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EXHIBIT 10.3
EMPLOYMENT AGREEMENT
AGREEMENT dated as of January 1, 1996 between Myriad Industries, Inc.,
0000 XxXxxxx Xxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx, 00000, a
corporation organized under the laws of the State of Delaware (hereinafter
referred to as the "Employer"), and Xxxxxx X. Xxxxx (hereinafter referred to as
the "Employee").
1. Employment: The Employer hereby employs the Employee and the
Employee hereby accepts employment upon the terms and conditions hereinafter set
forth.
2. Term: Subject to the provisions for termination as hereinafter
provided, the term of this Agreement shall begin on the date of execution of
this Agreement and shall continue until December 31, 2000, unless sooner
terminated in accordance with the terms contained herein. If Employer desires to
extend the term of this Agreement beyond December 31, 2000, Employer and
Employee shall negotiate an extension agreement before September 30, 2000.
3. Compensation: For services rendered by the Employee under this
Agreement, the Employee shall receive the following:
(a) As inducement to sign this contract employer will pay
employee a one time signing bonus of $20,000. This bonus will be paid within
thirty days after execution of this document.
(b) An annual salary of $125,000. Employee shall be entitled
to increases in his base annual salary, at least annually, on the anniversary of
the date of his Agreement. The amount of the increase shall be determined by the
Board or a committee appointed by the Board. However, it is agreed that the
Employee salary stated above should not be increased from its present amount
until the Board of Directors determined that Myriad has adequate cash flow to
pay the increased salary.
(c) As an inducement to Employee entering into this Agreement,
Employer shall issue to Employee as soon as reasonably practical 500,000 shares
of Class A Common Stock. The vesting period of this stock will be immediate.
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(d) Also an inducement to Employee entering into this
Agreement, Employer shall issue to Employee as soon as reasonably practical
600,000 shares of Class B Common Stock. The vesting schedule is as follows:
Date Number of Shares
---- ----------------
Upon Signing this Contract 150,000
12/31/96 150,000
12/31/97 150,000
12/31/98 150,000
(e) The employer hereby grants to the Employee, Stock Options
to purchase all or part of an aggregate of 1,000,000 shares of Class A Common
Stock according to the following performance schedule:
Options Granted
1. Upon Signing this contract 200,000 Shares
2. January 1, 1997 200,000 Shares
3. January 1, 1998 200,000 Shares
4. January 1, 1999 200,000 Shares
5. January 1, 2000 200,000 Shares
----------------
1,000,000 Shares A
The options allow the employee to purchase the Class A Common stock at a price
of $0.25 per share for a term of five years from the date of this contract,
subject to the provisions with respect to termination of employment, death or
disability of the employee. Any portion of the option not exercised prior to the
termination of the option shall thereupon become null and void. The shares of
Class A Common Stock and Class B Common Stock are being acquired for investment
and will bear appropriate restrictive legends.
The options granted pursuant to this Agreement shall be subject to the terms and
conditions set forth on Exhibit A attached hereto and made a part hereof.
(f) Additional compensation in the form of an annual bonus,
during the Initial Term, and any extensions of thereof, of this Agreement. The
exact structure and amount of said bonus shall either be determined by, or
subject to approval of, the Board. Said bonus shall be based on the annualized
profitability of the Employer.
(g) Such other stock options or incentive performance stock
programs determined at the sole discretion of Employer's Board of Directors
during the term of this agreement.
(h) Four weeks paid vacation during each employment year
(i.e., [January 1] through [December 31], which shall be taken in accordance
with a schedule submitted by the Board or its designee. This vacation period
shall be non-
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cumulative unless Employee shall forego his vacation in whole or in part at the
request of the Board or its designee, in which case the portion of such vacation
not taken in such employment year may be taken as additional vacation in the
following year.
(i) Other compensation and fringe benefits, including health
insurance, and company car, as the Board of Directors of the Employer may grant
to Employee from time to time in conformity with the Employer's policy, at the
sole discretion of the Board of Directors of the Employer.
