EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into and made
effective as of November 24, 1999, by and between Laser Photonics, Inc.
("Employer") and Xxxxxx X. XxXxxxx ("Employee").
RECITALS
WHEREAS, Employer is desirous of hiring Employee as one of its key
employees;
WHEREAS, Employee is willing to accept employment as an employee of
Employer;
WHEREAS, the parties hereto desire to set forth herein the
responsibilities of Employee and the expectations of Employer;
WHEREAS, Employee is granting Employee certain non-qualified Stock
Options, the terms of which are incorporated herein by this reference;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and obligations herein contained, the parties hereto
agree as follows:
AGREEMENT
1. EMPLOYMENT. Employer hereby employs Employee, and Employee
hereby accepts employment with Employer, upon the terms and conditions set
forth in this Agreement.
2. TERM OF EMPLOYMENT. The employment of Employee pursuant to
the terms of this Agreement shall commence as of November 24, 1999, and shall
continue until November 23, 2002, unless sooner terminated pursuant to the
provisions hereof (the "Term").
3. DUTIES.
3.1. BASIC DUTIES. Subject to the direction and control of the
Board of Directors of Employer, Employee shall serve as the Chief Financial
Officer and Vice-President of Finance and Administration of Employer and shall
fulfill all duties and obligations of such office.
3.2. OTHER DUTIES OF EMPLOYEE. In addition to the foregoing,
Employee shall perform such other or different duties related to those set forth
in Paragraph 3.1 as may be assigned to him from time to time by Employer;
PROVIDED, HOWEVER, that any such additional assignment shall be at a level of
responsibility commensurate with that set forth in Paragraph 3.1.
3.3. TIME DEVOTED TO EMPLOYMENT. Employee shall devote his
full time to the
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business of Employer during the term of this Agreement to fulfill his
obligations hereunder.
3.4. PLACE OF PERFORMANCE OF DUTIES. The services of
Employee shall be performed at Philadelphia, Pennsylvania.
4. COMPENSATION AND METHOD OF PAYMENT.
4.1 TOTAL COMPENSATION. As compensation under this
Agreement, Employer shall pay and Employee shall accept the following:
(a) For each year of this Agreement, measured from the
effective date hereof, base compensation ("Base Salary")
of Two Hundred Thousand Dollars ($200,000), with such
upward adjustments as may be approved from
time to time by the Board of Directors of Employer.
Such adjustments may be based on the performance of
Employee, the value of Employee to Employer or any
other factors considered relevant by Employer.
(b) Employer shall reimburse Employee for all reasonable
travel, entertainment and other expenses incurred or
paid by Employee in connection with, or related to,
the performance of Employee's duties,
responsibilities or services under this Agreement,
upon presentation by the Employee of documentation,
expense statements, vouchers and/or such other
supporting information as Employer may request.
(c) Participation in Employer's employee fringe benefit,
health insurance, life insurance, key man insurance
and other programs in effect from time to time for
employees of Employer and its affiliates at
comparable levels of responsibility. Participation
will be in accordance with any applicable policies
adopted by Employer. Employee shall be entitled to
vacations, absences for illness, and to similar
benefits of employment, and shall be subject to such
policies and procedures as may be adopted by
Employer.
(d) Nonqualified options to acquire up to 350,000 shares
of Employer's Common Stock at an exercise price of
$5.50 per share, subject to the terms of such options
as set forth in the Stock Option Agreement attached
hereto as Exhibit "A."
(e) Employee shall be entitled to an automobile allowance of
$1,000 per month.
4.2 PAYMENT OF COMPENSATION. Employer shall pay the
compensation provided for in Section 4 hereof as follows:
(a) Employer shall pay the base compensation in cash,
semi-monthly in twenty-four equal installments or in
accordance with Employer's payroll practices for all
its employees, but in no event less frequently than
monthly.
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(b) Employer shall pay in cash the reimbursement of such
discretionary expenses provided in Section 4 hereof.
5. TERMINATION OF AGREEMENT.
5.1. BY NOTICE. This Agreement and the employment of Employee
hereunder, may be terminated by Employee or Employer upon ninety (90) days'
written notice of termination. Notwithstanding anything to the contrary herein,
in the event that Employee shall be terminated for an occurrence described in
Section 5.2(b) which shall be the subject of an effective Disability Policy,
Employee shall not be entitled to receive any further payment from Employer
other than Employer's obligation to pay regular premiums to maintain the
effectiveness of such Disability Policy following the date from which Employee
shall be entitled to receive payment under such Disability Policy.
