EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement') dated as of November 1, 1996,
between VISTA TECHNOLOGIES INC., a Nevada corporation with its principal place
of business in the United States at 000 X. Xxx Xxxxxxx Xxxx, Xxxxx 0, Xxx
Xxxxx, XX 00000 (herein called the "Company") and Xxxxx X. Xxxxx (herein
called the "Employee") residing at 0000 Xxxxxxxxxx Xx., Xxx Xxxxxxxxx, XX
00000
1. EMPLOYMENT. The Company hereby employs Employee as the Company's
Executive Vice President and Chief Operating Officer reporting to the
Company's Chief Executive Officer. Employee will be responsible for management
and supervision of the Company's operations for the term of this Agreement,
and the Employee hereby accepts such employment upon the terms and conditions
hereinafter set forth.
2. TERM. The term of this Agreement shall commence as of November 1, 1996
(the "Employment Date") and shall continue in effect for a term of 36 months,
unless previously terminated in accordance with the provisions of Section 6 of
this Agreement. Thereafter, this Agreement shall be automatically renewed on a
year-to-year basis unless either party shall provide the other with notice in
writing of the termination of this Agreement at least 60 days' prior to the
expiration of this Agreement at the end of its original term or any renewal
thereof. For purposes of this Agreement, the "term of this Agreement" shall
refer to the initial term and all renewal terms hereof. In the event of
termination by the Company prior to the expiration of this Agreement at the
end of its original term or any renewal thereof, the Company shall pay the
Employee severance pay and benefits required by Section 6(e) of this Agreement
unless termination by the Company is for a reason specified in Sections 6(a),
6(b) or 6(c) hereunder
3. COMPENSATION. For all services rendered by the Employee under this
Agreement, the Company shall pay the Employee a salary and fringe benefits as
follows;
(a) CASH COMPENSATION: The Company shall pay the Employee a base salary
during the term of this Agreement, payable monthly, at the rate of
$175,000 per year per
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annum. In lieu of an annual bonus for the current fiscal year ending
March 31, 1997, Employee will receive a payment of $50,000 on May 1,
1997. Thereafter Employee will be eligible to receive an fiscal annual
performance bonus of up to 100% of base salary based upon achievement of
reasonable and achievable Company goals as determined and approved in
good faith by the Board of Directors to be paid no later than 90 days
from the end of such year. Employee shall be eligible for annual
performance appraisal and merit increase. Company may, but is not
obligated to, increase Employee's salary as Company deems appropriate.
(b) Stock Options: The Company shall grant the Employee Incentive Stock
Options under the Vista Technologies Inc. 1994 Stock Option Plan to
purchase 500,000 common shares of the Company at $2.625 per share which
shall vest in equal quarterly increments over a period of 12 quarters
from the Employment Date as set forth in the Stock Option Agreement.
(c) MEDICAL, INSURANCE, AND OTHER BENEFITS: The Employee shall at his
option be entitled to participate with other employees of the Company in
all group fringe benefit plans or other group arrangements authorized
and adopted from time to time. Employee shall also receive such other
benefits including vacation, holidays, and sick leave, as Company
generally provides to its employees holding similar positions as that of
Employee. The Company agrees to make available to Employee Company-paid
medical and long-term disability plans, and will make the annual
payments for Employee's life insurance policy #1A22073200 provided by
Pacific Mutual Insurance.
(d) CAFETERIA PLAN: The Company agrees to reimburse Employee an amount
equal to no more than seven and one half per cent (7 1/2%) of base
salary in any year for personal benefit expenses related to Employee and
his family as determined by Employee at his sole discretion. Cafeteria
Plan benefits shall not be accumulated and carried over from one year to
the next, and shall be forfeited to the extent not used within any
calendar year.
(e) EXPENSES: The Company shall either pay directly or reimburse
Employee for reasonable travel, entertainment and other business
expenses incurred by Employee in the performance of his duties
hereunder; provided that the incurring
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of such expenses shall be subject to such policies as shall be
established by the Board of Directors of the Company from time to time,
and Employee shall submit to the Company such documentation to
substantiate such expenses as the Company shall reasonably request.
(f) INITIAL EMPLOYMENT BONUS: Company will pay Employee a cash bonus
of $25,000 on or before December 15, 1996. In addition, the Company
shall grant Employee upon effective date of the Agreement 100,000 Class
G Common Stock Purchase Warrants for Company common shares exercisable
at a price of $2.625 per share in exchange for $100. The Company has
the right to repurchase these warrants for $100 should Employee be
Terminated by the Company for any reason other than in paragraphs 6(a),
6(b), and 6(d) hereof.
