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Exhibit 10.3
EMPLOYMENT AND SEPARATION AGREEMENT
This employment agreement ("Agreement") made this date, November 20,
1998, by and between DURASWITCH INDUSTRIES, INC., a Nevada corporation, with its
current place of business at 000 X. Xxxx Xxxxx, Xxxx, Xxxxxxx 00000
("DuraSwitch"), and J. XXXXXX XXXX of Emporia, Kansas ("Employee").
RECITALS
The parties recite and declare:
A. Employer desires to hire Employee because of Employee's vast
business experience and expertise as an inventor, developer and entrepreneur in
building an electronic manufacturing business, Camplex/Concept W ("Camplex").
B. Employee desires to be employed by Employer in the marketing
and operations capacity for the compensation described herein.
For the reasons set forth above, and in consideration of the mutual
covenants and promises of the parties set forth in this Agreement, Employer and
Employee agree as follows:
ARTICLE I
SECTION ONE:
1.1 Employment. Employer employs Employee to serve as Executive
Vice President of Marketing of DuraSwitch Industries, Inc. (DuraSwitch)
and on the terms and conditions stated in this agreement to:
- The Employee's primary responsibility will be to add
direction and experience to the DuraSwitch marketing
and sales organization through review of yearly sales
programs and the relationships on a continuing basis.
- The Employee's primary duties will be to direct the
marketing activities that market and sell the
DuraSwitch products.
- Assist the C.E.O. and President in special projects
in the operational organization as may be assigned
- Assist the C.E.O. and President in the development
and preparation of the long term corporate Five-year
Guide for Planning providing for the future survival
and growth of the business consistent with the
corporate purpose.
- Assist the C.E.O. and President in the development
and preparation of the short term One to Three-year
Strategic Plan and budget (including capital
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expenditure budget) based upon the goals set forth in
the Five-year Guide for Planning.
- Such other reasonable duties as may be assigned by
the Employer.
SECTION TWO:
2.1 Term of Employment. The term of Employee's employment shall be
until January 1, 2000, commencing the date of this Agreement. Continued
employment of Employee by Employer after January 1, 2000, shall be for
the term and on the conditions agreed to by the parties prior to the
expiration of this agreement.
SECTION THREE:
3.1 Best Efforts of Employee. Employee agrees in accordance with
his ability, experience and talents to perform all of the duties that
may be required of and from him pursuant to the express and implicit
terms of this Agreement, to the reasonable satisfaction of Employer.
Such duties shall be rendered at the Mesa, Arizona corporate office of
DuraSwitch and the Camplex office, Emporia, Kansas, as Employer shall
in good faith require.
SECTION FOUR:
4.1 Compensation of Employee. For the period of the agreement,
Employer shall pay Employee, and Employee shall accept from Employer as
payment in full for Employee's services under this Agreement,
compensation of $26,000.00 U.S. dollars annually, less any withholdings
for applicable taxes or benefits, payable biweekly as the Board may
determine while this Agreement shall be in force.
SECTION FIVE:
5.1 Reimbursement for Expenses. Employer shall reimburse Employee
for reasonable out of pocket expenses that Employee shall incur in
connection with his services for Employer contemplated by this
Agreement, on presentation by Employee of appropriate vouchers and
receipts for such expenses to Employer.
SECTION SIX:
6.1 Use of Confidential Information. Employee agrees that, in
addition to any other limitation contained in this Agreement,
regardless of the circumstances of the termination of employment, he
will not communicate to any person, firm, corporation or other entity,
any information relating to customer lists, prices, advertising, nor
any confidential knowledge or
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secrets that Employee might from time to time acquire with respect to
the business of the Employer or any of its affiliates or subsidiaries.
SECTION SEVEN:
7.1 Trade Secrets. Employee shall not at any time or in any
manner, either directly or indirectly, knowingly divulge disclose or
communicate to any person, firm, corporation or other entity in any
manner whatsoever, any trade secret information concerning any material
matters affecting or relating to the business of Employer, including
without limitation, any of its customers, the prices it obtains or has
obtained from the sale of, or at which it sells or has sold, its
products or any other information concerning the business of Employer,
its manner of operations, its plans, processes or other data without
regard to whether all of the above-stated matters will be deemed
confidential, material or important, Employer and Employee specifically
and expressly stipulating that as between them, such matters are
important, material and confidential, and gravely affect the effective
and successful conduct Employer's business and Employer's good will,
and that any breach of the terms of this section shall be a material
breach of this Agreement.
