EXHIBIT 10.150
Employment Agreement
Agreement made this 6th day of March, 2002, between HiEnergy Microdevices, Inc.,
a Delaware Corporation (the "Company"); and Xxxxxx X. Xxxxxxx, an individual
("Xxxxxxx").
WITNESSETH
IN CONSIDERATION of the mutual covenants contained herein, the parties agree as
follows:
1. EMPLOYMENT. The Company hereby agrees to employ Xxxxxxx, during the
term specified in Paragraph 2, and Xxxxxxx agrees to accept such
employment, all subject to the terms and conditions hereinafter set
forth in this Agreement.
2. TERM. Subject to the terms and conditions of this Agreement,
Xxxxxxx'x employment by the Company shall be for a term commencing
on the date hereof and ending on December 31, 2006, unless sooner
terminated as hereinafter provided.
3. DUTIES AND RESPONSIBILITIES.
(a) During the term, Xxxxxxx shall serve as Chief Scientific
Officer and Chairman of the Company and shall devote the
stated time and attention to the business of the Company. The
business of the Company, for purposes of this Agreement, shall
include (i) the detection of the substances of which objects
are comprised and the development, production, sale and
promotion of devices and technologies to effect such
detection, and (ii) such other endeavors as to which Xxxxxxx
and the Board shall mutually agree.
(b) Subject to the supervision of the Board of Directors, Xxxxxxx,
as Chief Scientific Officer of the Company, will be
responsible for the determination of the Company's research
and development program; its research and development
associations and consortiums; its patent policy; the
selection, hiring, and/or firing of its scientific,
engineering and technical personnel and of any Principal
Investigator or Co-principal Investigator on research and
development contracts of the Company and of their clerical
assistants, as well as their respective remuneration and
budgeting priorities.
(c) Subject to such requirements as shall be imposed by law or
governmental regulation, Xxxxxxx, as Chief Scientific Officer,
shall be responsible for determining what technical
information may be publicly disclosed by any officer or
employee of the Company.
(d) As Chairman, Xxxxxxx agrees to perform, and shall perform, the
functions of the Chairman as set forth in the By-Laws of the
Company; shall be one of two signatories on all checks and
drafts of the Company in excess of $1000; and, subject to
review by the Board of Directors, shall be the officer of the
Company responsible for submitting budgetary recommendations
to the Board.
(e) It is recognized by the Company that Xxxxxxx has heretofore
been engaged, and in the future may be engaged, in other
endeavors, including, without limitation, those relating to
nuclear fusion energy, satellite-borne nuclear power, and
anti-missile defense, as well as scientific education,
including, without limitation, scientific publications and
documentary films. It is recognized by the Company that such
activities are indirectly beneficial to its reputation,
standing and governmental and business relations. It is
further recognized that, provided the company does not furnish
its personnel, equipment, facilities or funding for such other
endeavors and that the work conducted on such other endeavors
does not interfere with the services and time on the job
provided to the Company by Xxxxxxx, any patents or other
intellectual property or other benefits derived from such
other endeavors are the sole property of Xxxxxxx and that the
Company shall neither have or claim any interest therein. A
list of Xxxxxxx'x other endeavors, as discussed above, shall
be maintained mutually by the Company and Xxxxxxx. All other
work conducted by Xxxxxxx during his employed time, or using
the Company's personnel, facilities or funding, and which is
not so listed, will be work for hire to the Company by
Xxxxxxx.
(f) Xxxxxxx shall devote not less than 35 hours per week to the
business of the Company, it being understood that he may give
such time and attention to other endeavors as does not
materially detract from his services for, and attention to,
the business of the Company.
(g) It is contemplated that, for the continuance of this
Agreement, Xxxxxxx will be employed as Chief Scientific
Officer and Chairman of the Company. In the event Xxxxxxx is
not so elected and not so continued in any or all of such
posts, for any reason other than termination for cause (as
defined below), such failure shall constitute a breach of this
Agreement by the Company and Xxxxxxx shall have the right to
terminate his employment hereunder forthwith by written notice
of such intention to the Company and the Company will be
obligated to make the severance payments set forth in
Paragraph 11 of this Agreement and to satisfy all other
obligations set forth in Paragraph 10.
