EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into by and between
SRC Vision, Inc., a corporation (the "Company"), and Xxxxx Xxxx (the
"Executive"), as of January 1, 1997.
I. RECITAL.
WHEREAS, the Company desires to employ the Executive as President and Chief
Executive Officer.
NOW, THEREFORE, the Company and the Executive desire to set forth in this
Agreement the terms and conditions of the Executive's employment with the
Company.
II. EMPLOYMENT.
The Company hereby employs the Executive and the Executive hereby accepts
such employment, upon the terms and conditions hereinafter set forth, from
January 1, 1997 to and including December 31, 1998. This Agreement shall be
automatically renewed for one additional year unless the Executive or the
Company gives notice to the other, in writing, at least 30 days prior to the
expiration of this Agreement, of its or his desire to terminate this Agreement
or modify its terms. The Company agrees that the Executive will be located, and
will render such services, in the Medford, Oregon area.
III. DUTIES.
A. The Executive shall serve during the course of his employment as
President and Chief Operating Officer of the Company and shall have such other
similar duties and responsibilities as the Board of Directors of the Company
shall determine from time to time.
B. The Executive agrees to devote substantially all of his time, energy and
ability to the business of the Company and shall not be involved in the
operations or management of any other competitive business. Nothing herein shall
prevent the Executive, upon written approval of the Board of Directors of the
Company, from serving as a director or trustee of other corporations or
businesses which are not in competition with the business of the Company or in
competition with any present or future affiliate of the Company.
C. For the term of this Agreement, the Executive shall report to the Chief
Executive Officer of the Company.
IV. COMPENSATION.
A. Base Salary. The Company shall pay the Executive a base salary at the
rate of $225,000 per year. Such salary shall be earned monthly and shall be
payable in periodic installments no less frequently than monthly in accordance
with the Company's customary practices. Amounts payable shall be reduced by
standard withholding and other authorized deductions.
B. Annual Bonus, Incentive, Savings and Retirement Plans. The Executive
shall be entitled to participate in all annual bonus, incentive, savings and
retirement plans, practices, policies and programs applicable generally to other
peer executives of the Company.
C. Welfare Benefit Plans. The Executive shall be eligible for participation
in and shall receive all benefits under welfare benefit plans, practices,
policies and programs provided by the Company to the extent applicable generally
to other peer executives of the Company.
D. Expenses. The Executive shall be entitled to receive prompt
reimbursement for all reasonable employment expenses incurred by him in
accordance with the policies, practices and procedures as in effect generally
with respect to other peer executives of the Company.
E. Fringe Benefits. The Executive shall be entitled to fringe benefits in
accordance with the plans, practices, programs and policies as in effect
generally with respect to other peer executives of the Company.
F. Vacation. The Executive shall be entitled to paid vacation of four weeks
per year.
G. Automobile. At the Executive's option, the Company shall provide the
Executive with the use of a Company owned or leased automobile or the Executive
shall be entitled to a $600.00 per month automobile allowance.
V. TERMINATION.
A. Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death. If the Company determines in good
faith that disability of the Executive has occurred (pursuant to the definition
of Disability set forth below), it may give to the Executive written notice of
its intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the day of
receipt of such notice by the Executive. For purposes of this Agreement,
"Disability" shall mean the absence of the Executive from his duties with the
Company on the basis provided in this agreement for a period of 3 months as a
result of incapacity due to mental or physical illness which is determined to be
total and permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or his legal representative. "Incapacity" as used
herein shall be limited only to such Disability which substantially prevents
Company from availing itself of the services of the Executive.
B. Cause. The Company may terminate the Executive's employment for Cause.
For purposes of this Agreement, "Cause" shall mean that the Company, acting in
good faith based upon the information then known to the Company, determines that
the Executive has: (1) committed an act of fraud upon, or an act evidencing
material dishonesty toward the Company; or (2) been convicted of a felony, which
conviction through lapse of time or otherwise is not subject to appeal; or (3)
willfully refused to perform material required duties and responsibilities or
performed them with gross negligence or willful misconduct.