SECTION EIGHT:
8.1 Invention Assignment. Employee agrees that all inventions,
developments and improvements (whether patentable or not) made or
conceived by Employee, solely or jointly with others, during employment
with Employer, and which pertain to the products, processes or business
of Employer, or which result from or are suggested by or otherwise
arise out of Employee's work, are the sole property of Employer.
Employee will keep complete records of such inventions, developments
and improvements and will promptly and fully disclose and assign them
to Employer.
8.2 Execute Assignments. Employee agrees that at Employer's
expense he will execute such assignments, patent applications, and
other papers and do such things as may be necessary to enable Employer
to perfect its title to and obtain patents on such inventions,
developments and improvements, both in the United States of America and
in all foreign countries; unless the Employer breaches this Agreement
8.3 List. Attached hereto is a list and brief description of all
inventions, developments and improvements made or conceived by Employee
prior to employment with Employer on which no patent application has as
yet been filed. Should any question arise as to whether an invention,
development or improvement was made or conceived during employment by
Employer, all such items not on this list shall be presumed to belong
to Employer.
If No Items Listed, Then Initial:
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(initial)
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SECTION NINE:
9.1 Nondisclosure of Confidential Information During Employment
and After Termination. Employee agrees that for and during the entire
term of this Employment Agreement, any information, data, figures,
sales figures, projections, estates, customer lists, tax records,
personnel history, accounting procedures, promotions, and the like,
shall be considered and kept as the private and privileged records of
Employer and will not be divulged to any person, firm, corporation or
other entity except on the direct authorization of the Employer.
Further, upon termination of this Agreement for any cause, Employee
agrees that he will continue to treat as private and privileged any
information, data, figures, projections, estimates, customer lists, tax
records, personnel history, accounting procedures, and the like, and
will not release any such information to any person, firm, corporation
or other entity, either by statement, deposition or as a witness,
except upon direct written authority of the Employer, or in response to
a Court Order, provided that: (1) Employee provides Employer with
written notice of such order within 24 hours of receiving notice of
such Order; and (2) Employee limits disclosure made in response to such
Order to the minimum amount to satisfy said Order. Employer shall be
entitled to an injunction by any competent court to enjoin and restrain
the unauthorized disclosure of such information.
SECTION TEN:
10.1 Surrender of Records on Termination of Employment. Employee
agrees that on termination of his employment for any cause whatsoever,
except in the case of wrongful termination or breach of this Agreement
by Employer, Employee will surrender to Employer in good condition any
record or records kept by Employee containing the names, addresses and
other information with regard to customers or potential customers of
Employer served by Employee.
SECTION ELEVEN:
11.1 Restriction on Use or Disclosure of Customer List and Other
Information. For a period of 24 months immediately following
termination of this Agreement, Employee shall neither call on nor
solicit, either for Employee or any other person, firm, corporation, or
other entity, any of the customers of Employer of whom Employee called,
with whom Employee became acquainted, or of whom Employee learned
during Employee's employment under this Agreement, nor shall Employee
make known to any person, firm, corporation, or other entity, either
directly or indirectly, the names and addresses of any such customers
or any information relating in any manner to Employers' trade or
business relationship with such customers. The foregoing, however,
shall not preclude Employee from taking employment with such persons or
entities after termination of this Agreement pursuant to its terms,
provided such employment will not result in a violation of section
12.1.
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SECTION TWELVE:
12.1 Noncompetition with Employer. Except in the case of breach of
this Agreement by Employer, Employee agrees that for a period of 24
months after termination of his employment with Employer in any manner,
whether with or without cause, Employee will not, within the United
States, directly or indirectly engage in the business of switch
development, manufacture, distribution or in any similar business
competitive with Employer or DuraSwitch.
SECTION THIRTEEN:
13.1 Vacation. Employee is entitled to a two week (10 business
days) vacation time annually. Employee may accumulate 50% of his
vacation time and choose to use it in a later year, but may not take it
as a cash payment upon retirement or termination, except in a Takeover
Event under Article II, Section One, subparagraph 1.3A.
SECTION FOURTEEN
14.1 Employee Stock Options. The Employer agrees to issue
non-qualified stock options at fair market value {$1.50 closing price
on OTC:BB} to vest 120,000 on 1/1/99, 80,000 on 1/1/2000, and 80,000 on
1/1/2001.
ARTICLE II
SECTION ONE:
Definitions
1.1 "Separation" means the termination of Employee's status as an
employee of Employer or any successor assign corporation.