4. COMPENSATION. In consideration of the services to be rendered by
Xxxxxxx hereunder, the Company agrees to pay Xxxxxxx, and he agrees
to accept, the following:
(a) Base Salary. For the period commencing January 1, 2002, and
ending December 31, 2002, the Company shall pay Xxxxxxx at the
annual rate of $125,000 annually, payable in cash monthly. For
the period January 1, 2003, through December 31, 2006, the
Company shall pay Xxxxxxx as follows:
(i) For the period January 1, 2003, through December 31,
2003, $137,500 annually, payable in cash monthly;
(ii) For the period January 1, 2004, through December 31,
2004, $151,250 annually, payable in cash monthly;
(iii) For the period January 1, 2005, through December 31,
2005, $166, 375 annually, payable in cash monthly; and
(iv) For the period January 1, 2006, through December 31,
2006, $183,012 annually, payable in cash monthly.
(v) In the event that Xxxxxxx, with the approval of the
Company, shall work less than the time required of him
under Paragraph 3(c), his base salary shall decrease
proportionally.
(b) Signing Bonus.
In consideration of Xxxxxxx executing and delivering
this Agreement, the Company has agreed to pay Xxxxxxx a
signing bonus by issuing to him its promissory note in
the face amount of $100,000 in the form of Exhibit A
hereto, payable (i) $50,000 upon receipt by the Company
of One Million Dollars or more from any source, and
(ii) $50,000 upon receipt by the Company of in excess
of $500,000 from its sales or operations (including
grants not directed for equipment) or receipt by the
Company of a further cash infusion of One Million
Dollars or more.
(c) Annual Bonus.
(i)At the beginning of each fiscal year, the Board of
Directors of the Company shall establish a bonus plan
based upon Company performance goals. At the end of the
fiscal year, officers of the Company, including
Xxxxxxx, shall receive a bonus based upon performance
against the established plan.
(ii) In no event shall Xxxxxxx'x bonus be less than 20%
of the total amount of bonuses paid to officers of the
Company pursuant to the bonus plan referred to in "(i)"
above.
(iii) In the event the Company's gross pretax profit in
any fiscal year shall exceed $.20 per share, then
Xxxxxxx'x bonus in that year shall not be less than
$50,000.
(d) Stock Options.
(i) The Company represents, warrants, and confirms to
Xxxxxxx its agreement in 1998 to then issue to him
options entitling him to purchase 111,040 shares of the
Common Stock of the Company at an exercise price of $3
per share, such options to be exercisable at any time
and from time to time within the period ending November
30, 2008. The Company represents
and warrants that it will take all corporate action
necessary or desirable to effect the valid issuance of
all such options to Xxxxxxx and the delivery of
certificates therefor to Xxxxxxx no later than March
30, 2002; and (ii) The Company shall grant and issue to
Xxxxxxx annually during the term hereof five-year stock
options at a rate of not less than one (1%) per annum
of the Company's stock issued and outstanding at the
end of the year, such options to have an exercise price
of the most recent arms length sale, or if publicly
traded, the average price for the preceding thirty
days. In no event shall Xxxxxxx receive, in the
aggregate, in any one year less than 10% of the total
number of options granted by the Company for services
in that year.
5. PENSION AND FRINGE BENEFITS.
(a) Xxxxxxx shall be entitled to participate in any employee
benefit plans generally available to senior officers and/or
key employees of the Company, including medical, disability,
pension, non-qualified deferred compensation plans, the
programs for the allowance for or the reimbursement of
automobile expenses, and any other plans of general
application to senior officers and/or key employees of the
Company on the date hereof and such plans and programs adopted
hereafter for the benefit of senior officers and/or key
employees of the Company.