5.2 OTHER TERMINATION BY EMPLOYER. Employer may terminate
Employee immediately for any of the reasons set forth below:
(a) For "Cause," immediately upon written notice from
Employer to the Employee. For the purpose of this Section 5.2, "Cause"
for termination shall be deemed to include only (i) the direct or indirect
competition by Employee with Employer (as hereinafter defined in Section 6; (ii)
the conviction of Employee of a felony or an act involving moral turpitude;
(iii) the drug or alcohol abuse by Employee, but only if Employee fails to seek
appropriate counseling or fails to complete a prescribed counseling program; and
(iv) the failure of Employee to comply with any material term of this Agreement
or the failure by Employee to perform his duties at a level of competency which
is normal and customary for employees in similar positions in similar types of
business after written notice of such noncompliance or nonperformance is
received by Employee and failure by Employee to comply or perform within (10)
days of the receipt of such written notice, counting as the first day of the ten
(10) day period the first business day after receipt of such notice.
(b) Upon the Disability of the Employee. As used in this
Agreement, the term "Disability" shall mean the inability of the Employee, due
to a physical or mental disability, for a period of thirty (30) days, whether or
not consecutive, during any sixty (60) day period to perform the normal and
customary services required of Employee pursuant to this Agreement. A
determination of disability shall be made by a physician satisfactory to both
Employee and the Employer, PROVIDED THAT, if Employee and the Employer do not
agree on a physician, Employee and Employer shall each select a physician and
such two physicians together shall select a third physician, whose determination
as to disability shall be binding on the parties.
(c) Death of Employee.
5.3 OTHER TERMINATION OF EMPLOYEE. Employee may terminate this
Agreement for "Good Reason." "Good Reason" shall mean the following unless such
circumstances are fully corrected within ten (10) days after the Employee
notifies Employer in writing that he intends to terminate his employment for
Good Reason:
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(i) the assignment, without the Employee's prior written
consent to another person, of Employee's primary duties that the Employee was
responsible for during the term of this Agreement, or a significant adverse
alteration in the nature or status of the Employee's employment from those in
effect during the term of this Agreement; or
(ii) any reduction by Employer in Employee's aggregate
compensation (other than as agreed to by Employee) in effect on the date
hereof or as the same may be increased after such date;
5.4 EFFECT OF TERMINATION.
(a) TERMINATION DUE TO EXPIRATION OF EMPLOYMENT
PERIOD. If Employee's employment is terminated due to the expiration of the
Term, Employer shall pay Employee the compensation (including accrued
bonuses, if any) and benefits due to Employee under Section 4 through the
last day of Employee's actual employment hereunder.
(b) TERMINATION FOR CAUSE. In the event that
Employee's employment is terminated for "Cause" pursuant to Section 5(a),
Employer shall pay Employee the compensation (not including accrued bonuses,
if any) and benefits due to Employee under Section 4 through the last day of
Employee's actual employment hereunder.
(c) OTHER TERMINATION. In the event that Employee's
employment is terminated by Employer other then under Section 5.2, Employer
shall pay Employee the compensation (including prorated bonuses, if any) and
benefits under Section 4 which would have been payable to Employee for a
period equal to the lesser of remainder of the Term or three hundred and
sixty-five (365) days. However, in the event that Employee's employment is
terminated by Employer other then under Section 5.2 or Employee terminates
for Good Reason under Section 5.4(e), within the first twelve months from the
commencement of the Term, Employer shall pay Employee the compensation
(including prorated bonuses, if any) and benefits under Section 4 which would
have been payable to Employee for period equal to two years from the
commencement date of the Term, less all amounts actually paid to Employee by
Employer from the commencement date of the Term to the date of termination.
(d) TERMINATION FOR DEATH OF DISABILITY. If
Employee's employment is terminated by reason of death or disability
pursuant to Section 5.2(b) or (c), Employer shall pay the estate of Employee
or Employee, as the case may be, the compensation and benefits under Section
4 which would otherwise be payable to Employee up to the end of the month in
which the termination of this Agreement for such death or disability occurred.
(e) TERMINATION FOR GOOD REASON. In the event
the Employee's employment is terminated by him for "Good Reason" pursuant
to Section 5.3 Employer shall pay the Employee the compensation (including
accrued bonuses, if any) and benefits under Section 4 which would have
otherwise been payable to Employee for a period equal to the lesser of the
remainder of the Term or three hundred sixty-five (365) days.