(j) Employee agrees that as a condition to the effectiveness
of this Agreement all shares of the Class B Common Stock of the Company now or
hereafter owned by the Employee shall be subject to the following restrictions
which shall be endorsed on all certificates for shares of Class B Common Stock
registered in the name of Employee:
The shares of Class B Common Stock evidenced by this
certificate shall not be sold, assigned, hypothecated, or
otherwise encumbered or transferred during the lifetime of
Xxxxxx X. Xxxxx except to his spouse, children or
grandchildren or to another registered holder of Class B
Common Stock. Shares of Class B Common Stock shall not be
converted into shares of Class A Common Stock except by Xxxxxx
X. Xxxxx or the persons designated in the preceding sentence.
The foregoing restriction does not prohibit the transfer of
Xxxxxx X. Xxxxx'x Class B Common Stock by will or the laws of
descent and distribution.
4. Duties: The employee is engaged as Senior Vice President and
Secretary of the Employer. The Senior Vice President of the Corporation is
subject to the control of the Chairman and Chief Executive Officer and the Board
of Directors. His duties shall be as follows, unless changed by The Board of
Directors.
SUMMARY: Directs and coordinates activities of one or more departments such as
purchasing, operations, or sales, or major division of business organization,
and aids Chief Executive Officer in formulating and administering organization
policies by performing the following duties personally or through subordinate
managers.
ESSENTIAL DUTIES AND RESPONSIBILITIES include the following. Other duties may be
assigned. Participates in formulating and administering company policies and
developing long range goals and objectives. Directs and coordinates activities
of department or division for which responsibility is delegated to further
attainment of goals and objectives. Reviews analyses of activities, costs,
operations, and forecast data to determine department or division progress
toward stated goals and objectives. Confers with Chief Executive Officer and
other administrative personnel to review achievements and discuss required
changes in goals or objectives resulting from current status and conditions.
Serves as member of management committees on special studies.
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5. Extent of Services: The Employee shall devote substantially his full
time, attention and energies to the business of the Employer and may not, during
the term of this Agreement, engage in other business activities, whether or not
such business activities are pursued for gain, profit or other pecuniary
advantage. Employee shall not be prevented from investing his assets in such
form or manner as will not require any services on the part of the Employee in
the operation of the affairs of the companies in which such investments are
made.
6. Disclosure of Information:
(a) The Employee recognizes and acknowledges that the
information, processes, developments, experimental work, work in progress,
business, list of the Employer's customers and any other trade secret or other
secret or confidential information relating to Employer's business as they may
exist from time to time are valuable, special and unique assets Employer's
business. Therefore, Employee agrees that;
(i) Employee will hold in strictest confidence and
not disclose, reproduce, publish or use in any manner, whether during or
subsequent to his employment, without the express authorization of the Board of
Directors of the Employer, any information, process, development or experimental
work, work in process, business, customer lists, trace secret or any other
secret or confidential matter relating to any aspect of the Employer's business,
except as such disclosure or use may be required in connection with Employee's
work for the Employer.
(ii) Upon request or at time of leaving the employ of
the Employer, the Employee will deliver to the Employer, and not keep or deliver
to anyone else, any and all notes, memoranda, documents and, in general, any and
all material relating to the Employer's business.
(b) In the event of a breach or threatened breach by the
Employee of the provisions of this paragraph 6, the Employer shall be entitled
to an injunction (i) restraining the Employee from disclosing, in whole or in
part, any information as described above or from rendering any services to any
person, firm, corporation, association or other entity to whom such information,
in whole or in part, has been disclosed or is threatened to be disclosed; and/or
(ii) requiring that Employee deliver to Employer all information, documents,
notes, memoranda and any and all discoveries or other material as described
above upon Employee's leave of the employ of the Employer. Nothing herein shall
be construed as prohibiting the Employer from pursuing other remedies available
to the Employer for such breach or threatened breach, including the recovery of
damages from the Employee.
7. Expenses: The Employee is authorized to incur reasonable expenses
for promoting the business of the Employer, including expenses for
entertainment, travel and similar items. The Employer will reimburse the
Employee for all such expenses upon the presentation by the Employee from time
to time of an itemized account of such expenditures.