(b) As Xxxxxxx is covered by Medicare, the Company shall pay his
supplemental Blue Cross, TIAA Long-Term Care insurance,
medical insurance for his children under eighteen (18) years
of age, and dental insurance for himself and his children, and
not less than $1000 per month into his TIAA annuity pension
fund until August 31, 2003.
(c) The Company will provide Xxxxxxx with a Lincoln, Cadillac, or
equivalent U.S. brand automobile of his choosing for his
business and personal use and will pay for all related
expenses thereof, including, without limitation, the costs of
registration, fuel, repairs, and insurance. (d) Xxxxxxx shall
be entitled to take time off for vacation or illness in
accordance with the Company's policy for senior executives
and/or key employees and to receive all other fringe benefits
as from time to time made generally available to senior
executives and/or key employees of the Company.
(d) The Company shall reimburse Xxxxxxx for reasonable and
necessary personal attorneys' fees, costs and expenses
incurred in connection with matters relating to the affairs of
the Company, excluding any disputes with the Company itself.
Such reimbursement shall not exceed $20,000 in any one year,
except as may be necessary to protect the Company from actual
or claimed liability to others or as shall be otherwise agreed
by the Company or provided for in Paragraph 12 hereof. Nothing
contained herein shall limit the Board of Directors from
providing defense costs to all officers and directors of the
Company, including Xxxxxxx.
6. REIMBURSEMENT. The Company shall reimburse Xxxxxxx for all proper
expenses, including, without limitation, travel and entertainment
expenses, incurred by him in the performance of his duties hereunder
in accordance with the Company's policies and procedures in effect
from time to time.
7. OFFICE AND LOCATION. The Company shall provide Xxxxxxx, at the
Company's sole expense, with an executive office at its headquarters
commensurate with his positions as Chief Scientific Officer and
Chairman within the facility then occupied by the Company.
8. EXECUTIVE SECRETARY. The Company shall provide Xxxxxxx, at the
Company's sole expense, with the services on a full-time basis of an
executive secretary of his choosing. Said executive secretary shall
perform those services for Xxxxxxx that are regularly performed for
the Chairman of the Board of a public company and shall also assist
Xxxxxxx in his positions as Chief Scientific Officer of the Company.
A salary customary in the area in which the Company's offices are
located shall be paid by the Company to Xx. Xxxxxxx'x executive
secretary.
9. INSURANCE . The Company shall, at its sole expense, provide Xxxxxxx
with the following insurance:
(a) Life Insurance. The Company shall provide Xxxxxxx with, and
pay up to $1,000 in premium per month for two key man life
insurance policies. The owner and beneficiary of one policy
shall be the Company. The owner of the other ("Xxxxxxx
Policy") shall be Xxxxxxx and/or the beneficiary or
beneficiaries designated by him. Every time the Company
increases its insurance on Xxxxxxx'x life the Xxxxxxx Policy
shall increase at the Company's expense by an identical
amount.
(b) Disability Insurance. The Company shall pay the premium on the
disability insurance policy presently maintained by Xxxxxxx
and any renewals thereof provided the premium shall not exceed
$500 per month.
10. TERMINATION.
(a) Termination for Cause. The Company may terminate Xxxxxxx'x
employment at any time upon Xxxxxxx'x xxxxx negligence or
willful malfeasance in the material performance of his duties
and responsibilities to the Company under Paragraph 3 of this
Agreement. Such discharge shall be effected by notice (the
"Discharge Notice") to Xxxxxxx which shall specify the reasons
for Xxxxxxx'x discharge and effective date thereof. In each
instance, such termination shall not be effective if the gross
negligence or willful malfeasance specified in the Discharge
Notice is cured by Xxxxxxx within ten (10) days following the
date of receipt by Xxxxxxx of the Discharge Notice.
(b) Termination for Disability. In the event of disability of
Xxxxxxx rendering him unable to perform his services hereunder
for a period of one hundred eighty (180) consecutive days, the
Company shall have the right to terminate this Agreement upon
giving not less than thirty (30) days' notice ("Termination
Notice") of its intention to do so. If Xxxxxxx shall have
resumed his duties hereunder within such a thirty (30) day
period and shall have continuously performed his services for
at least thirty (30) consecutive days thereafter, the
Termination Notice shall be deemed of no force and effect and
this Agreement shall thereupon continue in full force as
though such notice of termination had not been given.