1.2 "Separation Date" or "Date of Separation" means 30 days after
the date that Employer gives Employee written notice that Employer
wishes to terminate his employment with Employer, or 30 days after
Employee gives Employer written notice that he wishes to terminate his
employment with Employer.
1.3 "Separation Occurrences" means an Event which would cause
Separation. For purposes of this Agreement, there are three Events
which could cause Separation. These Events are as follows:
A. Takeover Event. "Takeover `Event", for purposes of
this agreement means the Corporation is taken over and Xx.
Xxxx is asked to leave. The concept of
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"takeover" for purposes of this Agreement means that control
or possession of the Corporation has been assumed by an
outside person(s) or entity(ies). It is contemplated that the
request of Separation is as a result of the Takeover Event.
B. Employer Initiated Separation. For purposes of this
Agreement, "Employer Initiated Separation" means Employer
terminates this Agreement for any reason other than Employee's
breach of this Agreement, Employee Initiated Separation or a
Takeover Event.
C. Employee Initiated Separation. For purposes of this
Agreement, "Employee Initiated Separation" shall mean: (i)
Employee terminating this Agreement for any reason other than
Employer breaching this Agreement; (ii) death of Employee;
(iii) disability of Employee for 60 consecutive days; (iv)
Employee's gross material neglect of duties; (v) Employee's
willful failure to abide by good faith instructions from
Employer; (vi) commission of a felony or serious misdemeanor
offense; or (vii) Employee's breach of this Agreement.
SECTION TWO:
Compensation and Separation Provisions
2.1 Compensation for Separation Occurrence. Compensation is to be
paid to Employee for a Separation Occurrence. Employee is to be paid in
the following manner.
A. Upon the occurrence of a Takeover Event, Employee is
to receive, in a lump sum payment, on the Date of Separation,
the sum equal to 2.99 times his gross annual base salary, less
any applicable withholding for state and federal taxes. (He
would also be entitled to receive all rights as provided by
local, state or federal rules or regulation, e.g., COBRA
notification plus accrued vacation and accrued bonus.)
B. Upon the occurrence of an Employer Initiated
Separation, Employee would receive, paid over a two year
period in equal installments (timed to coincide with each
Employer payroll period, as currently made), payments the sum
of which is equal to two times his gross annual base salary,
less any applicable withholding for state and federal taxes
beginning on the Date of Separation. During this two-year
period, he would receive all standard employee benefits (e.g.,
health insurance) at the then prevailing cost, if any.
Further, Employer will be required to continue to pay
Employee's, his spouse's, and dependent children's medical and
dental insurance coverage until Employee reaches age 65,
except for any portions paid normally by any new employer of
Employee. Employer will make the standard premium payments on
behalf of Employee and his spouse for the applicable months
commencing from the Date of Separation. Employer may change
its insurance coverage but will not
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discriminate against Employee or his spouse. Any rights
required to be provided to him by local, state or federal
rules or regulations would be granted at the end of the period
(e.g., Cobra notification plus accrued vacation and accrued
bonus).
2.2 Resignation from Corporation. Upon a Separation Occurrence,
Employee will resign his position as President or any other office of
Employer of DuraSwitch, and if serving on the Board of Employer or
DuraSwitch, will resign his position from such Board.
2.3 Release of Liability.
A. In consideration of the payments provided for herein
and the covenants herein made, but with the exceptions set
forth in this paragraph, and provided Employer has not
breached this Agreement, Employee, upon Separation will
release, on his behalf and on behalf of his heirs, executors,
administrators and assigns, any and all claims of any nature
whatsoever against Employer and its present and former agents,
officers, directors, employees, insureds and assigns, whether
known or unknown, which he may have or claim to have by reason
of any matter, cause or thing whatsoever at any time up to the
date of Separation. The FULL WAIVER AND RELEASE will include,
without limitation, all rights or claims arising under the
Arizona Civil Right Act, or any other applicable state or
federal statute or any common law cause of action, including
claims for breach of any express or implied contract, wrongful
discharge, tort, personal injury or any claims for attorney's
fees or other costs. Notwithstanding any provision to the
contrary herein, this release shall not apply to (1)
obligations and undertakings of Employer pursuant to the stock
option agreements to which Employee is a party as of the date
of Separation, or (2) the indemnification provision of
Employer's Bylaws.
SECTION THREE:
General Miscellaneous Provisions
3.1 No Disparagement. Following the Date of Separation, Employee
agrees not to disparage Employer or DuraSwitch or any of their
respective officers, directors, employees or agents. Employer agrees,
following Separation, not to disparage Employee.