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8. Disability: If the Employee is unable to perform his services by
reason of illness or incapacity for a continuous period of more than 180 days,
the Employer may terminate this Agreement. Upon such termination Employer shall
pay Employee twelve months of salary as provided in paragraph 3(a) hereof. The
full amount of such salary shall be paid at such times as such compensation
would otherwise be paid hereunder. All other obligations hereunder, except the
continuing obligations described in paragraph 6 hereof, shall thereupon cease.
9. Termination by Employer: The Employer may terminate this Agreement
for cause at any time, but only after a majority vote of the Board of Directors.
As used in this Agreement, the phrase "for cause" shall mean any of the
following: breach of any fiduciary duty to the Employer, fraud, gross
negligence, willful misconduct or conviction (including a plea of nolo
contendere) in a felony criminal proceeding (excluding traffic violations or
similar misdemeanors). In such event, the Employee, if requested by the
Employer, shall continue to render his services and shall be paid his regular
salary up to the date of termination. The Employer may terminate this Agreement
without cause at any time, but in such event the Employer shall be obligated to
pay Employee his full compensation under paragraph 3 hereof (including the
release of stock) through the end of the term of this agreement at such times as
such compensation would otherwise be paid hereunder. In each such event of
termination, all other obligations hereunder, except the continuing obligations
described in paragraph 6 hereof, shall thereupon cease. The amount due under
this provision shall not be subject to reduction for other compensation or
remuneration in any form received by Employee after the termination of his
employment under this Agreement.
10. Termination by Employee: Employee may terminate his employment by
notifying Employer at least 60 days before the date of termination of the
Initial Term or the then effective Additional Term. Such termination shall be
effective as of the last day of the Initial Term or the then effective
Additional Term. Employee may also terminate this Agreement for cause upon the
Employer's failure to materially comply with its obligations set forth in this
Agreement
11. Death During Employment: If the employee dies during the term of
his employment, the Employer shall pay to the estate of the Employee six months
of salary as provided in paragraph 3(a) hereof. The full amount of such salary
shall be paid within 60 days of such death.
12. Restrictive Covenant: During the term of this Agreement and any
extension hereof, the Employee will not, within a radius of 500 miles from the
present place of the Employer's business (or, even though the parties agree that
such limitation is reasonable, if such locations are determined by a court to
broad, such geographic area as such court may determine is reasonable) directly
or indirectly, own, manage, operate, control, be employed on a full time basis
in a managerial capacity by, participate in or be connected in any manner with
the ownership, management, operation or control of any business in direct
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competition with the type of business conducted by the Employer at the time of
the termination of this Agreement.
In the event of an actual or threatened breach by the Employee of the provisions
of this paragraph, the Employer shall be entitled to seek an injunction
restraining the Employee from owning, managing, operating, controlling, being
employed by, participating in or being in any way so connected with any business
in direct competition with the type of business conducted by the Employer during
the term of this Agreement. Nothing herein stated shall be construed as
prohibiting the Employer from pursuing any other remedies available to the
Employer for such breach or threatened breach.
13. Arbitration: Any controversy or claim arising out of or relating to
this Agreement or the breach thereof shall be settled by arbitration in the City
of San Diego, California, in accordance with the rules then existing of the
American Arbitration Association and judgment upon the award may be entered in
any court having jurisdiction thereof.
14. Notices: The notices required or permitted to be given under this
Agreement shall be sufficient if in writing and if sent by registered or
certified mail, return receipt requested, to his residence in the case of the
Employee, or to its principal office in the case of the Employer.
15. Waiver of Breach: The waiver by the Employer of a breach of any
provision of this Agreement by the Employee shall not operate to be construed as
a waiver of any subsequent breach by the Employee.
16. Assignment: Neither this Agreement nor any benefits hereunder are
assignable by Employee; but the rights and obligations of the Employer under
this Agreement shall inure to the benefit of and be binding upon the successors
and assigns of the Employer.