(c) Termination by Xxxxxxx. Xxxxxxx may terminate this
Agreement at any time by giving not less than three (3)
months' notice of his intention to terminate, in which
case all Company benefits shall be terminated "in due
course" as of the effective date of termination. Any
notes and earned stock options of Xxxxxxx shall
immediately vest and be paid as agreed.
11. SEVERANCE PAYMENTS. If this agreement is terminated by the Company
[without cause], the Company shall pay Xxxxxxx, on the termination
date, an amount of money equal to the aggregate unpaid balance of
the minimum annual base salaries provided for in Paragraph 4(a)
hereof through a period of two (2) years after the termination date.
Additionally, the Company shall continue to pay Xxxxxxx, for said
one year period, all of the benefits provided for in Paragraph 5(a)
and (b) above and, thereafter, all premiums associated with the
continuation of Xxxxxxx'x insurance under COBRA for the period that
COBRA shall be available to Xxxxxxx. Upon termination [without
cause], all of Xxxxxxx'x options respecting shares of the capital
stock of the Company shall forthwith vest in Xxxxxxx and become
immediately exercisable.
12. COMPROMISE OF UNPAID CONTRACTUAL OBLIGATIONS TO XXXXXXX. Xxxxxxx and
the Company have certain differences in their understanding of the
existence and magnitude of the Company's obligations to Xxxxxxx
under an Employment Agreement initially entered into between Xxxxxxx
and Advanced Physics Corporation on the 31st day of December 1993
and understood by Xxxxxxx to have been adopted and approved by the
Company on August 23, 1995. If Xxxxxxx is correct, the Company's
current obligations to Xxxxxxx under the aforesaid Employment
Agreement would exceed $4,000,000. Xxxxxxx and the Company have
agreed that Xxxxxxx will cancel all obligations or alleged
obligations of the Company to Xxxxxxx respecting the aforesaid
Employment Agreement in exchange for indemnification of Xxxxxxx by
the Company against any personal tax liabilities arising from the
issuance to Xxxxxxx of securities of the Company, up to a total
possible indemnification payment of Seventy-five Thousand dollars
($75,000). Accordingly, upon the release by Xxxxxxx of the Company
from his claims under the aforesaid Employment Agreement, the
Company agrees to indemnify and hold harmless Xxxxxxx from and
against any and all personal tax liability or liabilities or alleged
tax liability or liabilities of any kind or description, and against
all attorney's fees, costs and expenses of counsel of Xxxxxxx'x
selection with respect to such tax liabilities or alleged tax
liabilities, to the fullest extent permitted by law and subject to
the payment of no more than $75,000. It is understood by the Company
that it is a material condition of Xx. Xxxxxxx'x entering into this
Employment Agreement with the Company that he have no tax liability
whatsoever respecting the issuance by the Company of securities to
him, and it is the intention of the Company that to the limit of
$75,000, it bear any and all such liability in full. The parties
will execute and deliver such other and further documents as shall
be necessary or advisable to carry out the transactions contemplated
by this Paragraph 12. If the ultimate determination of tax liability
by Xxxxxxx is in excess of $75,000, the Company will advance to
Xxxxxxx an additional amount equal to the excess, up to an
additional $75,000, as an advance against salary, without the
collection of interest thereon.
13. EXCHANGE BY XXXXXXX OF SHARES OF CLASS B COMMON STOCK FOR SHARES OF
CLASS A COMMON STOCK OF THE COMPANY. Xxxxxxx is the owner of record
of 100% of the authorized and issued Class B shares of the Company.