3.2 Bylaw Indemnification. Employer agrees that following the Date
of Separation, the indemnification provisions under the Bylaws of
Employer will continue in full force and effect for the benefit of
Employee for so long as such indemnification provisions would have any
application to claims against Employee.
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3.3 Jurisdiction. This Agreement shall be governed in all
respects, whether as to validity, construction, capacity, performance
or otherwise, by the laws of the State of Arizona, irrespective of the
fact that one or more of the parties may become a resident of a
different state and no action involving this Agreement may be brought
except in the Superior Court of the State of Arizona or in the United
States District Court of the District of Arizona. If any provisions of
this Agreement are held by a court of competent jurisdiction to be
invalid, void or unenforceable for whatever reason, the remaining
provisions of this Agreement shall nevertheless continue in full force
and effect without being impaired in any manner whatsoever.
3.4 Attorney's Fees. Should either party employ an attorney to
enforce any of the provisions of this Agreement, to protect its
interest in any manner arising under this Agreement, or to recover
damages for the breach of any of the terms of this agreement, the
non-prevailing party in such action pursued in a court of competent
jurisdiction agrees to pay to the prevailing party all reasonable
costs, damages and expenses, including attorney's fees, incurred or
expended by the prevailing party in connection therewith.
3.5 Cooperation of the Parties. Employee and Employer agree to
cooperate fully and to take all additional actions that may be
reasonably necessary or reasonably appropriate to give full force and
effect to the terms and intent of this Agreement and which are not
inconsistent with its terms.
3.6 Costs. Except for attorneys' fees, Employee and Employer shall
bear their own costs and other expenses incurred in connection with the
negotiation and preparation of this Agreement and any Separation which
occurs pursuant to this Agreement.
3.7 Term. Unless otherwise agreed in writing by the parties, this
Agreement shall continue in full force and effect during the life of
Employer of its successors and/or assignees.
3.8 No Waiver. No term or provision of this Agreement shall be
construed as a waiver by Employer of any provision of its Articles of
Incorporation or Bylaws restricting the sale of transfer of shares of
Employer.
3.9 Employment. Except as specifically provided herein, nothing in
this Agreement shall confer on any employee of Employer any right to
continue in the employ of Employer, nor shall it interfere in any way
with his employment at any time.
3.10 Notice. Any notices or demands which shall be required or
permitted by law or by any of the terms or provisions of this Agreement
shall be in writing and shall be effective when delivered personally or
when sent by United States mail, registered or certified. Such notices
and demands shall be addressed to Employer or individual at their
addresses set forth in the
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caption of this Agreement, or at such other addresses as any party
hereto may relate in writing to the other parties.
3.11 Benefit. The provisions of this Agreement shall inure to the
benefit of and be binding upon the parities hereto, their heirs,
trustees, legal representatives, successors and permitted assignees.
3.12 Marginal Headings. The marginal headings in the paragraphs
contained in this Agreement are for convenience only, and are not to be
considered a part of this Agreement or used in determining its content
or context.
3.13 Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one
instrument.
3.14 Amendments. Employer and Employee reserve the right to alter,
amend, revoke or terminate this Agreement in whole or in part at any
time by their joint instrument in writing to that effect. This
Agreement must be amended in writing in order to be effective and
binding.
3.15 Whole Agreement. With regard to the subject of this Agreement,
the terms of this instrument constitute the entire agreement between
the parties and shall be binding upon and inure to the benefit of those
parties and the executors, administrators personal representative,
estate, heirs, successors and assigns of each. The parties represent
that there are no collateral agreements or side agreements not
otherwise provided for within the terms of this instrument,. This
Agreement supersedes and takes precedence over any prior written or
oral inducements, representations or agreements as may be set forth in
the Articles of Incorporation of Employer or the Bylaws of Employer, or
elsewhere.
3.16 Time. Time is of the essence of Employer's obligations
hereunder.
3.17 Breach. In the event either party breaches this Agreement the
aggrieved party shall have, in addition to all other rights and
remedies specifically contained herein, all rights and remedies
available at law and equity. The pursuit of some rights and remedies at
one time shall not preclude the pursuit of others at other times. All
remedies provided herein and at law and equity are cumulative and not
exclusive.
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IN WITNESS WHEREOF, the undersigned execute this Agreement to be effective on
the date herein written.
/s/ J. Xxxxxx Xxxx
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J. Xxxxxx Xxxx
DURASWITCH INDUSTRIES, INC.,
a Nevada corporation
By: /s/ R. Xxxxxx Xxxxxx
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R. Xxxxxx Xxxxxx
Its: C.E.O and President
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