Nothing herein shall be deemed to preclude the Company from awarding
additional compensation or benefits to Employee during the term of this
Agreement, upon approval of Company's Board of Directors, whether in the form
of raises, bonuses, additional fringe benefits, or otherwise.
4. DUTIES. During the term of this Agreement, the Employee hereby promises
to perform and discharge faithfully the duties which may be assigned to him
from time to time by the President of the Company in connection with the
conduct of its business so long as such duties are reasonably related to the
Employee's duties Executive Vice President and Chief Operating Officer of the
Company. Employee will be responsible for all domestic and foreign operations
of the Company and will have all relevant executives and their respective
subordinates report to him with the exception of the Chief Financial Officer
and his subordinates. Employee is employed to actively serve on a full-time
basis as an executive officer of the Company reporting directly to its
President.
5. EXTENT OF SERVICES; OTHER INTERESTS. During the term of this Agreement,
the Employee shall devote all of his working time, attention and energies
which is reasonably required for the performance of his duties and the
business of the Company and shall travel as reasonably required to discharge
the duties of his position with the Company as assigned by its Board of
Directors. The Employee shall not during the term of this Agreement be
engaged in any other business activities that are, or could
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potentially be, in competition with the business activities of the Company
whether or not such business activities are pursued for gain, profit or other
pecuniary advantage. Subject to the foregoing, the Employee may engage in
investment, business, professional and continuing education activities so long
as such activities do not substantially interfere with the performance of his
duties as the Executive Vice President and Chief Operating Officer of the
Company.
6. TERMINATION. Payment of severance described in this Section 6 shall be
paid no later than ten (10) days after becoming due.
(a) DEATH: In the event of Employee's death during the term hereof,
this Agreement shall terminate immediately and, except as expressly set
forth in this paragraph, the Company shall have no further liability
hereunder to Employee or his estate. The Company shall continue to pay
to Employee's estate his salary and continued stock option vesting for a
period of one (1) month from and after the date of death during the term
of this Agreement.
(b) PERMANENT DISABILITY. In the event that Employee becomes totally
disabled during the term hereof and such total disability continues for
a period in excess of ninety (90) days, whether consecutive or in the
aggregate during any 12 month period, at the end of such period of
disability the Employee shall be considered as permanently disabled and
this Agreement shall terminate immediately and, except as expressly set
forth in this paragraph, the Company shall have no further liability
hereunder to Employee. The Company shall continue to pay to Employee his
salary and continue stock option vesting for the period of disability
and a period of two (2) months from and after the date of total
disability commencing with the expiration of the first 90 day period of
such disability as severance pay hereunder.
Employee shall be considered as totally disabled if, and when because of
injury, illness or physical or mental disability, he is prevented from
effectively performing the duties of his employment. The determination
of total disability shall be made by the Board of Directors of the
Company, but said decision shall not be unreasonable or arbitrary and
shall be supported by the opinion (at the Company's expense) of at least
one licensed physician unless Employee shall
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without justification fail to submit to the necessary physical or mental
examinations. It is understood that Employee's occasional sickness of
short duration shall not result in Employee being considered totally
disabled, and Employee shall continue to be compensated hereunder during
such periods of occasional sickness so long as they shall not exceed
twelve (12) days In a calendar year.
(c) INVOLUNTARY TERMINATION FOR CAUSE. The Company may terminate this
Agreement for cause. For the purposes of this Agreement, a termination
for "cause" shall mean a termination resulting from a good faith and
reasonable determination by the Company's Board of Directors that
Employee (i) has committed a felony or act of moral turpitude which
would materially injure the Company or its reputation or, (ii) has
intentionally or willfully and repeatedly breached his duties hereunder
in a material respect and, if curable, has failed to cure the same
within thirty (30) days after receiving written notice of such breach
from the Board of the Company. Such notice must be given to Employee
following each claimed breach, whether or not curable. In the event of
termination for cause, the Company shall have no further liability
hereunder to Employee from and after the date of such termination.