The Company has determined that it is in the best interests of the
Company and its shareholders for it to exchange Class A shares of
the Company for all of Xxxxxxx'x Class B shares. Xxxxxxx agrees that
he will accept 100,000 shares of the Class A common stock of the
Company in exchange for all of his Class B shares, and the Company
agrees that such an exchange is fair and reasonable and agrees to
such exchange. The Company represents and warrants to Xxxxxxx that
its Board of Directors has or will take all necessary or appropriate
action to vest in Xxxxxxx full and unfettered title to such 100,000
shares of Class A Common Stock, free and clear of any liens or
encumbrances of any kind whatsoever, upon Xxxxxxx'x delivery to the
Company of his Class B Common Stock in exchange for said 100,000
shares of Class A Common Stock.
14. REPRESENTATIONS AND WARRANTIES OF THE COMPANY RESPECTING CERTAIN
SECURITIES ISSUED TO XXXXXXX AND ASSOCIATES AND RATIFICATION OF
TRANSACTIONS RELATED THERETO.
(a) The Company hereby represents and warrants to Xxxxxxx that the
securities set forth below have been duly and validly issued
by the Company and registered by the Company in the names of
the persons listed below and are outstanding, fully paid and
non-assessable securities of the Company:
(i) Advanced Projects Group, Inc. 58,000 share of Class A
(majority owned by Xxxxxx Xxxxxxx Common Stock and
Xxxxxxx Family Holdings, Inc.)
(ii) Xxxxxx X. Xxxxxxx 76,000 shares of Class A Common
Stock and all shares of Class B
Common Stock (converted by
Xxxxxxx into 100,000 shares of
Class A Common Stock pursuant to
Paragraph 13 hereof)
(iii) Xxxxxxx Family
Holdings, Inc. 166,049 shares of Class A
Common Stock
(b) The Company hereby ratifies and reaffirms all transactions
which resulted in the issuance of the securities listed in
"(a)" above and represents and warrants that its Board of
Directors has or will take all action necessary or appropriate
to vest in the parties listed above full and unfettered title
to all of said shares as stated above.
15. NON-DISCLOSURE AND COVENANT NOT TO COMPETEE
(a) Non-Disclosure. During the term of this Agreement and from and
after the termination of this Agreement, Xxxxxxx shall not,
except as required by law or to perform his duties under this
Agreement, divulge, disclose or communicate to any person,
firm, or corporation, any confidential information. The term
"confidential information" includes, without limitation,
information about the business of the Company (or any
division, subsidiary or affiliate of the Company) including,
but not limited to, methods of operation, pricing information
and customer lists, but excluding such information that was in
the public domain at the time it was acquired by Xxxxxxx or
that comes into the public domain other than through
disclosure by Xxxxxxx. If confidential information is
contained in any document or writing or is fixed in any other
tangible form, magnetically, electronically, or otherwise, and
if such confidential information is in Xxxxxxx'x possession or
under his control, he shall return such information and all
copies thereof to the Company upon his termination. Xxxxxxx
shall not directly or indirectly, take, copy, or transfer, in
any manner whatsoever, any of the business records of the
Company (or any division, subsidiary or affiliate of the
Company).
(b) Non-Compete. During the term of Xxxxxxx'x employment
hereunder, and for a period of five (5) years following the
date of termination of Xxxxxxx'x employment hereunder, Xxxxxxx
shall not, directly or indirectly, engage (whether for
compensation or without compensation) as an individual
proprietor, partner, stockholder, officer, employee, director,
consultant, joint venturer, lender, or in any other capacity
whatsoever (otherwise than as a holder of no more than 1% of
the total outstanding stock of a publicly held company) in any
business activity or business activities that compete with the
remote-non-intrusive detection business of the Company, it
being understood and agreed by the Company that "other
endeavors" of Xxxxxxx referred to and listed in Paragraph
3(a) and 3(b) hereof are not and never shall be considered as
competing activities to those of the Company. During the term
of Xxxxxxx'x employment hereunder, and for a period of the
greater of one year or any time during which Xxxxxxx is
receiving severance payments pursuant to Paragraph 11 hereof,
Xxxxxxx shall not, directly, or indirectly: either for himself
or for any other person, firm or corporation, divert or take
away or attempt to divert or take away any person, firm or
corporation who was or is a customer of the Company during the
term of this Agreement, or (b) induce or influence any person
who is engaged by the Company as an employee, agent or
otherwise, to terminate his or her engagement or to engage or
otherwise participate in a business activity directly or
indirectly competitive with the Company. (c) Scope of
Restrictions. The restrictions set forth in this Paragraph 15
are considered by the parties to be reasonable. However, if
any such restriction is found to be unenforceable because it
extends for too long a period of time or over too great a
range of activities or in too broad a geographic area, it
shall be interpreted to extend only over the maximum period of
time, range of activities or geographic area as to what may be
enforceable. (d) Remedies. In the event of a breach or a
threatened breach of this Paragraph 15 that is not cured by
Xxxxxxx after receipt of ten day's written notice from the
Company, the Company shall be entitled to an injunction
restraining Xxxxxxx from committing or continuing such breach,
as well as to any and all other legal and equitable remedies
permitted by law.