C. Obligations of the Company upon Termination Based upon Death or
Disability or Cause.
1. Death or Disability. If the Executive's employment is terminated by
reason of the Executive's Death or Disability, this Agreement shall
terminate without further obligations to the Executive or his legal
representatives under this Agreement, other than for (a) payment of the sum
of (i) the Executive's annual base salary through the date of termination
to the extent not theretofore paid, (ii) reasonable employment expenses, as
provided herein, through the date of termination to the extent not
theretofore paid and (iii) any accrued vacation pay to the extent not
theretofore paid (the sum of the amounts described in clauses (i), (ii) and
(iii) shall be hereinafter referred to as the "Accrued Obligations"), which
shall be paid to the Executive or his estate or beneficiary, as applicable,
in a lump sum in cash within 30 days of the date of termination and (b)
payment to the Executive or his estate or beneficiary, as applicable, any
amounts due pursuant to the terms of any applicable welfare or pension
benefit plans.
2. Cause. If the Executive's employment is terminated by the Company
for Cause, this Agreement shall terminate without further obligations to
the Executive other than for the timely payment of Accrued Obligations and
any amounts due pursuant to the terms of any applicable welfare or pension
benefit plans.
D. Obligations of the Company upon Termination without Cause. If the
Executive's employment is terminated by the Company other than for cause then
the Company shall pay Executive the Accrued Obligations and, in addition, shall
pay the Executive an amount equal to two years' base salary in equal monthly
installments unless such termination follows a "change of control," in which
case the Company will immediately pay the Executive such amount in cash. In
addition, the Company shall continue to pay the Executive's health and medical
benefits for a period of two years following the termination, at which time the
Executive will be entitled to pursue, at the Executive's cost, applicable COBRA
benefits. Moreover, all of the Executive's employee stock options shall become
fully vested.
For purposes of this Agreement, a change of control shall mean: (a) any
transfer or series of transfers of capital stock of the Company, other than as a
result of a sale of capital stock of the Company pursuant to a public offering
registered under the Securities Act of 1933, as amended, as a result of which
the holders of capital stock of the Company prior to such transfer or transfers
become, collectively, the legal or beneficial holders of less than fifty percent
(50%) of the capital stock of the Company; (b) the consummation of any merger or
consolidation of the Company with another corporation; provided, however, that
no Change in Control shall be deemed to have occurred if, immediately following
such merger or consolidation, legal or beneficial holders of capital stock of
the Company prior to such merger or consolidation shall own or control, directly
or indirectly, through one or more intermediaries, equity securities
representing the power to vote or direct the voting of more than fifty percent
(50%) of the voting power of all classes of equity securities entitled to vote
in the election of directors of the corporation resulting from such merger or
consolidation; or (c) any transfer of all or substantially all of the business
and assets of the Company to another corporation; provided, however, that no
Change in Control shall be deemed to have occurred if the legal or beneficial
holders of capital stock of the Company prior to such transfer of control,
retain directly or indirectly through one or more intermediaries, the power to
vote or direct the voting of more than fifty percent (50%) of the voting power
of all classes of equity securities entitled to vote in the election of
directors of such corporation to which all or substantially all of the business
and assets of the Company are transferred.
In addition, in the event that Xxxxxxx X. Xxxxx leaves the employment of
ARC Capital on or before December 31, 1997, other than being terminated for
cause, then the Executive shall have the option for a period of 30 days
following the termination of Xx. Xxxxx'x employment to treat this Agreement as
being terminated without cause but not involving a change of control.
E. Special Severance. Following the expiration of this Agreement, if the
Executive's employment at any time is terminated without cause, then the Company
shall pay the Executive as special severance compensation an amount equal to two
years base salary, payable in 24 equal monthly installments. This special
severance payment shall be reduced by standard withholding and other authorized
deductions.