(d) TERMINATION WITHOUT CAUSE. Termination of Employee for any reason
other than in paragraphs 6(a), 6(b), and 6(c) hereof shall be considered
Termination Without Cause. In addition, Employee's resignation from the
employ of the Company shall be deemed Termination Without Cause
("Constructive Discharge") if resulting from: 1) a reduction of more
than 25% of monthly base salary in cash compensation (excluding
performance bonuses) or other benefits other than as a result of a
decrease in compensation payable to Employee and to all other executive
officers of Company on the basis of Company's financial performance; 2)
a change in reporting relationship to the Company President or a
significant reduction in the nature or scope of Employee's
responsibilities, authorities, powers, functions or duties as an
Executive Vice President and Chief Operating Officer of the Company; 3)
a requirement imposed by Company that Employee relocate to an office
that is more than 25 miles from the Company's current headquarters; 4)
failure of Company materially to perform its obligations pursuant to
this Agreement. If Employee continues his employment with the Company
after a Constructive Discharge event occurs, that continuation
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shall not constitute a waiver of Employee's fight to treat such event as
an event of Termination Without Cause unless (i) his employment under
adjusted terms of employment after the Constructive Discharge Event
shall continue for more than 12 months after such Constructive Discharge
Event or (ii) his employment is subsequently terminated for cause under
paragraph 6(c) above. Any waiver of a Constructive Discharge Event as a
result of continued employment for more than 12 months thereafter shall
not, however, be deemed a waiver as to any other Constructive Discharge
Event which may subsequently occur.
(e) SALARY AND BENEFIT CONTINUATION UPON TERMINATION WITHOUT CAUSE.
Upon the termination of Employee's employment with the Company for any
reason whatsoever prior to the expiration of the original term or any
annual renewal of the term of this Agreement, except for (i) termination
upon death as set forth in paragraph 6(a) hereof; (ii) termination upon
permanent disability as set forth in paragraph 6(b) hereof; (iii)
termination for cause pursuant to paragraph 6(c) hereof; or (iv)
Employee's voluntarily electing not to continue in the employment of the
Company under conditions other than those set forth in paragraph 6(d)
hereof; then the Company within thirty (30) days after such termination,
and in lieu of all other obligations of the Company hereunder, shall: 1)
pay to Employee an lump-sum payment equal to his then base salary for a
period equal to twelve (12) months; 2) will provide Employee, at
Company's cost, with employment benefits consisting of life, health,
dental and long-term disability insurance for a period of 12 months
after termination; and 3) enter into a Post-termination Consulting
Agreement as defined below in paragraph 6(f) hereof. Thereafter, any
continuation of benefits under the Consolidated Omnibus Budget
Reconciliation Act (COBRA) will be at Employee's cost.
(f) POST-TERMINATION CONSULTING AGREEMENT. Upon the Termination Without
Cause, Employee will hold himself available to provide consulting
services to the Company for a period terminating one year after the
Termination Date (the "Consulting Period"). Employee will provide the
consulting services only upon the request of the Company's Chief
Executive Officer and for no more than ten hours per week (any period
shorter than one week will include a proportionate number of hours) at
such times and places as are mutually convenient to Employee and the
Company. However, Employee will perform those services at times and
places that do not reasonably conflict with his responsibilities to his
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then current employer. Employee will perform services as an independent
contractor with the customary and usual independence associated
therewith, and he will not be deemed an employee or agent of the Company
or have the authority to bind, or to enter into any contract on behalf
of, the Company, unless expressly authorized in writing to do so. The
Company will pay Employee a consulting fee of $150.00 per hour for each
hour actually worked at the Company's request. The Company's Board of
Directors has determined that Employee will be providing "substantial
services" to the Company during the Consulting Period such that any
option held by Employee on the Termination Date, if not fully vested at
the time, will continue to vest during the Consulting Period according
to its terms. Any option held by Employee at the Termination Date will
remain exercisable for the current term of the option during the
Consulting Period even though the employment of Employee will terminate
on the Termination Date.
7. NONDISCLOSURE OF CONFIDENTIAL INFORMATION. The Employee recognizes and
acknowledges that the Company's trade secrets and proprietary processes as
they may exist from time to time are valuable, special and unique assets of
the Company's business, access to and knowledge of which are essential to the
performance of the Employee's duties hereunder. The Employee will not during
or after the term of his employment, disclose such secrets or processes to any
person, firm, corporation, association or other entity for any reason or
purpose whatsoever, nor shall the Employee make use of any such secrets or
processes for his own purposes or for the benefit of any person, firm,
corporation, or other entity (except the Company) under any circumstances
during or after the term of his employment; provided that after the term of
his employment these restrictions shall not apply to such secrets and
processes which are then, or from tine to time thereafter, in the public
domain (provided that he was not responsible, directly or indirectly, for
permitting such secrets or processes to enter the public domain without the
Company's consent).
