documents,
papers and other materials consisting of or relating to the Proprietary
Information, and all copies thereof which are then in Employee's (or Employee's
agent's) possession or control.
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8. Rights in Products.
8.1 Ownership. Employee agrees that any inventions, designs, drawings,
specifications, computer software, ideas, documentation or other copyrightable
works or patentable inventions, formulas, processes or techniques which Employee
makes, conceives, reduces to practice or learns during Employee's employment
("Works"), and al intermediate and partial versions thereof, as well as all
program materials, flow charts, notes, outlines, designs, drawings,
specifications, and the like created in connection therewith (collectively "Work
Product"), and any formulas, processes, algorithms, ideas and other information
not generally known to the public (whether or not protected by copyright or
patent) and developed or generated by Employee in the course of developing the
Works ("Related Information"), shall, upon their fixation in a tangible medium
of expression (in the case of copyrightable works) or creation (in the case of
noncopyrightable works), be assigned to and constitute Proprietary Information
of the Company and shall be the sole property of the Company and the Company
shall be the sole owner of all patents, copyrights and other rights in
connection therewith.
8.2 Disclosure. Employee shall promptly disclose to the Company any
Works, Work Product or Related Information created, discovered, reduced to
practice or learned by Employee, either alone or jointly with others, during the
term of Employee's employment.
8.3 Assignment. Employee hereby assigns to the Company the sole and
exclusive right, title and interest in and to all such Works, and all copies of
any of them, without further consideration, and agrees to assist the Company to
register, and from time to time to enforce, all patents, register, and from time
to time to enforce, all patents, copyrights and other rights and protections
relating to the Works, Work Product and Related Information in any and all
countries. To that end, Employee agrees to execute and deliver all documents
requested by the Company in connection therewith, and irrevocably designates and
appoints the Company Employee's agent and attorney-in-fact to act for and in
Employee's behalf and stead to execute, register and file any such applications,
and to do other lawfully permitted acts to further the registration, prosecution
and issuance of patents, copyrights or similar protections with the same legal
force and effect as if executed by Employee.
8.4 Nonexclusive License. In the event (and to the extent) that the
Works, Work Products or Related Information contain any items or elements which
may be subject to preexisting proprietary rights of Employee, Employee hereby
grants to the Company an irrevocable, perpetual, nonexclusive royalty-free,
worldwide license to (a) use, execute, reproduce, display, perform, distribute
copies of, modify and prepare derivative works based on such preexisting rights
Page 7 - EMPLOYMENT AGREEMENT
and (b) authorize others to do any of the foregoing. Employee represents and
warrants that (i) Employee is the sole and absolute owner of any such items or
elements contained in the Works, Work Product or Related Information that are
licensed hereunder to the Company (collectively, "Licensed Items"), (ii) the
Licensed Items do not infringe on any third party's proprietary rights
(including, without limitation, rights of patent and copyright) and (iii) the
Company's exercise of its rights under the license granted hereunder to not
infringe upon any third party's proprietary rights (including, without
limitation, rights of patent and copyright).
9. General Provisions.
9.1 Injunctive Relief. Employee acknowledges that the Company will not
have an adequate remedy at law in the event of any breach or threatened breach
by Employee of any provision of Sections 6, 7 or 8, and that the Company will
suffer irreparable damage and injury as a result. Accordingly, in the event of
any such breach or threatened breach, employee hereby consents to the granting
of injunctive relief against him or her by any court of competent jurisdiction
without the posting by the Company of any bond or other security therefor, and
Employee further agrees not to raise as a defense the availability of monetary
damages as a remedy.
9.2 Arbitration. If any disputes or differences shall arise between
the Company and Employee, no suit shall be commenced by either one against the
other. These disputes and differences shall, however, be submitted to
arbitration in accordance with the laws of the State of Oregon, and all
arbitration proceedings shall be in the City of Portland. Judgment upon the
award rendered by the arbitrator(s) may be entered in any court having
jurisdiction. The Company and Employee will try to agree on one arbitrator
selected from a list submitted by the American Arbitration Association. If this
is not possible, there will be three arbitrators, one named in writing by each
party to this Agreement within 10 days after notice of arbitration is served by
either party upon the other, and a third arbitrator selected by these two
arbitrators. Costs of the arbitration shall be shared equally by Employee and
the Company. Each party will bear its own attorneys' fees and costs.