VI. ARBITRATION.
Any controversy or claim arising out of or relating to this Agreement, its
enforcement or interpretation, or because of an alleged breach, default, or
misrepresentation in connection with any of its provisions, shall be submitted
to arbitration, to be held in Medford, Oregon in accordance with the rules and
procedures of the American Arbitration Association. In the event either party
institutes arbitration under this Agreement, the costs and expenses of such
arbitration (including counsel fees) shall be borne by each of the parties, or
as the arbitrator(s) may determine at the request of either party.
VII. CONFIDENTIAL INFORMATION.
The Executive shall hold in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective businesses,
which shall have been obtained by the Executive during his employment by the
Company or any of its affiliated companies and which shall not be or become
public knowledge (other than by acts by the Executive or his representatives in
violation of this Agreement). After termination of the Executive's employment
with the company, he shall not, without the prior written consent of the
Company, or as may otherwise be required by law or legal process, communicate or
divulge any such information, knowledge or data to anyone other than the Company
and those designated by it.
VIII. SUCCESSORS.
A. This Agreement is personal to the Executive and shall not, without the
prior written consent of the Company, be assignable by the Executive.
B. This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns and any such successor or assignee shall
be deemed substituted for the Company under the terms of this Agreement for all
purposes. As used herein, "successor" and "assignee" shall include any person,
firm, corporation or other business entity which at any time, whether by
purchase, merger or otherwise, directly or indirectly acquires the stock of the
Company or to which the Company assigns this Agreement by operation of law or
otherwise.
IX. WAIVER.
No waiver of any breach of any term or provision of this Agreement shall be
construed to be, nor shall be, a waiver of any other breach of this Agreement.
No waiver shall be binding unless in writing and signed by the party waiving the
breach.
X. MODIFICATION.
This Agreement may not be amended or modified other than by a written
agreement executed by the Executive and the Board of Directors of the Company.
XI. SAVINGS CLAUSE.
If any provision of this Agreement or the application thereof is held
invalid, the invalidity shall not affect other provisions or applications of the
Agreement which can be given effect without the invalid provisions or
applications and to this end the provisions of this Agreement are declared to be
severable.
XII. COMPLETE AGREEMENT.
This instrument constitutes and contains the entire agreement and
understanding concerning the Executive's employment and the other subject
matters addressed herein between the parties, and supersedes and replaces all
prior negotiations and all agreements proposed or otherwise, whether written or
oral, concerning the subject matters hereof. This is an integrated document.
XIII. GOVERNING LAW.
This Agreement shall be deemed to have been executed and delivered within
the State of California, and the rights and obligations of the parties hereunder
shall be construed and enforced in accordance with, and governed by, by the laws
of the State of California without regard to principles of conflict of laws.
XIV. CONSTRUCTION.
Each party has cooperated in the drafting and preparation of this
Agreement. Hence, in any construction to be made of this Agreement, the same
shall not be construed against any party on the basis that the party was the
drafter. The captions of this Agreement are not part of the provisions hereof
and shall have no force or effect.
XV. COMMUNICATIONS.
All notices, requests, demands and other communications hereunder shall be
in writing and shall be deemed to have been duly given if delivered or if mailed
by registered or certified mail, postage prepaid, addressed to the Executive at
_______________________________________________, or addressed to the Company at
0000 Xxxxxxxx Xxxx, Xxxxxxx, XX, 00000. Any party may change the address at
which notice shall be given by written notice given in the above manner.
XVI. EXECUTION.
This Agreement is being executed 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. Photographic copies of such signed counterparts may be used
in lieu of the originals for any purpose.
XVII. LEGAL COUNSEL.
The Executive and the Company recognize that this is a legally binding
contract and acknowledge and agree that they have had the opportunity to consult
with legal counsel of their choice.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
SRC VISION, INC. XXXXX XXXX
By__________________________ _____________________________
Its_________________________