8. COVENANT NOT TO COMPETE OR INTERFERE. The Employee agrees that during
the term of this Agreement or for a period of one ( 1 ) year after the date of
Termination under this Agreement, whichever occurs first; (a) Employee shall
not intentionally interfere with, disrupt or attempt to disrupt the
relationship, contractual or otherwise between the
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Company and any customer, supplier, lessor or employee of the Company or any
of its subsidiaries and (b) Employee shall not as a sole proprietor or
otherwise for his own account or as a partner, employee, officer, director,
manager, agent, distributor, consultant, marketing representative, associate,
investor or otherwise (except as to a less than 5% interest in a public
company listed on the Nasdaq, a national, or a regional exchange), directly or
indirectly, own, purchase, organize or take preparatory steps for the
organization of, finance, work for, provide services to, advise, acquire,
lease, operate, manage or invest in or permit his name to be used or employed
in connection with any business which engages in providing equipment and/or
support services for corrective eye surgery in competition with the Company
(the "Business"). Employee further agrees that the covenants and other
provisions of this paragraph shall cover his activities in the whole of North
America, Europe and Asia (the "Territory"). The parties hereto agree that the
covenants contained in this paragraph (b) shall be construed as if the
covenants are divided into separate and distinct covenants in respect of each
of the products and services of the Business, each capacity in which the party
is prohibited from competing, and each part of the world in which such
competition is prohibited from taking place. The territorial restrictions
contained in this paragraph (b) are properly required for the adequate
protection of the Business and in the event any covenant or other provision
contained this paragraph (b) shall be deemed to be illegal, unenforceable, or
unreasonable by a court or other tribunal of competent jurisdiction. With
respect to any part of the Territory or otherwise, such covenant or provision
shall not be affected with respect to any other part of the Territory or
otherwise, and each of the parties hereto agrees and submits to the reduction
of said territorial restriction or other provisions to such an area or
otherwise, as said court shall deem reasonable. The parties further agree that
if any provision of this Agreement is found to be unenforceable, it shall not
affect the enforceability of the remaining provisions and the court shall
enforce all remaining provisions to the extent permitted by law
9. INVENTIONS. The Employee hereby sells, transfers, and assigns to the
Company, or to any person or entity designated by the Company, at of the
entire right, title and interest of the Employee in and to all inventions,
ideas, disclosures, and improvements, whether patented or unpatented, and
copyrightable material made or conceived by the Employee, solely or jointly
during the term hereof which relate to methods, apparatus, formulae, designs,
products, processes or devices, sold, leased, used, or under consideration or
development by the Company, or which otherwise relate to or pertain to
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the business, functions, or operations of the Company. The Employee agrees to
communicate promptly and to disclose to the Company, in such form as the
Employee may be required to do so, all information, details, and data
pertaining to the aforementioned inventions, ideas, disclosures, and
improvements and to execute and deliver to the Company such formal transfers
and assignments and such other papers and documents as may be required of the
Employee to permit the Company or any person or entity designated by the
Company to file and prosecute the patent applications and, as to copyrightable
material, to obtain copyright thereof.
For the purposes of this Agreement, an invention shall be deemed to have been
made during the term of Employee's employment if, during such period, the
invention was conceived or first actually reduced to practice by the Company,
and Employee agrees that any patent application filed within one (1 ) year
after termination of this employment shall be presumed to relate to an
invention which was made during the term of Employee's employment unless
Employee can provide satisfactory evidence to the contrary.
10. INJUNCTIVE RELIEF. The parties hereto acknowledge that (a) the
covenants and restrictions set forth in Sections 8, 9 and 10 of this Agreement
are necessary, fundamental and required for the protection of the business of
the Company, (b) such covenants and restrictions are material inducements to
investors to enter into agreements to invest in the Company, and (c) a breach
of any of such covenants and restrictions by Employee will result in
irreparable harm and damages to the Company which cannot be adequately
compensated by a monetary award. Accordingly, in the event of breach or
threatened breach of such provisions by Employee, Employee expressly agrees
that the Company shall be entitled to the immediate remedy of a temporary
restraining order, preliminary injunction or such other form of injunctive or
equitable relief as may be used by any court of competent jurisdiction to
restrain or enjoin the Employee from breaching any such covenant or provision
or to specifically enforce the provisions hereof. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies for such
breach or threatened breach.
11. INSURANCE. The Company, at its election and for its benefit, may insure
the Employee against accidental loss or death and the Employee shall submit to
such
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physical examination and supply such information as may be required in
connection therewith.
12. NOTICES. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail to his last known residence in the case of the Employee or to
its last known principal office in the case of the Company.
13. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed by a waiver of
any subsequent breach.
14. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California.
15. ASSIGNMENT. The rights and obligations of the parities under this
Agreement shall inure to the benefit of and shall be binding upon the
successors of such parties.
16. ENTIRE AGREEMENT. This instrument contains the entire agreement of the
parties. It may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, modification,
extension or discharge is sought.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
first written above.
EMPLOYEE: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
COMPANY: VISTA TECHNOLOGIES INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx, President & CEO
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