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(f) TERMINATION BY EMPLOYEE NOT FOR GOOD REASON. In
the event Employee's employment is terminated by him not for "Good Reason",
as defined in Section 5.3, Employer shall pay Employee the compensation (not
including accrued bonus, if any) and benefits due Employee under Section 4
through the last day of Employee's actual employment.
6. PROPERTY RIGHTS AND OBLIGATIONS OF EMPLOYEE.
6.1. TRADE SECRETS. For purposes of this Agreement, "trade
secrets" shall include without limitation any and all financial, cost and
pricing information and any and all information contained in any drawings,
designs, plans, proposals, customer lists, records of any kind, data, formulas,
specifications, concepts or ideas, where such information is reasonably related
to the business of Employer, has been divulged to or learned by Employee during
the term of his employment by Employer, and has not previously been publicly
released by duly authorized representatives of Employer or otherwise lawfully
entered the public domain.
6.2. PRESERVATION OF TRADE SECRETS. Employee will preserve as
confidential all trade secrets pertaining to Employer's business that have been
obtained or learned by him by reason of his employment. Employee will not,
without the prior written consent of Employer, either use for his own benefit or
purposes or disclose or permit disclosure to any third parties, either during
the term of his employment hereunder or thereafter (except as required in
fulfilling the duties of his employment), any trade secret connected with the
business of Employer.
6.3. TRADE SECRETS OF OTHERS. Employee agrees that he will not
disclose to Employer or induce Employer to use any trade secrets belonging to
any third party.
6.4. PROPERTY OF EMPLOYER. Employee agrees that all documents,
reports, files, analyses, drawings, designs, tools, equipment, plans (including,
without limitation, marketing and sales plans), proposals, customer lists,
computer software or hardware, and similar materials that are made by him or
come into his possession by reason of and during the term of his employment with
Employer are the property of Employer and shall not be used by him in any way
adverse to Employer's interests. Employee will not allow any such documents or
things, or any copies, reproductions or summaries thereof to be delivered to or
used by any third party without the specific consent of Employer. Employee
agrees to deliver to the Board of Directors of Employer or its designee, upon
demand, and in any event upon the termination of Employee's employment, all of
such documents and things which are in Employee's possession or under his
control.
6.5 NON-COMPETITION BY EMPLOYEE.
6.5.1 GENERAL. Employee agrees during the two years following
the termination of his Employment, not to recruit, engage in passive hiring
efforts, solicit or induce any person or entity who, during such two-year
period, or within one (1) year prior to the termination of Employee's employment
with Employer, was an employee, agent, representative or sales person of
Employer or any of its affiliates ("Employer Group") to leave or cease his
employment or other relationship with Employer Group for any reason whatsoever
or hire or engage the services of such person for
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Employee in any business substantially similar to or competitive with that in
which Employer Group was engaged during the Employee's employment.
6.5.2 NON-SOLICITATION OF CUSTOMERS. Employee acknowledges
that in the course of his employment, he will learn about Employer Group's
business, services, materials, programs and products and the manner in which
they are developed, marketed, served and provided. Employee knows and
acknowledges that Employer Group has invested considerable time and money in
developing its programs, agreements, offices, representatives, services,
products and marketing techniques and that they are unique and original.
Employee further acknowledges that Employer Group must keep secret all pertinent
information divulged to Employee about Employer Group business concepts, ideas,
programs, plans and processes, so as not to aid Employer Group's competitors.
Accordingly, Employer Group is entitled to the following protection, which
Employee agrees is reasonable:
Employee agrees that for a period of two (2) years following the
termination of his employment, he will not, on his own behalf or on behalf of
any person, firm, partnership, association, corporation, or other business
organization, entity or enterprise, knowingly solicit, call upon, or initiate
communication or contact with any person or entity or any representative of any
person or entity, with whom Employee had contact during his employment, with a
view to the sale or the providing of any product, equipment or service sold or
provided or under development by Employer Group during the period of two (2)
years immediately preceding the date of Employee's termination. The restrictions
set forth in this section shall apply only to persons or entities with whom
Employee had actual contact during the two (2) years prior to termination of his
employment with a view toward the sale or providing of any product, equipment or
service sold or provided or under development by Employer Group.