16. MISCELLANEOUS.
(a) Enforceability. The failure of any party at any time to
require performance by another party of any provision
hereunder shall in no way affect the right of that party
thereafter to enforce the same, nor shall it affect any other
party's right to enforce the same, or to enforce any of the
other provisions of this Agreement; nor shall the waiver by
any party of the breach of any provision hereof be taken or
held to be a waiver of any subsequent breach of such provision
or as a waiver of the provision itself.
(b) Binding Effect. This Agreement shall be binding upon the
Company, its successors and assigns and Xxxxxxx, his heirs,
and personal representatives. This Agreement may not be
assigned by either party without the prior written consent of
the other party being first obtained.
(c) Modifications. This Agreement may not be orally cancelled,
changed, modified or amended, and no cancellation, change,
codification or amendment shall be effective or binding,
unless in writing and signed by the parties to this Agreement.
(d) Severability; Survival. In the event any provision or portion
of this Agreement is determined to be invalid or unenforceable
for any reason, in whole or in part, the remaining provisions
of this Agreement shall nevertheless be binding upon the
parties
with the same effect as through the invalid or unenforceable
part had been severed and deleted. The respective rights and
obligations of the parties thereunder shall survive the
termination of the executive's employment to the extent
provided elsewhere herein and to the extent necessary to the
intended preservation of such rights and obligations.
(e) Notices. Any notice, request, instruction or other document to
be given hereunder by any party to another party shall be in
writing and shall be deemed effective (i) upon personal
delivery, if delivered by hand against receipt, (ii) mailed
postage prepaid, by United States certified or registered
mail, return receipt requested, (iii) upon being sent by
facsimile transmission (if receipt is electronically
confirmed) and, in each case, addressed as follows:
If to the Company:
HiEnergy Microdevices, Inc.
00 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
With a copy to:
Xxxxxxxxx Xxxxxxx Xxxxxx Xxxxxx
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
If to Xxxxxxx:
Xxxxxx X. Xxxxxxx
000 Xxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
With a copy to:
Xxxxx Xxxxxx Xxxx, Esq.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Any party may change the address to which notices are to be sent by giving
notice of such change of address to the other party in the manner herein
provided for giving notice.
(f) Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of
California, without application of conflict of law provisions
applicable herein.
(g) Entire Agreement. This Agreement represents the entire
agreement between the Company and Xxxxxxx with respect to the
subject matter hereof, and all prior agreements, plans and
arrangements
relating to the employment of Xxxxxxx by the Company are
nullified and superceded hereby.
(h) Headings. The headings contained in this Agreement are for
reference purposes only, and shall not affect the meaning or
interpretation of this Agreement
(i) Counterparts. This Agreement may be executed in one or more
counterparts, all of which shall constitute one and the same
agreement, and each of which shall be deemed an original.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
HiEnergy Microdevices, Inc., a Delaware Corporation
By: /s/ Xxxxxxx Xxxxxxx
------------------------------------
Xxxxxxx Xxxxxxx
President and Duly Authorized Signatory
/s/ X. X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx, Individually