17. Entire Agreement: This instrument contains the entire agreement of
the parties and it may be changed, modified, supplemented or amended only by an
agreement in writing signed by the Employer and Employee. The employment
agreement between the company and employee dated as amended is terminated
provided that options to purchase the Class B Common Stock of Myriad granted
under such agreement shall remain in full force and affect.
18. Governing Law: This Agreement shall be interpreted and governed in
accordance with the laws of the State of California.
19. Severability: If any paragraph, sentence, clause or phrase of this
Agreement is for any reason declared to be illegal, invalid, unconstitutional,
void or unenforceable, all other paragraphs hereof not so held shall be and
remain in full force and effect.
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20. Authorization The Compensation Commitee of the Board of Directors
of the Employer has authorized this Agreement, and specifically authorized
execution hereof by the undersigned on behalf of the Employer.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
Myriad International, Inc.
By: /s/Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
Chairman of the Compensation Committee
Employee:
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
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EXHIBIT A
OPTION TERMS
The options to purchase shares of the Class A Common Stock and/or the Class B
Common Stock of the Company shall be governed by the following terms and
conditions:
1. DEFINITIONS. For purposes of the Plan, the following terms have the
following meanings:
(1) "Agreement" means the Employment Agreement between
the Optionee and the Company dated as of January 1,
1996.
(2) "Board" means the Board of Directors of the Company.
(3) "Commission" means the Securities and Exchange
Commission, and any successor agency.
(4) "Company" means Myriad International, Inc.
(5) "Effective Date" has the meaning set forth in
Section 2.
(6) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, and any successor
statute.
(7) "Grant Date" means the date of grant of any Option.
(8) "Option" means an Option granted under the Employment
Agreement between the Optionee and the Company dated
as of January 1, 1996.
(9) "Stock" means the Class A Common stock (with respect
to Class A Options) or the Class B Common Stock (with
respect to Class B Options) of the Company, and any
successor entity.
(10) "Tax Date" means the date defined in Section 7.
(11) "Vesting Date" means the date on which an Option
becomes wholly or partially exercisable.
Initials ________ ______
Exhibit A Page 1
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2. Terms and Conditions of Grant. Options granted under the Agreement
shall be subject to the following terms and conditions and such other
terms and conditions not inconsistent with the Agreement as the Board
shall impose:
(1) Exercise of Option. In order to exercise all or any
portion of any Option granted under the Agreement, an
Optionee must remain as an officer, employee,
consultant or director of the Company, or a
Subsidiary, until the Vesting Date. The Option shall
be exercisable on or after each Vesting Date in
accordance with the terms set forth in the Agreement.
(2) Method of Exercise. To the extent the right to
purchase shares of Stock has accrued, Options may be
exercised, in whole or in part, from time to time in
accordance with their terms by written notice from
the Optionee to the Company stating the number of
shares of Stock with respect to which the Option is
being exercised and accompanied by payment in full of
the exercise price. Payment may be made in cash,
certified check or, at the absolute discretion of the
Board, by non-certified check.
(3) Nonassignability of Option Rights. No Option shall
be transferable other than by will or by the laws of
descent and distribution except to the parents,
spouse, children or grandchildren of the Optionee.
During the lifetime of an Optionee, only the Optionee
or the permitted assignees may exercise an Option.
Options assigned pursuant to this sub-section 2.(3)
shall remain subject to the provisions of sub-section
2.(4).
(4) Exercise After Termination of Employment or Death. If
for any reason other than permanent and total
disability or death an Optionee ceases to be employed
by or to be a consultant or director of the Company,
or a Subsidiary, Options held at the date of such
termination (to the extent then exercisable) may be
exercised, in whole or in part, at any time within
three (3) months after the date of such termination
or such lesser period specified in the Option
Agreement (but in no event after the earlier of the
expiration date of the Option as set forth in the
Agreement.
If an Optionee becomes permanently and totally
disabled (within the meaning of Section 11(e)(3) of
the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute, or dies
while employed by the Company, or a Subsidiary, (or,
if the Optionee dies within the period that the
Option remains exercisable after termination of
employment), Options then held
Initials______ ______
Exhibit A Page 2
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(to the extent then exercisable) may be exercised by
the Optionee, the Optionee's personal representative,
or by the person to whom the Option is transferred by
will or the laws of descent and distribution, in
whole or in part, at any time within one year after
the disability or death or any lesser period
specified in the Option Agreement (but in no event
after the earlier of the expiration date of the
Option as set forth in the Agreement.