6.5.3 NON-COMPETITION. Employee acknowledges that he will be a
"high impact" person in Employer Group's business who is in possession of
selective and specialized skills, learning abilities, customer contacts, and
customer information as a result of his relationship with Employer Group and
prior experience, and agrees that Employer Group has a substantial business
interest in the covenant described below. Employee, therefore, agrees for a
period of two (2) years from the termination of his employment, not to, either
directly, whether as an employee, sole proprietor, partner shareholder, joint
venture or the like, in the same or similar capacity in which he worked for
Employer Group, compete with Employer Group in the manufacture, marketing or
sales of excimer laser technology in connection with interventional cardiology,
psoriasis or any other field in which Employer enters or considers entering
into, provided Employee has actual knowledge of such field. The territory in
which this non-competition covenant shall apply will be limited to the area
commensurate with the territory in which Employee marketed, sold or provided
products or services for Employer Group during the two years preceding
termination of Employment.
6.6 SURVIVAL PROVISIONS AND CERTAIN REMEDIES. Unless otherwise
agreed to in writing between the parties hereto, the provisions of this Section
6 shall survive the termination of this Agreement. The covenants in this Section
6 shall be construed as separate covenants and to the extent any covenant shall
be judicially unenforceable, it shall not affect the enforcement of any other
covenant. In the event Employee breaches any of the provisions of this Section
6, Employee agrees
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that Employer shall be entitled to injunctive relief in addition to any other
remedy to which Employer may be entitled.
7. CHANGE OF CONTROL.
(a) For the purpose of this Agreement, a "Change of Control"
shall mean:
(i) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) or the Securities
Exchange Act of 1934, and as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 45% or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock") or (ii)
the combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"), which acquisition is effected
without the consent of at least a majority in interest of the Board of
Directors of Employer as of the date hereof. Specifically excluded from this
definition is the sale of shares by Employer in any offering of its
securities effectuated through any resolution of a majority of the Board of
Directors as constituted from time to time.
(ii) Individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any reason to constitute at least
a majority of the Board;
(iii) Approval by the shareholders of the Company of
(i) a complete liquidation or dissolution of the Company or (ii) the sale of
other disposition of all or substantially all of the assets of the Company.
(b) Employer and Employee hereby agree that, if Employee is in
the employ of Employer of the date on which a Change on Control occurs (the
"Change of Control Date"), Employer will continue to employ Employee and
Employee will remain in the employ of Employer for the period commencing on the
Change of Control Date and ending on the expiration of the Term, to exercise
such authority and perform such duties as are commensurate with the authority
being exercised and duties being performed by Employee immediately prior to the
Change of Control Date. If after a Change of Control, Employee is requested and,
in his role and absolute discretion consents to change his principal business
location, Employer will reimburse Employee for his relocation expenses,
including without limitation, moving expenses, temporary living and travel
expenses, temporary living and travel expenses for a time while arranging to
move his residence to the changed location, closing costs, if any, associated
with the sale of his existing residence and the purchase of a replacement
residence at the changed location, plus an additional amount representing a
gross-up of any state or federal taxes payable by Employee as a result of any
such reimbursements. If Employee shall not consent to change his business
location, Employee may continue to provide services required of him hereunder in
Philadelphia, Pennsylvania and Employer shall continue to maintain an office for
Employee at that location with the Company's office prior to the Change of
Control Date.
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(c) During the remaining Term after the Change of Control
Date, Employer will continue to honor the terms of this Agreement, including
payment of the compensation set forth in Section 4 herein.
(d) If during the remaining Term on or after the Change of
Control Date (i) Employee's employment is terminated by the Company other than
for "Cause" (as defined in Section 5.2(a) hereof), or (ii) there shall have
occurred a material reduction in Employee's compensation or employment related
benefits, or a material change in Employee's status, working conditions or
management responsibilities, or a material change in the business objectives or
policies of Employer and Employee voluntarily terminates employment within sixty
(60) days of any such occurrence, or the last in a series of occurrences, the
Employee shall be entitled to receive as a severance payment, subject to the
provisions of subparagraphs (e) and (f) below, a lump-sum payment equal to 200%
of Employee's current Base Salary (the "Lump-sum Payment") in addition to any
other compensation that may be due and owing to Employee under Section 4 hereof.
(e) The amounts payable to Employee under any other
compensation arrangement maintained by the Company which became payable, after
payment of the lump-sum provided for in paragraph (d), upon or as a result of
the exercise by Employee of rights which are contingent on a Change of Control
(and would be considered a "parachute payment" under Internal Revenue Code 280G
of the Internal Revenue Code of 1986, as amended (the "Code"), shall be reduced
to the extent necessary so that such amounts, when added to such lump-sum, do
not exceed 100% of the Employee's "base amount" as defined in Code Section
280G(b)(3)(A). Any such excess amount shall be deferred and paid in the next tax
year.