9.3 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement binding
on all the parties, notwithstanding that all parties are not signatories to the
same counter part.
9.4 Survival. All rights and obligations shall cease upon termination
of Employee's employment with the Company, except as otherwise explicitly set
forth herein and except for the rights and obligations set forth in or arising
out of Section 6, 7, 8, and 9 which shall survive the termination of this
Agreement forever.
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9.5 Headings. Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.
9.6 Officer and Board Member. So long as Employee is an employee of
Corporation and not in default hereunder, Employee shall be appointed and become
Chief Executive Officer and Chairman of Corporation and a member of the Board of
Directors on or after the effective date hereof.
9.7 Vacations. Subject to the approval of time by the Board of
Directors, Employee shall be entitled to the number of days as determined by
Corporation's policy. Initially, Employee shall be entitled to three (3) weeks
of vacation during each year of this Agreement. Any unused vacation time shall
not be carried over to future years.
9.8 Illness of Incapacity. Employee shall be entitled to sick leave
because of actual sickness, accident, or other incapacity, without any
adjustment in compensation in accordance with Corporation's policy. The Board of
Directors of Corporation in its sole discretion shall determine which adjustment
in compensation shall be made for any absences from work in excess of Employee's
normal sick leave time.
9.9 Waiver. The waiver by either Corporation or Employee of a breach
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by either party and shall in no way affect the
enforcement of all of the other provisions of this Agreement.
9.10 Severability. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Agreement and the application of such
term or provision to persons or circumstances other than those to which it is
held invalid or unenforceable shall not be affected thereby and each term or
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
9.11 Modification. This Agreement may not be changed or modified
except by the written agreement of the parties hereto. Not change, termination,
or attempted waiver of any of the provisions hereof shall be binding unless in
writing and signed by both parties. This Agreement may not be modified or
terminated orally.
9.12 Executive. Each of the parties hereto shall execute such
documents and shall take such other action as may be reasonably requested by the
other party to carry out the provisions and purposes of this Agreement in
accordance with the terms hereof.
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9.13 Applicable Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Oregon.
9.14 Integration. This Agreement contains the entire agreement between the
parties hereto pertaining to the subject matter hereof, and supersedes all prior
and contemporaneous agreements, oral and written, except those contemplated
hereunder or note inconsistent herewith.
9.15 Representation. This Agreement has been prepared by Xxxxxxxx X.
Xxxxx, P.C. as legal counsel to Employer. Employee has been advised, and by his
execution hereof acknowledges, that he has the right to, and should, have this
Agreement reviewed by his own separate legal counsel. This Agreement has been
negotiated at arm's length with the benefit or opportunity to seek the
assistance of legal counsel and accordingly shall not be construed against any
party.
9.16 Successors; Assignment. Employee may not assign, transfer,
convey, mortgage, hypothecate, pledge, or in any way encumber the compensation
or other benefits payable to him or any rights which he may have under the
provisions of this Agreement, without the prior written consent of Corporation.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
effective date first above written.
OMNI INTERNATIONAL RAIL OMNI PRODUCTS, INC.
PRODUCTS, INC.
By: /s/ Xxxxxxx X. XxXxxxx By: /s/ Xxxxxxx X. XxXxxxx
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Title: Chairman & CEO Title: Chairman & CEO
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Address: 000 XX Xxxxx Xxxx. Address: 000 X.X. Xxxxx Xxxx.
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Portland, OR. 97214 Portland, OR. 97214
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EMPLOYEE
/s/ Xxxxxxx X. XxXxxxx
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Name: Xxxxxxx X. XxXxxxx
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Address: 16161
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Xxxx Xxxxxx, XX 00000
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