(5) Compliance with Securities Laws. The Company shall
not be obligated to issue any shares of Stock upon
exercise of an Option unless such shares are at that
time effectively registered or exempt from
registration under the federal securities laws and
the offer and sale of the shares of Stock are
otherwise in compliance with all applicable
securities laws. The Company shall have no obligation
to register the shares of Stock under the federal
securities laws or to take whatever other steps may
be necessary to enable the shares of Stock to be
offered and sold under federal or other securities
laws. Upon exercising all or any portion of an
Option, an Optionee may be required to furnish
representations or undertakings deemed appropriate by
he Company to enable the offer and sale of the shares
of Stock or subsequent transfers of any interest in
such shares to comply with applicable securities
laws. Evidences of ownership of shares of Stock
acquired upon exercise of Options shall bear any
legend required by, or useful for purposes of
compliance with, applicable securities laws.
3. PAYMENT OF TAXES. Unless the Board permits otherwise, the participant
shall pay the Company in cash, promptly when the amount of such
obligations becomes determinable (the "Tax Date"), all applicable
local, state and federal withholding taxes applicable, in the Board's
absolute discretion, to (i) the exercise of any Option, or (ii) the
transfer or other disposition of shares acquired upon the exercise of
any Option.
4. ADJUSTMENT FOR CHANGES IN CAPITALIZATION. The existence of outstanding
Options shall not affect the Company's right to effect adjustments,
recapitalizations, reorganizations or other changes in its or any other
corporation's capital structure or business, any merger or
consolidation, any issuance of bonds debentures, preferred or prior
preference stock ahead of or affecting the Stock the dissolution or
liquidation of the Company's or any other corporation's assets or
business or any other corporate act whether similar to the events
described above or otherwise. Subject to Section 5, if the outstanding
shares of the Stock are increased or decreased in number or changed
into or exchanged for a different number or kind of securities of the
Company or any other corporation by reason of a recapitalization,
reclassification, stock split, combination of shares, stock dividend
or other
Initials ____ ____
Exhibit A Page 3
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event, the number and kind of securities with respect to which
Options may be granted under the Agreement, the number and kind of
securities as to which outstanding Options may be exercised, and the
exercise price at which outstanding Options may be exercised, shall be
adjusted, to the extent possible, so as to prevent dilution and without
regard to any resulting tax consequences to the Optionee.
5. DISSOLUTION, LIQUIDATION, MERGER. In the event of a dissolution or
liquidation of the Company, a merger in which the Company is not the
surviving corporation, or a sale of over 80% of the assets of the
Company, the Board, in its absolute discretion, may cancel each
outstanding Option upon payment in cash to the Optionee of the amount
by which any cash and the fair market value of any other property which
the Optionee would have received as consideration for the shares of
Stock covered by the Option if the Option had been exercised before
such liquidation, dissolution, merger, or sale exceeds the exercise
price of the Option. In addition to the foregoing, in the event of a
merger in which the Company is not the surviving corporation, the
Board, in its absolute discretion, may accelerate the time within which
each outstanding Option may be exercised.
6. SUCCESSOR CORPORATIONS. In the event of a merger in which the Company
is not the surviving corporation, the successor entity may assume the
obligations under all outstanding Options.
7. NO RIGHTS AS SHAREHOLDER OR TO CONTINUED EMPLOYMENT. An Optionee shall
have no rights as a shareholder with respect to any shares of Stock
covered by an Option until such Optionee has acquired title to such
shares. Subject to Sections 4 and 5, no adjustment shall be made for
dividends or other rights for which the record date is prior to the
date title to the shares of Stock has been acquired by the Optionee.
The grant of an Option shall in no way be constructed so as to confer
on any Optionee the right to continued employment by the Company, or a
Subsidiary.
Initials _____ _____
Exhibit A Page 4