(f) In the event of a proposed Change in Control, Employer
will allow Employee to participate in all meetings and negotiations related
thereto.
8. GENERAL PROVISIONS.
8.1. NOTICES. Any notices or other communications required or
permitted to be given hereunder shall be given sufficiently only if in writing
and served personally or sent by certified mail, postage prepaid and return
receipt requested, addressed as follows:
If to Employer: Laser Photonics, Inc.
0000 Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Fax: (000) 000-0000
If to Employee: Xxxxxx X. XxXxxxx
0 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Fax: (000-000-0000
However, either party may change his/its address for purposes of this Agreement
by giving written notice of such change to the other party in accordance with
this Paragraph 7.1. Notices delivered
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personally shall be deemed effective as of the day delivered and notices
delivered by mail shall be deemed effective as of three days after mailing
(excluding weekends and federal holidays).
8.2. CHOICE OF LAW AND FORUM. Except as expressly provided
otherwise in this Agreement, this Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, and both parties consent
to the jurisdiction of the courts of the State of Delaware with respect thereto.
8.3. ENTIRE AGREEMENT; MODIFICATION AND WAIVER. This Agreement
supersedes any and all other agreements, whether oral or in writing, between the
parties hereto with respect to the employment of Employee by Employer and
contains all covenants and agreements between the parties relating to such
employment in any manner whatsoever. Each party to this Agreement acknowledges
that no representations, inducements, promises, or agreements, oral or written,
have been made by any party, or anyone acting on behalf of any party, which are
not embodied herein, and that no other agreement, statement, or promise not
contained in this Agreement shall be valid or binding. Any modification of this
Agreement shall be effective only if it is in writing signed by the party to be
charged. No waiver of any of the provisions of this Agreement shall be deemed,
or shall constitute, a waiver of any other provision, whether or not similar,
nor shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
8.4. ASSIGNMENT. Because of the personal nature of the
services to be rendered hereunder, this Agreement may not be assigned in whole
or in part by Employee without the prior written consent of Employer. However,
subject to the foregoing limitation, this Agreement shall be binding on, and
shall inure to the benefit of, the parties hereto and their respective heirs,
legatees, executors, administrators, legal representatives, successors and
assigns.
8.5. SEVERABILITY. If for any reason whatsoever, any one or
more of the provisions of this Agreement shall be held or deemed to be
inoperative, unenforceable, or invalid as applied to any particular case or in
all cases, such circumstances shall not have the effect of rendering any such
provision inoperative, unenforceable, or invalid in any other case or of
rendering any of the other provisions of this Agreement inoperative,
unenforceable or invalid.
8.6 CORPORATE AUTHORITY. Employer represents and warrants as
of the date hereof that Employer's execution and delivery of this Agreement to
Employee and the carrying out of the provisions hereof have been duly authorized
by Employer's Board of Directors and authorized by Employer's shareholders and
further represents and warrants that neither the execution and delivery of this
Agreement, nor the compliance with the terms and provisions thereof by Employer
will result in the breach of any state regulation, administrative or court
order, nor will such compliance conflict with, or result in the breach of, any
of the terms or conditions of Employer's Certificate of Incorporation or Bylaws,
as amended, or any agreement or other instrument to which Employer is a party,
or by which Employer is or may be bound, or constitute an event of default
thereunder, or with the lapse of time or the giving of notice or both constitute
an event of default thereunder.
8.7. ATTORNEYS' FEES. In any action at law or in equity to
enforce or construe any provisions or rights under this Agreement, the
unsuccessful party or parties to such litigation, as
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determined by the courts pursuant to a final judgment or decree, shall pay
the successful party or parties all costs, expenses, and reasonable
attorneys' fees incurred by such successful party or parties (including,
without limitation, such costs, expenses, and fees on any appeals), and if
such successful party or parties shall recover judgment in any such action or
proceedings, such costs, expenses, and attorneys' fees shall be included as
part of such judgment.
8.8. COUNTERPARTS. This Agreement may be executed
simultaneously in one or more counterparts, each of, which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.
8.9. HEADINGS AND CAPTIONS. Headings and captions are
included for purposes of convenience only and are not a part hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the day and year first written above at Carlsbad, California.
"Employer"
LASER PHOTONICS, INC.
By: /s/ Xxxxx Xxxxxxxx
----------------------------
Xxxxx Xxxxxxxx, Chief Financial Officer
"Employee"
/s/ Xxxxxx X. XxXxxxx
----------------------------
Xxxxxx X. XxXxxxx
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